To The Daily Sun,
The Laconia Daily Sun recently published a letter from a customer of ours who expressed concern about recent increases in the price for cable services (Dec. 5, 2018, “Cable company makes it very difficult to stay with them”). We’re grateful for the feedback because we care about the impact our decisions have on our customers and know that others share the concern of the letter writer. Price increases are never welcome and they can be frustrating. So, when they’re necessary, they should be fully explained, especially when some of the factors driving prices are not widely known, or when price increases have been accompanied by enhancements that have brought many customers added value.
Like most companies, we experience increases in the cost of doing business and work hard to manage these costs on behalf of our customers. In our case, we continue to invest in our state-of-the-art, fiber-rich network to deliver advanced TV, phone and ever-faster internet speeds (we’ve boosted internet speeds for our customers five times in the last five years and introduced 1 gig internet this summer).
Yet, all cable providers, including Atlantic Broadband, experience unique costs because of the license fees that are paid for the networks that are offered to customers. Nationally, these costs have increased more than 20 percent in the last three years, a rate much higher than inflation. That’s because these networks — especially those that present live sports programming or produce exclusive original programming — have very high production and content acquisition costs, and these costs are rising.
In addition, local TV broadcasters charge companies like Atlantic Broadband a substantial fee to retransmit their signals to customers. These broadcast TV fees increased 18.5 percent in the first quarter of this year over the prior year on a national basis. Disputes over these rising fees have caused broadcast TV blackouts in other areas of the country, but we have worked hard to negotiate carriage agreements to prevent such interruptions wherever possible in our service areas.
This upward pressure on video rates is not unique to cable TV companies. Satellite TV companies and telephone companies that provide video services also have been forced to increase prices due to the cost of video programming. Even streaming video services are impacted: The New York Times recently reported that Netflix agreed to pay $100 million to Warner-Media for the right to offer the sitcom “Friends” to its customers for just one year. In testimony before the House Energy & Commerce Communications Subcommittee this September, analysts warned that streaming video services— which are sold as a “cord-cutting” alternative at artificially low introductory rates, often at a loss — will see rates escalate dramatically in the months and years ahead.
And, consumers who have sought savings by subscribing to a streaming service instead of a traditional cable package often unexpectedly discover that cobbling together a lineup of programming content requires multiple subscriptions — a logistical challenge with multiple bills that can end up costing more than the service they currently have — that is cumbersome to use and still has programming gaps.
That is why we’ve worked hard to provide an easy-to-use video service with a comprehensive lineup of popular channels. But we didn’t stop there. We also have taken steps to provide more value. This summer, we introduced a new, advanced TV platform powered by TiVo featuring an intuitive interface, advanced search and discovery, tailored recommendations, and a remarkable voice remote that provides fast, highly-accurate results of searched for programs, even when only part of a title or key word is spoken. Our enhanced video platform also provides access to Netflix, YouTube and other popular apps. In fact, Atlantic Broadband is the only provider in this region to have fully integrated Netflix into its TV platform.
When networks demand higher fees, we and other video providers must pass along some of these costs to customers. However, in the face of these economic realities, Atlantic Broadband will continue to work hard to negotiate with these broadcast and cable network programmers so our customers will have access to a wide range of programming content on the most advanced video platform available today at the fairest possible price.
Regional General Manager