CRTC’s Fee-For-Carriage/Value-For-Signal Report: Minority Report Steals the Show

The CRTC released its follow-up report to cabinet yesterday on the consumer impact of new fees associated with fee-for-carriage/value-for-signal (as a side note, the Commission's approach on releases – the financial reports on broadcasters and BDUs last week, the broadcast policy on Monday, and the consumer impact the following day – feels far too manipulative and staged.  There was no good reason not to release the broadcast policy and its consumer impact simultaneously).

The Commission conclusion amounts to an acknowledgement that prices will go up, but it believes that Canadians will continue to pay based on past experience of steady price increases imposed by cable and satellite companies.  It states:

It does not appear, however, that significant affordability issues would be created by a VFS regime that resulted in modest price increases, as both subscriber levels and average per customer BDU subscription revenues have steadily increased since 2002…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. For those consumers, the decision to retain such services is one based on a number of factors and not solely on affordability.

In other words, the Commission simply doesn't believe Canadians will change their television purchasing habits if faced with new additional fees.  In fact, the CRTC believes Canadians will continue to pay even though "a VFS regime, as proposed by broadcasters, may not increase consumer value in local programming because, as currently conceived, it does not guarantee incremental local programming or greater consumer choice."  Guided by these views, the Commission proceeded to reject calls for greater consumer choice in the form of "skinny basic" or a "pick-and-pay" approach.

There are additional noteworthy recommendations (the creation of a new complaints agency, urging the government to step up its action on the digital transition), but far more interesting is the stinging minority report from Commissioner Michel Morin.  Morin does not mince words in calling out the CRTC's failure to genuinely address consumer concerns:

The ramifications of the new basic service subscription rates will only be established through negotiations among the parties. The Commission defends the interests of the industry to the detriment of consumers who, for their part, remain powerless.  These consumers are the same 11 million Canadian subscribers who have been hit since September 2009 with the first bill for the $100 million resulting from the establishment of the Local Programming Improvement Fund (LPIF) (1.5% of the BDU's bill to the subscriber) with no guarantee as to any increase in content. How much will the bill be this time? $100 million? $200 million? $300 million?

Morin argues that a cheaper, skinny basic service is needed, not only to provide a lower-cost alternative but also to better reflect the reality of the current environment:

A limited basic service – one that would be less expensive because it would include a reduced number of imposed discretionary channels – would have fit in perfectly with this shift toward the pull culture, one of freedom of choice for the consumer. This service would have resolved the problem of affordable access by giving the consumer the option of subscribing and therefore paying for a private conventional channel which, because of a recognized value assigned to its signal, would no longer be offered free of charge.

Morin closes by blasting a proposed new complaints commission, noting that the consumers are seeking greater choice, not a new way to complain about their service.  Canadian Heritage Minister James Moore has indicated that the consumer perspective is his top priority on the fee-for-carriage issue.  One can only hope that he reads the Morin minority report.


  1. “For those consumers, the decision to retain such services is one based on a number of factors and not solely on affordability.”

    Yeah, like the refusal to support these jackasses. 60% of my TV is currently BitTorrented using a WDTV box, I expect that it will rise to 100% before the year is out.

  2. What?
    So they’re allowed to raise their prices as much as they want so long as the consumers can still afford it?

    What kind of bullsh*t is that? What happened to only raising prices with good reason? (i.e. technology increase resulting in benefits to the consumer, or inflation)

    CRTC, you fail once again.

  3. What will likely occur if VFS goes thru is it won’t show up as “Value for Signal Fee” on your cable bill; it will be characterized as something even more vague, sounding like some kind of “capital improvement fee” or “airport security fee”. Most consumers won’t even be aware of the issue, the fee will show up one day on their statement, and they’ll pay it, not realizing what it means or what it does. The cable companies have done it for years.

    And who the heck administers the LPIF? Who pays out the money? How do broadcasters get it? I’ve yet to get an answer to that one.

  4. In this day of being able to do practically everything via a web interface, why can I not simply go online to my cable company’s website, select the channels I wish to (or no longer wish to) receive and have the system provide access to those channels automatically—particularly since I’m on digital cable? I could even live with being required to pay for at least a month’s worth of viewing for any channel that I select.

    Oh right, then we’d be able to vote channels “off the island” with our dollars. Can’t have that. We need to support those lame channels in “the bundle” in order to watch the one or two I am actually interested in.

    It would also actually require the cable companies to get off their a$$es and implement a customer-friendly approach to business which, of course, they’re not going to do so long as the CRTC has their back.

  5. David Canton says:

    A big problem with this is lack of consumer choice. I’ll bet if most Canadians were given the choice of paying $10 extra per month, or not getting local channels, they would drop the local channels.

