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Could Canadians soon be freed from ugly cable TV box rental fees?

Mandatory television set-top box fees continue to irk subscribers. The U.S. is working on an alternative way to get programming: via a free online app — one that an expert predicts will also make its way to Canada.

U.S. considers mandating a new option to boxes: a free online app

Evan Kosiner in Toronto holds his Rogers SD box. The cable company is raising the box rental fee by $3 a month for some customers. (CBC)

When Evan Kosiner discovered that Rogers was hiking the rental cost of its SD TV box by $3 a month, he was none too happy.

"It just seems like another cash grab," says the Toronto Rogers cable customer about the box's recent price jump from $5.49 to $8.49 a month — a 55 per cent increase.

Mandatory television set-top box charges continue to irk Canadians trying to cut down their TV bills. In the U.S., a movement is afoot to free TV subscribers from the charge by offering an alternative way to get programming: via a no-cost online app.

If the U.S. initiative takes hold, it could spread to Canada. Until then, Canadians are boxed in.

TV subscribers can just buy their TV box, but many prefer to rent. Often, customers get a discount on the rental fee if they sign up for multiple services.

But for those who only get TV, the box fee can jack up their monthly bill.

Price hike for old box

Rogers charges $12.95 a month to rent its HD or high-definition TV box in Ontario — more if customers combine it with a PVR recording device.

But the cable company also offers a cheaper option — an older technology SD or standard definition box, which has now jumped in price for some customers to $8.49 a month. 

"They all of a sudden want to charge more for a product from 15 years ago? It seems like blatantly taking advantage of customers," claims Kosiner.

He rents two SD boxes but has a discount deal with Rogers so his fee increase won't kick in until 2018. Nevertheless, Kosiner filed a complaint with the CRTC on behalf of all people affected by the price jump.

Rogers spokesman Andrew Garas said in an email to CBC News that the rental price for the SD box is now higher because SD technology "is older and more expensive to maintain."

He also said customers can buy the SD box for $100 and that the fee hike does not apply to subscribers getting the new $25 basic Starter TV package.

However, many Rogers employees are currently informing people that the SD box rental for basic Starter customers has moved up to $8.49 a month. Rogers says this is a mistake and thanked CBC for flagging the issue. 

A screen grab from an online chat with a Rogers customer service rep Tuesday. The rep stated the SD box rental would be $8.49 a month for basic Starter customers. (Rogers)

The costs of technology

Bell Canada's rental box fees start at $7 a month. At a recent CRTC hearing, the commission asked the company why the box charge hasn't declined along with prices for other tech gadgets like DVD players.

Bell responded that it continues to provide its customers with the latest technologies and that doesn't come cheap.

But in the U.S., new technology may soon mean that TV subscribers will no longer have to rent TV boxes. The Federal Communications Commission's proposal would require cable companies to offer a free app that would allow customers to access their TV packages using a gadget such as Apple TV or other streaming device.

"Bottom line: consumers will no longer have to rent a set-top box just to watch the programming they already pay for," said FCC chair Tom Wheeler in a blog this month.

Customers would also be able to record programs using the system, but the cable companies would be allowed to charge a fee for that service.

If the FCC proposal is adopted, U.S. TV subscribers will be able to bypass a TV rental box and get their programming via a free app. (CBC )

The FCC estimates Americans pay an average of $231 US annually for TV box rentals. The CRTC has no comparable Canadian statistics.

The FCC is set to vote on the new rules on Sept. 29. If adopted, TV providers will have two years to comply.

Could apps come to Canada?

CBC News asked the CRTC if it would consider mandating free apps in Canada. The broadcast regulator responded that it does not regulate retail rates for TV services.

But industry watcher Greg O'Brien believes if the U.S. adopts the new rules, Canada will eventually follow suit. "When they decide they're going to change set-top boxes, our market changes with it," says the publisher of Cartt.ca which covers cable industry news.

"We don't control the market. We're too small."

O'Brien also warns that free apps would mean a loss of funding for Canadian productions unless the CRTC rewrites the rules. Currently, unlike the cable companies, app-based program providers like Netflix don't have to fulfil Canadian content requirements.

Kosiner says he would embrace a free app system in Canada. But he worries that Canadian cable companies would put up a fierce fight to prevent it from ever becoming a reality here.

"To cut off their arms essentially where they're going to be losing hundreds of millions of dollars in rental revenue for these boxes? I don't see it happening."

About the Author

Sophia Harris

Business reporter

Sophia Harris covers business and consumer news. Contact: sophia.harris@cbc.ca

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