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BEVCOMM (Blue Earth, MN)

In my markets, small cable operators are paying more than double the amount of money in retransmission consent fees than some of the largest operators for the same signals.  Until 2005 this was not an issue, but now the broadcasters are demanding ever exorbitant prices to carry their stations.  I've never been forced to raise customer rates because of broadcast carriage fee increases, but now I have a station seeking a 567 percent increase, and I don't see how I can avoid hiking them for my customers, or dropping these stations that differentiate us from our competition, thereby denying us the only slight competitive advantage we have.  Two out-of-market broadcasters that we carry -- they are significantly viewed in our service territory - are seeking increases of 3,500 percent!  I simply can not justify paying such rates for a second or third network affiliate.  Retransmission consent fees are a huge problem, and I anticipate they will be much more of a burden for small cable operators after the current negotiation period comes to a close.

BEVCOMM is a small rural cable and video provider with a total of 12 employees working for 3 different companies.  Our company provides service to over 4,000 video subscribers, both cable and IPTV. We have been in business since 1983, and experienced many hardships along the way, but budgeting for retransmission consent fees may be the toughest yet.

The challenges we face seem to be endless. Currently, I have several serious issues with creating digital tiers that best fit our customers' needs.  Because of the requirements and restrictions programmers place on how channels can be offered, I cannot create tier packages that are aligned with the interests of my subscribers without including unwanted programming.  Broadcasters and programmers' carriage demands limit our ability to compete with the satellite providers, and caused us to increase our rates.   It also affects our ability to increase broadband penetration in the rural areas that we serve.  If we could obtain programming with the same prices, terms and conditions as the satellite providers and the large MSOs, we could compete on a level playing field, but we're being unfairly discriminated against because of our size.

If things don't start to change for the better, investment in our cable and video plant may be capped or even reduced. We plan to be in business for a very long time, however, there are an increasing number of obstacles that worry me. If we can't make the investment as the last mile delivery system for video, broadband, and voice in rural America, who will?

 

~Jim Beattie - Manager

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