'Skinny Basic' Cable Will Reduce Consumer Choice? Claim Earns Rating Of 'Some Baloney'

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OTTAWA — "The end result (of new regulations mandating smaller, basic cable and satellite TV packages) is that there will be fewer Canadian choices." — Friends of Canadian Broadcasting spokesman Ian Morrison, Feb. 29, 2016.


On March 1, new rules introduced by Canada's broadcast regulator took effect, requiring all cable and satellite TV service providers to offer their customers a smaller, basic package of channels, for no more than $25 per month.

The trimmed-down channel packs, dubbed "skinny basic" by industry insiders, were supposed to — in the words of the Canadian Radio-television and Telecommunications Commission — mark the dawn of "a new era of choice for Canadian television viewers."

Under the new rules, customers can purchase a price-capped, basic TV package. Those same customers could then top up their basic service with either individual pick-and-pay channels or small bundles of their favourites.

CRTC chairman Jean-Pierre Blais has never stated that Canadians, overall, should expect to save money. In fact, several industry observers have predicted the new rules would result in added costs for consumers who subscribe to a basic service and then choose to add on extras.

But whether the measures will actually result in more choice for consumers has come into question.

The group Friends of Canadian Broadcasting, which advocates for better and more diverse TV programming, has concluded the move will ultimately mean fewer channel choices.

So which is it? More, or less, choice for TV buffs?

Spoiler alert: The Canadian Press Baloney Meter is a dispassionate examination of political statements culminating in a ranking of accuracy on a scale of "no baloney" to "full of baloney" (complete methodology below).

This one earns a rating of "some baloney." Here's why.


The CRTC announced in March 2015 that it would "unbundle" TV services in order to give consumers "more choice, flexibility and affordability" over what they watch. The move came as a result of broad public consultations.

The changes required all licensed television service providers to offer a basic package of channels, costing no more than $25 per month and consisting of local and regional stations, public interest channels such as the Aboriginal Peoples Television Network, as well as educational and community channels. The trimmed-down packages could also include local AM and FM radio stations, non-local over-the-air TV stations and American commercial networks such as ABC, CBS, FOX and NBC.

Several service providers offered the U.S. networks as part of their smaller basic services, effective March 1, while others opted to charge extra for them.

Service providers were also required to offer channels either individually or in packages of up to 10. But by December 1, they'll have to offer customers both a la carte and small package options.

The CRTC said the changes are designed to ensure Canadians have the ability to "choose the television content that meets their unique needs, budgets and realities."


In their purest form, the CRTC's new rules, once fully realized, will provide consumers with the choice of paying for fewer channels at a lower cost, and of picking the individual stations that they prefer to watch, says Michael Geist.

But for many, that's a false choice because it's likely inevitable that the rule changes will result in fewer channels to choose from, adds Geist, who holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa's Faculty of Law.

"We are probably going to lose some channels that are not financially sustainable and have very little in the way of audiences," said Geist.

"This is shifting Canada towards a more market-oriented marketplace for broadcast television."

Many channels will struggle because they are no longer cross-subsidized by being included in subscription-based bundles.

Cross-subsidization happens when service providers offset the costs of carrying more expensive channels with the lower costs of their less-expensive channels by bundling them into a one-price package.

Without subsidies, low viewership channels are left to survive on dwindling advertising revenues.

A report released in early January by the consulting firm Nordicity and communications lawyer Peter Miller concluded that conventional, private TV stations across Canada have seen revenues decline by about 25 per cent since 2010, reducing their ability to produce quality Canadian programming.

The report went on to warn that, under recent changes to CRTC regulations, including the unbundling of TV packages, revenue streams are set to drop even further.

"In our view, the most likely scenario over the short-to-mid-term is a material, but not fatal, erosion of traditional television," said the report.

The CRTC's Blais doesn't argue with that finding, saying "some channels may not survive in an environment marked by greater choice."

"However, channels will need to be innovative to succeed," Blais said in a recent statement.

But focusing solely on the value of basic TV packages misses most of the story, says Geist, who argues that the emergence of slimmer basic packages will push some people to re-examine what they watch, and how they watch it.

The real effects of the new system, he argues, will come later in the year, when the full pick-and-pay requirements kick in.

More broadly, Geist opines, new choices have and will continue to emerge in the form of the varying ways Canadians can view programming. Essentially, online choices.

"If we are talking about less choice in terms of traditional broadcast channels that one might watch on their television, yes, some of those channels may disappear in a pick-and-pay world because they simply don't have sufficient audiences to merit continuing," said Geist.

"If we are talking, on the other hand, about generally the amount of choice people have for entertainment and for video, it's obvious that there's far more choice today than there has ever been given the array of . . . online video services available and the like."


While some Canadian TV channels may disappear under the new system, unable to survive without cable and satellite subsidies, others may find ways to enlist new viewers and attract the advertising dollars needed to survive.

Better marketing of specialty channel selections may — or may not — pay off. Or, Canadians may turn away from lesser-watched traditional TV channels and focus their eyeballs toward online sources of programming.

But even if some specialty channels fade to black, TV today is merely one avenue of entertainment for Canadian viewers. And the choices offered through online sources appear endless.

For that reason, Morrison's statement ranks as "some baloney."


The Baloney Meter is a project of The Canadian Press that examines the level of accuracy in statements made by politicians. Each claim is researched and assigned a rating based on the following scale:

No baloney _ the statement is completely accurate

A little baloney _ the statement is mostly accurate but more information is required

Some baloney _ the statement is partly accurate but important details are missing

A lot of baloney _ the statement is mostly inaccurate but contains elements of truth

Full of baloney _ the statement is completely inaccurate


Jean-Pierre Blais speech to the Canadian Club of Toronto, Feb. 17, 2016.

Interview with Michael Geist, Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law, March 8, 2016.

Canadian Television 2020: Technological and Regulatory Impacts: A study by Nordicity and Peter Miller, Dec. 2015.

http://news.gc.ca/web/article-en.do?nid=1037039 _ CRTC welcomes new era of choice for TV viewers

Interview with Ian Morrison, Friends of Canadian Broadcasting, Feb. 29, 2016.

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