MCN Guest Blog

Shentel Cable Subs Face Viacom Blackout

3/28/2014 5:00 PM

 

Shentel, 110 years ago, was founded by a group of farmers to provide telephone service in rural communities in the Shenandoah Valley of Virginia.  While our business has evolved over the years to include advanced digital TV, high-speed Internet and digital phone services, we have remained true to our core mission of meeting the needs of consumers in rural communities.  Shentel’s Cable operations now provide service in Virginia, West Virginia, and Maryland.

Today, we are concerned that our ability to meet our consumers’ needs is at risk. Viacom has threatened to turn off its networks, including Nickelodeon, Comedy Central, VH-1 and MTV to 5.2 million subscribers across the country, including our customers in rural Virginia and West Virginia unless we agree to its demand for a price increase that is 40 times the rate of inflation.

We service rural communities where unemployment remains high and customers cannot afford this huge rate increase. In a time of economic downturn, one of the last “extras” a family can afford is more expensive cable television.

We have asked Viacom to justify their demand for a huge price increase. We haven’t received justification because there simply is none. Nielsen data actually show ratings and popularity of many of Viacom’s networks to be steadily in decline.

The programming choices offered by Viacom do not reflect the programming needs of rural communities and customers don’t want to pay for channels they do not watch.  There are lifestyle and taste differences in rural communities that we hope will one day be reflected in the programming choices of our customers.

Our customers care deeply about access to broadband which they are using increasingly for such necessities as distance learning and telemedicine. But when customers are forced to buy unwanted programming, their access to broadband is diminished.

Shentel is proud of the initial investment we made several years ago to build the broadband network in the region. We introduced broadband into many of these markets that never had it before because we understand the needs of these rural communities.

It is because we understand the needs of these communities that we cannot agree to Viacom’s demand for above-market price increases. We recognize that our decision to take a strong stance may hurt us with some of our customers in the short-term.  However, we believe that it would hurt us more in the long-term if we ignore the needs of our customers and allow Viacom to make unreasonable demands. Once one programmer is allowed to make an exorbitant rate hike it is only a matter of time before the next programmer will demand the same or an even greater increase.

Viacom’s actions cannot be considered in isolation. These threats and tactics have become endemic to the industry. Since 2012, large media companies have denied programming access to viewers in more than 200 cities when local cable television companies didn’t meet their demands.

We have worked hard over the years to bring broadband to our customers and to meet their need for affordable services. Today, our senior executives are angry that Viacom is not only threatening our ability to meet our customers’ needs but they show no sign of understanding the demographics or the unique challenges facing rural communities.

We understand that we are successful only if we take care of our customers. That has been the focus of this company for over a century and it will continue to drive our decisions as we move forward. If Viacom wants to be responsive to the needs of consumers it will leave its networks on while we finalize an agreement that is fair to all parties, including consumers, small cable companies and programmers.

Christopher S. Kyle is vice president of industry relations and regulatory for Shentel.

Editor’s Note: Viacom has confirmed that it continues to negotiate with the NCTC, but declined further comment.