Canadians can afford rise in TV fees: CRTC

Most Canadians could afford the modest price increase they'd be subject to if TV networks get approval to charge cable and satellite companies for their over-the-air signals, says the CRTC.

They might not want to pay more for TV services, but most Canadians could afford the modest price increase they'd be subject to if TV networks get approval to charge cable and satellite companies for their over-the-air signals, says the CRTC.

Heeding a specific request from Heritage Minister James Moore, the Canadian Radio-television and Telecommunications Commission issued a report Tuesday summarizing information and observations from its hearings regarding the future of Canadian television.

The report emerged a day after the regulator — pending federal court approval — gave the green light to value-for-signal negotiations between private broadcasters and the cable and satellite TV providers (also known as broadcasting distribution undertakings, or BDUs).

The CRTC said the overriding themes from the approximately 200,000 public comments it received last fall were that Canadians are concerned about the future of local TV programming and do not want to pay more for TV.

"It does not appear, however, that significant affordability issues would be created by a [fee-for-signal] regime that resulted in modest price increases," the commission said.

Dissenting opinion

The CRTC report was appended by a strongly worded dissenting opinion from commissioner Michel Morin. He criticized the majority opinion for making consumers "the forgotten ones," who will ultimately pay the price of the dispute between broadcasters and television distributors.

"The ramifications of the new basic service subscription rates will only be established through negotiations among the parties," he wrote. "The commission defends the interests of the industry to the detriment of consumers who, for their part, remain powerless."

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Morin said that consumers interviewed by the CRTC indicated broad support for the idea of skinny basic, and that they really wanted more choice and the ability to pick and pay for only the channels they want. Calls for a complaints agency are "misguided," he said, and an attempt to distract from what consumers really want.

"This recommendation is nothing more than an effort to pull the wool over people's eyes."  

According to figures provided by the BDUs, the number of cable and satellite subscribers and the average subscription revenue per customer have steadily increased since 2002.

During the hearings, the BDUs reported "the vast majority of consumers subscribe to discretionary services beyond the basic package, meaning that they are spending at levels that exceed the lowest entry point for television services," the CRTC said.

"While the commission recognizes that low-income households would feel the impact of an increase in the price of basic television services to a greater extent, the reality is that, for most Canadians, the price of such services would still remain low relative to overall personal disposable income.

"This suggests that many Canadians may be opposed to an increase in the price of basic television services but are still able to afford it."

Switch to digital will enable customized services

With the exception of dissenting commissioner Michel Morin, the CRTC also rejected the proposal for a "skinny basic" — a regulated, slimmed-down package of core TV channels. The commission reasoned that few TV subscribers professed interest in having only basic service and that forcing BDUs to trim their basic offering would likely cause them to dramatically boost the cost of their discretionary channels.

During the consultation period, consumers overwhelmingly called for more choice in the TV they pay for, and the CRTC report recognized that current regulations limit the way BDUs package their analog channels.

"These packaging limitations will be largely eliminated as part of changes to [CRTC] regulations that are scheduled to come into effect on Aug. 31, 2011," the commission said, referring to the deadline for the switch from analog to a fully digital broadcast system.

"These changes will enable BDUs to respond better to consumer demand for pick-and-pay and other packaging options."

Currently, Bell Canada and Vidéotron offer attractive à la carte channel options (coupled with basic service) for subscribers in Quebec.

Tuesday's report also recommends that the government:

  • Establish an independent, self-regulating body for consumer complaints about cable and satellite providers.
  • Work with the industry players and CRTC to co-ordinate Canadian television's transition from analog over-the-air signals to digital in 2011.

The regulator also suggested that — as in the U.S. — the government fund both a national consumer education program about digital TV as well as a subsidy program to help owners of older televisions purchase the equipment they'll need to receive digital signals.