Canadian cable, phone, and satellite providers have done a better job stymieing would-be “cord-cutters” than their counterparts further south in the United States.

The Canadian Radio-television and Telecommunications Commission’s (CRTC) annual report on the country’s telecom companies shows all of them remain exceptionally profitable, keeping pay TV customers far more effectively than American providers. Total revenues climbed from $12.5 billion to $13.5 billion in just one year, as price hikes, Internet Overcharging schemes like usage-based billing, and lack of competition continue to takes its toll on Canadian wallets.

The biggest winners were the biggest telecom companies in Canada — Rogers Communications, Bell Canada (BCE), and Shaw Communications, which all saw profits soar 8.2% to $11 billion.  Costs increased about 10.7% in 2011, fueled by network upgrades and rampant hikes in programming costs — an interesting state of affairs considering Rogers and Bell own or control a substantial number of the programmers demanding higher payments.  Most of those increases were passed on to customers in the form of rate hikes.

Although Canadians are increasingly interested in streaming online video, virtually every major Internet Service Provider in the country has effectively prevented customers from dropping cable television service in favor of broadband-only access.  They manage it with usage caps and usage billing on their broadband products.  With streamed video accounting for a substantial drain on customers’ monthly usage allowances, Canadians are unlikely to cancel cable TV in favor of watching all of their favorite shows online.

In fact, the number of Canadian households that subscribed to a cable company’s basic television service actually increased by 2.8% in 2011 to reach 8.5 million.  Experts say the country’s transition to digital over the air television may account for some of that increase, but a few high broadband bills with overlimit fees for “excessive Internet use” can effectively drive online video fans back to traditional cable TV as well.

Satellite television in Canada remained flat,  with a virtually unchanged 2.9 million Canadians relying on Bell and Shaw satellite service for television entertainment.

But everyone is paying more to watch.

In 2011, cable companies paid $2.1 billion in wholesale fees to the pay and specialty services they distribute, an increase of 10.2% over the $1.9 billion paid the previous year. The fees paid by satellite companies rose by 2.8% in one year, going from $894.4 million to $919 million.

That leaves vertically and horizontally-integrated conglomerates like Bell in the perfect position to extract higher programming payments.  Those costs are passed down to Canadian consumers and blamed on “greedy programmers,” despite the fact those programmers are owned in part or outright by Bell.

A Rogers retail rental store

Rogers is also well-suited to remain a part of the Canadian entertainment experience.  The company owns cable systems, wireless phone networks, programmers, and even home video stores. However Stop the Cap! reader Alex notes Rogers has been closing a number of those video stores over the past few months.

“This gives customers one less choice for renting movies, basically forcing them to use Rogers On Demand instead,” writes Alex.

Rogers On Demand comes with a higher price, too.  In-store rentals from Rogers are priced at 2 for $9 or 3 for $15.  A recent look at Rogers’ video on demand website, Rogers Anyplace TV, shows most movie titles priced at $4.99 each.  With Rogers closing 40 percent of their retail rental outlets, movie fans have had fewer competitive choices for movie rentals.

One potential new contender coming to Canada – kiosk video rentals.  Although services like Redbox are now commonplace in the States, they are virtually unknown in the north.  Jim Gormley, former owner of Jumbo Video is back with Planet DVD.  With just 2% of Canadians renting movies from kiosks, Gormley believes there is plenty of room to grow, especially as Rogers scales back its video rental business.

Planet DVD has a pilot project running with supermarket chain Sobeys to place kiosks in front of nine store locations.  The first kiosk was erected in early March in front of a Sobeys store in Mississauga, Ont.

A new release at a Planet DVD kiosk is priced at $3 for a one-day rental.  That’s less than what most video stores charge, but more than double what Americans pay at a Redbox kiosk.

If you want better Canadian broadband with fewer tricks and traps and live in Ontario or Quebec: put the house up for sale, pack up your things, and head west.

Canada’s heavily metered and capped broadband is ubiquitous in the country’s two most-populated provinces where a convenient duopoly of Bell and Rogers in Ontario and Bell and Videotron in Quebec control the vast majority of the broadband market.  But cross west into Saskatchewan and things start to look a lot better.

Canadians telecommunications consultancy The Seaboard Group praised SaskTel, the provincial phone company, for refusing to slap usage caps on its customers.  SaskTel does not deliver the cheapest Internet access by any means, but the company is investing heavily in fiber optic upgrades to turn the page on aging copper wire infrastructure.  Stringing fiber through Regina, Saskatoon and beyond may seem counterintuitive to other providers.  Saskatchewan, one of Canada’s “prairie provinces,” is hardly packed with people.  With more than 20 million Canadians living in Ontario and Quebec, Saskatchewan gives its 1 million residents a lot of open space.  Sparser populations usually translate into higher costs per customer for upgrades, but SaskTel persists.

SaskTel has historically relied on traditional DSL and has competition in larger communities from Shaw Cable, western Canada’s largest cable operator.  Although SaskTel’s DSL delivers lower speeds than Shaw can provide, it does so with no usage limits.

