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CRTC OKs pick-and-pay, but it’ll cost you

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A journalist uses a smartphone to record Canadian Radio-television and Telecommunications Commission (CRTC) Chairman Jean-Pierre Blais as he speaks during a news conference in Gatineau, Quebec March 19, 2015. Canadian television viewers will no longer be forced to pay for vast numbers of channels they do not watch, the country's broadcast regulator said in a sweeping ruling on Thursday. REUTERS/Chris Wattie

The CRTC’s decision to mandate cable and satellite television distributors to offer an entry-level service to customers for no more than $25 per month may open the door to increased choice, but it also comes with a dark side for consumers who have been waiting for years for a break on their television bills.

The new rules, announced Thursday by chair and CEO Jean-Pierre Blais, requires television service providers to make the low-cost packages available no later than March 2016.

By December of next year, consumers who want more than just the basic package of local and regional stations, public interest channels, education outlets and community channels and services will be able to subscribe to additional channels a la carte as well as via small, affordable packages.

Consumers will also have the right to retain their existing television services, if they wish.

Be careful what you wish for

While consumers have long bristled at being forced to buy channels in bundles, the impending arrival of this hybridized form of pick-and-pay availability promises to bring its own largely unintentional consequences to the Canadian television market. As annoying as bundling has been to value-seeking consumers - it’s akin to being forced to buy milk, peanut butter and laundry detergent all together when all you wanted was milk - the practice of regulator-mandated carriage tended to keep subscription rates for some individual channels relatively low. Channels and services that were included in basic packages and bundles enjoyed distribution to relatively large audiences, which helped them maximize advertising revenues.

Removing the protective coverage of bundling - along with its guaranteed revenue streams for normally low-demand channels which would otherwise have difficulty selling themselves to a mass audience in a completely free market - could force the price of individual channels up, in some cases significantly.

The CRTC wasn’t in a rush to share specific pricing details for individually-subscribed channels - or information on how many channels will be included in the basic service - because the answer may not be what consumers want to hear. Canadians may finally be on the verge of gaining the right to choose - and pay for - precisely what they want to watch, but they could be in for a nasty surprise when the bill arrives.

The prospects of greater consumer choice will also be challenged as once-coddled channels are forced to fend for themselves. Not all will survive, which ultimately leaves consumers with fewer choices. Worse, it hinders the ability of content producers to find markets for their work.

Canadian Media Production Association data suggests the TV production sector supported 125,000 full-time jobs in 2014 and generated C$2.3 billion revenue. If some channels fail because of the CRTC’s latest mandate, expect the job losses to touch producers, as well.

Drive change … to a point

The CRTC probably could have done more, but true to form decided to ease off the pedal. Blame a legacy of four decades of subscription-based television distribution that compels the regulator to carefully pace itself when deciding which pieces of Canada’s television infrastructure to dismantle, and how quickly. Move too quickly and risk damaging prospects for Canadian content producers. Move too slowly and the slow bleed of customers to over-the-top services like Netflix continues unabated.

Nice try

Unfortunately, it has become a case of too little, too late, as the rising tide of cord cutting means growing numbers of Canadian consumers will never benefit from the changes that were announced today. Consistent with announcements earlier this year from the regulator that addressed relatively minor consumer complaints by allowing American ads on Canadian Super Bowl broadcasts and removing Canadian content regulations during daytime, the regulator once again missed an opportunity to deliver truly transformational policy changes that benefit consumers, carriers, distributors and content producers.

The limitations of its current mandate that leave it toothless in the face of wholesale change in online content delivery further frustrate consumers who want greater choice no matter how it’s delivered.

Unless the CRTC finds a way to make itself relevant to an increasingly Internet-centric television landscape, it risks being doomed to forever ruling on yesterday’s media battles. Consumers looking for affordable, high-quality Canadian content on their smartphones, tablets and Internet-connected devices may be out of luck.