Surfing for change on the cable TV wave
Published 12:00 am Sunday, November 19, 2006
By Sarah Light, staff writer
Options. Prices. Better channels. For many Albert Leans there is a long list of concerns when it comes to local cable television options.
In 1996, the city of Albert Lea signed its most recent franchise agreement with cable TV provider Charter Communications. And in exchange, the city receives about $175,000 in franchise fees each year that go to the general fund.
But is this single company fulfilling the needs of all of the cable subscribers in Albert Lea, or should a second franchise be considered, like it has been done in many cities throughout the state?
On Nov. 27, some of these local cable concerns will be discussed at the Albert Lea City Council meeting when Tucker Carlson, director of government relations with Charter Communications, will speak to attendees.
While there have been many issues raised with this cable debate, here is a more in-depth look into three of the major concerns.
One company versus more
Although Albert Lea currently has only one cable TV company signed on as a franchise, would it make a difference for another business to join up with the city?
Wayne Billing, New Richland city administrator, said last summer their city signed on with a second cable provider called Hickory Tech Digital TV. Now the city is split almost 50/50 with the two cable providers.
&8220;The biggest value to residents is the choice,&8221; Billing said. &8220;If they&8217;re dissatisfied with one provider, they have somewhere else to go.&8221;
He pointed out how each of the companies might offer different services, and he said he thinks having two companies gives the businesses an incentive to do a better job in customer service.
&8220;I like having two,&8221; he said.
The New Richland City Council agreed favorably to the second franchise and decided to bring Hickory Tech on after the business offered their cable services to the city.
Jennifer Spaude, director of public and investor relations with Hickory Tech, said their company serves 11 digital TV communities where it is competing against an incumbent cable provider.
They began in St. Peter in 2001 and have recently spread to Mankato and North Mankato.
&8220;From a community&8217;s perspective, having two options is very beneficial to the consumer,&8221; Spaude said.
In an article in the Free Press of Mankato on July 25, Minneapolis lawyer Brian Grogan, a specialist in telecommunications and cable television, pointed out the benefits of having competition &8212; which he said included higher quality services.
The article stated, &8220;Cable television prices are 17 to 20 percent lower in markets where there&8217;s competition, according to Congressional hearings.&8221;
Service and rates were two of the major concerns pointed out by the Albert Leans interviewed for this article.
Darrel Roemmich of Albert Lea said he would promote having two companies because of the competition it would create.
&8220;Competition is always good,&8221; Roemmich said. &8220;It keeps everybody honest. That&8217;s what competition is for.&8221;
When asked if she would consider bringing a second cable company to Albert Lea, City Manager Victoria Simonsen said she would certainly entertain the idea of another cable company coming to town. She has initiated phone calls to two other companies but did not receive responses from them, she said.
&8220;From the city&8217;s perspective, it means more choices for more customers and additional franchise fees,&8221; Simonsen said.
Rates
While many interviewed agreed they would like to see a second company signed on with the city, they also said they would like to see some changes with the current cable rates. But who can make those changes?
Right now, cable rates are something that the programmers and the cable company decide for Albert Leans.
Under the city&8217;s current franchise agreement, the city has no control over any of the rates, Simonsen said.
Before 1992, cities could regulate their rates, but the Telecommunications Act of 1996 made it so cities could only regulate the very basic rates. If 15 percent of the market gets infiltrated, however, then the city would lose that control. And that is just what happened.
Twenty-five percent of the business in Albert Lea uses satellite, so that took away the city&8217;s right to control the basic rates.
Carlson said Charter&8217;s rates have gone up recently because of increased operating costs for the business. These increases in operating costs are the same operating cost increases that other businesses are facing, he said.
&8220;Every other business in Albert Lea is dealing with energy and health care increases,&8221; he said.
One aspect of the rates debate is a push for the implementation of a senior discount. Many seniors throughout town were interested in this concept.
Albert Lean John Reid has been researching this issue for several years.
Reid said according to FCC law, seniors are allowed a discount. In the Charter agreement, there is nothing to prohibit discounted rates. He plans to discuss this at the City Council meeting, he said.
&8220;We&8217;re entitled to it; we should get it,&8221; Reid said.
But Simonsen said this wouldn&8217;t be practical for the city to support.
&8220;If they get the discount, everybody in the middle pays for it,&8221; Simonsen said. &8220;It&8217;s not something we can recommend. If it was something based on income, it might be something we could recommend.&8221;
Carlson also said this concept would be difficult to implement because it is difficult to verify who lives at each home.
&8220;It&8217;s a fairly difficult program to manage because we don&8217;t like to be intrusive into our customer&8217;s lives,&8221; Carlson said.
Programming
When it comes to programming, many of those interviewed said they would rather pay for the channels they want, instead of paying for a bunch that they don&8217;t want.
&8220;I think you&8217;re paying too much for all these channels you don&8217;t watch,&8221; said Scott Poppe of Northrup. &8220;I&8217;d rather pick the channels that I want and then pay for them that way.&8221;
Reid agreed. He said he is tired of paying for indecent programming that he doesn&8217;t want to watch.
&8220;If I could pick and choose at a reasonable price, I would jump on it,&8221; Reid said.
Carlson said a la carte programming &8212; paying only for the channels you want &8212; has been a consideration, and technology is getting to the point where it could offer this to customers. But the problem comes with the programmer&8217;s rules.
&8220;We certainly don&8217;t oppose customer&8217;s having more choice,&8221; Carlson said. &8220;The reality would be that I think the majority of people would still take a bundled package of programming because there&8217;s more than one viewer in most homes.&8221;
The cost of channels would also increase exponentially in an a la carte world because the programmers aren&8217;t going to take a loss on their programming, he said.
Other Albert Leans expressed additional wishes to receive more Minneapolis news stations.
But because of Albert Lea&8217;s location in the Rochester-Austin-Mason City TV market, there would not be access to the Minneapolis and St. Paul stations. Cities such as Rochester and Mankato are exceptions because they have their own TV markets, Carlson said.
These are only a few of the issues raised by Albert Lea residents during the past few weeks during interviews for this article. For additional information on some of these concerns, visit the upcoming City Council meeting.
&8220;We continue to try to improve our business and keep our customers satisfied,&8221; Carlson said. &8220;That&8217;s the biggest challenge &8212; staying competitive and keeping everyone satisfied so they&8217;ll stay our customers.&8221;