I appeared on CBC’s On the Coast to discuss the federal government’s plan to require cable companies to offer channels individually.
Post Tagged with: "cable"
Yet Canadian cable and satellite providers remain a stubborn holdout. The broadcast community has long resisted a market-oriented approach that would allow consumers to exercise real choice in their cable and satellite packages, instead demanding a corporate welfare regulatory framework that guarantees big profits and mediocre programming. My weekly technology law column (Toronto Star version, homepage version) notes that could have changed had the Canadian Radio-television and Telecommunications Commission pushed back against Bell Media in a major case involving the terms of broadcast distribution, but a ruling late last week indicated that it remains reluctant to do so.
The second day of the CRTC hearing on usage based billing left the Commission with three fairly divergent views on Canadian networks, traffic management, and the wholesale tariff (coverage from the Globe, Cartt.ca, Wire Report). While Bell focused on network congestion in its presentation on the first day, the cable providers and independent ISPs provided a much different perspective, focusing instead on incentives to invest (cable) and competition (independent ISPs).
While the cable and independent ISPs provided most of the substantive debate, the much-anticipated appearance of Open Media garnered the most fireworks. Open Media (and CIPPIC) were told that much of their submission was outside the scope of the proceeding, since it focused on retail UBB and the Commission had already rejected extending the hearing to cover those issues. Instead, it faced questions about its membership, funding, and self-interest as well as shocking questions from new CRTC Commissioner Tom Pentefountas, who asked “I am trying to find out what is undemocratic about the system we have right now ‘allowing a few companies to control the Internet access market would be irresponsible and undemocratic’.” The question came in the context of questions that suggested independent ISPs were tremendously profitable without needing to invest in networks. While many Commissioners have asked informed, tough questions over the first two days of all sides, that line of questioning is precisely the sort that generates public skepticism about the CRTC.
Once Open Media was done, the floor was open to lengthy sessions with both the cable companies (Rogers, Videotron, and Cogeco) and independent ISPs. The cable companies provided a well organized opening presentation that avoided the focus on network congestion (the word congestion was barely mentioned) and instead emphasized the complexity of networks, the differences between cable networks and Bell’s network, and the need for policies to encourage ongoing investment.
The Globe’s Derek DeCloet has a terrific piece on the fat profit margins for Canadian cable giants – bigger than those in the U.S. due to massive price increases and no foreign competition.
Today is the deadline for submitting comments on the fee-for-carriage issue (you can do so directly at the CRTC's website) and I wade in with my views in this week's technology law column (Toronto Star version, homepage version). I note that for the past two months, Canadians have been subjected to a non-stop marketing campaign pitting two deep-pocketed industries – broadcasters and broadcast distributors – against each other. Television and radio commercials, full-page newspaper advertisements, websites and Twitter posts all seek to convince the public that new fees for local television signals are, depending on your perspective, either a TV tax or crucial funding to save local television.
Broadcasters claim some local TV stations will close if they do not receive millions in additional fees from cable and satellite companies as compensation for distributing their signal. Cable and satellite companies leave little doubt they will pass along any new fees – possibly as much as $10 per month per subscriber – to their customers. The additional fees inevitably will not come from the bottom lines of cable and satellite companies, but rather from the pockets of consumers.
While the reaction for many Canadians might be sensibly to tune out the entire mess, politicians and regulators will still be left seeking a solution. In fact, some politicians have pledged to support local television, but also promised to avoid new consumer costs. Can these two positions be reconciled?
The answer may lie in giving consumers more choice, by allowing them to pay only for the channels they want – regardless of whether they are local, foreign, or specialty (such as CNN or movie networks).