Jean Pierre Blais at the public hearing to discuss the implementation of the new basic television package and flexible packaging options in Canada

Speech

Gatineau, QC
September 7, 2016

Jean-Pierre Blais, Chairman
Canadian Radio-television and Telecommunications Commission

Check against delivery

Good morning, ladies and gentlemen, and welcome to this public hearing. Before we begin, I would like to acknowledge that we are meeting here today on traditional territory of the First Nations. I would like to thank the Algonquin people and pay respect to their elders.

Renewal process

This hearing is being held as part of the process to study the licence renewal applications of television service providers.

This hearing will be limited to the following two areas:

First, the practices certain providers have adopted in offering the small basic package and flexible packaging options.

And secondly, the implementation of the obligation to distribute, effective December 1, 2016, discretionary services on a stand-alone basis and in packages of up to 10 services.

Let’s Talk TV

The CRTC held an extensive conversation with Canadians about the future of television in Canada. In March 2015, we published a series of decisions to ensure that Canada’s television system adapts to the future, new platforms and Canadians’ new viewing habits.

One topic kept coming up during that conversation: choice. Canadians have more and more options when it comes to viewing audiovisual content on various platforms.

Canadians told us loud and clear, however, that they do not have those same choices when it comes to traditional television services. Some consumers felt they were locked into expensive packages and had to subscribe to several channels in order to access the content they really wanted. The CRTC took action to ensure that Canadians have more affordable choices when it comes to basic packages and bundles of channels.

Since March 2016, providers who hold a licence have been required to offer an affordable basic package at no more than $25 per month. Some channels must be included in the package, such as local stations, mandatory distribution channels, and educational and community channels. Others are optional, such as stations affiliated with U.S. commercial networks (ABC, CBS, FOX, NBC) and PBS, local AM and FM stations, other Canadian over-the-air stations and educational channels from other provinces or territories in each official language.

Since March 2016, these providers are also required to offer optional channels, either on an individual basis or in small packages of up to 10 channels. They will be required to offer these two choices starting on December 1, 2016.

Opportunity

In February 2016, in a speech to the Canadian Club in Toronto, I stated that providers should not see this change as an opportunity to replace business practices aimed at maximizing profits at the expense of captive consumers with new behaviours that run counter to consumer interests. Rather, I challenged them to further improve the products they offer Canadians and put control of television back into the hands of viewers, namely their clients.

The affordable basic service option is clearly attractive to certain Canadians. As of June 30, 2016, 177,000 Canadians had signed up for the affordable basic service. Some providers offered Canadians new options to make it even more beneficial.

We received a number of comments from satisfied Canadians. Here is one:

“I like what the skinny package has done. I was able to eliminate channels I don’t watch and with money I saved I ordered channels I want. My monthly bill overall has not changed but I have more channels I want and less channels I don't like. I look forward to individual channel pricing so I can eliminate more channels I don't watch.”

Here is another:

“I am very happy with [my service provider]’s ‘skinny basic’ TV package. By switching […], my cost was reduced by $18 per month. As a retiree living on a fixed income, this was very important to me. In addition to the Canadian TV channels, the [basic] package also includes the Big 4 US networks (NBC, CBS, ABC, Fox) which was also very important to me […]. For my own personal viewing, the channel selection included in the package is sufficient and I do not intend to add any more channels.”

However, other Canadians are dissatisfied and shared their concerns and frustrations about the way some providers are offering the affordable basic package and the new smaller channel packages.

Here are a few representative examples of comments we received from disappointed Canadians.

One Canadian told us:

“My service provider has effectively held me hostage—if I choose to change to the Skinny package, I'm forced to forfeit “background” bundle savings (ones that I don't see on my bill […] this is “internal” cost-savings logic) and an increase in the PVR rental that I already pay for. Even if I chose to go with the base skinny package (with no add-ons), the total cost will be HIGHER than my current package and rental. Yes, I get more channels now—but I don't WANT more channels. I want 15. And I get punished for that.”

Another Canadian told us that the basic package offered by one particular supplier “might meet the letter of the law but is clearly designed to be completely undesirable and uneconomical.”

Here is one final example:

“Yesterday I called to inquire about the skinny $25 package. They said that if I chose that service, my telephone bill will increase by $20 a month and my internet by $30 a month.”

As you can see, some Canadians have told us clearly that they are not satisfied with the way the new choices have been implemented.

Together, Bell, Rogers, Shaw and Vidéotron serve more than three-quarters of all subscribers. For this reason, we invited them to appear at this hearing to determine whether their actions are consistent with our objective of offering Canadians more choice.

Process

Before we begin, I would like to make a few introductions.

The panel for this hearing consists of:

  • Stephen Simpson, Regional Commissioner for British Columbia and the Yukon
  • Christopher MacDonald, Commissioner for the Atlantic Region and Nunavut
  • And myself, Jean-Pierre Blais, Chairman of the CRTC. I will be presiding over this hearing.

The Commission team assisting us includes:

  • Sylvie Julien, Hearing Coordinator
  • Jean-Pierre Lefebvre, Manager
  • Claude Brault, Senior Policy Analyst
  • Pierre-Louis Prégent, Senior Policy Analyst
  • Jean-Sébastien Gagnon, Legal Advisor
  • and Cindy Ventura, Hearing Secretary.

I would now like to invite Ms. Ventura to explain the procedure we will be following.

Madam Secretary . . .

- 30 -

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