OTTAWA – The CRTC has denied Tuesday an application requesting that the regulator increase the price of the basic television package from $25 to $28 per month and to index the price to inflation.
The application, filed by Bell, Cogeco, Eastlink and SaskTel, was denied on the basis that there was insufficient evidence provided to suggest that the $25 price was no longer economically viable for the providers, the regulator said, noting the “strength of the BDU industry.”
Ironically, the CRTC argued inflation actually provides more justification for a price cap on the cost of the mandatory carriage package because consumers are more likely to be adversely impacted by price increases than the broadcasters.
“The applicants did not provide any detailed, costed analysis that demonstrates that the cost borne by the BDU for the provision of the basic service has increased as a result of inflation or otherwise, to the extent that a permanent increase of 12% to the maximum allowable retail rate and the implementation of an annual inflationary index are warranted,” the CRTC said in the decision.
The group application was filed in January 2022. The commission requested comments from the public on it in September and then re-opened the comment period in light of new information.
That new information said that a minimum of 1.5 million subscribers could be subjected to an increase in their monthly basic TV bill if the application was approved. As such, groups like the Public Interest Advocacy Centre and the Forum on Research and Policy in Communications opposed the application on the basis it could have a disproportionately negative effect on low-income subscribers.
“The Commission is concerned about the potential harm that would arise from the pricing out of vulnerable factions of the population from being able to access a service that makes such significant contributions to fulfilling the objectives set out in the Broadcasting Act, particularly in terms of ensuring access to local Canadian stations,” the regulator said in its decision.
The CRTC noted that increasing the price would, therefore, leave Canadian vulnerable to cutting the cord and lose access to valuable information, including local news. It also said that increasing the basic TV price would bring the price closer to the first-tier BDU offerings, leaving them vulnerable to “upselling” and thus would “defeat the purpose of the requirement.”
As for incorporating a yearly indexing based on inflation, the CRTC raised two concerns with that: that the consumer price index – a basket of goods to measure price increases – is a consumer-centric metric and BDUs have more market power than the average consumer to use volume discounts to keep prices low; and that the vast majority of CPI products do not apply to the price of broadcasting services, thus allowing the BDUs to “artificially” increase prices that are fully borne by the consumers.
The application was supported by Rogers, Corus, the Canadian Communication Systems Alliance, Access Communications Co-operative Limited, and Pelmorex.
When reached, Cogeco declined to comment. Bell and Eastlink did not provide a comment in time for publishing.
