MTS Classic TV phase-out hastened by CRTC rules

Manitoba Telecom Services Inc.'s first generation of IPTV service was already on the way out, pushed aside by a more technologically advanced alternative the carrier started in 2009, but CRTC requirements for participation in a national alert system might bring about the demise of MTS Classic TV sooner than expected. A letter from MTS, published on the CRTC's website earlier this month, asks that its Classic TV service be given a one-year reprieve from the March 31 deadline for most TV service providers, over-the-air TV broadcasters and radio stations to be part of a national emergency warning system. MTS said in its letter that technology used for Classic TV will not support an emergency alert system. The direction was given by the CRTC in August. Third parties have until Dec. 8 to respond to the request by MTS. "We have confirmed that a technical solution is not available for implementation and that our only option will be to terminate the service," MTS said in its letter to the CRTC. Classic TV was launched in 2003, MTS spokesman Craig Lawrence said in an email. MTS said in its letter that it would like to have its deadline for complying with the CRTC's order for participation in the emergency broadcast system extended so it can "minimize the disruption to those Classic TV subscribers who will be forced off the platform, by giving them time to switch services in a more orderly fashion." MTS noted that since launching its more advanced IPTV service, Ultimate TV, in 2009, the number of Classic TV subscribers has gone from 84,000 to about 12,000 as most customers migrated to the newer service. However, it said those that remain on Classic TV "tend to be very cost conscious and the low-end Classic TV, with its small theme groups, lack of add-ons (e.g., PVRs, new media services) and no set-top box rental fees, allows them to minimize their expenditures, while still being able to choose just the programming services they want to watch. For this reason, we have been reluctant to force customers to migrate off the older platform. However, the requirement to participate in NPAS means we will likely have to do so." The letter notes that Classic TV stopped being available to new customers last January. Lawrence said this was done with the intention of eventually phasing out Classic TV, and that just 10 per cent of the company’s overall IPTV customer base remains on that service. Beyond upsetting existing customers of Classic TV, MTS said in its letter to the CRTC that it would be "far beyond our existing capabilities" to move the rest of its Classic TV customers to Ultimate by March 31 next year, as it would double the amount of expected installations. MTS added that allowing MTS Classic to exist one more year without being part of the emergency alert system would "soften the financial impacts on MTS. We anticipate that some proportion of the customers who are forced to migrate off our Classic TV service will choose to switch to another service provider or will opt to cut the cord entirely, rather than move to our Ultimate IPTV service. This proportion could be significantly greater, if an extension is not granted, since we would be physically unable to accommodate all of the resulting requests for service between now and 31 March 2015." During a call to the MTS customer-help line, a service representative said Classic customers are being urged to switch to Ultimate because Classic will not be supported "within a year or so." She said a basic service price of $44.50 a month for Classic can be maintained for customers upgrading to Ultimate, though they would have to pay extra for equipment, such as a whole-house PVR system for $6 a month. The MTS customer service representative said, unlike Ultimate, Classic does not have the capability for digital recording, pausing and rewinding live TV, or high-definition channels. She said it's likely that some customers of Classic are in areas where Ultimate is not available. Mario Mota, a TV-industry analyst with Boon Dog Professional Services, said MTS' Classic service was among the earlier versions of IPTV to arrive in Canada. For those hanging onto MTS' Classic TV service, Mota said in a phone interview: "It might be a cost issue. ... It could be a thing with seniors or low-TV users that just don't want that extra functionality." Mota said MTS risks "angering" the remaining Classic customers by being too heavy handed in moving them over Ultimate, though at some point it makes sense to pull the plug on the lesser of the two TV services. "It gets to a point where you have to find that magic number; so is it 5,000 customers where economically it makes sense to switch them over and eat the costs for them to do so?" Mota said. "Because there's savings to having them on the Ultimate and there's higher average revenue per customer on Ultimate than on the Classic service." Mota said there are likely similar technological issues in making this alert system available to those still on an analog cable connection. He estimated there are between one million and two million cable customers that fall into this category. In response to a question about whether analog connections pose a problem to complying with the CRTC's requirements for a national alert system, Rogers Communication Inc. spokesman Kevin Spafford said in an email: "Through our migration efforts over the past few years, the vast majority of our customers now have digital cable. We will use our cable network to ensure our customers receive alerts in compliance with the CRTC’s policy decision." — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Peter Henderson at phenderson@thewirereport.ca

MTS Classic TV phase-out hastened by CRTC rules

News | 11/14/2014 9:07 pm EST

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