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Mediacom adds "Local Broadcast Surcharge" to bills to cope with increasing television fees

Increasing fees charged by local television broadcast companies has prompted Mediacom to add a “local broadcast surcharge” to the bills of customers who have local television stations in their programming package, it says.

Mediacom, which provides telephone, Internet and television service in 22 states, sent notices to customers this month announcing the change. Those customers also will see an additional $1.09 to their bills beginning with their next billing cycle.

The change will not impact costs of Internet or phone subscriptions.

Phyllis Peters, Mediacom’s communications director, said that the fees broadcasters charge are the company’s single-biggest expense, climbing to an average of 12 percent per year.

“We’ve worked to find other places to close the gap. We’re realizing more efficiencies in our operational expenses by using new technology, we’re streamlining where we can, but it’s becoming increasingly difficult to absorb the increases that the broadcast television stations demand each year,” Peters said. “The owners are asking for more and more money to carry their programming.”

There are two main contributors to the increase in programming fees, she says — sports broadcasting and local affiliate broadcasting.

“There are two real drivers of the increasing costs,” Peters said, “local television stations and sports media charging more for their programming.”

Traditionally, television stations were able to survive off advertising revenues, but as those have slumped, the business model has shifted to add programming fees.

The Albany Herald contacted the parent companies of the three local broadcast television stations in the Albany market, Raycom Media (WALB), Barrington Media (WFXL) and Gray Television (WCTV and WSWG).

“Our retransmission fees haven’t changed in a while, so it’s hard for me to believe that any rate increase by Mediacom is a reflection on us,” Rebecca Bryan, vice president and chief legal counsel for Raycom Media said.

Bob Prather, the president and chief operating officer of Gray TV, said that distributors like Mediacom pay much more for cable programming than they do for the local broadcast content, adding that if anything, the local fees being charged are likely too low.

“The truth is, the fees to the broadcasters are only a tiny portion of what they’re paying for their cable content,” said Prather, who also is the chief executive officer of Southern Community Newspapers, the parent company of the Albany Herald. “Frankly, I think the fees are too low.”

Warren Spector, the chief financial officer for Barrington Media, was out of the office and unavailable for comment Thursday.

The media landscape has shifted with new technologies, which has led to battles between programmers and content distributors. Earlier this week, News Corp. threatened to pull Fox Network off the public airwaves and form a pay-cable network if the courts didn’t block Aereo Inc., a web startup, from charging a subscription for transmitting Fox’s broadcasts without permission.

“If we can’t have our rights properly protected through those legal and political avenues, we will pursue business solutions. One such business solution would be to take the network and turn it into a subscription service,” said News Corp’s chief operating officer, Chase Carey, speaking at the National Association of Broadcasters show in Las Vegas.

The television industry is closely watching the case to see whether it could disrupt the traditional TV model. The industry sees Aereo and other similar services as a threat to its ability to control subscription fees and generate advertising income, its two main sources of revenue.

Aereo could cut the numbers of people who need or want a more expensive cable video subscription, which would eat into an estimated $3 billion that broadcasters will reap this year from cable and satellite systems in so-called retransmission fees, according to a projection by research firm SNL Kagan.

“It is clear that the broadcast business needs a dual revenue stream from both ad and subscription to be viable,” Carey said.

Peters said that Mediacom is changing the way it passes those broadcasting surcharges along to customers, a move meant to be more fair, she says.

The company used to take the increases in programming costs and spread those over its entire customer base regardless of where its subscribers reside. But because the programming fees often vary based a customer’s geographic location, Peters said, the heads at Mediacom felt it more fair to pass along the fees of the local broadcasters to customers in the area served by those broadcasters.

“There are some places where the surcharge will end up being about $2.93, which is a rather large difference from $1.09 that will impact customers in Albany,” Peters said. “It’s not fair to force those customers who live in areas where the fees are cheaper to pay a higher surcharge.”

So far, there is no check, Peters says, that would keep broadcasters from continually raising their fees each year — a tactic Mediacom wants to curtail through participation in an online petition available through its website.

Reuters News Service contributed to this report.

Comments

Sherwood_Eagle_Alum 1 year ago

I wish I could get a reverse surcharge anytime my Internet goes down.

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mrcvsjr 1 year ago

I concur. Since the wind is beginning to pick up and the storm is headed our way, the cable will soon be out and then we will have to deal with their useless customer service.

