As a not-for-profit cable provider, FPB works to provide reliable service at the lowest possible rate. FPB’s membership in the National Cable Television Cooperative (NCTC) provides us with leadership, expertise and support during negotiations with large cable networks.
The NCTC is in active negotiations with multiple cable networks, including NBC Universal and AMC Networks (AMCN). Cable programmers ask for increases during every contract negotiation. When agreements are reached, these increases are passed directly through from the programmers to FPB and on to the customer. According to FPB Marketing and Video Content Coordinator Harvey Couch, most of the Classic Cable rate leaves our community and goes to large media conglomerates throughout the US. “Breaking down the FPB Classic Cable bill, most of the rate goes to programming costs. Currently, FPB Classic Cable (including retrans fees) costs $64.43 per month, per customer. Cable programmers and media companies in Los Angeles, New York, and Atlanta receive approximately $38.00 of that charge. Another portion goes for retransmission consent to national companies that own the network affiliates in Louisville and Lexington. The remaining amount ($16.50) is used by FPB to provide cable service to customers. Equipment, personnel and infrastructure maintenance all are funded by the small portion remaining from the rate structure. In 2002, that amount was $15.75. While our customer rates have unfortunately increased significantly since 2002, the amount that stays in this community has essentially remained the same.”
Currently, FPB carries AMC on Classic Cable and IFC, We TV, and BBC America are offered on Preferred Cable. AMCN is demanding that FPB move the Preferred Cable networks to Classic Cable (therefore passing on that expense to more subscribers) as well as launch two other channels they own (Sundance Channel and BBC World News) on Classic Cable. All told, AMCN wants to go from one to six networks on Classic Cable. According to Couch, this should be a customer decision, not one forced on to unwilling subscribers. “Migrating three lightly-viewed channels and launching two brand new channels that customers do not want on Classic Cable doesn’t seem fair to FPB or our customers.”
If FPB accepts these terms, the increase to customers for the AMCN programming on FPB Classic Cable would be approximately 400%. Additionally, AMCN is requesting a 10 year contract. Couch states that this was an unprecedented demand from AMCN. “Most cable programming contracts are 3-5 years. It seems irresponsible to sign a contract of that length, especially not knowing the landscape of the video world in 10 years.”
FPB staff and operators from another 700 NCTC member companies have communicated to AMCN that we are willing to pay a fair increase on AMC and maintain existing distribution for their other channels, but AMCN has made it clear that the distribution terms on this deal were going to be an all or nothing situation.
FPB has called for a special public meeting to discuss the potential rate increases with our Board and customers. The special meeting will take place Tuesday, December 1 at 5pm at the downtown Farmers Bank location (125 W. Main St, 4th floor).
Couch says this is a huge decision for our customers. “FPB is dedicated to providing reliable service at the lowest possible rate. It is a responsibility we take great pride in. This public hearing will provide valuable input as to how FPB staff and our Board approach this very important decision.”