Does Canada’s Food TV need special protection when it made 53% gross profits on the backs of cable subscribers that pay for the network whether they watch it or not?

“If you cut your cable, then your Internet is going to go up,” predicts Gary Pelletier, president of the Canadian chapter of the Cable & Telecommunications Association for Marketing.

That is just one of several predictions many Canadian cable and phone companies are claiming will come from the “disastrous decision” to allow consumers the freedom to pick and pay for only the cable channels they want to watch. Amidst claims that over 10,000 jobs will be lost, chaos and bankruptcy will stalk minority and niche cable networks, consumers will pay much higher bills, and American programming will boycott Canada fearing a-la-carte could make its way into the United States, Canada is at least having an adult discussion about the future of television and where it fits in the country’s identity.

Big changes are coming as a result of the latest great soul-searching made by our good neighbors to the north, always concerned about the potential of the Canadian Experience being overrun, if not decimated by the United States’ entertainment hegemony. In a moment of clarity, regulators have just realized what the rest of English-speaking Canada already knew: protectionist content regulations don’t work on the Internet. Canadians routinely bypass geographical restrictions and Canadian content laws with virtual private networks that relocate them, online at least, to a home address in the U.S. so they can binge-watch the unrestricted American versions of Netflix, Hulu and other online video services.

Regulators have now adopted the attitude – “if you can’t beat ’em, join ’em,” encouraging Canadian entertainment producers to create fewer, but better shows that will not only attract Canadian audiences, but those abroad.

Only the exchange is supposed to be mutual. High quality Canadian television productions like Orphan Black, Schitt’s Creek, X Company, The Book of Negroes, This Life, 19-2, Vikings, Killjoys, Rookie Blue, and Murdoch Mysteries are all among Canadian critics’ top favorites. But relatively few Americans know these shows exist or assume they are co-productions owned by some American entertainment conglomerate. Only a brief glimpse of a Canadian flag during the warp speed end credits might clue viewers this isn’t the case.

Despite protectionist media policies that have endured since 1970, the Canadians are now boldly going where Americans have so far feared to tread. They are having the conversation about the future of television and online entertainment in all forms while American media barons remain in denial.

For average consumers, the biggest change will begin next spring when the era of Canadian a-la-carte cable television arrives, allowing consumers to take an ax to the expensive 120-300 channel television package once and for all. Starting March 1, all Canadian providers will be required to offer consumers a basic cable package priced at no more than $25 a month, containing Canadian and U.S. over the air stations and networks, educational, and public channels. If you want more, you can have it by buying channels or mini-packages of networks individually to create a personalized cable TV lineup of networks you actually care to watch.

Programmers across Canada, particularly those catering to sports fans, foreign audiences, religious viewers, and minorities are horrified by the idea. So are media critics that fear the change could help bring an end to Canada’s unique multilingual and multicultural identity.

Customers like James Rehor of Hamilton explains why.

“Why would I pay for it? Why do I get it? Why does it come on my TV?” asks the 60-year-old construction worker. He’s ready on day one to purge the large number of French and other non-English channels from his Cogeco Cable lineup. Rehor offers comfort to sports programmers, however. He’s a big fan of the Toronto Maple Leafs, so Leafs TV, Sportnet, and TSN will stay.

Non-sports fans are another matter. They can’t wait to ditch the sports networks that are always the most expensive channels in a Canadian cable package.

“Clearly the most expensive (channels) will always be sports,” Pelletier tells the Canadian Press. “At the end of the day, for sports watchers, their cable bill will probably stay the same or increase, maybe … In the case of someone who doesn’t watch any sports at all, their bill will probably decrease.”

[flv]http://www.phillipdampier.com/video/CRTC Supporting the creation of content made by Canadians for Canadians and global audiences 3-2015.mp4[/flv]

An Age of Abundance: Canadian telecom regulators are transforming media regulations in Canada, recognizing the way Canadians watch television has changed. Quality, not quantity, is now most important. CRTC chairman Jean-Pierre Blais discusses the new reality. (6:08)

Pelletier and his industry friends are on a mission to convince Canadians to leave well enough alone and not drop the current all-for-one price cable television package for a-la-carte — not realizing the potential consequences.

Some in the cable industry have tried other scare tactics to no avail.

One industry-backed study predicted pick-and-pay could cost the economy 10,000 jobs. Consumers could care less. Unifor, a union that represents many in the television sector, seemed to agree Canada’s cultural heritage will be at risk with lowest common denominator programming dominating from St. John’s to Vancouver, much of it shoveled from the United States. But Canadians still want their House of Cards and Homeland.