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Somebody 1 year ago

The same thing will happen if you have a satellite dish so don't feel bad. Besides the cable company has to pay those fees regardless whether your cable goes out or not.

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Somebody 1 year ago

Ironically my cable and internet was working fine during the so called storm, but my electricity went out, so without electricity cable being on didn't do me any good. I had rather my cable had gone out., I can always watch a dvd or a pre recorded ballgame.

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agirl_25 1 year ago

When my satellite internet goes down I call and give them a fit. I demand credit for time down when it is not Mother Nature causing it, ie. high winds and rain knocking out the transmission. I even got so sick of calling them that I had them send me one of the notebooks the call centers use to troubleshoot so now I do my own. Once a connection went bad on the equipment and after 2 weeks of waiting for them to send out a tech to fix it my husband fixed it. I contacted the Maryland Attorney General's office and reported the horrendous service and when the ISP contacted me I demanded 4 months of free service for my husband's work. I got it too.

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dmyers80 1 year ago

if they do that, they'll end up paying you to have mediacom service! lol

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GeeGee 1 year ago

I am thinking about going with Direct TV. It is wonderful and you get so much more. They are pathetic, but the rates have been stable for a while.

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Somebody 1 year ago

I had a friend that had direct TV and he was unhappy with it. He lost signal everytime it rained, once he got hit by lightning and was without service for a month, and then the price went up after a period of time. He didn't read the fine print of the contract he signed. He said never again.

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Bulldawg 1 year ago

Well, your friend should have read the fine print. I am sure the term "intoductory rate" was on the contract.

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FryarTuk 1 year ago

The issue here is that the city of Albany could allow WG&L to provide fiber optic cable and internet service to consumers. WG&L already has the service on line for city, county, county schools and PPHS. It is a fantastic service. Why can't that be provided to the city WG&L consumers? Another example how the commissioners operate out of their lower bowels instead of their cerebella.

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Somebody 1 year ago

As if WG&L has great uninterupted service. My electricity goes out more than my cable does, and they are not above raising their rates all the time either.

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FryarTuk 1 year ago

No, it is not perfect but it is 1000 times better than Mediacom. My internet at home goes out constantly. When the wind blows my service blinks on and off. When it rains it is just off until everything dries. The entire Merry Acres area has significant problems. Service calls are wretched when they come. I am able to reach people on the telephone eventually but it always results in a service call from a person's with intellectual margins beginning with a stump to a stump grinder. As for rates at WG&L they are among the lowest in the state and certainly lower than GA power.

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agirl_25 1 year ago

I have been thinking maybe we will get Dish TV because we live out in the woods and have the big satellite dish so have a huge variety of programs. People's opinions differ as to which to get...Dish or Direct. I have heard some good things about Dish TV. I read you can bundle with Dish, which would be kind of nice to have TV and internet together but I would miss the variety the big dish offers.

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Sister_Ruby 1 year ago

It's going to be quieter around my house without cable TV.

I'll just have to play my old soul and R&B records instead.

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FryarTuk 1 year ago

Remember, this is the kind of service you get with the City Commissioners making decisions about utilties. When they take over WG&L don't be surprised if we have a lot of problems with service. If you like Mediacom and ABY police department administration you gonna love your new WG&L under Tommie Postell, Jr. Langstaff, Chris The Piker, Climbing Ivy Hines and Milquetoast Mayretta.

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Abytaxpayer 1 year ago

Amen...but hey maybe the "Leaders" will get new laptops from WG&L too. Those mediacom laptops are getting old.

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Somebody 1 year ago

What Mediacom laptops? I am so sick of hearing about that. Anyway I thought the city commission sent those back a week after they got them, or at least they were going to. I never saw the big deal in that anyway, they were just laptops, not like they were giving them BMW's. Funny thing is, had WALB or some other company had donated them nobody would have said anything about it.

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FryarTuk 1 year ago

Those laptops were not sent back with the exception of one commissioner. Most of them wound up at pawn shops. (lol) If you don't see any big deal in city contractors giving city commissioners $800 to $1000 gifts you fit right in with the commission. Funny thing is Jim Wilcox and WALB would never have done that even if they were a city contractor. Funny thing is why in the hell does a commissioner accept gifts from a city contractor knowing it's unethical and illegal.

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agirl_25 1 year ago

Ohhhh is the laptop story a good one? Speaking of laptops, someone told me that all the kids in high school, or maybe just seniors, got new laptops provided by the county. All the kids had to pay was a small fee for insurance, about $15 I think she said. Seems a lot of those laptops were unfortunately "stolen"....sniff. Do they give them to the students in DoCo? This was in another county.

