Proposed BDU code inconsistent with unregulated OTT: consultant

The CRTC’s proposed new code of conduct for television service providers is at odds with the commission’s stance that it won’t regulate over-the-top (OTT) services, according to broadcast consultant Peter Miller. He said it was “interesting that this regulator still wants to get involved in this level of detail with respect to traditional providers while still saying they’re going to do nothing with over-the-top providers.” The CRTC proposed the consumer code Thursday in its final Let’s Talk TV decision, which it said in a press release would help better inform Canadians and help resolve disputes between customers and their TV providers. The commission also announced measures to improve services for Canadians with disabilities. “So if I’m a disabled person or blind person, I’d be saying, ‘Well, this is great, but what is the commission doing for me in terms of what Netflix provides?’” Miller said. “So to me, there’s a bit of an inconsistency between the desire to move forward on these types of measures and a refusal to do anything about over-the-top.” The CRTC said the code reflects feedback it gathered from Canadians during its Let’s Talk TV review, including that TV providers sometimes don’t provide enough information about their packaging and pricing, and “sometimes provide misleading or inaccurate information, as well as poor or inconsistent customer service.” Macquarie Capital Markets analyst Greg MacDonald said in a phone interview that the proposed code seems like further evidence of the CRTC trying to encourage the transition to more of an online-based broadcast distribution model "because that's a model that, I think the regulator believes, the consumer is going to be happiest with." The fact that the proposed code would apply to cable, IPTV and satellite-TV providers, but not web-based platforms, supports this notion, he said. "They're going to regulate traditional distribution, so that's a stick, and they're going to leave online distribution unregulated, and there's the carrot," MacDonald said. "So that's the incentive, presumably, for the industry to move from one economic model to another. And we know that that's the usage trend that the consumers have right now." MacDonald said the same idea applies to another decision related to Let's Talk TV process, released earlier this month, in which the CRTC proposed allowing exclusive video-on-demand content to be provided by TV service providers on the condition that the same content is put online for any Internet user to access. Dave Heger, a U.S.-based telecom analyst with Edward Jones, said it's not clear the CRTC is intentionally setting regulations to prompt TV service providers to move to an online distribution model, although that could ultimately be the effect of some of its policies. In a phone interview, Heger added that he did not see anything within the proposed code for TV service providers that would make him re-evaluate valuations of Canadian companies in the industry. He said the code of conduct is less substantial than CRTC's decision last week to require skinny-basic TV packages for no more than $25 a month and pick-and-pay options next year, and will also probably have less of an effect on the TV-service industry, by itself, than the wireless code had on Canadian mobile operators. He said there could be some added "operational" expenses resulting from aspects of the code, such as the proposal for more specific timeframes in which service calls must happen. Addressing another aspect of the proposed code for TV service providers, Heger said it's hard to see how one of these companies could be held responsible for providing 45-days notice for all changes that might affect a person's channel packages or the type of service a channel provides. For example, there was no official warning issued before Quebecor Inc.'s Sun News Network suddenly went off the air in February. "It's a change that the programmer is making, and if the programmer doesn't provide 45-days notice ... I don't think they can ultimately hold the distributor responsible for something that is ultimately out of their control," Heger said. Gord Hendren, president of Charlton Strategic Research Inc., said in a phone interview that the CRTC’s approach is consistent with the stance they’ve taken throughout the Let’s Talk TV hearing, in which they’ve focused on new rules for traditional TV while declining to regulate online services. “It’s in line with everything else that’s being done. They’ve focused on television, and this is just one more piece in the puzzle.” He added that the decision is likely to be popular with consumers, and that it’s going to be more important for customers to understand their contracts as the industry moves toward a pick-and-pay system in television. Hendren added that the move “creates alignment” with rules in place for wireless, wireline and Internet service. As part of the announcement, the commission also proposed that complaints relating to the code be included under the purview of the Commissioner for Complaints for Telecommunications Services (CCTS), which currently deals with complaints around wireless, wireline phone and Internet service. In a press release Thursday, CCTS commissioner Howard Maker said the office welcomes the CRTC move, and that the “CRTC’s proposal that we apply our expertise to this new role is an expression of its continued confidence in our organization.” The CRTC also outlined measures Thursday to make more content available to Canadians with disabilities, including requiring closed captioning in online versions of shows that are closed captioned in their regular TV broadcasts, increasing the amount of programming with described video, and ensuring accessible remote controls and set top boxes are available to consumers where possible. The CRTC said the TV service providers' code of conduct would address issues such as “the clarity of communications, promotions and offers, service agreements and related policies; notification in the event of changes; and cancellation and disconnection.” In November, the CRTC forbade telecommunications companies from requiring subscribers to give a 30-day notice to cancel their TV, Internet and phone services, which came into effect earlier this year. “With greater knowledge about their agreements and bills, and about how to make complaints, Canadians would be able to act with more confidence in the marketplace and make more informed choices about the services and channels they receive,” the CRTC said in one of its online posts Thursday. The number of complaints CCTS receives about television is “considerable,” the CRTC said, and noted that in the 2013-2014 reporting year, CCTS “received 3,496 complaints about television-related matters that it considered to be outside of its current mandate,” while the CRTC “itself received 4,369 BDU-related complaints concerning billing, channel placement, disconnection, and other contract-related issues between January 2011 and December 2014.” The CRTC said that while it is generally in favour of applying a market-driven approach to overseeing customer service, “ the Commission is of the view that a market-based solution to customer service standards has not met, and is unlikely to meet, the outcomes set for the present proceeding. Consequently, additional measures should be taken to ensure that Canadians are better equipped to make their own informed choices in a dynamic marketplace.” The CRTC is consulting on the proposed code, with a deadline of May 25 for comments. Broadcasting consultant Kelly Lynne Ashton said there were no surprises in the decision, since the CRTC said in an earlier working document it wanted to deal with consumer complaints. She added that she's not sure how much the code will help consumers “because all the information that has to be provided is a pretty lengthy piece of information. So most of us are just going to click ‘agree’ and not read.” She said the more significant aspect of the announcement is that consumers now have “someone to go to with their issues.” Richard Paradis, president of media consulting firm Groupe CIC, said the proposed code for TV service providers is similar to the CRTC’s wireless code. Paradis said that the decision’s focus on consumers is in line with its pro-consumer stance, and one that’s “very close to the wishes of the Conservative government.” “The commission has always said, since the chairman has been there, that one of their priorities is the consumer perspective,” he added. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and reporting and editing by Derek Abma at dabma@thewirereport.ca

Proposed BDU code inconsistent with unregulated OTT: consultant

Broadcast | March 26, 2015

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Proposed BDU code inconsistent with unregulated OTT: consultant

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