CTV urges CRTC to put brakes on TV costs

CTV and consumer groups are calling for the re-regulation of television providers to stem the tide of steadily rising prices, the latest twist in the battle over who will pay for local programming.

The broadcaster this week posted a message on its "Save Local TV" website urging regulators to put the brakes on cable and satellite companies including Rogers and Bell, who recently announced prices will be going up 1.5 per cent on Sept. 1.

The two companies say the hikes will cover a new expense ordered by the Canadian Radio-television and Telecommunications Commission to help pay for local programming in smaller towns.

CTV says cable and satellite companies are unfairly trying to offload this new regulatory cost, called the Local Program Improvement Fund, onto consumers.

"Under [the] cloak of the LPIF, cable and satellite companies are increasing customer bills to enhance profits," CTV said in its statement. "These anti-consumer billing practices by cable and satellite companies are contrary to the recommendations from the CRTC on the LPIF."

The broadcaster is calling for the CRTC to re-establish its authority over cable and satellite pricing, a power it gave up earlier in the decade to spur competition between providers.

Consumer groups support CTV's position and say the competition the CRTC hoped for has not emerged. In most cases, customers have two providers to choose from at best and in many cases they have only one.

"We would like the CRTC to wake up and realize they have deregulated a monopoly," said Michael Janigan, executive director of the Public Interest Advocacy Centre. "The chickens have come home to roost. No realistic competition exists. At most, it's a duopoly and it's certainly a fat and happy duopoly."

Prices for television services have risen dramatically since deregulation took effect. Typical Rogers and Shaw subscribers have seen their bills jump 70 per cent since 2002, according to the Friends of Canadian Broadcasting.

'A hell of a lot of money'

Television providers say the increases are the result of several factors, particularly the addition of improved services such as hundreds of channels, digital and high-definition.

"CTV may think 20 or 30 channels is all they need but if they haven't looked at cable or satellite TV in the past five years and noticed some changes, they'd be the only ones that haven't," said Phil Lind, vice-chairman of Rogers. "We spend $750 million a year on our network, that's a hell of a lot of money."

Mirko Bibic, head of regulatory affairs for Bell, said rising prices are also the result of ever-increasing regulatory costs. Once the LPIF takes effect, Bibic estimates television providers will be paying out nearly $1 billion in regulatory costs a year.

"Consumers need to realize that a big portion of their TV bills today are consumed by regulatory fees and charges," he said. "What the broadcasters want is to double down on those fees. Customers need to know that TV taxes are already high and that broadcasters want even more. It's time to say no to TV taxes."

CTV's charge that television providers are using regulatory charges to help boost their bottom lines is also erroneous, Bibic said. Bell's satellite service has never earned a profit and has lost more than $2.2 billion since its inception.

He said consumers should direct their anger about the latest increase at broadcasters, including CTV, who are refusing to pay for local programming themselves in favour of buying more expensive American shows.

"It's not the distributors who have asked for these taxes to be imposed .… They shouldn't be upset at us," he said. "This all started because the broadcasters were looking for wealth transfers."

Some scrapping television service

Lind, for his part, said the regulator should take the blame for the new fee.

"[Consumers] can direct their anger at the CRTC. The CRTC is the one that's going to do this."

Many consumers, meanwhile, are becoming wary of ever-increasing prices and are considering scrapping their television service in favour of a growing number of free online offerings. Bibic said this is a trend that both service providers and broadcasters need to pay more attention to. 

"We all need to be aware of the issue and more has to be done to be creative to address those issues and it's not [going to be accomplished] by relying on customer subsidies."

PIAC's Janigan said it's unfortunate that consumers are getting stuck in the middle of a blame-game triangle and hopes the three sides can come together and hammer out a better arrangement when the LPIF is re-examined by the CRTC in the fall.

"The way this is being conducted is with the assumption that the only pot available for contribution is from the consumer," he said.