The TV pricing drama

It’s no mystery, and it’s certainly not a comedy

Remember when watching TV meant having to choose between ABC, NBC and CBS (and sometimes the public television station, when it was clear enough)? As we walked across the room to switch channels on a TV set encased in a wood-grain cabinet, we could not imagine a world where hundreds of channels existed, catering to viewers interested in sports, movies, home decorating, cooking, science fiction, cartoons, politics and everything in between.

While we have gained tremendous choice in our television viewing options, we have also lost any pricing stability. In fact, the only thing predictable about programming rates is that they will continue to increase for the foreseeable future.bigstock-Row-of-widescreen-HD-displays--22657049

Why do TV programming prices keep climbing?

A portion of the fee you pay for your TV package each month covers the equipment and personnel costs associated with delivering you the service. But a majority of your bill goes to pay the providers of the programming you love to watch — and that you don’t watch. Because of the way these companies (from CNN and FOX News to Disney Channel and ESPN) structure their contracts, we must pay them according to the number of subscribers we have, not the number of people who actually watch each channel.

A 2013 article in the New York Times1 offered ESPN as a good example. Only 1.36 million of the sports network’s 100 million subscribers, the article states, were tuned in during prime time hours April-June of 2013. Nonetheless, all 100 million paid ESPN’s programming fees those months as part of their monthly bill from their service provider.

ESPN is an easy target for a discussion on why TV subscription costs keep climbing. According to a recent Planet Money article on npr.org2, ESPN is the most expensive channel, charging service providers $5.54 per month per subscriber. That same article lists TNT at $1.33 and Disney Channel at $1.15. Rounding out the bottom of the list as the least expensive channels were Hallmark Channel at 6 cents and CMT Pure Country at a nickel per subscriber.*

But ESPN is not the only channel that continues to raise its rates. In fact, some of the biggest increases have come from the broadcasters of “local stations,” who traditionally allowed service providers to carry their signal at no charge. Now, each time service providers have to negotiate the retransmission consent agreements with these networks, their monthly price per subscriber goes up.

Is there a solution on the horizon?

Currently, providers like us are required to buy a bundle of several channels (and often place them in certain packages) in order to get the two or three most popular channels a programmer offers. Congress has considered legislation that would change such requirements, making it possible for subscribers to have options for paying only for those channels they want to watch.

Judging by past attempts at such legislation, it appears to be a longshot that mandated unbundling will happen any time soon. It also remains unclear if picking your channels a la carte would have a significant impact on your bill anyway. A study released last year by Needham Insights suggested that the fees per member charged by ESPN, for example, would soar to $30 under such a structure, based on the assumption that their number of subscribers would drop from 100 million to  approximately 20 million die-hard sports fans.

This could also spell an end for the smaller specialty channels that would not attract a large enough audience to generate the ad sales to support them.

What is our role?

As your telecommunications company, we are committed to providing you with the channel selections you want while doing all we can to maintain package prices. This will not be easy, and you will continue to see price increases in the future as the cost we pay for these channels keeps going up.

However, we want you to know that our eyes are on the bigger picture. Whatever happens in the future regarding how you buy and watch your favorite channels, we know that the most important part of that equation is the network for delivering the signal. Whether it’s traditional TV, media websites or “over the top” services like Netflix and Hulu, you must have a robust, reliable network to enjoy these services. And we are committed to providing the broadband connectivity to deliver all you demand — in whatever form that might take — for many years to come.

 

(1) “To Protect Its Empire, ESPN Stays on Offense,” by Richard Sandomir, James Andrew Miller and Steve Eder – New York Times, Aug. 26, 2013

(2) “The Most (And Least) Expensive Basic Cable Channels, In 1 Graph,” by Quoctrung Bui – Plant Money, NPR.org, Sept. 27, 2013

*These estimates are based on a study by SNL Kagan of fees paid by the large, nationwide providers, and do not reflect the exact cost we pay for these channels.

Wireless needs wires

Why your cell phone would not work without the wired landline network

When this company was formed decades ago, our mission was to provide reliable telephone service to our region. Telephone service was the single most important method of communicating quickly with family, businesses or emergency services — across town or across the country.

bigstock-Smartphone-application-concept-34815812Today there are more cell phones in America than there are people. Users talk trillions of minutes each year and send billions of text messages every month. With all this wireless connectivity, do we really need the wired network at all?

Absolutely. The copper and fiber lines that run overhead and underground through the networks of companies like ours play a critical role in moving signals between the more than 300,000 cell sites located across the country. When you use your cell phone to make a call or access the Internet, your connection spends part of its journey on the same network that makes landline calls and Internet connections possible.

“The wireline network is the backbone of our whole telecommunications system. We need wires.” Those were the words of U.S. Sen. Mark Pryor, D-Ark., who chairs the Subcommittee on Communications, Technology, and the Internet, in an interview last fall on C-Span (www.c-spanvideo.org/program/Pryor). AT&T CEO Randall Stephenson expressed a similar sentiment last year in a Forbes magazine article when he said, “The more wireless we become, the more fixed-line dependent we become.”

According to a Foundation for Rural Service whitepaper*, the components of a wireless phone network are:

Cell phone: The device you use to make the call

Cell site: A radio transceiver that connects the caller to the network

Mobile switching center: The “brains” that control all elements of the wireless network

Interexchange switching and transport network: The equipment that connects the wireless network to other wireless or wireline networks

The transport network is where we come in. Without our network of wires, your wireless phone calls would never be connected. So the next time you reach for your cell phone to make a call or check your email, remember that it’s the wireline companies like ours that are helping make that connection possible.

