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Rogers Institutes a Local Programming Improvement Fund Fee

August 25th, 2009 · 32 Comments

If you are a customer of Rogers Cable, get ready to pay more to watch TV. Rogers has sent out letters notifying customers that starting next month, it will levy a Local Programming Improvement Fund (LPIF) fee of 1.5% of their cable TV bill. Rogers helpfully points out that the fee is a direct result of the CRTC requiring cable and satellite TV providers to fund local programming in smaller markets. When the CRTC mandated that cable and satellite providers pay for local programming, it naïvely hoped that the cost will not be passed on to consumers:

In establishing this new fund to support local programming, the Commission [CRTC] is conscious of the impact that it will have on licensed BDUs [Broadcast Distribution Undertakings such as cable and satellite TV providers]. While the precise impact will vary from undertaking to undertaking, the Commission estimates that the aggregate impact on BDUs will be to lower their overall operating margins – currently at approximately 35% – by no more than 1%.

In light of the performance levels of the BDU sector and the benefits accruing to BDUs as a result of other changes being made to the regulatory framework, the Commission is of the view that there is no justification for BDUs to pass along any increased costs relating to the LPIF – estimated to be on average approximately $0.50 per month – to their subscribers.

It is interesting that Rogers chose to break out the LPIF fee separately instead of incorporating it into the next round of price hikes. After all, a 1.5% fee on a $29.99 monthly cable bill works out 45¢ and Rogers is already in the habit of regularly increasing prices by a dollar or two every year. Today basic cable in Ottawa costs $29.99 excluding taxes and a digital service fee of $2.99 — up from $28.49 in 2008, $27.49 in 2007, $25,99 in 2006, $24.99 in 2005, $23.99 in 2004 and $21.99 in 2003 — an increase of 36% over a 6 year period. So, why would Rogers break out the LSIF fee? Informed speculation is welcome.

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32 responses so far ↓

  • 1 Henry // Aug 25, 2009 at 11:21 pm

    From what I read, Roger’s cable and internet retention do not give out very good deals if you want to lower your cable and internet bills.

    Bell has $18 a month for HD Basic. I had great success with Bell internet retention department, but make sure that you are transfered to the retention department. If you want to save some money, you can consider choosing Bell for internet or cable, but make sure that you have more than one service to get the bundling discount.

  • 2 Phil S // Aug 25, 2009 at 11:58 pm

    The Rogers cable service people were yanking my chain so much that I ended up not bothering to get cable – I’m all rabbit ears.

    Basically the cable guy kept making appointment after appointment and never showing up but then SAYING that they showed up and I just didn’t answer my door. After 4 tries, I was so pissed off that they were wasting my time that I told them to get lost and I can survive without cable, which I’ve been doing for years now… So far, it’s not a big loss. Heck, Rogers cable service is expensive now!

  • 3 Potato // Aug 26, 2009 at 12:24 am

    It’s pretty obvious why — they want a price hike without wanting to appear like the bad guys. They had their hike in March, and will likely again this March.

    Same thing with their wireless “system access fee”, or Bell’s “touch tone service” fee.

  • 4 Leading Edge Boomer // Aug 26, 2009 at 3:22 am

    The amount of junk mail I get from Rogers is incredible.

    These glossy brochures and letters cost a fair buck to produce and send, They could lower fees several dollars a month just by cutting it out. Bell sounds me some junk mail, but mo where near the volume that Rogers does. This mail actually turns me against Rogers rather than convince me to buy. What a waste!

  • 5 Lender // Aug 26, 2009 at 7:33 am

    Whoever assumed that additional charges will not be passed on to customers is very naive indeed. You cannot blame your local cable provider for charging you an additional; amount, when they have to pay increased taxes!

  • 6 Gregory // Aug 26, 2009 at 7:40 am

    That removing the “grandfathered” discounts recently pushed me over the edge (and the lack of quality programming) and I got rid of Rogers Cable and Internet. I’m now using OTA (antenae in my attic), FTA satelite (the legal free kind) and Teksavvy for internet (will be switching my Bell land line to them too). No regrets, savings pays for plenty of entertainment choices.

  • 7 Ray // Aug 26, 2009 at 7:56 am

    I agree with Potato, Rogers did not want to look like the bad guy in fee increases. I currently am paying around $500/mth to rogers in cable/internet/homephone and several wireless phone bills…..everything is being disconnected over the next few weeks as I get much better offers from competitors.

  • 8 Al R // Aug 26, 2009 at 7:57 am

    I believe all the major carriers are going to be implementing this fee, and by all accounts there will be additional fees when carriers are forced to pay “fee for carriage” to the traditional OTA stations.

    I’m seriously considering finding a way to receive programming without going through a Canadian carrier – not because I can’t afford it (the fee increases amount to far less than a rounding error in my monthly budget), but because I have a strong dislike for both Rogers and Bell, and I’m seriously sick of the CRTC.

    I’m considering going with DirecTV. You can pay for their signal through a third party in the US that facilitates the service for Canadians, so you don’t have to pirate. IMHO, the programming is superior, and you can get local news, etc. from OTA stations.

  • 9 Caitlin // Aug 26, 2009 at 8:41 am

    This is part of the reason I don’t even have cable at all anymore. I was already paying Rogers $75/mo to watch the approximately 5 channels I was interested in (as of course most were in their “second tier” of channel options and so cost more), so finally I just said “screw it” and cancelled. I’m not going to Bell or another competitor, I’m just not going to watch TV that way anymore.
    It’s been 4 months since I’ve watched TV, and I don’t miss it a bit!

  • 10 boko // Aug 26, 2009 at 9:16 am

    “why would Rogers break out the LSIF fee?”

    Because they know after a little crying and complaining, people will pay it..and so the story goes on. I myself dont have cable and will never get it, paying for commercials, media propaganda and re-runs of Seinfeld is not intriguing enough for me to waste time or money on cable.

  • 11 Thicken My Wallet // Aug 26, 2009 at 9:36 am

    Cable/internet/cell fees have been subject to many class action law suits recently relating to allegedly undisclosed fees, government levies that long expired but companies kept charging, over-charging etc.

    I agree with Potato- there’s a marketing spin (especially since the carriers and cable companies are engaged in a PR war) but I suspect the lawyers want to CYA the company too.

  • 12 ioana // Aug 26, 2009 at 10:06 am

    I got tired of being yanked around by Rogers so I switched to StarChoice. It’s not a better product, but it’s good enough and I get invoiced in a sane manner. It’s straightforward, which was such a relief for me .

    Here’s a tip for Rogers customers: always, always ask to talk to the cancellation department no matter what you want to do with them. It’s the only department that has a clue.

  • 13 DividendMan // Aug 26, 2009 at 10:13 am

    I think they are doing it for the same reason at the gas pump it shows the breakdown of the taxes/fees that make up the end price. But who cares?

    I love how people complain about cable TV price hikes as though it was an essential service.

    What we should really be getting upset about is the alcohol price hikes – what’s up with that??

  • 14 Dave From GP // Aug 26, 2009 at 10:19 am

    Anytime you can make the government look like the bad guy you do it. I’m from Alberta and even the provincial government uses this tactic to make the federal government look bad!

  • 15 Canadian Capitalist // Aug 26, 2009 at 10:51 am

    I personally couldn’t care less about local programming. I don’t watch it that much and get my local news through the newspaper. The only reason to keep cable is to watch the occasional NFL game.

    1. Shift the blame on the government for the price hike.
    2. Legal reasons due to many class action lawsuits.
    3. The cable companies did not want to fund this and they are trying to get the public on their side against the broadcasters.

    @Gregory: How many channels can you get with legal FTA receiver? Unfortunately, the OTA choices in Ottawa are pretty limited, especially for HD.

    @ Al: Can you let us know how to get DirecTV through third parties?

  • 16 Henry // Aug 26, 2009 at 10:53 am

    Ray: Be sure to try to argue with Rogers consolidated retentions. My gut feeling is that your $500 Rogers bill can be cut to as little as $200 a month. I am not sure what you are paying right now, but I am sure that Rogers consolidated retention can give you $35 a month for extreme internet (this promotion is given to university students so you might even get something better), $20 a month for home phone, $20 wireless retention plan for each wireless line, and $30 to $50 for a cable package. On top of these, you get 15% off all base fees which is the bundling discount. You can get a good deal, because you spent a lot with Rogers and that gives you leverage.

    If you are moving to different services to different providers such as wireless to Telus, internet and home phone to Teksavvy, and satellite to Bell, there will be a lot more paper work and you might not be able to get the bundling discount. If you are moving everything to Bell, you get $5 off for each service, which would be pretty good too. However, it is more difficult to reach Bell’s retention department and navigate through Bell’s customer service. I know quite a bit of people who stick with Rogers just because Bell customer service can be really difficult to deal with and reach. I don’t you would be able to get retention deals for every service from Bell initially as well.

  • 17 NL // Aug 26, 2009 at 12:14 pm

    They do it for the same reason they show separate system access fees on cellphone bills – to make it appear as if this were a government-imposed levy. At least in this case, they would be accurate.

  • 18 Al R // Aug 26, 2009 at 1:19 pm

    @ CC – you need to find a broker who will set it up for you. Walk into pretty much any specialty satellite store and they should be able to help you out.

  • 19 Smac20 // Aug 26, 2009 at 1:27 pm

    Just wrote an article about the price wars beginning to take off in Canada for wireless, TV, Internet, Home phone.

    I was party to getting a sweet deal from shaw recently for $30 a month to get home phone (unlimited long distance in North America) / High speed Extreme Internet / 200 TV Channels. I think it normally goes for over $200 a month.

    There is a website specifically about the outraged from this deal http://10buckstoo.com . They give a step by step on how to try and get the deal.

  • 20 Twitter Trackbacks for Rogers Institutes a Local Programming Improvement Fund Fee | Canadian Capitalist [canadiancapitalist.com] on Topsy.com // Aug 26, 2009 at 4:01 pm

    [...] link is being shared on Twitter right now. @ccapitalist, an influential author, said New Blog Post: [...]

  • 21 Jim Jamiesers // Aug 26, 2009 at 6:09 pm

    You don’t have to pay Bell’s “touch tone service” fee. You can opt out and go analog – you just need the rotary dial phone.

  • 22 Steve // Aug 26, 2009 at 10:08 pm

    > There is a website specifically about the outraged from this deal http://10buckstoo.com . They give a step by step on how to try and get the deal.

    Yes, and the web site is apparently backed by Novus. Unless the same person does PR for both the web site and Novus only by coincidence.

  • 23 Andrew // Aug 26, 2009 at 10:42 pm

    This is the same company that continues to break out a “system access fee” on their cell phone service, years after the government stopped levying the fee.

    If these guys can make any part of their profit margin look like a tax to customers, they will.

  • 24 Canadian Personal Finance Blog » Blog Archive » Random Thoughts: Crisis? What Crisis? // Aug 28, 2009 at 4:01 am

    [...] Canadian Capitalist wonders about Rogers new Local Television “Fee”, but we all know it is just another grab for cash, Rogers really isn’t making me a happy [...]

  • 25 Weekend Reading – August 28, 2009 | Financial Freedom // Aug 28, 2009 at 6:59 am

    [...] Capitalist discusses Rogers recent fee hike. Generation X Finance has some Moving [...]

  • 26 Gregory // Aug 28, 2009 at 7:56 am

    @CC: I’m also in Ottawa (Stittsville) and agree that the OTA channels are so-so (I get poor reception from the Manotick tower even with a pre-amp), however not a bad quantity of stations (sure would like more HD though). It does cover my needs (local news, and most programs we watched can be found on one of the stations). There is always boxed DVD seasons new or on craigslist, downloads from networks (at least Canadian ones :-( ) etc. As for FTA, still playing with it, with a Rotor there is a fair amount of options for interesting programming.

  • 27 Leslie // Aug 28, 2009 at 4:21 pm

    Next up from Rogers: a surcharge for increased coax cable cost or whatever other infrastructure cost they can pass along a la the airlines; an additional fee for the cost of sending out invitations to future subscribers (read: junk mail); upgrade their customer service dept to 900-line only so they can make money from complaints.

    I’ve been using OTA for 20 years and don’t feel I miss out on much. These days there’s a bounty of info free on the web, and I don’t need to see another talent show or reality program to set through my week.

  • 28 Bernie // Aug 29, 2009 at 2:02 am

    What do you expect from an anti-Canadian company that wants to bring a dull foreign brand of football to Toronto with hopes of breaking up the CFL.

  • 29 Michael - The Fat Loss Authority // Aug 29, 2009 at 7:01 am

    Sounds like I should be taking a look at the Primus flyer that came in the mail this week.

    Mike

  • 30 Will // Aug 31, 2009 at 3:35 pm

    Ha.. yes.. “Robbers” up to their usual shenanigans..

  • 31 John // Aug 31, 2009 at 10:01 pm

    I contacted CRTC and they are of the view that there is no justification to pass on this cost to the consumer. This is another indication of Rogers getting whatever they can from the consumer. Time to switch.

  • 32 Vimal // Dec 28, 2009 at 2:18 am

    http://www.crtc.gc.ca/eng/info_sht/tv13.htm

    What can I do to avoid paying such an increase?
    Consumers should contact their service suppliers, as this increase is not required or regulated by the CRTC. The CRTC considers that these companies can absorb a contribution to the LPIF of this size and does not see any reason why these supplemental costs should be transferred to their subscribers.

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