Article content continued

“We expect many specialty channels will become unprofitable in an unbundled world. It is difficult to pinpoint which channels will be closed, but the impact on profitability should not be material as these stations were not very profitable to begin with.”

The C.D. Howe Institute, in a study in September, warned that “attempting to regulate pick-and-pay or product offerings would launch the CRTC on a more interventionist role in the entire content and video distribution business.”

The independent Toronto-based think-tank said such a move “would almost certainly require the CRTC to supervise the prices for unbundled products, as otherwise, broadcast distributors could offer larger bundles at steep discounts to discourage à la carte consumer choice.”

Another issue is who will set the pricing structure of pick-and-pay packages.

Mr. Yaghi suggests the CRTC could either set the cost of a basic package itself or allow companies to determine prices “as they see fit.”

Thursday’s ruling on pick-and-pay follows a series of hearings, which the federal body has dubbed “Let’s Talk TV,” aimed at developing new measures the regulator argues “will maximize choice for Canadian television viewers.”

These include dropping quotas on Canadian TV content in daytime programming, although the minimum 50% rule will remain in force during evening prime-time viewing.

At the same time, the CRTC wants to encourage more investment in higher-quality Canadian content. To encourage that growth, the regulator will require at least 35% of programs on specialty channels be produced in this country. Right now, the quota can fall anywhere between 15% and 85%.

Since becoming chairman in 2012, Mr. Blais has promised a more consumer-focused approach to regulatory decisions. As he stated in rejecting BCE’s initial bid for Astral Media shortly after his appointment: “Certainly, it is my intent to put Canadians back in the centre of their communications system.”