Pitcairn officials talk with Comcast to take over cable service
By Jacqueline Dell and Kyle Lawson
Published: Thursday, Oct. 3, 2013, 10:30 a.m.
Lacking on-demand service and a lineup of high-definition channels, Pitcairn Community Cable is struggling to keep up with its deep-pocketed cable and satellite TV competitors.
The number of subscribers has fallen to less than 600, and borough officials hope to sell what may be Pennsylvania's last municipally owned cable TV service to a larger provider.
A meeting was held last week with Comcast Corp. to discuss a potential buy out, but as of this week no deals had been made, said Councilman Kevin Dick, who leads the cable committee. The company, which is managed out of the borough building, hasn't been very profitable, he said, and the cost of programming is escalating.
“Since I've been involved, I haven't seen it make much money at all,” Dick said. “There has been a steady decline in profit. The company is in the red” as it works to pay off a loan for cable upgrades.
Comcast Spokesman Bob Grove declined to comment Tuesday on whether the company was negotiating with the borough.
Established in the 1950s, Pitcairn Community Cable flourished for decades as the only source of cable TV in the borough.
“Because of Pitcairn's location in the valley, it's hard to get a TV signal,” Council President John Prucnal said. “The citizens couldn't receive a signal and only got three channels.”
The cable service began with some makeshift equipment on top of a hill, on land the borough solicitor owned.
“They put telephone poles in the ground and put old house antennas down, and ran wires down from there into Pitcairn,” Councilman Orelio “Rollo” Vecchio said.
At one point, no competitors were allowed in town, Prucnal said. “Then, the satellites came out. We lost a few customers to them, and then Verizon got their foot in the door, and we lost a big majority of customers.”
Verizon Communications Inc. has offered its FiOS fiber-optic service in Pitcairn for about three and a half years, company spokesman Lee Gierczynski said. Pitcairn officials approved a franchise on Dec. 23, 2008.
FiOS TV, Internet and phone service costs $99.99 a month, while DirecTV sells a package with more than 285 channels for $86.99 a month. Pitcairn basic cable includes 90 channels — which includes seven high definition channels — for $45.50 per month. The most expensive package includes HBO and Showtime — the only two premium channels offered — in addition to internet access for $114.36.
“Our peak amount of clients was between 1,200 and 1,400,” said Jim Comunale, utility foreman for the cable company.
As of August, 576 Pitcairn residents subscribed to the service, Pitcairn Manager Malisa Migliori said. Revenue totaled $463,443 last year, and the company had $451,761 in expenses including about $281,000 for programming fees, $45,000 for salaries and wages and $56,000 for the cable upgrade loan.
“It was profitable when we had no competition. We are losing customers on average of 100 a year,” Councilman Doug Crothers said.
Dick said Pitcairn Community Cable lacks digital video recorder service, pay-per-view programming and an extensive lineup of premium channels.
“At one point, local channels didn't even charge” to have their programs carried on the cable service, he said. “But now they all do. It's a lot of money to keep upgrading and it's not feasible anymore.”
Prucnal said a half dozen communities statewide once ran their own cable TV companies, “but Pitcairn may actually be the last.”
It is uncommon for municipalities to provide cable service to residents, said Brian Herrmann, communications director of the Broadband Cable Association of Pennsylvania, a trade group based in Harrisburg. No numbers were available for how many communities might offer such services.
Cable industry consultant Stephen Effros said Pitcairn could be fortunate that Comcast has a presence in nearby Monroeville.
“If you had Comcast in an adjacent large community, then Comcast could say, ‘We will take it and rebuild it and connect to the existing plant we've got,' ” said Effros, of Washington, D.C.
It's difficult for a small town to compete with large cable providers, because the technology and the equipment is constantly changing, Effros said. Also, TV and broadband services are highly competitive, and involve negotiating with programmers and assembling and pricing service packages, he said.
Due to the loss of so many customers, “We will get to a point when we will have to shut it down,” Crothers said of the cable company.
Still, Bob Duncan of Duncan Communications Consulting, hired by the borough to help find a buyer, said the operation is an attractive asset with updated technology.
“It has a state-of-the-art, 860 megahertz system and it provides video and internet,” Duncan said. “It also has the capability to provide telephone service.”
Resident Carl Howard switched back to Pitcairn Community Cable TV and Internet after subscribing to Verizon FiOS for a while.
“I'm satisfied with it,”said Howard, also president of Pitcairn's historical society.
Vecchio said the cable company is “a service to the people of Pitcairn, especially the seniors. We're giving them a decent product for a fair price.”
Jacqueline Dell is a freelance writer. Kyle Lawson is a staff writer for Trib Total Media. He can be reached at 412-856-7400 or firstname.lastname@example.org.
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