Trouble in television land
Ever since New Day Broadband sent letters to its Quincy customers announcing that it would discontinue Discovery Network channels, including The Discovery Channel and Animal Planet, while at the same time hiking rates from $40 to $44.95, resident subscribers have been calling the broadband company and threatening insurrection.
Neal Schnog, chief executive officer at New Day is outraged himself that companies like Disney and ESPN “have been charging Comcast much less than small operators.” In much the same way, he said, “Discovery has realized they can use their monopoly.”
According to Schnog, Discovery is refusing to sell its programming through the national cable television buying co-op, which is where New Day gets its programming.
It doesn’t have to honor the co-op for new operators he said. Schnog’s contention is that New Day isn’t a new operator, because the Quincy cable system has been a part of the national buying co-op since 1963.
Discovery doesn’t agree and, further, like many companies, it forces “bundled” buying —which means New Day has to take Discovery’s travel channel along with Animal Planet, for example.
Schnog said that 10 years ago ABC “was one of the worst offenders,” but now it is allowing him to go into the co-op to get the best pricing. “For as big as they are,” he said, “at least they’ve been commercially reasonable.”
Discovery’s refusal to allow New Day to purchase through the co-op has nearly doubled the cost of buying Discovery Network programming.
Schnog has finally decided to take a stand. “I believe in the free market,” he said, “and I don’t generally rail against big companies,” but he feels he’s “left with little choice and few options.”
Currently, Schnog is consulting with legal counsel about how to proceed with Discovery, and he is reluctant to talk further about any future legal proceedings against the network.
Schnog also addressed the rate increase head on: “The Quincy system has had some of the lowest rates for ages — arbitrarily low — it didn’t provide for reinvestment.”
New Day took over the local, community-owned cooperative cable system that has been running in Quincy since 1963. Schnog said if New Day hadn’t taken it over and upgraded it substantially, it wouldn’t have survived.
Further, New Day has put money into upgrading the old system, resulting in a much better picture quality for consumers.
Even with the rate increase, Quincy’s rates are substantially lower than those in the rest of the country according to Schnog. Average rates run $55 –$60 per month.
Schnog characterized New Day as a “small system (that) provides good, everyday video service at a reasonable price, with no contracts or deals that expire.”
He said the company’s primary business “isn’t video, but high-speed Internet.”
New Day has “invested in a substantial hybrid fiber coaxial network.” The system is “capable of delivering download speeds exceeding 10 megabytes to 95 percent of Quincy.”
New Day owns the system in Portola, as well. High-speed Internet became available May 11. “There is enough bandwidth that people can have 100 times dial-up” speeds, and it’s “200 percent faster than DSL and priced less,” said Schnog. Also, the company will soon provide a back-up power supply.
Schnog sees high-speed broadband as a potential solution for rural consumers in escaping the grip of video conglomerates, as well. He hopes that in the future people can buy their video programming over the Internet. “The model will change,” he said, “high-speed Internet is the real key for consumers.”