 *The whitepaper “Wireless Needs Wires: The Vital Role of Rural Networks in Completing the Call” was produced by the Foundation for Rural Service and authored by GVNW. To order a complimentary copy of the full paper, visit www.frs.org.

Make your home a hotspot!

Did you know you can make the power of the Internet available throughout your home? With a Wi-Fi network, your Internet connection is no longer confined to one computer.

When the broadband service coming into your home is connected to a wireless router, you can create a Wi-Fi network that allows you to get more benefit from the same service — just like a Wi-Fi hotspot you see in libraries, restaurants, malls, hotels and other public places.

bigstock-Home-Wifi-Network-Concept-41857123Many devices today are Wi-Fi enabled, ready to take advantage of your home’s network. This includes smartphones, tablets, laptops, e-readers, monitoring and security systems, gaming systems, televisions, thermostats and even appliances.

Unlock the power of your broadband Internet connection. As your telecommunications company, we can help you determine what you need to create a home Wi-Fi network.

Note: Are you a business owner who would like to set up a Wi-Fi network for your employees or customers? Contact us for more information.

 

Introducing your kids to email

Digital Citizenship

By Carissa Swenson

CarissaSwenson-smallEmail is an important communication method, with adults using it daily at work, in school and for personal needs. However, with so many ways to communicate, many children are drawn to interact through Facebook, Twitter and text messaging. It’s therefore important that we teach our children the value of email as a form of correspondence.

Consider the following guidelines for introducing your young one to email.

  • Contact your local telecommunications provider and ask them to set up a new email account for your child.
  • Talk to your child about how beneficial email can be for the future, and the importance of using it right now. They can use it for sharing ideas and tips, asking questions, assigning tasks to family members and even sending funny jokes.
  • Email your child a few times each week. Ask them about their ideas for weekend activities, send links to educational websites or even mention a recipe that you want to make together.
  • In the evening, open the emails together and demonstrate how the content is beneficial and sometimes couldn’t be shared through another method.
  • Try to foster an understanding that not all communication has to be done through social media, and that email will be an important part of their life in the years ahead.

Email is a great tool, but it also presents its own set of hazards. The benefits of educating your child about email outweigh the challenges, as long as you teach them these important guidelines:

  • Only open and reply to email from people you know.
  • If you receive an email from a company or a bank asking for information, never reply (and your child should inform you about this email as soon as possible).
  • Never share sensitive information, such as date of birth, social security number, physical address or passwords in an email.
  • Never open email attachments unless you are absolutely certain they are from a known source.

Put these tips to work and start teaching your child how to properly use email. It’s an important part of becoming a good digital citizen.

Carissa Swenson is the owner and technology specialist of TechTECS, a technology training, education, consulting and support company.

 

#ruraliscool

Share your photos, videos, thoughts and stories on your favorite social media channels, and use the #ruraliscool hashtag.

Simply add #ruraliscool to your posts on Instagram, Facebook, Twitter, Pinterest and YouTube. Your posts will help spread the word that our region offers a great lifestyle — and one that is supported by modern technology.

We are looking for photos and story ideas for possible use in future issues of this magazine. Share yours today!

The IP evolution

Regulations must change to accelerate advances in technology

Two letters — IP — are changing the way we connect as a society. Short for “Internet Protocol,” the term refers to the standardized method used to transmit information between devices across the Internet. This goes well beyond accessing websites on your computer. IP technology is used today for connecting everything from security systems to appliances, and it enables you to share photos, watch TV, chat over video and more.

As innovation continues to bring us new ways to use IP technology, it is important for industry regulations to support the adoption of that technology. As your telecommunications provider, we are working with other companies like ours across the U.S. to encourage changes in FCC rules that will help consumers take advantage of the IP evolution.

We are doing this work through NTCA—The Rural Broadband Association. In coming issues of this magazine, we will take a look at incentives NTCA is recommending to the FCC. In the March/April issue, we will explore the idea of universal support for standalone broadband service — and explain why current rules prevent us from being able to sell a broadband connection without some type of phone line bundled with it.

The IP evolution is here, and our mission is to ensure your home and community are ready for all the benefits it brings.

 

FCC addressing rural calling issues

Rural telecommunications providers work through NTCA to encourage government action

By working together and being involved in the regulatory process, rural telecommunications providers are seeing progress toward resolving rural calling issues.

NTCA—The Rural Broadband Association represents the voice of rural providers across America. For three years, NTCA has been working with the Federal Communications Commission (FCC) on the issue of rural call completion, where subscribers in rural areas report significant problems receiving long-distance or wireless calls on their landline phones. These problems include failed connections and poor call quality.

The problem appears to lie in the fact that some long-distance and wireless carriers, in an effort to cut costs, are contracting with third-party service providers to route phone calls into rural areas.

In its latest ruling toward the end of 2013, the FCC took steps that the NTCA described in a statement as “positive developments for rural consumers and their loved ones who have suffered the frustration or fear of a call not completing, lost business or endured public safety concerns because of circumstances beyond their control.”

Shirley Bloomfield

Shirley Bloomfield

Shirley Bloomfield, CEO of NTCA, expressed gratitude for the FCC’s efforts, adding “there is still much work to be done to ensure that no consumer will be cut off from critical communications, but NTCA is hopeful that this order will help to minimize consumer confusion by precluding false ringing, provide immediate incentives for providers to better manage completion of their calls, give the FCC a useful tool in identifying bad actors for enforcement, and serve as a springboard for further conversations about what else remains to be done to achieve truly universal and seamless connectivity.”

As your telecommunications provider, we will continue to keep you updated on this important issue through the pages of this magazine.