  6. At the end of the day, the ones getting bent over the counter on this is the consumer. To think that the BDUs won’t pass on the costs you’ve got to be dreaming; why would any CEO take that hit to the profits? Mary, I in fact think that they’ll call it exactly a VFC charge. Why? They’ve fought against this setup; why not highlight to the consumer exactly how much they are getting dinged for it, in particular if it adds more than about a dollar to the bill? I think you are referring to Roger’s Government Regulatory Recovery Fee. However, in that case they are trying to deflect consumer anger to someone else and away from themselves.

    If the networks are going to be allowed to say that they won’t provide the signal, why shouldn’t the consumer be able to tell the BDU that they don’t want it?

    The item I found the most offensive in the parts of the broadcast policy statement that I read would allow the networks, if they are unable to reach an agreement with a BDU, to force the BDU to blackout foreign shows, on foreign channels, for shows that they hold the rights to. In essence, if they own the broadcast rights and can’t get the advertising revenue for it, then the Canadian TV viewer isn’t allowed to watch it.

  7. Not Worth It
    Screw this nonsense, I (like many others I’m sure) will be canceling my cable and get my video fix off the net. Whatever free over-the-air signals I can pick up will augment that. The cable companies (mine’s Rogers) have pushed their game too far by continuing to provide shabby, redundant service with usurious pricing schemes. The broadcasters are slowly dying as their advertising based revenue models wither away and it won’t be long before they either make a full transition to the net or pack up their tents and scurry off into the night. Good riddance to all of them.

    As for the CBC, it has the existing infrastructure to maintain itself as a voice over the air and across the net and should be supported to that end. But that’s a whole other rant.


  8. Screw these guys. Seriously. All they do is screw us over, so why not. Just follow their example. I started getting free satellite a while back – can’t say I feel bad about it at all, considering. & similar sites can help keep your costs down, too.

    Eat it, CRTC.

  9. Really?
    Wow, that sounds out of touch. Maybe I’m a customer cable doesn’t want, but I’ve never signed up because it’s *always* been to expensive for me. For the minimal amount I might watch (mainly hockey games), I’d be willing to pay maybe $5~10 / month. I’d watch maybe two channels and I don’t need or want any more.

    On the other hand, there’s all kinds of compelling content on the internet, most of which does not resemble TV programming.

    To be fair, this is mostly a problem for the cable companies. I see no reason why the CRTC should be involved in forcing them to include low-tier products for people like me if they don’t want to.

    The logic that consumers will bear price increases simply because they have done so in the past completely ignores the fact that this kind of thing is threshold based, and past increases simply mean we are now closer to the threshold at which people will cancel cable altogether. People are already complaining … isn’t that a sign that we are ready to move on? Especially with the internet lurking in the background as competition?

  10. die CRTC die says:

    Principle of the thing
    Yes I can afford a slight increase in cable for the local. But the principle of paying money so I don’t get to see the US commercials with the SuperBowl for example just defies common sense. Therefore I will cancel cable if this VFS nonsense goes through. The irony is CTV might get 25 cents a subscriber for their broadcast signal, but they’ll lose revenue from people like me who no longer subscribe and subsidize specialty channels like TSN and Discovery.

  11. This decision does the one thing the government wanted. Kicks the whole thing down the road till after the next election. If Harper can’t get his majority the next time around he will be gone. He doesn’t want any thing getting in the way of his last shot.

  12. Wow. Just finished reading the Minority Report. Wow!!! This guy shouldn’t hold back, he should tell us what he really thinks. I think that is the most intelligent thing I have seen come out of a government agency in my entire time on this planet. (Aside from the Royal Commissions interim report on the use of Marijuana which could have saved us 30 years of the war on drugs.) Wow is he so not getting his appointment renewed when it comes up. Instead we follow the majority. To quote Ronny James Dio. “When you listen to fools, the mob rules”

  13. Shows how out of touch the group is that came to this decision.

    This is supposed to protect the GOOD of Canadians NOT Canadian corporations. And this really offer NOTHING in terms of having broadcasters offering more quality local television.

    If they black-out shows, I’ll just cancel my whole cable package and go straight to the source from the US.

  14. Too expensive
    I have already stopped paying for cable service because it has become too expensive. They force you to take dozens of channels you do not want just to get they few that you do want. Screw-em.

  15. CRTC is out of touch with reality
    Television is a total wasteland right now as it is.

    Well over 33% of every hour is nothing but annoying commercials. And what’s left over going on the air isn’t worth crap anyway.

    This decision is simply more proof to show these stupid fat cats at the CRTC are totally f*cking out of touch with reality.

    Almost everyone I know in the private sector has either (1) not received cost of living increases, or (2) pay cuts, or (3) job losses.

    Just where do these assholes think we can come up with the extra money??? “Value for Signal” fee? There is no value in the crap that’s coming through right now.

