The CRTC will post the Let's Talk TV decision on measures to maximize choice for Canadian television viewers on the CRTC website www.crtc.gc.ca at 4:00 p.m. on Thursday, March 19, 2015.
The Chairman of the CRTC will deliver a statement and answer questions shortly after 4:15 p.m.
Indeed, the supplier will charge what it can get from the customer. Their shareholders and the capital markets want to see their financial returns maximised.
So why should we believe that cableco and telco would not also try and charge for their full infrastructure costs three times over in charging for each of their TV, internet and phone services?
We shouldn't. But that is not the point, in my mind. They have no obligation, legally or morally, to offer their services at no cost. The price they charge should not be tied to their costs. It should be what the market will be, be that above or below their cost.
The problem is all the regulation. That has created a market that is not truly free. I don't know the solution to that at this point, but being forced to offer their services at no charge does not seem to me to be the right way to go.
Your controversy with a zero price model must be with someone else.
I appreciate your scepticism over the effectiveness of the regulator. I was questioning the flat assertion made twice in this thread (not by you) that only the relevant part of the infrastructure costs were being charged for each of the internet, TV and phone services. That being an integral part of the $25 skinny basic discussion in this pick and pay CRTC announcement thread.
However regarding your observation, it is not the regulator that has made the market not truly free but the original nature of the natural monopolies (which advancing technology has now turned into duopolies in most locations). The chicken came before the egg.
I look forward to advancing technology, and a healthier wholesale market, continuing to enable more and more market entrants to enable the retail market to begin to approach a free state.
The cricket has been truly magnificent tonight by the way.
You are correct, the no-charge basic was not something you had suggested. And I did not mean to infer that it was, but the discussion on payment for infrastructure goes back to that point.
I think you and I are likely at the same place in the hope that technology will free the market and I do see that starting already.
If I'm reading paragraph 27 correctly it sounds like a BDU is free to put a whole mess of other channels in an entry level package and charge whatever they want, so long as they also offer the mandated skinny-basic package at $25 or less. It's possible that there would be two $25 packages - the mandated one and another with bonus channels.
For clarity, the Commission notes that BDUs will not be prevented from providing a first-tier offering that includes other discretionary services (e.g. children’s services, pay audio services or mainstream sports services) as an alternative first-tier offering, provided that they also offer the entry-level service offering described above. However, BDUs will not be allowed to require subscribers to buy any services other than those in the entry-level service offering to access any other services or packaging options. In other words, a subscriber who opts for the entry-level service offering may not be prohibited from also subscribing to discretionary services either on a pick-and-pay or small package basis.
Knowing Bell, they will put a hefty premium on discretionary packages that will neutralize their appeal with skinny basic. An example of this is when they bumped individual theme packs from $5 to $10 each in order to make it cost ineffective for people to downgrade their service. It affected me since I had downgraded to two theme packs from the previous 6 theme pack bundle. I cancelled Bell soon after for a more cost effective BDU.
Yep. That's what happened with me also. A few years back I too was trying to reduce the cost of my programming with Bell with only 3 theme packs and no sports, but HAD to get 6 with a sports pack to be considerably cheaper. I learned that the true value of each package was basically nothing if they could offer twice as many for less money. Cancelled and have been happily BDU free ever since. However, IF this skinny basic plus a few choice channels turns out to be reasonably priced, I may be tempted back as a supplement to my main OTT sources. However, judging by previous business practices of the Big 2 BDUs (in my area), at the end of this I suspect they will not be taking any LESS money from their subscribers from this racket.
A few people suggested that basic cable should be "free" if they have another cable service, because they think they are already paying all the costs of service.
I took Shaw Cable as an example since their year-end is the broadcast year, which the CRTC uses for their data collection.
Shaw's annual report states that 92.7% of their cable TV customers have internet. If Shaw were to issue a bill credit to those 1,890,506 customers that have both services to give them "skinny basic" for free, Shaw Cable would end up with a $24 million annual loss. Clearly that's not a sustainable business model.
A few people suggested that basic cable should be "free" if they have another cable service, because they think they are already paying all the costs of service.
I only recall seeing 1 person suggest that skinny basic should be free, but I have not reread the entire thread. For the sake of your argument however let's consider your $25 per month rebate for each TV customer calculation logic.
The key advantage and thrust of skinny basic and pick and pay is that together they will virtually eliminate the cross-subsidization of pay services and specialty services by those who do not want to watch them nor pay for them. The two go together in maximising choice for Canadian TV viewers in the CRTC announcement.
Accordingly, it would NOT follow that those customers who subscribe to more TV than skinny basic would be receiving ANY rebate at all each month let alone $25 each month.
