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[March 29, 2014]
Viacom ready to black out millions of rural cable subscribers [Radio and Television Business Report (RBR-TVBR)]
(Radio and Television Business Report (RBR-TVBR) Via Acquire Media NewsEdge) Over 100 years ago, Consolidated Communications was founded as a small, independent telephone company. Over the past century, the business has evolved into a broadband provider of high-speed Internet and advanced digital television serving over 120,000 cable customers across six states. Over the years, we have successfully navigated our way through drastic changes in the industry, and through many negotiated agreements with our TV programmers and partners. I am proud to say that we have always been successful in negotiating a fair deal on behalf of our customers either directly with programmers or through the National Cable Television Cooperative (NCTC). As a result, we have never experienced a blackout and the NCTC – which has completed hundreds of deals with programmers – also has never been subjected to a blackout. While current negotiations with Viacom have been difficult, we have a lot of faith in the NCTC to negotiate on our behalf and reach an agreement that is fair to all parties including customers, cable companies and programmers.
Unfortunately, in the current negotiations, the rates that Viacom is asking us to pay are beyond what we consider to be fair. We were surprised and disappointed at the size of the rate increase demanded by Viacom, which is far greater than industry averages.
Viacom has threatened to turn off its networks, including popular channels such as Nickelodeon, Comedy Central, BET, MTV and VH-1 to 5.2 million customers across the U.S. and require small cable companies to remove all its channels if we do not agree to a price increase that is 40 times the rate of inflation.
The scale of the increase proposed unfortunately puts smaller cable companies like us in a lose-lose situation. If we agree to pay what Viacom is demanding and our larger competitors such as Comcast and Time Warner Cable continue to pay far less, that puts us at a serious competitive disadvantage. If, on the other hand we say no to the huge price increase because our customers cannot afford it, our customers may lose access to the Viacom networks.
Today, our industry is facing multiple challenges and some would argue that the system is broken. Something is certainly wrong when programming price increases continue to skyrocket at a pace that far exceeds market rates, while changes in technology and an explosion in options for how consumers can access content has caused a leveling off or decline in demand for traditional cable networks across the board.
The last thing networks and content providers should do at a critical time like this is to price ourselves out of the market. We fear that will be the result if smaller providers like us agree to such large increases.
TV is all about choice and allowing customers not only to choose what content they want to watch, but also when and where they want to watch it. While customers love content, they want to pay a fair and reasonable price for it. When they are no longer paying a fair rate or are unable to watch what they want when they want it, then we are at risk of losing customers.
Consolidated Communications has been serving the needs of its customers for over a century. We have been able to grow and expand because we understand the needs of our customers and the communities in which we operate. As a small company we have the ability to quickly address our customers' needs. And most importantly, we treat them as the valued customers that they are.
We hope that Viacom continues to treat its cable customers and partners with respect and negotiates in good faith to reach an agreement. If so, I believe we can agree to an extension that allows customers to access their networks while we continue to work hard to finalize a fair, long-term deal.
–Jaime Montes is Content Acquisition and Digital TV Senior Manager of Consolidated Communications, a cable TV and broadband Internet access provider serving 120,000 cable customers in California, Pennsylvania, Illinois, Texas, Kansas and Missouri.
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