Canadian TV providers accused of giving cheap bundles cold shoulder

TORONTO (Reuters) - Consumer advocates accused Canadian telecom and cable companies of failing to adequately promote the launch on Tuesday of cheaper basic packages of television channels under sweeping new rules imposed by the country’s broadcast regulator.

Rogers Communications Inc and BCE Inc’s Bell, two of Canada’s biggest distributors, listed the C$25 ($18.57) basic service on their websites by the March 1 deadline, but placed the “skinny” packages and smaller groups of add-on channels below more expensive and expansive offerings.

A Rogers comparison page showed the basic bundle was costlier than more comprehensive options once C$58 for “something for everyone” was added. Bell’s Starter pack does not qualify for rental fee waivers and bundle discounts.

“The big telecom companies are trying to strangle the C$25 package at birth,” said Josh Tabish, campaigns director at consumer advocacy group OpenMedia.

University of Ottawa law professor Michael Geist noted the Rogers package includes major U.S. networks, while Bell’s does not.

Bell’s basic offering “is not designed for anyone to buy,” he said.

CBC News reported last week that both companies planned to downplay the cheaper products, citing an internal Bell document and interviews with unnamed employees.

Bell declined to comment on the anonymous claims but said its packages and marketing comply with the rules adopted by the Canadian Radio-television and Telecommunications Commission (CRTC) in March 2015.

Rogers said it has trained staff to help customers “find the option that best meets their needs.”

The new CRTC rules also include a provision requiring all extra channels be offered individually by December.

The sweeping change to how Canadians access their favorite television shows followed complaints from consumers who did not want to pay for channels they did not watch.

It also came as low-priced streaming services such as Netflix Inc challenge the dominance of major Canadian television providers, which also include Telus Corp, Shaw Communications Inc and Quebecor.

Ryan Bushell, a portfolio manager at Leon Frazer who holds stakes in BCE, Telus, Rogers and Shaw, said the cheaper service would cut profits, though some customers looking to cancel might instead move to cheaper subscriptions.

He said the cost of upgrading networks for ever-faster Internet connections was a bigger issue, especially for telecommunications companies.

“The trend for TV revenues per household is down,” Bushell said. “The question will be how much and how fast they can make it up on the Internet side.”

Editing by Paul Simao