$20M lawsuit claims Altice reneged on its Keep Americans Connected pledge

Altice logo
The lawsuit says Altice made the plaintiff pay a reconnection fee after the Keep Americans Connected pledge ended. (Altice)

The owner of a New York City barber shop has filed a $20 million class-action lawsuit against Altice, claiming that Altice reneged on its Keep Americans Connected pledge, which it signed in the early days of the pandemic.

Artem Shalomayev, owner of 3715 Barber Shop in the Bronx, is suing on behalf of potentially thousands of other similarly-situated small business owners, according to Jon Norinsberg, the lawyer for the plaintiff.

Shalomayev, like many others, was forced to shut his doors from mid-March to mid-June in 2020 to comply with shelter-in-place orders due to the Covid pandemic.

On March 13, 2020, then-FCC Chairman Ajit Pai announced the Keep Americans Connected initiative, asking broadband providers to pledge not to terminate service to any residential or small business customers because of their inability to pay their bills and to waive any late fees.

More than 800 companies, including Altice, signed the chairman’s pledge.

RELATED: Verizon, AT&T, T-Mobile extend no-disconnect pledge through June 30
 
At the time, Altice USA’s CEO Dexter Goei said, “Altice USA is proud to do its part in ensuring that customers and business in our service areas have reliable access to the connectivity services that are critically important during this rapidly evolving public health situation.”

Shalomayev said he was sent three Altice invoices from March to June 2020, charging for internet and phone services even though his business was mandatorily closed. His suit says that Altice then terminated his services based on non-payment in late June 2020, which he views as going against the pledge.
 
According to his complaint, Shalomayev asked an Altice customer service representative if he could pay the bills in order to get his service restored, and the representative said that his service was permanently disconnected, that he would have to set up a new account and pay a $180.00 reconnection fee. If he didn’t comply as the customer service rep demanded, he would lose the telephone number associated with his business, which was a hardship since many of his customers were familiar with that number for decades.
 
Shalomayev paid the overdue bills along with the reconnection fee and a late-fee that Altice imposed, as well.

When he finally was allowed to reopen his business in August, 2020, Shalomayev received his first new monthly Altice bill and claims that Altice had doubled his monthly fees for internet and phone services.

Norinsberg told Fierce that Shalomayev is not complaining that he had to pay for his telecom services from March through June. Rather, the lawsuit is narrowly focused on the issue of being forced to enter a new contract with a new reconnection fee when services shouldn’t have been terminated in the first place.

“The lawsuit is simply about terminating service based on non-payment and forcing people to pay new fees to reinstall the service,” said Norinsberg. “We think Altice was trying to pull a fast-one, trying to recoup some revenue losses due to the pandemic.”

Mike Saperstein, Vice President of strategic initiatives & partnerships at USTelecom – The Broadband Association, said, “The KAC pledge started on 3/13/20 and was originally for 60 days. The pledge was then extended to run through June 30, 2020. The pledge was not to terminate service to residences and small businesses during the period for non-payment, as well as to waive associated late fees. The pledge was not to provide free service during that period, but instead offered to relieve the pressures of termination and late fees due to inability to pay at that point.”

Although Shalomayev is the only plaintiff at this time, Norinsberg said his law firm is estimating a 50,000-member class with similar damages. That will all be determined during the discovery process of the lawsuit. “We think it extraordinarily unlikely this was an isolated incident,” he said. "We’ve had many class actions.”

Altice

Altice sent the following comment to Fierce: “Throughout the pandemic, Altice USA has been committed to providing support and relief to our customers, including providing free broadband services to students, suspending disconnections for households and businesses during the height of the pandemic as part of the Keep Americans Connected Pledge, and establishing a $10 million Community Relief Program that included among other activities $3 million in small business grants and $5 million in ad credits to help businesses impacted by the pandemic recover.”

The company has previously made some comments about the effect of the pandemic on its subscriber base.

In its fourth quarter 2020 earnings call in February 2021, Goei said the company saw a net customer loss of 15,000 residential customers, which included customers associated with the Keep Americans Connected Pledge as well as a similar New Jersey Executive Order, according to a Seeking Alpha transcript.

Goei said at the time, “All of those customers have been brought current in the fourth quarter through a combination of balance forgiveness, payment plans or cash payments. So far, we are seeing positive trends — payment trends in that cohort in early 2021. Recall that the Pledge — the FCC Pledge ended in June.”

RELATED: Altice USA broadband sub growth grinds to a halt in Q2

On its most recent earnings call in July 2021, Altice reported a jump in churn that left it with almost no gains in the quarter. Broadband subscriber growth was flat in the quarter, with the company adding just 200 organic net customer additions compared to 70,400 in Q2 2020.