Canada’s telecommunications industry regulator is opening a public consultation after several large cable providers filed an application to raise the price of basic cable packages by 12 per cent, and asked for approval to automatically raise prices in line with inflation.
Basic cable and television packages are capped at $25 a month, not including equipment, following a 2015 ruling by the Canadian Radio-television and Telecommunications Commission that sought to ensure consumers have affordable television options.
Documents filed by the CRTC on Wednesday show that in January, four telecoms that offer cable television requested that the CRTC raise the basic package rate to $28, and increase the cost every year in relation to inflation.
The price increases were proposed as Canadians are already financially stretched with inflation increasing the price of many basics, including gas and food. Inflation in 2022 recently reached 7 per cent, which could raise the price of a basic package to nearly $30 in 2023.
The four broadcasters – Bell Canada, Cogeco Communications Inc., Bragg Communications Inc. (carrying on business as Eastlink) and Saskatchewan Telecommunications – told the CRTC the cost of carrying mandatory channels included in the basic package has increased over the past five years: 18.5 per cent in the English-language market, and 13 per cent in the French-language market.
“The basic package was introduced in 2016 and the price hasn’t changed in the intervening six years, even as costs have gone up,” Bell spokesperson Jessica Benzinger said on Wednesday.
A spokesperson from Eastlink declined to comment. Anastasia Unterner, spokesperson for Cogeco, said the company was facing rising costs of operation and inflationary headwinds.
But such a price increase assumes that the CRTC is “treating this like a regulated rate instead of an accessibility subsidy,” said John Lawford, executive director of the consumer rights organization Public Interest Advocacy Centre.
He said he was not previously aware of the proposed price increase, but that his organization will likely oppose it, given the package is meant to provide essential services, including Canadian Broadcasting Corp. channels.
Bell and Rogers’ basic packages include about 30 stations each: mostly news, with some entertainment. According to the CRTC’s requirements, these packages must include local and regional TV stations, provincial legislature channels where available and local educational channels.
When the CRTC was discussing setting the current price in 2015, broadcasting distribution undertakings, or BDUs, including Rogers Communications suggested it should be reviewed annually, but the CRTC opted not to includes measures for any regular price updates, saying the $25 maximum “would be appropriate and sufficient to allow BDUs to recoup their associated network access costs.”
In a company conference presentation following the CRTC’s ruling in 2015, Guy Laurence, Rogers’ then-chief executive officer, said that “the cost of those channels is very low, so the margin on that package will be very good.” A spokesperson from Rogers declined to comment on the current proposed increase.
The requested price change would apply to all licensed broadcasters, including Rogers, Telus Communications Inc., Quebecor Media Inc. and Shaw Communications Inc.
In a statement, Telus spokesperson Richard Gilhooley said that, at this time, the company “is not seeking to increase the cap on basic TV packages.” Nonetheless, it would still be subject to the change in price.
In its release, the CRTC said it will accept submissions until the end of October, and asked commenters to consider in particular whether another system aside from the consumer price index should be used to measure inflation, or whether it should instead apply a fixed-price increase over a number of years.
According to CRTC spokesperson Patricia Valladao, the regulator does not publish granular information by individual packages, including the small basic service.
Irene Galea