Skinny basic best practices not enough to ‘scare’ BDUs: PIAC

The best practices for TV service providers offering skinny-basic cable packages announced by the CRTC Monday don’t amount to much more than lip service, with no real consequences for providers who don’t align themselves with the regulator’s preferred behaviour, according to a consumer advocate. John Lawford, executive director of the Public Interest Advocacy Centre (PIAC), said in a phone interview he was initially excited by the decision posted to the CRTC’s website Monday, outlining its findings following a fall proceeding into the skinny-basic cable rollout, but that “in the end it’s all best practices, so it’s a lot of ‘you should do this, you should do that’ and no rules.” Monday’s decision comes nearly two weeks before the second phase of the CRTC’s new TV regime, which requires that all providers offer individual channels both on a standalone basis and in small theme packs on Dec. 1, in addition to the $25 basic package that became mandatory on March 1. “Starting on December 1, Canadians will have greater flexibility in choosing how they subscribe to TV services,” CRTC Jean-Pierre Blais said in a press release. “We have set out best practices for television service providers and created online tools to help Canadians navigate this new world.” In September, BCE Inc., Rogers Communications Inc., Shaw Communications Inc. and Quebecor Inc.’s Videotron appeared before the commission as part of a two-day public hearing into the implementation of the skinny-basic packages, though a total of 11 providers were up for renewal. Broadcast distribution undertaking (BDU) licences were renewed for a one-year term, instead of the usual seven-year term, the CRTC said, adding that “a second licence renewal proceeding to examine a broader range of issues will take place next year.” The best practices highlighted by the CRTC include giving customers the ability to add or remove channels from their subscription online, offering different options for set-top boxes such as rental, rent-to-own or outright purchase, providing bundling discounts and the ability to add discretionary services, regardless of the package size, and providing clear, simple information about the different package offerings. “While it does not consider that regulatory action is required at this time, the Commission will monitor all of these practices, including how BDUs promote and offer the small basic service and pick-and-pay and small package options, and will take any necessary remedial action when it examines the renewal of the licences for most BDUs again next year,” the CRTC said. “So they can continue on doing their thing and I guess the commission feels that some strong language and some reminders to follow best practices, coupled with lining everybody’s licence renewals up for next year will be enough to scare them into doing stuff,” Lawford said. “But they haven’t shown, the companies that is, in the past they’re at all scared of the commission on this one. So I don’t think it’s going to work.” In an email, Bell spokeswoman Jacqueline Michelis said the company was still looking at Monday’s decision, but that “Bell always complies with the regulations, of course.” She added: “Bell is now Canada’s largest and fastest growing TV provider. We introduced a $25 Starter TV service along with new channel packages last February. Our pick and pay channels and small channel packs beat the CRTC’s Dec. 1 deadline by nine months.” Rogers spokesman Andrew Garas said that “we know everyone has different needs and that’s why we’ve been adding more choice with simple options. We’re glad the CRTC agrees we have implemented the new flexible packaging rules properly.” He added the company would be “launching standalone channel selection in the coming days and even more improvements to our TV experience in the coming months.” Shaw did not respond to a request for comment. But despite Monday’s announcement not coming in the form of concrete rules, Manish Nargas, a research analyst with International Data Corp. (IDC) Canada, said the decision could have a positive impact on consumers. “The price proposition was not there for customers since Day One because it was either not advertised fully on their website and, if you do choose it, just the overall cost of switching over to the skinny basic and losing all those bundled discounts and additional features just didn’t make sense,” Nargas said in a phone interview, adding that he was a consumer who considered making the switch, but found he couldn’t justify the change “or the loss in quality of service for a few dollars’ savings.” IDC surveys consumers about their TV habits at the beginning of every year, and this year, prior to the March 1 rollout of skinny basic, 74 per cent of respondents said they were somewhat or very likely to consider the skinny basic option, Nargas said. Prior to September’s hearing, the CRTC said that 177,000 Canadians had signed up for skinny basic packages. But given Monday’s decision, paired with the Dec. 1 full pick-and-pay deadline, Nargas said he’s “really, really excited to see what happens in January and I think it’s going to have a positive influence.” The CRTC decision noted that some changes had already been made by TV service providers since March, such as Bell announcing that it would no longer tie its IPTV service to a purchase of its Internet service, and highlighted tied selling as one of the practices it was keeping its eye on. “Specifically, the Commission considers that it would be contrary to the intent of the Policy for a larger service provider to take advantage of its competitive position to tie its TV services to the subscription of an additional service such as Internet,” the decision said. “In this regard, the Commission determined in the Policy that the $25 maximum price for the small basic service would be sufficient to allow BDUs to recoup their associated network access costs.” The CRTC also noted that though Rogers “initially defended its decision not to offer bundling discounts to small basic subscribers, it announced at the hearing that all its small basic customers who buy a three-product bundle will be eligible for product and hardware discounts starting in the first quarter of 2017.” These are “good results,” Lawford said, but don’t address the concerns that PIAC raised during the hearing, such as having a standardized way of finding information about the various providers’ offerings. “In terms of all the things people complained about, this doesn’t actually do anything,” Lawford said. “Nothing changes today, so business as usual.” — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Skinny basic best practices not enough to ‘scare’ BDUs: PIAC

Broadcast | November 21, 2016

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Skinny basic best practices not enough to ‘scare’ BDUs: PIAC

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