OTTAWA and TORONTO – A pared-down basic programming package, with its content and pricing determined by the CRTC, could be the solution to affordability if fee-for-carriage is implemented, the CBC said.
In a submission to the Commission on Monday, the public broadcaster recommended that BDUs adopt an all-Canadian basic package which includes only the “essentials”, such as local television stations, plus “a very limited number” of other licensed programming services.
Calling it a “win-win-win scenario”, CBC said that its proposal would benefit BDUs, consumers, and broadcasters alike.
“It’s a win for cable companies because they’ll have all the flexibility that the Commission has already given them”, CBC/Radio Canada chief regulatory officer Steve Guiton told Cartt.ca, referring to last year’s review of the BDU regulatory frameworks. “It’s a win for consumers because they’re getting a low cost entry point into the system and won’t be gouged (on pricing by the BDUs), as we say that they have in the recent past, and, it’s a win for broadcasters because it enables the Commission to put forward a model for compensation for what they provide to the cable companies.”
But at least one of Canada’s biggest cable companies doesn’t agree that this concept the answer.
“This idea of ‘skinny basic’ is like a solution looking for a problem”, said Rogers’ SVP of regulatory, Ken Engelhart, in an interview with Cartt.ca. “It would be a win-lose-lose. It would be a win for the broadcasters because they’d get their fee-for-carriage. It would be a lose for the customers because they’d get less channels without much savings, and it would be a lose for the cable company because we’d be forced to sell a basic service that people didn’t like.”
The plan dictates that BDUs not be permitted to include any additional services in the basic package, but, consumers would have the option, though not the requirement, to purchase any additional services. The CRTC would approve the cost of the basic package.
Television service providers would negotiate with broadcasters to determine the compensation payable for the services they distribute, including the local television services in the basic package, the proposal continues. The CRTC would act as arbitrator in any situations where the parties could not agree.
“How do you regulate rates in a competitive market?”, Engelhart questioned. “And this system wouldn’t work technically for a number of years with cable. You’d have to have an all digital network first.”
Canadians who stand to lose their over-the-air TV signals as a result of the upcoming digital transition would also benefit, Guiton said.
“The other thing that our proposal does is provide a solution for the digital transition”, he continued. “What this does is ensure that they (TV consumers) will stay in the system, and while not free, it will allow them to participate in the Canadian broadcasting system at a low cost, and not force them to enter it at the $40, $50 or $60 level.”
So why not let consumers decide which services they feel are essential?
Rogers’ Engelhart said that the ‘pick and pay’ approach won’t work in Canada, citing attempts by now defunct Look TV and Bell ExpressVu (now Bell TV).
“Look TV already tried this and they went bankrupt. It wasn’t that popular with people and it didn’t provide a viable business model. Bell ExpressVu used to offer a ‘skinny basic’ and nobody bought it. And, 10% of Canadian households already get a ‘skinny basic’ today – it’s called an antenna. So why would they want to pay a bunch of money for it?”
But Guiton said that the BDUs can’t be relied upon to self-regulate through only “competitive forces and the moral suasion from the Commission”.
“It’s important that the Commission designate which channels go in this package, because you want to make sure that Canadians across the country are going to get a reasonable set of basic services – a consistent, standardized set of services, so that Canadians can get what the Broadcasting Act is promoting: access to a minimum level of Canadian content.”
