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CTV and consumer groups are calling for the re-regulation of television service providers to curb the trend of steadily rising prices. The broadcaster posted a message on its "Save Local TV" website urging regulators to stop cable and satellite companies who recently announced price increases of 1.5% starting Sept. 1.
Bell and Rogers say the price hikes will cover a new expense ordered by the CRTC to help pay for local programming in smaller towns. CTV, meanwhile, argues cable and satellite companies are unfairly trying to offload this new regulatory cost, called the Local Program Improvement Fund (LPIF), onto consumers.
CTV 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.
Prices for television services have risen dramatically since deregulation took effect. Typical Rogers and Shaw subscribers have seen their bills jump 70% since 2002, according to the Friends of Canadian Broadcasting.
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.
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,' " Bibic explained. " '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 points out. Bell's satellite service has never earned a profit and has lost more than $2.2 billion since its inception. He says consumers should direct their anger about the latest increase at broadcasters.
Phil Lind, vice-chairman of Rogers, argues that 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 points out that this is a trend that both service providers and broadcasters need to pay more attention to.
Michael Janigan of the Public Interest Advocacy Centre, said that 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.
Source: CBC.ca, 08/12/2009
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