CRTC Rules Give Customers More Choice

by Jordan Richardson on July 23, 2012

With a pair of decisions on Friday, the CRTC may have given Canadians more choice over their television channels.

The Canadian Radio-television and Telecommunications Commission ruled that customers should have the ability to subscribe to individual television channels rather than needing to subscribe to expansive, expensive packages. This could mean a loosening in how channels are dished out and how much Canadians have to pay.

Like every decision that seems to initially benefit the consumers, there is a catch. The fewer channels a subscriber signs up, the more expensive the channels will be. This is kind of how most business models work, so we shouldn’t be surprised.

Cable companies have long held to the idea that it’s “too expensive” to let customers have their television channels on an a la carte basis. Thanks to a run away from traditional cable packages and toward services like Netflix, however, the cable companies have had to change their respective tunes. Necessity dictates different market parameters and, as a result, the decision was nearly inevitable.

“Whether it’s Netflix or some other service, the point is that there’s a lot happening out there,” said Jeffrey Eisenach, a professor at Washington’s George Mason University Law School. “What you are seeing here is a regulator that is acknowledging those challenges and trying to bring some stability to the situation.”

How this decision will impact what the cable companies charge with regard to wholesale rates remains to be settled. Bell Media want their wholesale prices to remain the same, although they have suggested that smaller companies will be able to use the same pricing models and can allow customers the ability to pick individual channels like the ruling states.

Bell Media still holds to the belief that consumers may want more than they think they want, though.

“They [consumers] should now have a lot more control and if their goal is to save money they should be able to do that,” said Bell Media president Kevin Crull. “We can let consumer behaviour dictate final outcomes. We find consumers watch a lot more than they think they do; they discover programming by surfing and looking through the guide.”

In another decision, the CRTC sided with Telus in its dispute against Bell Media. In that case, Bell thought that they could impose minimum viewership restrictions and revenue standards in clauses in its contract that allows Telus to distribute specialty content. Because of the ruling, Telus can continue to offer a sports package of specialty channels – including TSN. Had Bell won the ruling, TSN would be included in the basic cable package if customers wanted it or not.

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