Howard Law, a media spokesman for Unifor, predicts less profitable Canadian channels will fold under a pick-and-pay pricing model.

“The introduction of pick and pay will, in itself, lead to a major loss of revenues to Canadian broadcasting system, which ultimately plays out in less Canadian content and less Canadian jobs and less Canadian broadcasting,” he said in an interview on CBC’s The Exchange with Amanda Lang.

Minority interest and religious channels are also worried about their future. Most of those networks are classified as “specialty channels” by the Canadian Radio-television and Telecommunications Commission (CRTC). Legacy networks that have been around since at least the 1990s have been sitting pretty, protected by their designation as a “Category A” specialty station. Unlike in the United States, Canadian cable networks are licensed to operate by the CRTC, and at least 60 of those Category A networks also enjoy “genre protection,” a CRTC policy that guarantees their channel carriage on Canadian cable, satellite, and telco TV systems and protection from other cable networks that want to run the same kind of programming.

[flv]http://www.phillipdampier.com/video/CBC How New CRTC Rules Will Change Canadian TV 3-2015.mp4[/flv]

For decades, protectionist Canadian content regulations made certain Canadian television reflected its audience. But online video and the Internet has allowed Canadians to bypass traditional cable television to watch they want, not what the government hopes they will. New CRTC rules reflect that reality as Canadian TV rethinks how to get the viewer’s attention. From CBC-TV’s The National (4:16)

CRTC policies have allowed Canadian specialty channels to flourish despite operating in a smaller marketplace with fewer viewers than their American counterparts. That means networks like FoodTV and HGTV in Canada have profit margins ranging from 53-58 percent. Fashion Television and BookTV made an improbable $2.7 million in pre-tax profit, not so much from viewers but from the licensing fees every Canadian cable customer pays for the four networks whether they watch them or not.

From its start, Canadian TV has always faced a looming shadow from the south. Protecting Canada’s identity has been a priority for decades.

“If you’re a specialty channel that’s lived within the protective cocoon of bundling for years, you’ve gotten used to having a full-time job with benefits,” independent technology analyst Carmi Levy told CBC News. “Contrast that with living outside the protective cocoon, you’re essentially a freelancer, you fight for every contract, you have no benefits, there are no guarantees that money will be coming tomorrow or next week.”

It probably won’t be coming from subscribers like Mr. Rehor, who won’t hesitate to drop channels if they go unwatched.

The CRTC is also doing some dropping of its own, starting with genre protection, which could lead many specialty networks to follow American cable networks that today depend on chasing ratings to justify their licensing fees. The unintended result in the United States has been questionable lineup changes like the appearance of Law & Order rerun marathons on WEtv, a network supposedly dedicated to women’s entertainment. Ovation, a fine arts independent cable network that is about a niche as a network can be, depended on weekend binges of PBS’ Antiques Roadshow reruns in 2012 just to attract enough viewers to show up in the ratings.

Lesser known networks like OutTV, Canada’s only network dedicated to lesbian, gay, bisexual, and transgender viewers, may face an uncertain future if it can’t charge a premium price to make up for expected subscriber losses from pick and pay. Other niche channels may have to merge with other networks or more likely relaunch with an online platform and deliver a reduced menu of content to audiences.

Large Canadian mainstream networks and programmers don’t expect too much change from pick and pay, as most Canadians will likely still demand a package with their programming included. But distributors – cable, satellite, and telco TV platforms, do expect some major changes. The average Canadian now pays around $50 a month for basic cable, a price that will be cut in half next spring.

Rogers Cable already knows what is coming. It ran a trial in 2011 in London, Ont., with 1,000 customers who were given the choice of picking and paying for the channels they wanted. It didn’t take long for the cable company to discover customers loved it and TV stations and cable programmers hated it.

“We found that customers like bundles, but want to build their own. They want a basic package and an extra package they create,” Rogers spokesman Kevin Spafford told the Toronto Sun. “We did get push back from TV stations. There was concern about offering this service. They did not want us to proceed with that model.”

After the trial ended, Rogers allowed the pilot project participants to keep their pick and pay packages, something they’ve held tightly for over four years.

