CRTC reforms include $25 basic TV package, pick-and-pay options

An “entry-level” TV package for $25 and the ability to choose specialty channels a la carte are among the reforms the Canadian Radio-television Telecommunications Commission (CRTC) has outlined in a bid to modernize TV viewing.

The CRTC announced Thursday (March 19) providers must offer the entry-level TV service at a maximum of $25 a month by March 2016.

And by the end of that same year, the public authority said Canadians should be able to supplement the $25 package with specialty channels they can choose on a pick-and-pay basis or through “small, reasonably priced” bundles.

“Canadians were clear that they wanted choice in the marketplace. Today's decision gives them the ultimate choice. It supports those who want to subscribe to fewer channels, more channels, or who like the bundles of channels they already have,” the CRTC said in its announcement.

Currently, Canadians must buy large bundles of channels even if they are only interested in a few of the offerings.

CRTC chairman Jean-Pierre Blais said in a statement the changes were being introduced in a “measured way” to minimize the impact on the Canadian economy and jobs in the TV industry.

“We recognize that broadcasters need time to adapt their business and programming strategies, while cable and satellite companies need to update their informatics systems,” he said.

“There is nothing, however, that would prevent them from offering Canadians greater choices ahead of the schedule outlined by the (CRTC).”

The basic package must include all local stations, education channels and public interest channels like the Aboriginal Peoples Television Network.

The $25 cap for a basic package would no doubt affect the prices offered by providers.

Vancouver-based Telus (TSX:T) offers a promotional plan that starts at $20 a month, while it's next least expensive plan goes for $35 monthly.

Shaw, meanwhile, charges $34 a month for its lowest-cost package.

“Consumers will emerge as the clear winners, benefiting from increased choice and the potential to lower their monthly bills,” Michael Geist, the Canada research chairman in Internet and e-commerce law at the University of Ottawa, wrote in a March 19 blog post.

“Yet the CRTC decision will undoubtedly be greeted by doomsayers who will argue that pick-and-pay will increase prices and decrease choice (because some channels will fold).”

But Geist added the idea consumers benefit by paying for channels they don’t watch “merely because distributors enjoyed market power to force them to do so is a strange notion of consumer welfare.”