However, for the consistency of your argument, given that you have implicitly assumed that 100% of TV and internet customers would be a skinny basic customer only for TV and therefore entitled to a full $25 credit each month, you ought also to add back in the $525,232,000 of expenses that related 100% to pay and specialty services as those expenses would now be near zero (not quite zero because APTN are being thrown a bone in the CRTC decision).
Shaw's change in net profit, on your assumptions which I do not agree with, would be adversely impacted by only a net $42,000,000 and not $567,000,000 as you suggest.
Bell will raise the price for Internet for customers who just opt for skinny basic, you'll see they will find other ways to get as much out of their customers as they can.
I'd like to see BDU billing be more like other utilities. There should be a basic charge for billing and infrastructure maintenance that should include any services that can be delivered without any additional costs to the BDU - that would include all Canadian channels that do not charge subscription fees. The channel should be responsible for getting the signal to the BDUs headend, then it can be sent out in clear QAM. Additional fees would be charged for services that incur additional costs, like specialty channels that require subscription fees and STBs, internet service and landline service. Fees for those additional services should reflect the cost of additional infrastructure requirements (people who want superfast internet should pay significantly more than anyone satisfied with 1 Mb/s), as well as consumption (like gas and electricity, this should be the actual marginal cost of providing the service).
$25/month would be a reasonable basic charge. Then you could add a landline for another ~$20 plus long distance charges, slow internet for ~$20 plus ~$0.02/GB, fast internet for ~$80 + $0.02/GB, or specialty channels for ~$20 plus the actual subscriber fee charged by each channel that you want.
If memory serves me correctly the figure of $25 was introduced at an earlier CRTC hearing.....it was the consensus that amount would cover the infrastructure costs, channel costs, etc, for Bell TV. $25 x 2 million+ subs equals a lot of money each month. Every dollar extra could be considered gravy. Unfortunately many of us know about creative book-keeping and how money is thrown into the Bell Media pot to give either a profit or lose for the year.
^ True, the cost of the actual data transmission for a voice call is now minimal and relatively insensitive to distance. There are still additional costs associated with interfacing with networks outside of Canada though.
When a new phone would be releases it would cost $199 on 3 year contract. The phone subsidy was $500. At the time many had $60-$70 plans with 6GBs.
Now with 2 year contracts it's $199 or more for the upfront cost. And the $500 subsidy isdivided over 2 years instead of 3. This translates into an increase of $7. Minimum plans is $80 or $85 with 500megs. So yes, they are gouging with 2 year contracts.
Thanks Dr. Dave for those figures.
Here in Quebec, though not as bad as in other Provinces we still get unwanted channels. For example, they added LCN. Then they added Musique Plus and Musimax to sweeten the deal for who ever wanted to buy them as part of the conditions of the Astral Aquisition. The kicker is they now added RDS to Fibe basic but not satellite basic. Yet we all got the same increase in price. So a skinny basic would be good for many that just want for example 5 channels. Lots of sports fans would take that option but then Bell and Rogers will spread their sports content an all their channels. leafs would be on SportsNet Ontario, SportsNetOne, SportsNetwork and CBC(Saturdays) for a greater audience for advertising revenue. So that would take up 3 channels right there. Bell would do the same and you'd need a la carte 10.
I hope that they offer smaller options like a la carte 5 and 10 as that would be enough for some people. But I see them starting off at a la carte 15.
Obed, I'm not suggesting in the real word that there wouldn't be a dramatic shift in specialty channels with pick-and-pay.
My point was that skinny basic is a subset of "fat basic", comprised mainly of free channels. Those free channels exist today. If the internet customers were already paying the full costs, then that $25/month would just be excess profit and the cableco would still be making a fair profit even after deducting the cost of the TV service from the internet customers' bills.
When you consider the costs of TSN, Sportsnet, YTV, and other channels on basic you can see that those do bring up the costs a fair amount. Remove them from basic and it should cost a lot less. In fact I think CRTC should have mandated that no sports be on any basic package at the very least.
Did anyone forget to ask would the skinny basic channels be provided in SD or HD. What a great way to add more cost to the $25......that Mr. & Mrs. Subscriber will be an additional $10 for HD.
I imagine that where HD is available OTA, they'd have to carry that. But where it isn't, I imagine they could in theory pull that. I don't think any of them would be stupid enough to go that far though.
The skinny package is to be no more than 25$, correct?
Does this mean all fees and taxes inclusive?
If not, then the 35$ skinny cap is useless in my opinion. Oops, that was a slip of the finger!
Apart from that, over what time period does 25$ cap last before they are allowed to start raising the price?
If these questions have been answered elsewhere, sorry for the repeat.
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