The Canadian government has promised a number of consumer-friendly changes to the way that broadcasting and wireless telephone services are offered, although it remains to be seen precisely how such changes will be affected.
It is also unclear what role the government will take, given that much of the subject matter falls within the jurisdiction of the CRTC, the independent broadcasting and telecommunications regulator.
The announcements were made as part of the October 16 Speech from the Throne, which kicked off the new session of Parliament. The new initiatives include the following:
Roaming in Canada
The Government announced that it “will take steps to reduce roaming costs on networks within Canada,” suggesting that the focus will be solely on domestic roaming fees, the fees charged when subscribers use their devices when located outside the service area of their carrier. The focus on domestic fees only may be due to the fact that international roaming charges are based on charges levied by foreign carriers for services received in foreign countries, and therefore beyond direct Canadian jurisdiction.
The government announcement is also interesting in light of related initiatives by the CRTC, the country’s independent regulator, which are already underway.
The CRTC Wireless Code, which comes into effect on December 2, 2013, already limits potential sticker shock from both domestic and international roaming charges, but does not address pricing for roaming services. The Code provides that a service provider must suspend both national and international roaming once the charges reach $100 for any monthly billing cycle, unless the customer expressly consents to pay additional charges.
Moreover, at the end of August 2013, the Commission also commenced an investigation of roaming frameworks and pricing, requiring Canadian wireless carriers to file information regarding the rates, terms and conditions from wireless operators offering roaming in Canada. This information was only recently filed with the Commission, and it is unclear what further action, if any, might be taken.
No “Pay to Pay”
The government also announced that it will end polices that require customers to pay extra to receive paper bills. This initiative appears to be directed at businesses generally, but may have a particular impact on providers of telecommunications and broadcasting distribution services, given the prevalence in the industry of levying an additional fee for the provision of a paper invoice, rather than an electronic one.
Pick ‘n Pay Television
The throne speech also notes that the government believes that Canadians should be able to choose the combination of television channels that they want, and will therefore require such channels to be unbundled. However, there are a number of serious challenges to implementing a pick-and-pay regime.
First, the broadcasting policy objectives set out in the Broadcasting Act include the requirement that broadcasting undertakings must make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming. Based on this objective, theBroadcasting Distribution Regulations require distributors to ensure that a majority of the video and audio channels received by each subscriber are devoted to the distribution of Canadian programming services. Other CRTC rules require that foreign pay and specialty services be sold only in packages with Canadian pay and specialty services.
In addition, the rates paid to TV services by broadcast distributors are based on the number of subscribers to a given channel, and therefore to the penetration level of the tier or package of services within which the channel is sold by the distributor. Given the smaller subscriber base, services sold on a standalone basis carry much higher wholesale fees, which are passed on to the consumer. So while consumers may avoid paying for services that they don’t want, they will likely pay more for the services that they do want. As a result many have cautioned that true pick-and-pay may actually result in higher costs to consumers.
The pick-and-pay conundrum has frequently been considered by the CRTC, and will presumably again be on the table as part of a public consultation to be held on October 24, 2013.
Finally, the throne speech indicated that the government would “continue enhancing high-speed broadband networks for rural Canadians.” Once again, it is unclear what this will mean in concrete terms.
In past years, the Broadband Canada: Connecting Rural Canadians program, which operated between June 2009 and April 2012, provided $225 million toward a program which would fund up to half of the eligible project costs to build and operate broadband infrastructure (minimum 1.5 Mbps) to certain unserved and underserved communities. The government reported that a total of 84 projects were funded, bringing broadband access to a total of 218,000 previously unserved or underserved households.
The one certainty relating to the recent announcements is that consumers and industry stakeholders alike will be watching with interest in the coming months to see exactly how the government intends to fulfill its throne speech promises.