March 1 marked a major milestone for the implementation of the Canadian Radio-television and Telecommunications Commission’s new regulatory regime for television services.

As of that date, the most significant changes to the distribution of television programming by cable, IPTV and satellite distributors have now been implemented. These changes were announced in multiple policy statements and regulations the CRTC issued in 2015 which were intended to provide more flexibility to consumers to choose the television programming services they want to receive. This article will recap and update on the two major changes to television services that Canadians are experiencing as a result of regulatory changes implemented in 2016.

The CRTC’s new rules for packaging and distributing television programming services came into effect on March 1, 2016. These rules apply generally to large cable, IPTV, and satellite distributors. The two most highly anticipated and publicized changes were the requirement to provide a smaller basic service at a capped cost and the requirement to make available other programming services like specialty channels on a pick and pay or small package basis.

“Skinny basic”

The CRTC made several adjustments to the basic service by requiring distributors to offer a basic service package that costs subscribers no more than $25 per month (not including equipment) and that contains only a limited number of prescribed channels.

Those channels are: Canadian local and regional over-the-air television stations, such as the CBC/SRC, CTV and Global stations; Canadian channels that the CRTC has deemed to be of public interest, such as CPAC; provincial educational channels; and community channels and services operated by provincial legislatures. The basic service can also include: all local AM and FM radio stations; a limited number of distant Canadian television over-the-air stations; a set of over-the-air stations of the four U.S. commercial networks (ABC, CBS, FOX and NBC) and PBS; and, an educational channel of another province or territory in each official language (if no other educational channel is offered).

Although it is rate-regulated and the number of optional channels that can be included are few, there are enough variations permitted such that the new basic service package may still be a competitive differentiator between distributors.

Slimmer in size and cost than in the past, this new basic service has been colloquially referred to as “skinny basic.” The skinny basic is in contrast to the entry-level service Canadians might have seen before, which varied, often greatly, by distributor in terms of price and channels. However, distributors can also still offer subscribers an alternative, larger basic service, similar to that which subscribers could take prior to March 1.

“Pick and Pay” and “Small, Reasonably-Priced Packages”

The CRTC’s new rules regarding pick and pay and small packages also came into force on March 1.

On top of the basic service, Canadians can now subscribe to additional programming services, namely Canadian and foreign services, on an individual pick and pay basis or in small packages.

The CRTC requires that these packages be “reasonably priced.” As of December 1, 2016, distributors must offer these discretionary television services on both a pick and pay and small package basis. Distant or out-of-market Canadian stations are not included in the pick and pay and small package rules. In other words, except as permitted to be distributed on the basic service, these stations do not have to be offered on an individual basis or in small packages. A distributor can also choose to continue to offer additional, larger packages of channels on top of the individual and small packages.

The introduction of these new requirements does not eliminate existing CRTC packaging rules for the most part. Earlier CRTC policies and regulations relating to packaging and distribution, including conditions of licence, are still in place and continue to govern the packages television service providers can offer.

A Whole New World?

2016 is a year of upheaval for distributors and also television programming service providers, as the CRTC implements policies and rules which will shape television services in Canada for a long time to come. These changes have generated a lot of public attention as they are designed to serve the interests of consumers. How Canadians will react to this new paradigm of flexibility is yet to be seen.