Canadians will soon have more say about which television stations come into their homes after the country’s broadcast regulator came down on the side of consumers for the second time in a week.
The Canadian Radio-television and Telecommunications Commission ruled Friday that consumers should be able to subscribe to individual channels instead of expansive packages, a decision that hints at looser cable-TV subscription models. But there’s a catch – the fewer channels a subscriber signs up for, the more expensive each channel will be.
For example, customers who now pay 30 cents a channel for 250 channels could drop their subscription to 30 channels – but their cost per channel might jump to $1.50.
Consumers have long complained they are forced to pay for channels they don’t watch in order to receive the few they do, but cable and satellite companies have maintained it would be too difficult to offer them the ability to pick and choose.
But with Internet services such as Netflix and Hulu luring away traditional TV viewers, cable and satellite companies have little choice but to adapt. In that respect, the CRTC ruling sets the stage for deeper competition.
“Whether it’s Netflix or some other service, the point is that there’s a lot happening out there,” said Jeffrey Eisenach, a professor at Washington’s George Mason University Law School who specializes in broadcast competition and regulation. “What you are seeing here is a regulator that is acknowledging those challenges and trying to bring some stability to the situation.”
It’s the second consumer-friendly decision of the week for the CRTC, which earlier decided to kill the Local Programming Improvement Fund. The fund collected small amounts each month from cable and satellite companies – which was usually passed on to subscribers at a cost of about $25 a year – in order to fund local programming.
Friday’s precedent-setting decision was among the offshoots of a long-simmering dispute between Bell Media and a handful of the country’s smaller cable companies. While the sides recently agreed that the cable companies should be allowed to offer customers the ability to pick and choose, they couldn’t agree on pricing.
The cable companies wanted their wholesale prices to remain the same. But in siding with Bell, the commission determined that there could be a sliding scale that would mean customers who subscribe to more channels would pay less per channel.
Bell Media president Kevin Crull said consumers should expect flexibility from their television providers because of the agreement. While the ruling extended only to the cable companies named in the ruling, Mr. Crull said Bell would offer similar terms to other companies that offer its channels, such as TSN and MuchMusic, to consumers.
“They [consumers] should now have a lot more control and if their goal is to save money they should be able to do that,” he said. “We can let consumer behaviour dictate final outcomes. We find consumers watch a lot more than they think they do; they discover programming by surfing and looking through the guide.”
The cable companies – Bragg Communications Inc., the Canadian Cable Alliance Inc., Cogeco Cable LP and MTS Inc. – can now offer packages using Bell’s new pricing scheme. Bell said it would allow other cable companies to package its channels the same way, if they wish.
Rogers Communications Inc. isn’t so sure the changes will be good for consumers, arguing that the cost of less popular channels could increase exponentially because of the changes, making the introduction of any custom-tailored plans needlessly expensive.
There is no specific timeline for any changes.
Telus Corp., meanwhile, in a related decision, won the CRTC’s approval to keep its theme-pack model for subscribers. Telus offers sports as a separate sports theme package, and if Bell’s terms had been accepted by the CRTC it would have been forced to include TSN in its basic package. It could have spelled the end of customer-friendly theme packages at Telus.
“In our case, the decision is you can have the option to take on programming,” said Ted Woodhead, vice-president of telecom policy and regulatory affairs. “Customers should only take on the programming they actually desire to take.”