Karen Peterson: The public has a right to know Click’s fees

Staff writerApril 6, 2014 

Last Sunday, we ran a story about Tacoma’s public cable system. It began with a bold, front-page headline and went on to fill a page and a half inside the paper.

All of that ink was spilled, essentially, to divulge one simple number — 300 percent. That’s how much we believe Seattle-based Fisher Communications raised its fees to Tacoma’s cable system, so Click could air the local ABC-affiliate, KOMO, and associated channels. The price spike happened in three short years.

Three hundred percent is the answer to a simple question we asked more than a year ago. In a very public fight, Click resisted a rate increase, and Fisher yanked KOMO from Click customers for a month. Click eventually caved to what they called an “unreasonable” increase.

Our question: What was the increase?

Getting an answer should have been simple. Click is a government agency, so we asked for its retransmission contracts with Fisher going back a few years. To compare, we also requested Click’s contracts with other local broadcasters.

The city said it would release them, but had agreed to notify broadcasters if there was any threat of public disclosure. Once notified, broadcasters lawyered up, raced to court and got an order prohibiting the release.

We continue to press for their release through an appeal — now before the state Court of Appeals.

In addition to locking up the contracts, the judge also locked up documents “related” to the contracts. That meant the city couldn’t divulge even the amount of checks made out to the broadcasters.

Keeping those documents secret sets a dangerous precedent. State law is clear that taxpayers get to see who their local governments write checks to and for how much.

It’s information about those transactions that the city, apparently inadvertently, gave out to another requester who asked about all the city’s contracts. TNT reporter Kate Martin found among them amounts paid to broadcasters. She used them to calculate the amount Click was paying broadcasters, per-subscriber, to retransmit their signals.

That’s what led to last week’s story.

In our minds, the story comes a year late. But making the information public remains important.

Ratepayers of a public cable company are the owners of the system and should know what’s behind their rate increases. Click has raised rates five times since 2010 and is asking for a sixth hike.

Our more detailed information confirms why. Local broadcasters — who once shared their channels for free — now charge ever-higher retransmission fees. It’s a gold mine in their new business model.

National cable programmers — ESPN, Comedy Central and the rest — are increasing fees, as well. The rates they charge are easier to find. A simple Google search turns up 2013 monthly per-subscriber rates of $5.54 for ESPN and $1.24 for Turner Network Television.

Click isn’t alone in passing along higher rates to customers. The same thing is happening to people who subscribe to Comcast and other cable networks. This story offers a peek into what’s happening to their bills, as well.

But beyond Click’s 20,000 cable customers, every customer of Tacoma Public Utilities and citizen of Tacoma has a stake in this cable company and how it’s run. They all helped to pay for its infrastructure. And when Click rates don’t cover its costs, they all bear the losses.

In the end, the city as a whole must decide if it belongs in the cable business. Having detailed information helps citizens make that decision.

City and Click officials — threatened by the broadcasters that disclosure of the retransmission rates might cause them to sue, to raise rates or to pull out of the network altogether — pressed us to not publish our story. They gave us a 12-point memo about it. If the TNT publishes, it does so “knowing that it could lead to Click!’s demise,” the memo said.

Click has challenges to its long-term viability, but our story isn’t one of them.

As an independent cable operator, Click struggles to keep up with programming costs and pricey technology advances. It has a tough private competitor in Comcast, not to mention Netflix, Hulu, etc. It is losing subscribers. More than 700 small cable companies have gone out of business in the past five years.

As for the broadcasters, it’s hard to blame our disclosure for their next rate increase. They’ve gone up dramatically in recent years, even when the rates were secret. If anything, disclosing their hefty increases may cause them to slow down. If not, the public may perceive their ultimate motive as piracy rather than mere profit.

This much is clear: Broadcasters want to keep the rates hidden. They told the judge the rates were “trade secrets,” known to virtually no one. No one, that is, except every broadcaster and the big cable companies that operate in markets across the country.

Left out of the trade non-secrets are independent cable companies like Click. Even they should be able to find a consultant who can advise them of the going rates for retransmission fees.

The only people who really didn’t know the fees being charged our public utility were the owners — ratepayers and taxpayers.

We believe making rates public levels the playing field and will lead to better decisions about Click’s future.

Like it or not, Click is a public cable company. That has its advantages, but also comes with responsibilities. One of them is transparency.

Click — and the broadcasters — should have anticipated that as a cost of doing business.

Karen Peterson: 253-597-8434 karen.peterson@thenewstribune.com

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