    Cogeco will be losing me as a customer. The “complete basic package” of total dribble will be canceled and the $660/year will be put to much better use.

    Screw you, CRTC.

  16. Perfectly said …
    Found this in another forum. Couldn’t have said it better myself:

    “Well, until the next CRTC decision on UBB comes down, likely in August. Can’t do too much with the 60Gb cap Bell is requesting be imposed on the wholesalers, along with their pricing for overages. They want to bring it in line with what they charge their own subscribers so as to stomp on the competition, and incidentally make it hard for people to get around the increased cable and satellite prices by downloading. And Rogers is no better. They offer good speeds, but not the bandwidth needed to fully take advantage of them. So it will get very expensive to download programs, especially HD. The CRTC has pretty well handed over the heads of the Canadian consumers on a platter to the likes of Bell and Rogers.”

    Read more:

  17. Jack Robinson says:

    CRTC Complicity in the hijacking of Canadian Broadcast Rights
    As an active on and off-line supporter of an array of consumer-based activist initiatives attempting to assure the continued existence of relevant, accessible and user defined Canadian broadcasting against the unfettered onslaught of carrier concentration and control… I’m both disgusted and outraged by the CRTC’s gutlessly passing the puck over to the courts for ‘clarification’, cynically accepting the signal providers’ rationale for increased fees for carriage and most obscene of all… excluding the CBC from any viable negotiating process with the Big Media Sharks feeding for free on their (OUR!) local, regional and nationally produced-on-a-shoestring content.

    Welcome to the New Rome Network, kidz…

  18. Short memory?
    Methinks the CRTC underestimates the anger of a public scorned. Remember the hue and cry when cable was a “negative option”? (google for more info) and that was in the days before the internet. The CRTC may not think it’s a big deal but politicians sure as hell will when the mass emails and facebook groups start.

  19. Laurel L. Russwurm says:

    The CRTC is worse than a “Reality Show”
    The CRTC doesn’t seem to have any connection to reality.

    Here we have the CRTC again regulating in the corporate interest instead of the consumer interest, which their mandate says they are supposed to do. (Gotta wonder why Morin is the minority report; could it be that the majority don’t understand the issues?)

    It’s like this. There are many Canadians who cannot afford cable AND internet. (Sounds like the majority of the CRTC aren’t aware of this.) I’d be willing to bet that there are a lot of people who can afford one or the other, but not both. You know, families who know that feeding the kids comes first.

    So what happens when the marginalized Canadian families can no longer afford one or the other? Over the air Broadcast will be gone soon.

    Oh, the CRTC says, that’s OK. It’s only those un-important poor people who can’t pay for it. Most Canadians can afford to pay a little bit more.

    What the CRTC majority don’t seem capable of grasping is that it is good for Canada – not just Canadian consumers, but for Canada’s future – to ensure that every child is educated and educated well. This is why ACCESS is crucial.

    Because what happens if this generation’s Jim Balsillie and Mike Lazaridis are growing up in families that can’t afford TV or the Internet? For the short-term gain — corporate dividends — the CRTC may well be blowing Canada’s opportunity for the next Blackberry.

  20. Not impressed... says:

    When you can’t sell something…
    This is crap. They are also saying that Canadians will continue to watch the news on TV. That’s not a very likely. I like to watch the news, but now the Canadian news industry has become overly self indulgent over the last 2-3 yrs. There are way too many stories on the people who are giving the news and not enough news. There is barely any type of in-depth coverage about what is happening as it concerns Canadian. i.e. Nobody really challenged Harper when he declared he wasn’t going to give interviews. He just got to go silent and they sat back. There’s also no real diversity on issues. We have so many ethnic groups here in Canada and we don’t get to hear them as pundits. Everything seems so “late-breaking” and watered down as it has to fit into the broadcaster’s political point of view. What you’re getting now is headlines and news which is really advertising … This is becoming so transparent that’s why I now go to the internet for my news. I can check different points of view and give and read commentary etc.(i.e. like we are all doing now). Isn’t it ironic how we are discussing this issue on the internet and not on TV? I don’t see myself going back to the news on TV anytime soon. I think one rule of sales is if you can’t sell something you lower the price, offer discounts and even give it away in order to create a demand…You don’t raise your prices and offer less. As far as I am concerned, they are all better off being a web platform and stream content from it so we the consumer can pick and choose what we want to see and pay as we go.

  21. Junji Hiroma says:

    Do what i do,Start doing stuff they did in the early 1900’s
    In the early 1900’s people didn’t have this crap that is going on.They had ZERO TV or Internet.The amish had NO electricity,internet OR TV.Maybe going back to the olden ways is maybe better for canada and maybe it’ll hit the BEAST (Bellus Rogers and the CRTC) right where it hurts.All canadians should dump their TV’s AND PC’s and we’ll see how low their stocks will drop