The Frankfort Plant Board has been signaling for at least three months that cable customers would likely have to pay more to view formerly “free” TV broadcasts from Kentucky’s two biggest cities. Now it’s official and the municipal utility will hold a public hearing April 3 on a proposed $3.26 monthly surcharge.
It could have been worse. When negotiations with area broadcasters began late last year, board members warned the per-customer cost of the retransmission agreements could reach $6 a month. By putting this figure on the table at the outset, the utility is now in position to boast that it cut the potential rate increase nearly in half. And that’s exactly what chairwoman Sheila Burton did. “I think we did a good job by not hitting that $6 mark,” she said after Tuesday’s meeting.
Besides the extra fees for area channels – which didn’t charge anything for rebroadcast rights prior to three years ago – cable customers will also pay $1 and $2 a month more, respectively, for “preferred” and “classic” cable tiers. Rate increases ranging from $1 to $2.50 a month are planned for subscribers to premium channels such as HBO.
Balancing out the proposed increases are some instances of rate relief. High-definition “plus” programming will drop from $10 to $7 a month in hopes of boosting patronage. And a previously considered increase in cable box rentals is out of the picture. Holding the line on box fees, in our opinion, benefits both the Plant Board and its customers. Cable boxes are a fact of life nowadays and they also provide the utility a means of marketing potentially profitable services such as on-demand video. With video stores a thing of the past, the Plant Board should seize the opportunity to offer customers convenience and reasonable rates for watching new releases on cable.
Meanwhile, the system proposes to upgrade broadband speeds for Internet users, with some prices unchanged and others raised to reflect improvements. A discount still applies to “bundled” cable and phone service.
The Plant Board previously suggested trends favored higher rates for cable TV, with ever-rising programming costs, but stable or falling costs for Internet service, which is less expensive for the utility to provide. With this prophecy more or less coming to pass, the utility should not wait until the next round of rebroadcast negotiations to decide how to respond. The whole broadcast universe has changed over the past three years and rate inflation for cable viewers may get even worse. The escalation of retransmission fees – up to 4,500 percent this time – is alarming. Both the Plant Board and its customers should be asking themselves how much they’re willing to pay for duplicate network affiliates from Louisville and Lexington. Before heading back to the table in 2014, the utility needs to set some limits and seriously consider dropping selected stations in one or both cities or perhaps setting special rates for viewers who insist on expensive redundancy.
Earlier this year, chairwoman Burton said the board needs a strategic plan to control cable costs. She’s right. In olden days, the Plant Board vastly expanded the channel choices in local living rooms without significant rate increases. The selection is still growing steadily but the prices are climbing fast. The question isn’t just which channels to watch but how much they’re really worth.