BDUs defend skinny basic implementation in CRTC hearing

Videotron, Rogers, Shaw and BCE's introduction of basic channel packages and flexible pricing options went under the microscope in Gatineau, QC.

red tvThe CRTC’s broadcaster licencing renewal hearing got underway Wednesday, with Videotron, Rogers Communications, Shaw Communications and BCE going before the commission in Gatineau, QC to field questions about their implementation of basic channel packages and flexible pricing options.

On a day that for the most part was an open discussion, as opposed to a Let’s Talk TV-style grilling, the key takeaway was that implementing the flexible pricing options mandated by the CRTC has been a complex process, with BDUs for the most part still in negotiations with programming services with regard to à la carte channel pricing ahead of the upcoming December deadline. 

The CRTC led the day with Videotron, a company it deemed to have been the most successful in implementing new packages and flexible pricing offerings. “My advice is to ask clients what they want; that’s why we’re out ahead,” boasted Videotron president and CEO Manon Brouillette.

The cable companies’ willingness to promote the CRTC-mandated “skinny” packages was an oft-posed question throughout the day, with Rogers, Shaw and Bell all defending their marketing for the new packages.

Bell Canada was on the hot seat for consumer complaints over its alleged practice of telling consumers the prices of their other services would go up  if they chose to go with the skinny basic cable packages. Payal Gabrani-Bahl, VP of content, said the issue was one of an individual customer service representative, rather than an endemic approach to consumer-facing sales.

The day’s questioning also turned to how cable companies would implement a la carte pricing options, with the Dec. 1 deadline less than three months away. Across the board, the response was that wholesale negotiations are still ongoing and that the process is a lengthy one. “It just makes for tougher negotiations,” said Bell’s SVP of regulatory affairs Robert Malcolmson of the relationship between the BDUs and programming services in light of the CRTC-mandated changes.

A contentious issue surrounding à la carte pricing has been the extra cost to subscribers of adding individual channels. Commissioner Steve Simpson posed this question during Shaw’s hearing, to which Mehr confirmed there would be an increase. However, Mehr said the mark up on selecting channels individual will be in accordance with the cost to cable cos.

“If anyone is concerned distributors are going to get rich on the mark ups for individual standalone services, I don’t think there is a risk of that,” said Mehr, adding “We will make less money in a limited TV pick and pay world.”

As of June 30, the last time the total was taken, 177,000 households had signed up for skinny basic packages, across all of the cable providers, according to CRTC numbers.

The second day of the hearing is on Thursday, with the Consumers’ Association of Canada (CAC) and the Public Interest Advocacy Centre among those to speak in front of the commission.