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Bulldawg 1 year ago

Very true, Fryar. BTW the play on the names is priceless. :)

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hotdog 1 year ago

That's the bigges crock of b.s. I have ever heard....what happened to the de regulation of cable TV actually DECREASING cable costs??

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VietVet1 1 year ago

Sock it to you, sock it to you, sock it to you

Kind of remindes me of Laugh In!!

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RedEric 1 year ago

Isn't it amazing how people and groups just blatantly lie and really don't care if you find out or not. Apparently you count for nothing in their book. And in the Bible Belt too. I bet these liars are deacons in their gigantic block long churches or even bishops like our local Phoney.

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Sally_O 1 year ago

They ain't lying, The cable companies don't get those channels for free. The networks are always raising the programming fees and it affects all cable companies and Satellite companies. They ain't doing what no other business wouldn't do and that is pass the cost over to the customers. That is why some satellie companies dropped some channels to avoid paying more for those channels.

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Bulldawg 1 year ago

I guess they ain't told you not use ain't when you are writing or talking.

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Sally_O 1 year ago

Just like they ain't told you not to talk with your mouth full.

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FryarTuk 1 year ago

No, they are " lying " and are in wait for you too. The City could require stricter standards or they could encourage competition which cures a lot of supervisory needs. " The issue here is that the city of Albany could allow WG&L to provide fiber optic cable and internet service to consumers. WG&L already has the service on line for city, county, county schools and PPHS. It is a fantastic service. Why can't that be provided to the city WG&L consumers? Another example how the commissioners operate out of their lower bowels instead of their cerebella." (from above)

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Sally_O 1 year ago

No they are not lying because I have a cousin that works for Comcast cable and they have the same problem with network providers raising programming fees on them. Ask Dish network why they dropped some of their channels off their line-up. It was because the networks wanted to raise their programming fees. So instead of raisinbg their fees they elected to drop them off their line-up, but then customers complained about that as well.

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FryarTuk 1 year ago

Yes, they are lying. I have Dish network at my Lake Blackshear cabin and it has excellent service and the only change in my $32.95 a month service is the addition of a bunch of food channels that I do not watch but there was no increase in fees.

Why don't you address the real point here?

" The issue here is that the city of Albany could allow WG&L to provide fiber optic cable and internet service to consumers. WG&L already has the service on line for city, county, county schools and PPHS. It is a fantastic service. Why can't that be provided to the city WG&L consumers? Another example how the commissioners operate out of their lower bowels instead of their cerebella." (from above)

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Sally_O 1 year ago

No they are not lying. You say Dish Network added a few Food channels at no additional charge, well that may be true on some small scale network spinoff of a channel that already exist on the lineup, but most of your bigger network channels charge a fee based on subscriber count and Dish Network dropped some channels because of those incresed fees. It was on the local news WALB & Fox 31. Mediacom at one point dropped Peachtree TV because of increased fees and Direct TV or dish (Can't remember which one) did the same thing, but Mediacom ended up putting them back on. The city of Albany had already done a study to see if it was feasible for them to get into cable and the study came up negative.

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FryarTuk 1 year ago

Sal, I see you got some skin in the game. Okay. No biggie.

They are lying and you are avoiding the issue.

You say: (Can't remember which one) .

Work on your memory kid before you start making those sorts of statement.

Sal says: The city of Albany had already done a study to see if it was feasible for them to get into cable and the study came up negative.

Frankly, if the City did a study I am glad they stayed out of the Cable business. They can't use laptops, and I darn don't want them putzing around with my cable.

Speak to the real issue: There is already a cable service in place at WG&L, a fiber optic cable and internet service that is fantastic. The City never examined the expansion of the service to consumers. If the system was made available throughout the city it would blow the doors off that the crystal television and internet pestilence Mediacom screws us with.

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Sally_O 1 year ago

If you get such great service from Dish Network why are you concerned with Mediacom in the first place? And If it makes you feel better to say they are lying then more power to you, my cousin says they are telling the truth and he works for comcast so i think i will take his word over yours.

BTW regarding my memory, I was refering to a story over a year ago, sorry I didn't take notes. Far as I am concerned this discussion is closed.

P.S. Perhaps WG&L should get us some new power lines to replace the pestilence WG&L screws us with. Maybe then the electricity in my neighborhood wouldn't go out everytime it drizzles.

