CCTA makes its case for the removal of customer winback restrictions

The Canadian Cable Television Association (CCTA) has once again argued for changes to winback rules that prohibit incumbent cable companies from direct marketing customers who have notified them of their intention to cancel their basic cable service. The cable industry stated its case in a June 9 filing to the CRTC (Broadcasting Public Notice 2003-21). Below is an edited excerpt of the submission. The full submission can be found here. Winback marketing is a common practice in competitive markets and a source of benefit that competition provides to consumers. Accordingly, winback restrictions should be adopted only where no other less intrusive safeguard is available and even then, only as a transitory measure. …Since 1999, cable companies have experienced a reduction in their share of the broadcasting distribution market while DTH companies have enjoyed substantial gains in their relative market share. In 1999, cable companies served more than 8 million basic cable subscribers, about 93% of the total customers subscribing to a BDU service provider. DTH companies served about 0.5 million customers, equal to 6% of the total customers, and other companies (e.g. MDS, SMATV) served the remaining customers. In the years since the (winback) restrictions were imposed, the market share of the incumbent cable companies has fallen such that by 2002, basic cable subscribers fell to about 7.5 million, equal to only 79% of all BDU customers. Meanwhile, DTH companies increased their customer base four-fold to more than 2 million customers and increased their share of the market to 20%. In fact, Canadian DTH companies have actually caught up with U.S. satellite service providers, matching their 20% market share in only five years of operation, compared with eight years for U.S. DBS operators. DTH companies in Canada are continuing to grow at an impressive rate, with the two Canadian providers now reporting total customers of more than 2.1 million. At the same time, the number of basic cable subscribers has been in decline. ...Cable companies have also experienced a decrease in their share of the subscription revenues generated in the BDU market during the period 1998 to 2002, with only 77% of the total revenues generated from the distribution of broadcasting services. Based on CRTC financial statistics, BDU competitors have increased their share of subscription revenues from just over 1% in 1998 to almost 23% in 2002. Bell ExpressVu is the largest of the non-incumbent BDUs with more than 1.3 million customers. This makes it the fourth largest BDU in Canada. Bell ExpressVu expects to have as many as 1.46 million subscribers by the end of this year...In addition, the vast majority of new customers signing up to Bell ExpressVu's service are coming from cable-served areas. ...Star Choice is the second largest of the non-incumbent BDUs with almost 800,000 customers. It is also the sixth largest BDU in Canada...In CCTA's submission, the winback restrictions on incumbent cable companies are no longer necessary to ensure a competitive BDU market. Retaining such restrictions in the face of a competitive market can actually have the unintended effect of restricting some of the benefits of competition for consumers and distorting the market. There is ample evidence that the BDU market is vigorously competitive. This is demonstrated by the growth and success of competitors, including two that are now among the largest BDUs in Canada. …CCTA submits that the competitiveness of the broadcast distribution market is well established and there is no risk that lifting the winback restrictions would undermine this success. For the same reasons, there is no basis for retaining some amended form of winback restrictions for the incumbent cable companies in certain markets, for certain types of dwellings or for a shorter period of time. Competition is well established across all markets and consumers have demonstrated a willingness and ability to switch competitors. In the case of MUDs, the commission has established sufficient safeguards to ensure competitors can access subscribers in these markets. Having achieved sustainable competition, the restrictions have outlived their usefulness and are no longer necessary or appropriate. Accordingly, CCTA requests that the commission lift the asymmetrical winback restrictions applied to the incumbent cable companies.

CCTA makes its case for the removal of customer winback restrictions

News | 06/30/2003 4:00 am EDT

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us