Canada asks regulator to study unbundling of TV channels

OTTAWA Thu Nov 14, 2013 2:07pm EST

An electronics store employee watches Canada's Prime Minister Stephen Harper deliver a national televised address in Calgary, Alberta, December 3, 2008. REUTERS/Todd Korol

An electronics store employee watches Canada's Prime Minister Stephen Harper deliver a national televised address in Calgary, Alberta, December 3, 2008.

Credit: Reuters/Todd Korol

OTTAWA (Reuters) - The Canadian government instructed the country's television regulator on Thursday to study the impact on consumers of unbundling cable- and satellite-television packages and to report back by April.

The government pledged last month to push cable and telecom providers' to provide more flexibility than allowed under the current standard practice of requiring the purchase of TV channels in large packages rather than individually.

"Right now, most cable- and satellite-TV subscribers must sign up for bundles of channels - many of which they may have no interest in - to get the ones they really want," Heritage Minister Shelly Glover said in prepared notes for a speech in Vancouver.

"Our government said very clearly that we would require channels to be unbundled, while protecting Canadian jobs."

She said the government wants first and foremost a report from the Canadian Radio-television and Telecommunications Commission on the impact that unbundling would have on consumers. It would then ensure that consumers "see more choice and better service".

Media companies say that consumers will likely pay much more per channel if they are pushed to shrink the content packages they offer.

The Conservative government made its pledge on TV packages last month as part of a broader pro-consumer push aimed at regaining voter support ahead of a federal election in 2015.

Distribution companies have already been offering Canadians some alternatives to the take-it-or-leave-it bundles, some to a greater extent than others, and this is being watched with interest in the United States, where bundling is also prevalent.

In the largely French-speaking province of Quebec, for example, industry sources estimate that 70 percent of viewers buy a very basic TV offering of mostly broadcast fare and then pay for small groups of cable channels from a long list ranging from Discovery Channel to BBC Canada.

Telus Corp, one of the nation's largest telecom companies, has used the a la carte strategy as a major selling point since it aggressively expanded its Optik TV service several years ago. Since 2011, the number of subscribers to its TV services, mainly Optik customers, has more than doubled to nearly 750,000.

Other Canadian cable companies have moved with varying degrees of intensity: BCE Inc's Bell has matched the pick-and-choose deal offered by Quebecor Inc's Videotron in Quebec.

In Ontario, Canada's most populous province, cable provider Rogers Communications Inc and Bell have been less open to such change.

(Additional reporting by Alastair Sharp; Editing by Jeffrey Hodgson and Peter Galloway)

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