Where are the federal Conservatives headed on policy? Over the past year there have been some odd priorities, at least to my mind. My favourite odd ducks are:
1 – Making a new training program a key plank of the last budget, pushing into provincial jurisdiction and annoying all of the provinces, let alone Quebec. Where was the crying demand for a new federal training program coming from anyway?
2 – Undermining the entire direction of foreign investment policy by denying the MTS sale of Allstream due to security concerns. Really? Where is our gatekeeper press on this one?
3 – As part of the pro-consumer initiative, taking on cross border pricing differences (some of the causes are federal but many are provincial jurisdiction). How are they going to deliver on that?
I was hoping that this latter direction might be code for taking on supply management but that would be a big surprise. Too much to hope for?
Last week there was much floating of the government forcing video distributors to offer pick-and-pay as part of the pro-consumer agenda. This week we will get a better idea of specifically what this will mean for consumers.
The absence of pick-and-pay has long been a bugbear of critics of the Canadian broadcasting system. It is aggravating to have to buy packages that contain many channels that you do not want in order to be allowed to get the ones that you do want. Programming packages are not, however, simply a result of past policy and CRTC regulation.
In the U.S., pick-and-pay does not exist either. The U.S. cable, telco and DBS satellite companies claim that customers do not want it. There is a small minority of consumers that claim that they want it, but when purchase decisions are made, almost everyone chooses packages, even when pick-and-pay options exist. Independent consumer research has shown the same result. So this particular pro-consumer initiative is something that consumers have shown they do not really care about.
The Canadian system is more complicated and this is probably what the Conservative government is getting at. The packaging, along with other measures, has been carefully designed to protect and promote Canadian content. The packaging rules, however, have already been gradually relaxed by the CRTC over the past ten years or so in a series of small incremental steps. That is why no one noticed the changes even though they have been significant. The CRTC has slowly changed the regulatory direction from protection of Canadian content to promotion of Canadian content.
There will be a host of unintended consequences to pick-and-pay once somebody has to decide what it will really mean. Will there be a basic package of some kind that consumers still have to buy before they get to pick-and-pay? Will the overall package selected have to be predominantly Canadian? Will pick-and-pay apply only to Pay-Tv channels and specialty channels? The cable, satellite, and telco video providers will not want to see their revenue decline. Are we going to get pick-and-pay but have to pay the same for the privilege?
We shall find out what it really means later this week. Pick-and-pay would be great in my opinion, even if overall market experience has shown that most consumers do not choose it when they can get it. I still hope that maybe the pro-consumer agenda means the end of supply management instead of just pushing the CRTC to go a little faster.
