Deregulation fails to halt cable price hikes by Barbara Shecter

Basic rates charged by Canada's largest cable operators have increased 5.5% since deregulation of the industry began in the late 1990s, according to a report released yesterday by the Canadian Radio-television and Telecommunications Commission.

However, the 2002 figure of $20.05 a month was down slightly from the previous year when the average monthly basic cable charge was $20.16.

In 1999, cable operators with more than 6,000 customers charged an average of $19.01 for basic cable each month. That was shortly before competition enabled them to change their basic cable rates without seeking approval from the CRTC.

The CRTC had determined that once a cable firm lost more than 5% of its customers to a satellite or other direct-to-home TV service, it could apply to be deregulated.

Large cable firms have seen their market share erode to 72.4% in 2002 from 80.5% in 1999, according to the CRTC report released yesterday. By the end of November 2003, 4.7 million, or 70% of the large cable companies' customers were in areas where the rates had been deregulated.

According to the Broadcasting Policy Monitoring Report, the number of subscribers to digital services (including cable and direct-to-home satellite) increased 18% to 3,594,691 in June of 2003, from 3,050,518 a year earlier.

The CRTC report also revealed that while conventional television channels continue to lose ground to niche specialty channels, Canada's major broadcasters have more overall viewers than six years ago because they own both conventional and specialty channels.

Channels such as the Comedy Network and TSN helped Bell Globemedia pull in 19.2% of viewers last year, up from 16.4% in 1999. That was despite the fact that the share of viewers of its conventional channels fell to 14.9% from 15.9%.

The Broadcasting Policy Monitoring Report also indicated that:

- There has been a decrease in the use of broadcast media, particularly television, commensurate with an increase in Internet use.

- Internet advertising revenues in Canada declined by almost 20% in 2002 to $116-million, representing 2% of overall advertising revenues in Canada.

- Canadian drama and comedy programs in French attracted 48% of French-language viewership in 2002, up from 46% in 2001 and 43% in 2000.

- Canadian drama and comedy viewership in English was flat at 11% in 2002, the same as the previous two years. Foreign drama and comedy programs accounted for the other 89%.

- When sports, news and current events programming is added to drama and comedy viewing, Canadian shows held 76% of French-language consumers and 32% of total English-language viewership.

- Revenues for conventional private television in English fell 1.7% in 2002, but increased 3.3% for French TV.

- Revenue for English-language specialty, pay and pay-per-view services increased by 10.8%.

© National Post