By Kaitlin Mayhew -- email@example.com
EDINBURG -- Cable subscribers in Shenandoah County may be facing higher rates or loss of at least one popular channel as a result of retransmission fees that several networks are introducing as of Jan. 1.
According to David Ferguson, former vice president of customer service for Shentel, and now a consultant for the company, television stations have been authorized by Congress since 1992 to grant or deny providers like Shentel the right to carry their signals.
These stations include those affiliated with ABC, CBS, FOX and NBC. This right and agreement is renewable every three years. The majority of Shentel's agreements will expire at the end of 2011.
This year, the stations have begun requiring fees for the right to retransmit their signals that Ferguson said are eight to 13 times higher than the previously agreed upon amounts.
"Last term we paid 35 cents per subscriber per month," said Ferguson. "The total has increased to $5.25 per customer per month."
He said that although that is the initial request the broadcasters have sent, Shentel is currently in negotiations with nine stations trying to come up with amounts that would make the change less abrupt.
"These increased programming costs will ultimately have to be passed on to our customers," Ferguson said. "Therein lies the challenge to keep affordable programming within the reach of the average consumer in Shenandoah County."
Shentel currently serves 8,000 subscribers in Shenandoah County.
Ferguson said that if a compromise is not reached between Shentel and the television programmers by Dec. 31, customers will undoubtedly lose some of the channels that they can currently view.
For example, Shentel currently transmits WHSV-3 out of Harrisonburg and WJLA-7 out of Washington, both of which are ABC affiliates.
With the current proposed rate increase, Ferguson said that customers' bills would be increased by $1.70 per month just to keep both of those channels.
"In order to keep our programming costs affordable for our customers we may be forced to drop one of these," he said.
One reason for this is that because both channels are affiliated with ABC, almost all of the prime time programming is duplicated.
Which one Shentel would choose to drop would ultimately depend on the cost the company could negotiate with either station, he said.
Cindy Rinker of Shentel said that she believes the company may ultimately end up keeping WHSV, which may not be a popular choice with everyone.
"[Channel 7 meteorologist] Bob Ryan is like a weather god around here," she said. "There would be people who are upset about that."
Ferguson said that although he knows some subscribers will be upset with the changes, he hopes some will understand and take the time to realize why they are taking place.
"We are working very hard to keep these programming costs realistic," he said. "We agree that we should pay for their programming, we just do not feel that these types of costs are justified, especially in these hard economic times."
However, he did say that there is the potential for a station to go "dark" on Jan. 1 and then be available later on in the year as negotiations take place.
Ferguson has been with Shentel since 1992, and said he has taken part in every negotiation transaction concerning retransmission since then.
"This is the toughest one in all the negotiating periods that I've dealt with," he said.
And he's not sure whether or not the fees will continue to get worse as the year goes on.
Some affiliated stations, such as those out of Washington and Harrisonburg, now have to pay fees to the parent companies that they didn't in the past, so that may have something to do with the fee increases.
"The rules by which cable companies and broadcasters operate under, that are dictated by Congress, haven't been changed in 20 years," Ferguson said. "In most markets broadcast stations have certain powers over networks and syndicated programming and these should be looked at."
He recommends a system where a customer can choose which channels they actually want to watch, perhaps a list of 10, 20 or more depending on preference, and pay for those individually.
"There has to be some change I think in the way programming is provided to the customer."