Rogers’ pilot offered something like what the CRTC is demanding be available to all Canadians:

ROGERS PICK AND PLAY PILOT

• $20 a month for “skinny basic” TV package of Canadian stations. (The CRTC plan mandates no more than $25.)
• 15-channel package for $27 a month. Other packages of 20 and 25 stations also offered, for more money. (The CRTC wants networks to offer channels individually or in mini-bundles.)
• U.S. major networks offered for $3 a month. (Under the CRTC policy, these stations may appear under the basic or a-la-carte tiers.)

REGULAR ROGERS

• Basic: $40 a month, 190 channels
• Digital Plus: $63, 220 channels
• Sports packages: $77, 230 channels
• VIP TV: $77, 270 channels
• VIP Ultimate: $119, 320 channels

The upcoming changes are probably the biggest in Canadian cable television history, but they still may not be enough to attract cord-nevers — those who have never subscribed to cable TV. Most are under 30 and already watch all their favorite shows online. Some budget-minded Canadians who want to cut their cable bill may consider joining them by cutting the cord altogether or slimming down their cable packages, but Pelletier warns that cable operators will not leave their money on the table.

Supplementing a slimmer cable package with a streaming service or two could increase data charges, Pelletier warns. Plus, you may have to surrender any discounts you get from bundling cable with home phone, Internet and/or wireless service.

Usage capped Internet is also still an effective deterrent for cord-cutting and whether your television entertainment comes over the cable or online, providers will still make a run for your wallet. Some observers predict providers will dramatically increase the retail prices of a-la-carte networks to limit potential savings while also continuing to raise broadband prices.

A 2014 national PIAC poll found 90 per cent of 1,000 consumers polled were willing to pay an additional $1 a month per channel, while 54 per cent would be willing to go $3 a month, and 21 per cent would be willing to pay $5 a month for an extra channel of their choosing. Many don’t realize under the current system the wholesale rate for many channels is under 50 cents a month. Considering what Canadians are willing to pay, it is likely cable companies will price channels according to what the marketplace will tolerate, which could be around $3 for each channel a month.

Suspicion about any cable company offering a New Deal is something Americans and Canadians have in common. Mr. Rehor is already keeping a wary eye.

“I think it’s a good idea, I just don’t know how they’re going to really work it,” he says, fearing it could ultimately end up costing the same amount he pays now.

[flv]http://www.phillipdampier.com/video/CBC Pick and Pay TV 3-2015.flv[/flv]

CBC News offers this extended discussion about the implications of “pick and pay” cable television. (10:11)

Atlantic Broadband will be the new name of MetroCast Communications of Connecticut, as Montréal-based Cogeco Cable, Inc., takes ownership of the small cable operator and its parent Harron Communications, L.P., in a $200 million deal.

MetroCast Connecticut’s network passes close to 70,000 homes and businesses across nine communities in eastern Connecticut including New London, Waterford, East Lyme, Montville, Plainfield, Killingly, Sterling, Griswold, and Putnam.

Cogeco Cable serves mostly suburban customers in parts of Québec and Ontario. Cogeco’s American cable operations are branded as Atlantic Broadband. The company serves customers in western Pennsylvania, South Florida, Maryland/Delaware and South Carolina.

The deal will add another 23,000 TV, 22,000 Internet, and 8,000 phone customers to the Atlantic Broadband family during the third calendar quarter of 2015, if the sale is approved by regulators.

More people will read this story than Atlantic Broadband has current customers for its 1Gbps broadband project in Miami.

“Atlantic Broadband is proud to be the first company to deliver 1 Gigabit Internet service to its customers here in the Miami Beach area,” said David Keefe, Atlantic Broadband’s senior vice president and general manager of the South Florida region. “While other companies are talking about what they will be doing, Atlantic Broadband moved forward and started offering this service in one of its communities. We look forward to extending access to our Gigabit Internet service to other properties and communities within our Miami footprint.”

Although Mr. Keefe isn’t being modest, his company’s gigabit broadband coverage area certainly is.

At present, the company serves just 40 properties with the super high-speed broadband service in high-income Indian Creek Village — the 8th richest community in the United States.

The tiny village of Indian Creek, in the Miami-Dade area, is made up of 40 properties and is the 8th richest community in the U.S.A.

Designed to appeal to residents who can spare no expense, the Atlantic Broadband package also includes more than 350 TV channels powered by TiVo, integrated access to Netflix, and unlimited phone service for up to four lines.

An Atlantic Broadband spokesperson wouldn’t reveal the price of the package, and admitted customers cannot choose standalone broadband-only service.

