Canada to Offer a La Carte Cable Pricing by 2016

Gene Page/AMC
American suppliers of series like 'The Walking Dead' will have to weigh the impact of losing Canadian bundling arrangements.

Popular U.S. channels like FX and AMC will be available for purchase on their own, while U.S. networks will included in a $25/month skinny basic package.

Just as Apple and Dish Network get U.S. cable unbundling underway, Canada has followed suit with a smaller basic cable service and pick-packs unveiled on Thursday.

The CRTC, the country's TV regulator, has ordered domestic carriers to allow consumers to pick and pay for the Canadian and American TV channels they want by December 2016. That means the end of Canadians being compelled to take pricey subscription packages of unwanted TV channels they don't want or view.

Hollywood will take notice as the CRTC has opened the door to the a la carte purchase of TV services in Canada "to give Canadians the ability to create their own value proposition based on the TV services they want to receive and pay for." The CRTC will also compel carriers to offer a skinny basic cable package capped at $25 a month that includes affiliates of U.S. networks, including ABC, CBS, Fox, NBC and PBS.

The entry-level cable package aims to dissuade TV viewers here from cutting or shaving the cable cord as they opt for Netflix Canada and other digital alternatives. American suppliers of popular primetime series like The Walking Dead and Homeland will now weigh the impact of losing Canadian bundling arrangements first introduced in the 1970s.

U.S. channels earlier threatened during CRTC hearings to consider leaving the regulated Canadian broadcast system and return over-the-top if popular channels like CNN and AMC are no longer bundled with MSNBC and BET on high-penetration tiers, or offered to consumers on a standalone basis.

Current contracts between Canadian carriers and American broadcasters like CNN, A&E and FX for the most part stop those U.S. channels from being sold a la carte. Canadian distributors may also need a greenlight from a U.S. broadcaster if their channel is unbundled from a basic cable package.

And such a move may require a bigger per-subscriber carriage fees due to the American broadcaster demanding steep wholesale subscription fees for popular U.S. channels like CNN, FX Canada and AMC Canada. For its part, the CRTC intends to make it a condition of Canadian carriage for American TV channels that they be available to consumers here on a standalone basis.

"The commission considers that the imposition of this condition on non-Canadian services is essential to ensuring a fair playing field between Canadian and non-Canadian services available to Canadians in the context of a competitive, consumer-driven environment," the CRTC said in its decision.

The regulator insists that still making popular American channels available as part of large basic cable packages, in addition to standalone sale, should convince U.S. broadcasters to not pull channels and keep them in the Canadian market. What's more, the Canadian TV watchdog expects U.S. and other foreign broadcasters to be "good corporate citizens" and respect local carriage rules to remain in the Canadian market.

The coming cable unbundling in Canada by reluctant distributors follows a push from the federal government, which is looking to a pick and pay regime to bring about increased consumer choice and savings.