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Updates

Why do people think Gigabit TV is priced higher than its Competitors?

9:33AM June 29, 2018

I have had a number of people ask me why our TV costs are higher than our competitors.  In realty, they are very close in price for ONE reason:

WE DON'T ADD FEES!

This recent article points out that consumers very rarely know how much their cable bills will be. 

https://www.consumerreports.org/tv-service/cable-tv-sneaky-fees-what-the-fee/

Here is a list of the Fees Consumer Reports says are on our competitor's cable bills that are generally above their advertised prices:

Broadcast TV Fee, $4 to $11
Networks such as ABC and Fox have always charged cable companies for content—and yet somehow that's not baked into the advertised price.

Sports Surcharge, $7 to $12
This pays for regional sports networks, but no one tells you that some are owned by the cable companies themselves.

HD Technology Fees, $10
The HD fee persists as an add-on years after nearly all programming has switched to high-def.

Set-Top Box/Receiver Fees, $7 to $13
You have to rent your cable box and maybe the remote control. Over a few years, these charges can easily add up to more than you paid for the TV itself.

DVR Service, $13 to $25
This is often the biggest added fee in a cable TV bill. It's what you're charged for the ability to record shows.

Our Pricing Model:

We have a very simple pricing model at Gigabit Minnesota and here is a detailed description of our prices:

1)  Fiber Connection Fee ($19.95) - This is the cost to gather the content from all the providers, transport it to every home and support the service on an ongoing basis.

2)  Content Fees ($15.95 or $85.95) - This is the actual cost of the content or channels we provide in the two packages we offer.  This is a true cost with no profit margin built in.  We do this so that you know what the content costs me to provide the channels to you.  This is an area that has increased dramatically since we took over the fiber assets in your community.  I used to pay around $.13 per local channel to have the "free" channel on my system.  These costs have increased to over $4.00 per local channel for each subscriber to our service.  The other channels have increased also over the last 4 years at a rate much higher than inflation. I'd love to hear what channels you think we should consider dropping to reduce the content costs of our bundles.

3)  Set Top Box Fee ($9.95 or $19.95) - We have 2 Set Top boxes we use to provide TV Service to you our customers.  Each TV in your home needs a Set Top Box currently.  We are looking for ways to provide TV using software based solutions, but the costs are substantial.  Each Set Top Box can cost us between $250.00 and $500.00.  We currently rent them to our customers at a rate of $9.95 and $19.95 per month and we are required to rent them as the content providers require security/encryption protections that could be compromised by selling these set top boxes.  Set Top box repair and replacement are the highest support costs in our organization.  The new Roku and TiVo solutions where you the consumer buys the Set Top are solutions we are considering.  I'd love your feedback or thoughts on these types of solutions.

4)  Taxes and Fees - Here are the various Taxes and Fees we list on our bills and who the money goes to:

Video PEG Fee - This Fee goes to the City you live in to support Government Channels.  Currently this is a $.50/month fee, but we have just been notified by the City of Rosemount that the fee will be increasing to $.75/month effective January 1, 2019.

FCC Regulatory Cable Fee - This Fee goes to the FCC to support the Federal Governments regulation of the Cable Industry.

City Franchise Fee - This is a 5% fee on Video service items (see items 1, 2 and 3 above) that goes to the City you live in granting us a Franchise Agreement to use community Right of Ways to build fiber to your homes and support the City's regulation of our company for Video services.

Taxes - Yes, the Federal Government, State of Minnesota and Dakota County all get a percentage of the Video service items that are collected by us and paid to the various government groups.

I said that we were simple, but after writing this, I wish it was simpler.  We believe in transparency and we believe we are the most transparent provider you can find. 

Please feel free to go to join.gigabitmn.com and comment and engage with us on what we can do better.  We are always looking for ways to improve and provide the best service we can provide.  Please share this information with your neighbors who use our competitors to show them why you have a better solution with us!

Jim Hickle, President Gigabit Minnesota


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