“The needs of Indian Creek Village were unique so custom service packages were created that include all of Atlantic Broadband’s TV services, Gigabit Internet and four phone lines,” a spokeswoman told Multichannel News. “Currently, there is not a published a standalone price for Gigabit Internet.”

Residents in the wealthy enclave include Victoria’s Secret model Adriana Lima, Spanish singer Julio Iglesias, his son Enrique Iglesias, Robert Diener, co-founder of Hotels.com, Edward Lampert, hedge fund billionaire and owner of what is left of Kmart and Sears, Don Shula, retired football coach, Charles Bartlett Johnson, mutual fund billionaire, billionaire investor Carl Icahn and former Philadelphia Eagles owner and billionaire art collector Norman Braman.

Other famous residents both past and present have included Beyoncé and Jay-Z, pro golfer Raymond Floyd, coach Rick Pitino, U.S. Senator George Smathers, Sheik Mohammed al Fassi, television host Don Francisco, co-founder of Calvin Klein Barry Schwartz, radio magnate Raul Alarcon, coal and oil executive, heiress and philanthropist Suzie Linden, Arthur I. Appleton, President of Appleton Electric Company and founder of the Appleton Museum of Art and Bridlewood Farm, and his wife Martha O’Driscoll a former Hollywood actress.

Atlantic Broadband has not ripped out classic cable infrastructure for its less-well-to-do customers outside of the village in the Miami-Dade area and relies on RF over Glass technology for its network extensions. That allows the company to keep its legacy equipment in place while giving some residents access to fiber and others traditional coaxial cable.

Atlantic serves an island of customers in the Miami Beach area, but most of Miami gets its cable service from Comcast. Competitor AT&T has promised fiber upgrades and gigabit speeds for its own customers in the Hialeah, Hollywood, Homestead, Opa-Locka, and Pompano Beach areas, but no time frame has been announced for the upgrade.

Atlantic Broadband will have one advantage over AT&T U-verse. It does not have usage caps.

Atlantic Broadband serves around 230,000 residential and business subs in western Pennsylvania, Miami Beach, Maryland/Delaware, and Aiken, S.C. It is owned by Cogeco Cable of Canada.

Cogeco red-flags addresses where its deadbeat customers live.

An Ontario cable company is refusing to hook up service for a new renter until the former tenant’s $1,500 past due balance is paid in full.

Cogeco Cable told its would-be customer it could not install his broadband, phone, and cable-TV service, even though the renter offered to provide a letter from his landlord asserting he had no relationship to the earlier tenant.

The cable operator’s “skip” policy, which flags accounts disconnected for non-payment, can make life difficult for the new renter or property owner. Cogeco’s policy is designed to stop disconnected customers from restarting service under someone else’s name.

In some cases, Cogeco has reportedly even disclosed personal details about the owner of the past due account, along with a detailed breakdown of the services and charges they incurred.

Customers who have encountered a red flag from Cogeco when attempting to sign up for service have been asked for a notarized letter, preferably from a personal attorney, disavowing any relationship to the former account-holder, along with copies of property transfer documents.

A Cogeco representative tells Stop the Cap! the potential customer was misinformed. Cogeco will not hold a new customer accountable for another customer’s past due balance.

Customers who encounter problems because of “flagged” accounts or addresses should ask to speak to a supervisor. Some supporting documentation may be required in some instances. But usually the supervisor can approve the order and help the customer set up service over the phone.

Cogeco customers in Québec will find faster speeds and a larger usage allowance for most of the company’s broadband packages.

The changes took effect Feb. 1. Customers can get the new speeds by briefly unplugging their cable modem, resetting it.

• Express 5 now offers 5/1.5Mbps service with a 25GB monthly cap;
• Express 10 now offers 10/1.5Mbps service with a 60GB monthly cap;
• Turbo 14 now offers 14/2Mbps service with a 80GB monthly cap;
• Turbo 20 now offers 20/2Mbps service with a 100GB monthly cap;
• Ultimate 60 now offers 60/2Mbps service with a 300GB monthly cap.

“Internet needs are rapidly evolving,” said Ron Perrotta, vice president of marketing and strategic planning at Cogeco Cable. “We have taken into consideration the feedback received from our current residential customer base, and made the necessary changes in order to meet the needs of the vast majority of our customers and provide them with more competitive internet offerings.”

If Cogeco surveyed their customers regarding getting rid of usage caps altogether, the answer would likely be yes. But that is a question Cogeco does not seem willing to ask.

Cogeco offers different plans for customers in Ontario: