The CRTC vertical integration hearing continues today, following several full days last week in which the Commissioners repeatedly asked whether companies such as Rogers, Bell, and Shaw should be required to offer a “skinny basic” service – a cheaper television package with limited programming. The introduction of skinny basic appears to be one of the CRTC’s preferred responses to the issue, since it is concerned that vertically integrated companies will use their broadcast distribution services to require subscribers to subscribe to their broadcast properties. The major integrated providers have opposed the idea, arguing consumers aren’t interested.

While greater consumer choice is definitely needed, skinny basic, which still envisions a required basket of channels, isn’t good enough. A preferable approach would be to offer consumers real choice with a full pick-and-pay format. I discussed the option in 2009 during the fee-for-carriage fight:





A full “a la carte” model would require three steps. First, exclude public broadcasters from the issue altogether. The CBC argues it is also entitled to fee-for-carriage compensation, yet that runs counter to the very notion of a public broadcaster. The public has already paid for the broadcasts and should not be asked to pay again. Public broadcasters should instead form a new basic tier for cable and satellite providers that would be considerably cheaper since it would only include channels for which no fees are attached.

Second, make all remaining channels – local, foreign, and specialty – optional for consumers. Groups of channels can still be packaged to offer better value (sports, movie, local channel, or U.S. channel packages), but the crucial difference from the current system would be that Canadian consumers would get to decide what channels they want to pay for.

Third, institute a fee-for-carriage system so private broadcasters are compensated for their local signals where consumers choose to subscribe. If Canadians are really concerned with their local television, they will subscribe and the broadcasters will be the beneficiaries. If the Canadian broadcasters are wrong, however, they lose both compensation and mandatory carriage.

The core principle is simple – the CRTC mandates full consumer choice so that vertically integrated companies can’t use their market power to pressure consumers to subscribe to unwanted channels, broadcasters are forced to compete for consumer dollars by offering something that is worth paying for, and consumers start with public broadcasters (which they’ve already paid for) and go from there.