Tacoma’s Click cable subscribers could pay about 10 percent more starting in July if the City Council approves a rate increase this month.
Officials say the increase, which would be the sixth since 2010, is necessary because of rising fees from programming providers.
Without the rate increase, city-owned Click would fall short of its 2013-2014 budget by $1.3 million. The rate increase is projected to raise $722,000 by the end of the year to help offset that shortfall. Tacoma Power would subsidize Click for the remaining amount, according to a city memo.
The utility board recommended changes to the rate structure last month, which would raise Click’s most popular, 88-channel package from $48.29 to $52.99 per month — the same price as a similar package offered by Comcast. That package was $36 a month in 2010.
Comcast historically raises rates after Click does, utility officials said earlier this year.
Tacoma Public Utilities Director Bill Gaines said in a memo to the City Council that the fees from content providers are increasing faster than budget analysts had predicted.
About two-thirds of a subscriber’s bill pays for programming costs for channels including ESPN, Comedy Central and local broadcast stations.
The bulk of the fee increases are coming from sports channels such as ESPN and Fox Sports, said David Nelson, president of the Tacoma Public Utilities board.
“I am sure they (negotiators) are having a difficult time,” Nelson said Monday. “We are basically down to nine organizations that control content.”
Pam Burgess, business and operations manager for Click, said in the past five years, network owners have been asking for higher percentage increases each time contracts are open for negotiation.
“We don’t currently have any indication that it’s going to slow down,” she said.
Among those content providers are Seattle broadcasters, who charge Click what is called a retransmission consent fee to provide what are otherwise free, over-the-air television signals.
An analysis earlier this year by The News Tribune showed a precipitous climb in the fees that Click pays to broadcasters. In all, Click has paid at least $4.3 million for retransmission consent fees to five broadcasters from 2009 through 2013, according to The News Tribune’s review of public records and a for-pay government purchasing database.
Nelson said Seattle broadcasters will continue to ask for more and more money for retransmission consent fees.
“It’s inevitable. I’m sure they are going to come back to us pretty soon and raise rates,” Nelson said Monday. “We just haven’t heard anything lately about it.”
Nelson said the utility board is continuing to explore selling Click, but it cannot sell the system’s fiber-optic network that also allows Tacoma Power to operate its power grid.
“If the right offer came along, I think it would be a good thing,” he said.
The City Council will view a presentation on the proposed cable rate increase Tuesday and could vote on the increase as early as next week.
Gaines said in a recent memo that “continued rate increases, at least on an annual basis, are required to ensure proper recovery of cost increases.”Kate Martin: 253-597-8542 kate.martin@ thenewstribune.com @KateReports