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FryarTuk 1 year ago

Sal, memory is not your long suit is it? The Dish service is subscribed at my cabin at Lake Blackshear. I have the distinct pleasure of living in the City of Albany where I suffer with Mediacom. I think if you will review the thread you will see the remarks were directed at Mediacom's honesty. You yet have not addressed the issue of fiber optic cable and internet. As for WG&L service complaints you're grasping at straws if not fabricating cover. Give your cousin my regards.

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Somebody 1 year ago

Gee Ft give it a rest already, Mediacom sucks! WG&L rules! We get it, feel better now? Gees! On to the next squawk.

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FryarTuk 1 year ago

Well, it's raining and the internet is on again, off again, on again, off again.

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Brother_Love 1 year ago

Poor boy, Mediacom making him suffer. Looks like reading is not one of your strong points either Fryar Turk, I believe Miss Sally said she through with this conversation, but I guess you gots to get the last word in because it makes you feel good and tough inside, make you feel like the big cheese. You say you got Dish service at Blackshear, what keeping you from getting Dish service in Albany? I got Direct Tv so I don't worry about it. One other thing, your words say you don't like Albany, well there are highways leading out of Albany to the north, south, east and west. Feel free to take either one you like.

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FryarTuk 1 year ago

On again? Let's see. Bro, it looks like your reading problem is you read between the lines where nothing is printed. If you want to give something a rest, give it a rest. Get lost in other words. But you are right WG&L rules, Mediacom sucks and a satellite doesn't work through the tall pines on my property or I would have Dish. Now if you don't like reading the hard print just go to another blog while you're picking your nose and scratching your arse.

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Brother_Love 1 year ago

I think you can't read, I ain't said nothing about Mediacom sucks or WG&L rules, you blinded by something, maybe that snot coming out of your nose. Excuses! Excuses! I got tall pines on my property and my Direct TV works fine. Your just looking for excuses to moan & groan about everything in the city. i never see you happy about anything. You're just a miserable SOB. Like I said before, the highways are open in all directions.

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FryarTuk 1 year ago

An SOB I might be but I am not miserable. And unlike you my daddy is not my brother. Folks have asked you about your name of Brother_Love, I'll bet your sisters and other women folk in your family could give us the reasons. What do you think?

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agirl_25 1 year ago

GASP!!!!! Red, say it ain't so...hahahaha... a phony deacon...naw...can't believe that. How funny!! I bet he dresses to the 9's, and drives a big car, huh?

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B4it 1 year ago

The only way to lower the cost of cable or satelite TV is for the masses to start canceling their services. I think they are at a tipping point. If they continue to raise the price, many will start canceling the service = not enough value to justify the expense.

Also, isn't it ironic that the ad channels pay to have their products shown, and then we pay the program providers to show them. There are hundreds of other channels provided, but only a very few even worth watching.

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Sally_O 1 year ago

Another way would be for the network channels to stop charging the cable companies for airing their programming. After all the networks get a lot of revenue money from sponsors for running their TV ads nationally and they can charge a hefty price based on the ratings that network brings in.

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FryarTuk 1 year ago

Another way is for the City Commission to do its job.

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whattheheck 1 year ago

"We’ve worked to find other places to close the gap. We’re realizing more efficiencies in our operational expenses by using new technology, we’re streamlining where we can, but it’s becoming increasingly difficult to absorb the increases that the broadcast television stations demand each year,”

Almost sounds like what Joel was saying yesterday on Phoebe vs sequester, doesn't it?

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scooby62 1 year ago

How do you know a politician is lying? His lips are moving.

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FryarTuk 1 year ago

Service Unavailable ... just popped up. I think Mediacom knows my feelings. Proof's in the pudding.

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Somebody 1 year ago

My cable and internet has worked fine all week, only issue I had was when my electricity went out the other night during that little rain.

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FryarTuk 1 year ago

Well, just wait until WG&L is controlled by the Commissioners that selected Mediacom and you'll really be excited. Then when they spend the $60 million dollars in MEAG reserves you will be over the top. Then when GA Power comes looking for ABY's part of Plant Vogtle you will be so pleased.

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FryarTuk 1 year ago

Internet back on line. Went to Lake Cabin after church to watch Masters' finish on Dish. A lot of disappointed people in the neighborhood due to problems with Mediacom during weather. As I say, it would be nice to have the fiber optics available for all consumers.

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FryarTuk 1 year ago

Service Unavailable

Just popped up. I spoke too soon. CIAO!

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