Iowa’s municipal cable providers – and their customers – will be paying much more for “free TV” in 2015 after the latest round of retransmission consent negotiations.
The Federal Communications Commission (FCC) requires TV stations and cable providers to negotiate new agreements every three years. Prior to the early 2000’s, TV stations usually allowed cable companies to carry their signals for little or no charge. But as TV stations have seen their advertising revenues shrink and demands from their affiliated network for a share of any fees, retransmission consent costs for cable companies have skyrocketed. That has forced cable companies, including Iowa’s 19 municipal cable companies, to make some difficult decisions.
The Federal Communications Commission (FCC) requires TV stations and cable providers to negotiate new agreements every three years. Prior to the early 2000’s, TV stations usually allowed cable companies to carry their signals for little or no charge. But as TV stations have seen their advertising revenues shrink and demands from their affiliated network for a share of any fees, retransmission consent costs for cable companies have skyrocketed. That has forced cable companies, including Iowa’s 19 municipal cable companies, to make some difficult decisions.
At Spencer Municipal Utilities (SMU), the spiraling costs meant that keeping TV stations with duplicate network affiliations was no longer a luxury that SMU and customers could afford. SMU decided to drop the two TV stations from their lineup in an effort to keep costs to a minimum. As SMU explained to customers in a news release on their website:
At Spencer Municipal Utilities (SMU), the spiraling costs meant that keeping TV stations with duplicate network affiliations was no longer a luxury that SMU and customers could afford. SMU decided to drop the two TV stations from their lineup in an effort to keep costs to a minimum. As SMU explained to customers in a news release on their website:
“Since 2009, SMU has been paying to bring most of the broadcast channels to customers in Spencer. There is a misconception that we get many of the broadcast channels for free and should be able to pass them along to customers that way. SMU has been doing what we can to keep cable costs affordable for customers and we negotiated the best deals we could,” says Amanda Gloyd, marketing and community relations manager at SMU.
Despite reducing the number of TV stations that they have to pay for, SMU General Manager Steve Pick says their total retransmission fees will still more than triple compared to 2014.
Algona Municipal Utilities (AMU) decided to drop TV stations based in Mason City and Austin, Minnesota at the end of 2014 in order to limit retransmission costs. AMU Marketing and Community Relations Director Bob Jennings says they started receiving calls from customers as soon as the channels went dark on New Year’s Day. Jennings says that after hearing the explanation for the stations being dropped, most customers seem understanding but are still disappointed.
Cedar Falls Utilities fared better than some others in the latest round of negotiations. Overall costs for “free TV” will increase by just under 60% in 2015 compared to last year, and they’ve done so without having to drop any channels.
In addition to rising costs for retransmission consent, Harlan Municipal Utilities (HMU) has struggled with another problem. Harlan is considered to be in the Omaha TV market. As a result, Omaha stations have exercised rights under their network contracts to force HMU to drop three out of the four Des Moines TV stations they used to carry. HMU’s Doug Hammer says that means customers receive far less coverage of Iowa news than in the past. Plus, there is a lack of diverse content.
“The whole principle of broadcast news coverage is to offer the public a choice of viewpoint and coverage. In my mind, it is not right that Iowans do not have access to Iowa based TV stations for Iowa news, weather, sports, events, and public affair information. The local Des Moines station are very willing to work with us and allow carriage. We appreciate their efforts to try and make that happen. It is their agreements with the networks that prohibit carriage on an out of market system.”
Other municipal cable operators in Iowa that are dealing with cost increases include Muscatine Power and Water (individual station increases range from 43% to 110%) and Laurens Municipal Communications (fees doubled in aggregate).
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