Shaw’s decision to provide considerably more generous usage allowances has kept the pressure on SaskTel to upgrade its infrastructure to compete.

SaskTel CEO Ron Styles told the Leader-Post its fiber optic network will give cable a run for its money, and until then, it is satisfied undercutting cable pricing for broadband, delivering a far better experience than either Rogers or Bell provides eastern Canadians, Styles says.

Seaboard president Iain Grant found that what customers are willing to pay for service can also influence what prices providers charge.

“The price is more based on what you’re prepared to pay,” Grant said.

People in western Canada evidently are not willing to hand over as much money as their friends in Ontario and Quebec.

West of Saskatchewan lies Alberta and British Columbia — Telus territory.  Telus is western Canada’s largest phone company and also principally competes with Shaw Cable.

Shaw has forced Telus to back down on fueling enhanced revenue with usage caps of its own, and has been aggressively upgrading its network with additional fiber optics and DOCSIS 3 technology, forcing Telus to embark on its own upgrade effort.

Macleans reports western Canada’s more-competitive broadband market has been good for consumers, but has also exposed a difference in priorities for providers.

With Shaw breathing down its neck, Telus has committed to a $3 billion fiber optic network expansion in B.C., improved wireless coverage, and more IPTV service.  Macleans notes Telus is the only major telecom or cable company in Canada that hasn’t purchased a television asset, focusing instead on its core businesses of connecting customers.

In eastern Canada, Bell faces Rogers and Videotron.  Critics contend Bell sees no imminent threats there, and the phone giant is spending its money elsewhere, announcing a $3.4 billion acquisition of Astral Media — an entertainment company owning 24 specialty cable channels and pay-TV networks, including the Movie Network and HBO Canada.

Bell’s latest “investment” follows its 2010 $1.3 billion buyout of CTV and last year’s $1.32 billion co-purchase of Maple Leafs Sports and Entertainment (the other buyer was their ‘arch-competitor’ Rogers Communications).

While Telus spends money on upgrading its broadband and video services to customers, Bell is positioning itself to control 34% of Canada’s TV universe.  Bell is also the same company that advocated slapping nationwide usage-based pricing on Canadian broadband consumers to pay for the “network upgrades” it contends were needed to handle increasing demand.

All Canadians fall somewhere on the Bell/Rogers Anger Continuum.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Conglomermate.flv[/flv]

Introducing Conglomermate — “Only Conglomermate makes sure you’re matched up with someone in the same phase you are.” — The Rick Mercer Report  (1 minute)

Bell Canada Enterprises, Inc. announced Monday it extended its Fibe Internet and television service to most parts of Quebec City.

Unlike in most other Fibe-enabled Canadian cities, Bell’s network in Quebec City offers true fiber to the home service, not a combination of fiber to the neighborhood/copper wire.  That means increased broadband speeds — downloads up to 175Mbps and uploads of up to 30Mbps.  Quebec City was selected for true fiber service because of of the predominance of overhead aerial wiring, which is much easier and cheaper to replace with fiber than underground wiring.  For other major Canadian cities like Montreal and Toronto, Bell has made do with a lesser network that combines fiber and existing copper phone wiring that offers lower capacity for broadband and video services.

Bell says Fibe is now open for business in the region’s boroughs of Quebec, Beauport, Sillery, Ste-Foy, Cap-Rouge, Charlesbourg, L’Ancienne-Lorette, Loretteville, Sainte-Therese-de-Lisieux and Montmorency.  Service for Levis is expected shortly.

The company says it intends to reserve additional fiber to the home service primarily for multi-dwelling units and new housing developments in Ontario and Quebec, primarily between Windsor in the west and Quebec City in the east.

The company’s aggressive deployment of fiber is an effort to stem landline losses in eastern Canada.  Between cell phone providers and cable companies like Rogers, Cogeco, and Quebecor’s Vidéotron Ltee., Canadians have been hanging up permanently on Bell landlines at an alarming rate for the company.

Dvai Ghose, analyst at Canaccord Genuity told his clients, “Bell is now reporting amongst the worst residential line losses in North America.”  In the last quarter alone, 90,000 Bell customers said goodbye, perhaps permanently.

Bell has lost more than 1.2 million customers in the last two years.  Even Fibe may not be enough to stem the losses.  Canadians are not excited by the company’s video or broadband services, adding only around 27,000 new customers in the last quarter.  Bell’s notorious love of Internet Overcharging schemes like usage caps may be partly responsible.  The company enjoys a poor reputation among Internet enthusiasts for its wholehearted support for usage-limiting Canada’s online experience.

Financial analysts believe aggressive deployment of Fibe may be critical to the company’s long term survival.  Not only must Bell compete with a trend towards wireless phones, it has cable competitors selling triple play packages of phone, Internet and television service at prices that are frequently lower than what Bell charges.

Fibe is expected to be expanded to include the entire island of Montreal and some of the surrounding region by the end of 2012.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bell Entertainment Fibre Internet and TV in Canada.flv[/flv]

An extended length introductory commercial for Bell Canada’s Fibe TV and Internet.  (6 minutes)