MONTREAL – Sometimes it’s hard to put a finger on the reasons why we decide to pull something out of the tens of thousands of words spoken at CRTC hearings and turn it into a story.
Other times, such as Cogeco Cable CEO Louis Audet’s focused, furious appearance Wednesday, it’s easy to figure out why we cover some submissions instead of others…
We know everyone works hard on their presentations and the job they all do is commendable. However, as I often tell people, we can’t write about everyone. That said, there are frequent portions in every CRTC hearing that stick out, where our ears prick up and we start typing furiously. For independent cable providers, that came with an exchange between CRTC vice-chair broadcasting Tom Pentefountas and Bragg Communications (EastLink) which has some of them apoplectic (we have the e-mails to prove it).
Tuesday afternoon, Pentefountas was grilling Bragg president Lee Bragg and the company’s regulatory chief Natalie MacDonald over the cable company’s opposition to Bell Canada’s purchase of Astral Media and at one point Pentefountas asked Bragg and MacDonald: “I think you have, what, 40,000 subs?”
Now, MacDonald was polite and pointed out to commissioner Pentefountas that EastLink actually has 465,000 subscribers (she didn’t say the company is the seventh-largest BDU in Canada, the TV market leader in Nova Scotia and PEI, the first in Canada to launch telephony in competition with the incumbent telco and has systems all over Canada), but other independent cablecos we talked to that day and Wednesday (none of whom want to anger the Commission, so they shall remain nameless as they asked) were and are angry that the vice chair would not know this basic information about EastLink. “It clearly demonstrates how little they know about the industry outside the vertically integrated companies,” wrote one independent in an e-mail.
“I have an image in my head of every small system owner picking up their phone and calling Rogers, Shaw, EastLink, Cogeco or otherwise to talk about acquisition,” said another.
A small bit of a big hearing, but vice-chair Pentefountas’ bad guess at the size of EastLink has rippled through the industry.
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Were wireless providers really offered Bell Media content for $3 million a year (as Bell’s George Cope said on Monday) for their mobile platforms? Not quite, said Rogers SVP video content, David Purdy. The first offer Rogers received, back in 2011 for specialty channel and some CTV main network content “was in the double-digit millions,” he said. The next round of negotiations, it dropped, but still “far above $5 million,” Purdy told commissioners.
So, Rogers launched its mobile video product in May of this year with no Bell Media content and August 4th “was the first time I personally heard the $3 million figure,” he added. “And it was verbal. We never received a formal offer.”
Negotiating this way, “is the oldest trick in the book,” for companies that want a head start, Purdy continued. Bell begins with “a very high number with a really onerous guarantee and you work your way down over an 18 month period,” and by then Bell has “had 18 months of exclusivity and you’ve sucked up all the customers who care about this.”
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Tom Berry, president of film and TV producer Première Bobine used part of his presentation to call for a new policy framework to address the over-the-top providers many Canadians have turned to for some of their video desires. “We are concerned that as Netflix takes square aim at the Canadian pay television sector that it has no Canadian content obligations, and doesn’t even have local offices. Our colleagues at APFTQ have insisted on local offices for French language Bell services and Bell has agreed,” he said.
“The same principle should apply to Netflix. We believe that if we wait until there is measurable evidence of pay-TV cord-shaving in this country, it will be too late to reverse the damage. Clearly a new policy framework is required.” It’s worth noting he hasn’t been alone in musing about a policy hearing on OTT.
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Speaking of asking for new proceedings, the Public Interest Advocacy Centre wants the Commission to call a hearing into the costs Canadians have to pay for cable and internet services. Besides the data it brought showing Canada will have the highest levels of concentrated cross media ownership in the western world if the Bell-Astral deal is approved (we’re #2 now, says its research), the group says Canadians believe they pay far too much for their video.
“VI (vertical integration) and media concentration further undermine consumer choice and flexibility to pay only for services that consumers want to watch. Thus, we urge the Commission to immediately initiate a public proceeding to examine BDU pricing,” said PIAC’s counsel Janet Lo.
CRTC chair Jean-Pierre Blais challenged the group’s survey, however, noting that it only tracks consumers’ perception of pricing, and not whether BDU rates are truly unaffordable. The chair suggested the fact Canadians keep paying their bills and few seem to be cutting the cord shows consumers find value for money there. If you ask Canadians what they think of any costs, “they’d say taxes are too high and the price of cheese and milk are too high,” said Blais. All the survey PIAC presented measures “is that the perception of unaffordability has gone up.”
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Talking with people in the hallways during breaks and at lunch often leads to the coalescing of opinion on just what the Commission might decide when it hands its decision down on this acquisition later this fall. After three days there are two things observers have begun predicting: 1) Bell Media’s plan to convert TSN Radio into the French language RDS Radio is just not on. As our coverage noted yesterday, commissioners are none too pleased the company less than a year ago appealed to the Regulator for a better frequency to improve its service to Anglo Montrealers, got the frequency (660AM), and now want to flip it to a French station.
2) The $40 million in transaction benefits money Bell wants to spend in the far North on wireless broadband seems to be in trouble, too. SSi Group, Ice Wireless and Iristel made excellent presentations on how the three companies are doing their level best to bring broadband competition to Canada’s Territories. Each noted how $40 million “that Bell would pay itself,” said SSi’s Dean Proctor, would distort the market where these three companies, and others, are delivering broadband in those regions. Virtually all of the creative community has demanded that planned benefit be killed, too, as it is not an on-screen benefit.
That doesn’t mean those two predictions will come true. We’re just summarizing the hallway scuttlebutt we’ve heard in talking to some just watching – and some taking part.
The hearing continues Thursday morning with Telus up first.
