Jean-Pierre Blais insists his decision to impose pick-and-pay channel pricing on cable and satellite companies is all about giving power to the people.
"We're restoring Canadians' control over their communication system," the chairman of the Canadian Radio-television and Telecommunications Commission insisted in a recent speech to the Canadian Club in Toronto.
It all sounds nice. You can now get a "skinny" basic TV package of traditional broadcast channels for $25 a month – much less than the cost of any of the existing packages. And for a few extra dollars you can add a clutch of specialty channels you might actually watch, such as sports or movie channels.
Hallelujah. Say goodbye to paying for Treehouse TV, Country Music Television, The Shopping Channel, or whatever other unwanted stations are on your channel roster.
Why then do so many cable subscribers feel more confused and abused than ever following the March 1 changes mandated by the CRTC?
It turns out that when you do the math, most people are better off with what they have – packages that viewers have complained to the CRTC are too big and expensive. In some cases, customers will pay more and get less by opting for the skinny package, once you factor in things such as equipment rental costs and the loss of some bundle discounts. As a result, experts predict the vast majority of cable and satellite customers will likely stick with what they have.
Apparently, we'll settle for fat and unhappy over skinny.
The Globe and Mail provided a handy comparison guide to the various options on offer from the main cable providers in Wednesday's paper and online. The two-page spread is enough to make your head hurt. There are a vast array of channel permutations and combinations to consider, along with differing equipment rental fees and bundle discounts.
What's perhaps most striking is that prices remain quite similar between companies that directly compete in regional markets. For most Canadians, that's typically a choice between two providers.
Choice, it seems, is more a concept than a reality, in the absence of more competition.
In the U.S., satellite TV provides low-cost competition to cable. Not in Canada, where there is greater concentration of ownership across platforms. TV service providers Bell Canada and Shaw own Canada's two satellite TV providers, and have little incentive to compete with themselves. Many of the same TV providers also control broadband rates, providing a financial hedge when viewers abandon cable for streaming services such as Netflix.
It's not the only factor that limits competition. Most Canadian TV providers also sell mobile phone services. That means they can dissuade customers from switching cable providers with so-called "bundle" savings.
CRTC's pick-and-pay rule may have also unintended consequences, resulting in less choice for consumers at the end of the day.
"While the effort aims to give consumers more choice at the expense of the television distributors, we think the costs will actually be borne by the television broadcasters and the specialty television providers, and may result in fewer choices for the consumer," Moody's Investors Service argued in a report this week on Canada's broadband market. "The television content companies rather than the distributors will pay the price for consumer choice."
That's because cable companies will renegotiate contracts with their content providers, based on what offerings viewers ultimately choose. For example, if fewer people want Country Music Television, cable and satellite companies may bargain down the price – or drop it altogether.
Choice comes in many forms. A much larger challenge for both the industry and regulators is the rapid growth of Internet streaming, which is drawing viewers and advertisers away from traditional TV providers.
The TV choice that Mr. Blais so passionately wants for Canadians is coming naturally, through technological change. So why try to impose choice, fix prices and micromanage competition?
There are better ways to get to the same place. The most obvious is for the federal government to drop all remaining foreign ownership restrictions on telecom companies and broadcasters. This would create a more attractive investment climate and lower barriers to entry for foreign telecom providers.
That would leave the CRTC with the thorny problem of promoting Canadian content, even as viewers migrate to platforms over which regulators exert little or no control.
Mr. Blais isn't a fan of mandated Canadian programming quotas, which he has dismissed as "wholly anachronistic in an age of abundance and in a world of choice." CRTC quotas nonetheless remain in effect during prime-time for Canadian broadcasters.
He may soon reach the conclusion that mandated pricing is equally ineffective.