Nothing basic about basic package issue

Consensus is hard to come by in the broadcasting world. Even on an issue seemingly as basic as the basic package, distributors cannot agree on a singular solution. And although all BDUs advocate the ability to respond to consumer demands, they apply this dictum to basic package regulations in many ways. "Customer choice be maximized through straight-forward rules that mandate a smaller basic service and otherwise give BDUs the flexibility to react to customer demand in the packaging of programming services," writes MTS Allstream Inc. in its final comments on last month's BDU and specialty hearing. But as other BDU's note, a smaller, cheaper basic package is not necessarily the best way to maximize customer choice. "There is no need for regulatory intervention with respect to mandating a new basic package," writes Telus in its comments. "We submit that competition is a better way than regulation to promote affordability and choice." Similarly, Rogers Communications Inc. writes, "The record provides no evidence of consumer demand for a small "lifeline" basic service." And Cogeco Cable Inc. submits, "There is nothing on the record to suggest that consumers are dissatisfied with their existing basic service offerings or seek a smaller basic package. As long as a minimum set of core services is included in the basic package, there is no policy justification for limiting the ability of BDUs to add services to the basic tier in a competitive environment." Shaw Communications Inc. goes further to say that if reducing the size and price of the basic package involved removing the US 4 + 1 channels, customers would turn to the black market or antennas. "The proposal for the creation of a stripped-down mandatory basic service option is also completely unnecessary," added Shaw. "There is absolutely no demand for a reduced basic service. Only 6% of our customers purchase basic cable alone." But MTS was not alone in thinking customers would like the option to enter the system with a small, inexpensive basic package before picking the services they'd like. "Bragg supports the proposal that, in a digital environment, BDUs provide a core basic service that includes the over the air services, the 9(1)(h) services, and a provincial educational service, along with community programming, all at a reasonable price," wrote Bragg Communications Inc. And while there's clear BDU consensus opposing carriage fees, is there any other issue in which all distributors line up in the same direction? Judging from the final comments, it doesn't appear so. Recommendations on genre protection, for instance, were mixed among the BDUs. Rogers and Cogeco both specifically debunked the notion that eliminating genre protection would result in ‘morphing in the middle,' - "Genre protection stifles innovation and high quality by forbidding competition. A service with a guaranteed monopoly over any given content area has little incentive to improve its product," wrote Rogers. MTS similarly argued that genre protection has served its purpose. "The protection that has been afforded to the many successful Canadian services that are currently on the system has succeeded in enabling these services to establish a strong brand and viewership. To extend genre protection in the future would only serve to limit new competing Canadian services, which may be better able to serve consumers." But Telus argued there's no sense messing with a rule that has worked thus far. "Genre protection and simultaneous substitution have served the Canadian broadcasting system by protecting Canadian program rights," wrote Telus. "By maintaining measures which ensure that broadcasters can maximize the revenue potential of their program rights, the need for subsidies is reduced." Telus also lines up opposite the other BDUs on the issue of mandatory access, arguing in favour of maintaining access regulations while Rogers, Cogeco, Shaw, MTS and Bragg would like the rule eliminated. There's nothing basic about reaching a consensus among stakeholders on broadcast regulations.

Nothing basic about basic package issue

Broadcast | May 15, 2008

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