By K.B. Sherman, Contributing Writer
Shrewsbury – Michael Hale, Shrewsbury Electric and Cable Operations (SELCO) general manager, gave a status update to the Shrewsbury Board of Selectmen at their Dec. 22 meeting. As in previous years, Hale forecast increases in television rates.
On the electric side, said Hale, things are going very well. Rates will not need to be adjusted because of current cheap energy costs, and users will be able to provide sufficient revenue for the winter supplies.
On the cable side, however, things are very different. Costs continue to rise very rapidly from content providers – about 20 to 30 times the cost to them. This may be due to the ever-increasing rate in which television content is being split from channel providers and being made available through streaming video: the channel providers are “getting it while they can,” he said.
SELCO can drop channels or pass increased costs along to consumers. Beginning in January, contracts already locked in place will require a 53-cent increase for just basic service. Two other contracts are about to expire: AMC and NBC Universal. Further, in February, the TNT contract expires just as college basketball’s “March Madness” starts. AMC on SELCO may go dark in February because of disputes over the new contract costs. Negotiations are so contentious that complaints have been filed with cable oversight authorities. AMC is asking for rates that would move all channels to expanded basic – “the rates that would be off the charts,” said Hale. AMC is demanding a 10-year agreement, which today is unheard of since these days the rates move every 60 days or so.
“This would be fiscally irresponsible,” noted Hale, and would, he contended, raise rates for AMC content by about 400 percent, possibly also setting a precedent for other suppliers.
The current cable market is shifting to “skinny bundles” with just several channels in a group, but suppliers are fighting this. If SELCO does not agree, viewers would lose such shows as “The Walking Dead” unless they had access through Google or other applications. According to a survey done by SELCO, 87 percent of current users would not be willing to pay such a high rate for AMC and SELCO will have to decide what to do for its customers.
SELCO plans to raise its rate for Basic by $1 and Expanded by $6/month. Rate adjustment will be addressed in January versus February. However, the rates as of March will still be lower than almost all other providers in the state. And while TV rates will increase, phone rates will drop for “triple-play” customers. Phone and Internet service are still subsidizing video by over $1 million. However, Hale is concerned that this subsidy will disappear in 2-5 years because of huge cable rate increases as suppliers try to ameliorate their loses because of debundling content to answer streaming video use.
Comments from the selectmen were varied. Selectman Maurice DePalo urged SELCO to deploy a “Geek Squad” to deal with large commercial customers’ dissatisfaction with service. And Selectman Henry Fitzgerald urged greater signal bandwidth and complained that junk phone calls were making telephone use almost impossible. Hale reasserted that SELCO is trying to stay ahead of the curve in such ways as doubling system capacity and increasing speed again this summer.
“In five years? I have no idea what improvements are coming,” he said. Hale agreed that “no call” lists were a “joke” and noted different new approaches are being tried.
The board thanked Hale for the update.
