Canadian Cablecos Dodge Government Demand For Cheaper TV Bundles -- By Hiding Them From Consumers
This week, the Canadian government will begin forcing Canadian cable operators to provide cheaper, more flexible cable TV packages. Under the new CRTC rules, companies must provide a so-called "skinny bundle" of discounted TV channels starting March 1, and the option to buy channels a la carte starting December 1. But while the CRTC's attempt to force innovation on the cable industry may be well-intentioned, it's already clear that Canadian cable operators plan to do everything in their power to tap dance around the requirements.
One of the tricks, apparently, involves companies like Rogers and Bell simply refusing to seriously advertise the new options to consumers. A Bell training document leaked to the CBC clearly tells employees that they shouldn't even bring up the option unless the customer asks:
The other problem is that even if cable operators are forced to offer better, cheaper, TV options, they'll just turn around and recoup any lost revenue on the broadband side of the equation. In Canada, that historically has involved hitting uncompetitive broadband markets with usage caps and overage fees -- just like Comcast's efforts here in the States. Given the TV sector is ripe for disruption from Internet video either way, it may make more sense for regulators to focus their attention solely on boosting broadband competition, letting traditional, expensive television continue its slow but steady death spiral.
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One of the tricks, apparently, involves companies like Rogers and Bell simply refusing to seriously advertise the new options to consumers. A Bell training document leaked to the CBC clearly tells employees that they shouldn't even bring up the option unless the customer asks:
"The Bell training document states: "Do not promote the Starter TV package. There will be no advertising, and this package should only be discussed if the customer initiates the conversation."In addition to refusing to advertise the new options, Bell and Rogers employees tell the news outlet that the packages are saddled with a large number of below-the-line fees, so that what appears to be a bargain is anything but once Canadian consumers actually get their bills:
"The Bell document also shows that add-ons to the basic "Starter" pack can become so costly that what was supposed to be a good deal for Canadians could wind up, in some cases, costing more than their current cable bill..."They're making the skinny basic package simply unbuyable," he said. "What's been explained to me is that maybe one per cent of people would be interested in getting it."So whereas the new option may be advertised (barely) as a discounted tier, once you saddle the tier with restrictions, fees, hardware rental charges and other below-the-line surcharges, consumers won't be getting much of a deal. And, unless the CRTC is willing to police each and every bill and force total pricing transparency on misleading fees (which neither the FCC nor CRTC have much of a history with), the entire effort risks being for naught.
The other problem is that even if cable operators are forced to offer better, cheaper, TV options, they'll just turn around and recoup any lost revenue on the broadband side of the equation. In Canada, that historically has involved hitting uncompetitive broadband markets with usage caps and overage fees -- just like Comcast's efforts here in the States. Given the TV sector is ripe for disruption from Internet video either way, it may make more sense for regulators to focus their attention solely on boosting broadband competition, letting traditional, expensive television continue its slow but steady death spiral.
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