It may be seem incongruous with the concept of localism, but existing Federal rules and regulations hamper my company's ability to offer its customers, all of whom reside in Minnesota, with broadcast stations that provide their state's news, weather and sports. Even though our systems and our customers are located in Minnesota, Hiawatha Broadband Communications (HBC) is within 55 miles of the broadcasters serving the LaCrosse/Eau Claire, Wisconsin DMA. This means the Wisconsin broadcasters can take advantage of the exclusivity rules to prevent HBC from offering in-state broadcast programming from other markets, such as the stations in the Twin Cities, Minnesota DMA.
In order for HBC to best serve its customers, we pay to carry the network stations in both of these markets, knowing that the LaCrosse/Eau Claire stations will force us to black out most of the programming on the Twin Cities stations. However, making local content available to our communities is important, so we pay an employee to monitor the Twin Cities stations, and when there is a breaking news event in Minnesota, like the 2007 bridge collapse in Twin Cities, and sporting events that involve Minnesota teams, we request from the LaCrosse/Eau Claire stations and the sports leagues that they not exercise their exclusivity during these times. As a small cable operator, these costs are hard to bear. Because we conducted a survey, we know our customers prefer to receive broadcast stations from Minnesota, but unless there are changes to current federal rules and regulations, like those offered up in the Television Freedom Act of 2007 (H.R. 2528), we'll continue to be hindered in our ability to offer true local broadcast programming.
HBC is a voice, video, and broadband provider serving approximately 10,000 customers in the Minnesota communities of Winona, St. Charles,Wabasha, Lewiston, Rollingstone and Stockton. The company has been in business for 10 ½ years and has 64 employees. In our service areas, we compete against Charter, Mediacom, US Cable, Qwest and others.
Unreasonable retransmission consent and other programming demands harm our customers. For the first time, we are being presented with retransmission contracts that demand per subscriber fees and the carriage of multicast feeds, and we continue to be burdened by exclusivity protections that are contractually imposed. At the same time, the programmers persist in forcing us to carry unwanted programming that our customers aren't interested in receiving, in order to offer the programming they want. The programmers also demand that their networks are placed on our most widely subscribed-to tiers. Due to federal rules and regulations and unrestrained media consolidation, the broadcasters and programmers can engage in abusive behavior against us, leading to higher cable rates, and more bloated tiers. If we had more flexibility in the way we obtain access to programming, we'd give our customers more choice by offering more tiers of programming.
We provide a competitive service in all the communities that we serve today, but unless federal rules and regulations change, it will become increasingly difficult for us to provide our customers in small markets and rural areas with advanced services at reasonable prices.
-- Gary W. Evans, President and CEO
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