EastLink applies for basic cable rate deregulation four years after other cablecos

More than four years after many of Canada’s other large cablecos applied for basic cable deregulation, EastLink has followed suit. Paula Sibley, a communications specialist with the Atlantic Canada-based cableco, tells Canadian Communications Reports that applying for the deregulation later than other cable providers doesn’t necessarily mean that EastLink has been able to better fend off competition. Basic cable rate deregulation is granted when cablecos can demonstrate that they have lost 5% of their customer base. "It’s more a reflection of the marketplace of Atlantic Canada," says Sibley, on the timing of the application to the CRTC. "I think the market as a whole has become extremely competitive, and there are a lot of emerging technologies in the TV industry. There more choice and competition for customers in the marketplace." She says that EastLink isn’t noticing a lot of competition from telco Aliant’s television service yet because it "is only operating in a small geographic area." The customer loss, according to Sibley, has mostly gone to satellite TV distributors Bell ExpressVu and Star Choice. EastLink has applied for deregulation for its Class 1 cableco systems in the Nova Scotia communities of Bridgewater, Halifax, New Glasgow, Sydney, Truro, Bedford/Sackville, Kentville and Dart-mouth, as well as in Charlottetown PE. Rogers Cable Inc. was the first to apply for basic cable rate deregulation for two of its small systems in Ontario – St. Thomas and Woodstock – back in May 2001 (CCR, May 24/01). Being deregulated means that cablecos can raise the price of their basic cable packages without prior CRTC approval; otherwise, a cableco would have to apply to the CRTC to be able to raise rates. Historically the regulator has only allowed basic rates to be upped if a cableco’s profitability is below set thresholds, if a wholesale rate increase has been approved by the commission for a specialty TV channel carried on basic, or if a specialty TV service has been added to the basic tier. Sibley notes, however, that EastLink isn’t necessarily looking to raise the price of its basic cable TV packages by applying for deregulation. "It’s about having the flexibility to respond to the marketplace," she states. But given that cablecos can lower their prices without deregulation, it appears likely that EastLink customers will see a basic cable TV rate increase. Rogers followed its May 2001 application for deregulation of its St. Thomas and Woodstock systems with similar requests for some of its other systems. As well, Regional Cablesystems, now known as Persona, applied in October 2001 for deregulation of its Sudbury and Timmins ON systems (CCR, Oct. 11/01). In June 2002, Vidéotron ltée applied for rate deregulation of some of its systems, while that same year some Cogeco and Shaw systems (CCR, July 4/02) were deregulated. During a speech in 2002, CRTC chair Charles Dalfen noted that 42% of all basic cable subscribers would be in deregulated systems by the end of May.

EastLink applies for basic cable rate deregulation four years after other cablecos

Broadcast | January 12, 2006

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