The national broadcast regulator and the country’s four biggest television service providers are in for an earful this week over the rollout earlier this year of so-called skinny-basic TV.
The Canadian Radio-television and Telecommunications Commission will kick off public hearings Wednesday to discuss how the new, trimmed-down $25 packages have been offered to consumers.
Hundreds of complaints were filed with the CRTC and consumer groups in the weeks after the regulator mandated the packages, which came into effect March 1. Many complainants expressed disappointment that the long-awaited arrival of smaller basic TV packages and different channel choices didn’t prove to be the deal they’d hoped for.
To the Consumers’ Association of Canada, which received about 1,000 complaints in just six weeks, it appeared many cable providers were trying to discourage consumers from switching to the smaller offerings by making them as unattractive as possible, said the group’s president, Bruce Cran.
“The service providers went out of their way to make it difficult for all of us as consumers,” said Cran.
“Overall, I don’t think we got anything of value.”
While the packages themselves were mandated to cost $25 or less, that price often excluded routine discounts, such as those offered for bundling two or more services, but included extra fees for necessities such as the rental of a digital TV box.
BCE Inc.’s Bell TV, as an example, offered its “starter” service at $24.95 a month, but required customers to also pay for Internet service. It also charged installation fees. Those fees were waived for new customers who paid for a higher-priced service and also bought Internet and home phone service under contract.
Shaw Communications Inc., based in Calgary, offered its “limited” package for $25, but also charged for installation and HD receiver.
Bell did not respond to a request for comment and Shaw declined to provide subscriber numbers or say what it expected from the hearings.
But a spokesman for Rogers Communications Inc., said the company is fully prepared to defend its starter package. Rogers offers its lower-tier service as a “stand alone” product, and charges $5.49 for the receiver.
The CRTC has maintained that the goal of requiring service providers to offer a small basic package, along with bundles or individual channels, was never to ensure subscribers get more TV for free. CRTC chairman Jean-Pierre Blais has also suggested consumers should haggle with their service providers.
But Blais had also said the CRTC would “not hesitate to act” if TV distributors ignore the spirit of the new regulations. Industry insiders say the regulator was most annoyed by service providers that required customers to buy other services in order to get a $25 TV package.
While he faulted the service providers for pushing the boundaries of fine print, Cran said the CRTC must also take responsibility for failing to give clear guidelines to the cable and satellite companies for what it considered an acceptable pricing model.
“There wasn’t a designated package that everyone had to conform to, which probably would have been better,” said Cran.
This week’s hearings offer a chance for the CRTC to get it right, said Cran, by tightening regulations in advance of a Dec. 1 deadline for TV providers to offer both individual channels and packages of up to 10 channels, on top of the slimmer basic service.
But CRTC officials say the regulator has no plans to change its policies. Instead, it could impose conditions as part of upcoming service provider license renewals to halt any marketing practices it finds objectionable.
The Public Interest Advocacy Centre has recommended the CRTC prohibit what it calls “unfair practices,” such as taking away bundling discounts or removing access to video-on-demand services.
Service providers should also be required to better promote their skinny basic and pick-and-pay options, said PIAC legal counsel Alysia Lau.
“So when customers do call about them and they ask about them, they aren’t left feeling kind of confused about what exactly they might be getting and how much it will cost them,” said Lau.
“We think TV providers should be up-front about these other options and that they should promote them.”
The CRTC said that roughly 177,000 consumers had opted for the cut-rate basic packages as of June 30, out of an estimated 10 million TV service subscribers across the country.
The regulator will hear first from the four big service providers — Videotron Ltd., Shaw, Rogers and BCE Inc. — before consumer advocates have their say in front of the panel Thursday.
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