Damariscotta signed a 15-year contract with Time Warner last week, while Newcastle continues to negotiate terms with the cable giant.
The Damariscotta Board of Selectmen set the town’s franchise fee at their Sept. 7 meeting.
After some discussion and input from residents and representatives of Time Warner and Lincoln County Television (LCTV), the board voted to approve a 15-year contract with a three percent fee and a $40,000 PEG grant.
The board voted 3-2 for the contract, with Selectmen Vicki Pinkham and Dave Wilbur opposed. Prior to the vote, the pair said they supported a shorter contract.
In Newcastle, the process is taking longer. A lengthy Sept. 12 public hearing before the Newcastle Board of Selectmen revealed a difference of opinions between members of the public, municipal officials and Time Warner, without any apparent consensus.
Damariscotta selectmen, prior to their vote, said the town is not required to hold a public hearing.
The issue centers around franchise fees and Public Education and Government (PEG) grants, two ways cable companies pay municipalities for the right to operate.
Time Warner currently pays a three percent franchise fee on all subscriber bills, collecting slightly over $10,000 last year.
Newcastle and Time Warner set the fee in the contract. The entities have the option to end the collection of franchise fees or adjust the fee within the range of 1-5 percent.
Time Warner passes franchise fees on to its subscribers in the form of a line item on monthly bills. At present, subscribers would pay a $2.10 monthly franchise fee on a theoretical $70 bill. The increase or decrease of a single percentage point would add or subtract $0.80.
Newcastle can also request a PEG grant from Time Warner, another expense the company passes on to customers.
A proposed $14,000-plus grant to buy recording equipment for Lincoln Academy would amount to a monthly addition of $0.19 to a $70 bill over a 15-year period.
Newcastle resident Chris Doherty, a member of the LCTV Board of Trustees, collected 77 signatures on a petition requesting a PEG grant to purchase recording equipment for the town office at a cost to be determined.
Doherty, a volunteer, currently uses a small digital video camera to film selectmen’s meetings for airing on LCTV.
Time Warner has the option to absorb the fees and grants instead of passing them directly to customers, although the company, without exception, passes the fees directly to customers, Shelley Winchenbach, Time Warner’s director of governmental relations, said.
The company’s choice irks LCTV Station Manager Mary Ellen Crowley, who called it a “political tool” and a marketing gimmick.
By breaking out the franchise fee as a separate line item, Time Warner can market a $19.95 package that actually costs more after the inclusion of the franchise fee and other additional costs.
Crowley likened it to an airline that advertised trans-Pacific flights for $250, neglecting to mention a $600-plus fuel surcharge.
The franchise fee and the PEG grants represent part of “the cost of doing business,” not unlike labor costs or any other expense, Crowley said.
“What Time Warner chooses to charge cable subscribers is totally up to [Time Warner] and doesn’t have anything to do with” the town’s requests, Crowley said.
Ultimately, the market will decide what Time Warner customers pay, Crowley argued. “They have to be competitive with the satellite company,” she said.
Winchenbach said “every other cable company” passes on the fees, too.
Others at the public hearing had more general complaints.
Lynn Norris, a Newcastle resident, said she pays $20.89 for Time Warner’s basic, 21-channel package. Of the 21 channels, however, more than half are “useless,” Norris said.
The package includes four shopping channels (including a French language shopping channel), three empty channels, a second French language channel and “three Fox affiliates” specializing in reruns of the same programs, Norris said, leaving “10 functional channels.”
Norris particularly objected to the removal of a C-SPAN channel from the basic package. Norris said she contacted Time Warner with her concerns and was told she could get the channel back if she upgraded to a higher-priced package.
“On a fixed income, this is it. I can’t pay more,” Norris said.
If the situation fails to improve, “I’ll cut the thing off and watch Free Speech TV,” Norris said, referring to an online service. “I don’t think I should be paying for half of 21 channels.”
Selectwoman Ellen McFarland also chided Time Warner, reinforcing Crowley and Norris’s arguments.
“You should pay… for the privilege of having a contract to provide and sell your product in this town,” McFarland said. “It’s really not a tax,” she said. “It’s a rent. It’s a cost for doing business here.”
“It’s a waste for [customers] to purchase channels they have no interest in watching,” McFarland said.
McFarland and Chairman Brian Foote also raised questions about Time Warner’s customer service. Both said they or people they know have had frustrating experiences, failing to receive prompt replies from the company, receiving unsatisfactory responses or not receiving any acknowledgment at all.
Foote, an executive at Lincoln County Healthcare, said he had to threaten to switch to another company to get Time Warner to address issues at Miles Memorial Hospital.
“There has to be an ability for consumers to lobby you folks… so they don’t just get lip service,” McFarland said. “It isn’t all about money. It’s about how you respond to people.”
Newcastle Town Administrator Ron Grenier said residents could contact the town if they’re unable to reach Time Warner or fail to receive an adequate response from the company.
The contract the entities are negotiating includes customer service and “rights of individuals” clauses, as well as “penalty language” to address violations, and Grenier can act as an intermediary for local customers, he said.
The selectmen will resume discussion of the issue at their Mon., Sept. 26 meeting. Grenier expects a vote during that meeting, he said.
