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Consumer advocates want the CRTC to prohibit TV service providers from taking bundling discounts away from customers who opt for mandated, cut-rate, basic service.Noraznen Azit/Getty Images/iStockphoto

The national broadcast regulator should ban TV providers from removing bundling discounts from customers who opt for mandated, cut-rate, basic TV service, consumer groups told hearings Thursday.

Removing the discounts amounts to discrimination and runs contrary to the intent of new rules designed to provide consumers with greater choice and flexibility in buying TV services, the Public Interest Advocacy Centre said.

"We believe practices such as the removing of the availability of bundling discounts and of certain services, including video-on-demand and free previews, subject certain basic service subscribers to an undue disadvantage, which is not justified," PIAC executive director John Lawford told the Canadian Radio-television and Telecommunications Commission.

"These practices deter customers from switching or subscribing to the skinny basic."

The CRTC is holding hearings this week examining the rollout of so-called skinny basic TV services after receiving hundreds of consumer complaints about how the TV providers were offering the $25 basic packages that were mandated effective Mar. 1.

Consumers have been disadvantaged by restrictions some of the TV providers imposed on customers who wanted to switch from more expensive channel packages, said PIAC legal counsel Alysia Lau, who argued that cable and satellite companies can't be counted on to unilaterally change their marketing practices.

"The (CRTC) should impose rules that would protect consumer choice," she said.

But CRTC chairman Jean Pierre Blais questioned why the regulator should force service providers to offer across-the-board discounts, likening the TV pricing models to the those offered by the major airlines.

The difference, Lawford said, was that the airlines charge more when they provide more services, while the TV providers were removing discounts from customers simply because they wanted to pay less for essentially the same service for which they were paying higher rates.

The big four service providers – Bell, Shaw, Rogers and Videotron – denied Wednesday that they were being "paternalistic" with customers by placing restrictions on the cheapest of their cut-rate TV offerings.

But they told the hearings they have learned lessons from the rollout and are adapting their marketing practices in response.

"For us, the launch of starter and theme packs in March was only the beginning," said Rogers vice president Pam Dinsmore.

"With the offering of full pick-and-pay by Dec. 1, and the rollout of our new IPTV platform, we will be making a range of TV services and packaging options available that will meet the needs of almost every household we serve."

Consumers also complained that some carriers, including Bell Canada, require customers to buy other services such as Internet, in order to gain access to their mandated smaller TV services.

Just hours before the hearings were launched Wednesday, Bell announced it would offer its smallest TV package as a "stand alone" service by early in the new year.

Lawford welcomed the announcement, but questioned the timing and credited consumer pressure for the move.