Muscatine Power & Water's Stance on Recent Rate Increase and How You Can Positively Impact Future Potential Rate Increases
on Thursday, March 1, 2018
This week, the Muscatine Board of Water, Electric and Communications Trustees approved a request for an increase for MP&W’s most popular Digital TV packages, effective April 1, for $3-$7/month.
If you’re wondering how we got here, we’re happy to share that information. While we typically negotiate contracts with the various broadcasters every 3 years, contract expiration years are staggered, meaning we’re constantly negotiating with someone. Additionally, most programmer’s contracts have annual increases built-in for the off-years, too. All TV service providers (cable, satellite, online/streaming) have cost increases every year, but not all of those get reported to local news.
Though we negotiate very hard with programmers to be able to bring the best programming to our community, the fees we pay national programmers and local broadcast providers account for 77% of the cost of your TV packages. The minimal 23% left is used for operation and maintenance expense, as well as staff to support the service. This wasn’t always the case. When we started in the Cable TV business in the ‘90’s, programming fees were substantially lower as a percentage of total costs.
This increase is a pass-through from locally-operated television networks and national channels. This is just enough to cover the costs of programming content increases. In the end, we persevered in our negotiating efforts and worked hard to reduce the fees we’re forced to pay to bring programming content to the community. Unfortunately, the negotiations with broadcasters are very one-sided in favor of the broadcaster, but we were able to minimize the effect of the cost increases. Fortunately, and unlike satellite or streaming video services, MP&W is not-for-profit and our rates are designed to cover costs, not pay dividends to stockholders.
We don’t enjoy having to make rate increases and, frankly, we’re not happy about it, but did you know that existing federal laws give national TV programmers and local broadcast providers all the leverage against cable providers in contract negotiations? That’s right. Federal law gives them the power and forces utilities like ours to agree to sometimes unreasonable demands- including increasing prices and the addition of new content for a fee or facing the removal of programming we know you want.
Want to know what you can do about it? Make your voice heard in Washington D.C. Contact our U.S. Senators and Representatives and let them know how you feel about broadcasters having this much control.
Here’s the good news- we’re here for you, our local community. We remain focused on maintaining competitive rates for you and providing local service and support. We continue to make significant investments in infrastructure and upgrades within the community, including our new ultra-competitive fiber technology, giving our community a huge advantage. MP&W and our employees individually, support our community with our time, energy, and money. The three utilities provide millions in free or reduced services for public properties. We are not a monopoly or the only game in town, but we are happy and beyond proud to be a part of this community and thankful that this community chooses us everyday!
- mpw digitaltv