GATINEAU – While producers and others argued how and where the $220-million BCE/CTV benefits package should be spent, the two largest carriers without broadcast or specialty TV divisions warned the CRTC that something must be done to rein in the power a combined BCE/CTV will have.
While the Commission has long prohibited content exclusives on the TV side (CTV has to make Comedy Network available to all carriers and can’t sign an exclusive with any one or two), our exploding media world has all experimenting, looking for new business models and lines of revenue on new, unregulated, platforms.
Part of that experimentation has been content exclusives in wireless and broadband – which of course fall outside the purview of the CRTC.
This can’t be allowed, said Michael Hennessy, SVP government relations at Telus. “The Commission should institute a moratorium on carriage of content exclusives by BCE and all of its affiliates,” he said Wednesday morning, noting this is something Shaw agreed to during the hearing into its purchase of Canwest Global’s TV assets.
Telus is already angry with Bell over its existing exclusives with the NHL and NFL, not to mention its exclusive on CTV-owned business news channel BNN. “Bell launched BNN on mobile on Sept 6, a full 5 months ago and yet they continue to drag their feet regarding any negotiations to offer this same content to us. They stall by saying that they haven’t fully developed their business plan for these mobile content rights,” said Hennessy. “And yet their alleged absence of a business plan regarding the mobile rights hasn’t prevented Bell from launching the content on their own service."
As for Bell’s hockey and football exclusives, Telus has already filed official complaints with the CRTC on those, saying such exclusives are contrary to the public interest.
“Our discussions with the leagues indicated that they would be open to providing sublicensing rights to Bell so that the content could be available to all,” Hennessy added. “Exclusives regarding such marquee programming are harmful to competition and contrary to the public interest because they restrict consumer choice by potentially tying access to the content to subscriptions to new platforms, like a wireless contract.
“Consumers should not have to sign multiple wireless contracts to obtain all the programming they want on these new emerging platforms.”
While Cogeco also fears exclusives and wants the same prohibition Telus does, it harbours more concern about BCE/CTV’s sheer market power on items like pricing for specialty channels. Without some interim rules between the approval of this transaction and the vertical integration hearing in June, “the overwhelming market power of the resulting conglomerate would allow it to extract unreasonable rents from the other players in the Canadian broadcasting system, and ultimately from Canadian consumers,” Cogeco CEO Louis Audet told the panel of commissioners.
He pointed to his company’s experience in Portugal where one video carrier also owns sports rights and has not made them available to other distributors, something Cogeco has complained about to the regulator in that country, to little success thus far.
Audet also added that CTV has been putting off negotiations on new carriage agreements for many of its specialty channels whose contracts have expired – including TSN’s, which was done at the end of 2010 – awaiting the completion of the company’s sale to BCE.
So, when asked by Cartt.ca then if the rumours are true that TSN is asking carriers for a wholesale rate more than double what it is currently getting, Audet responded there have been no numbers discussed as there have been no negotiations.
“They’re not engaging in a dialogue with us and that’s one of the concerns we presented to the Commission, he said. “They have refused to engage in discussions with us – and that’s our complaint today.
“These guys are waiting until after the hearing to hit us and we think this is wrong.”
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When it comes to the benefits package, the Canadian Media Production Association insisted the Commission keep to past practice and make sure that 85% of the monies are earmarked for on-screen (i.e. Cancon) initiatives. Past acquisitions have seen that percentage of benefits money head towards programming. That means the $84 million BCE wants set aside for an MPEG-4 conversion of its satellite TV is just wrong and the money should head towards making Canadian drama, says the association.
CRTC chairman Konrad von Finckenstein asked why such an upgrade, which would be tied to making sure 30 small broadcasters are then carried by satellite TV, wouldn’t qualify as an on-screen benefit, since many would then be able to see their local TV station on their Bell TV service?
“We think (such an upgrade) is a normal cost of doing business,” said CMPA CEO Norm Bolen. “It’s anti-competitive to subsidize something like that.”
Cogeco’s Audet agreed telling the Commission earlier: “(Spending benefits dollars on) an MPEG-4 transition is simply not an acceptable benefits package addition.”
“This will free up a large quantity of capacity for satellite distribution to the potential detriment of other satellite providers and to cable providers,” added Cogeco’s regulatory chief Yves Mayrand.
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Members of Canada’s disabled community, assembled under the “Access 2020 Coalition”, repeated a similar theme it espoused at the Shaw Communications-Canwest Global hearing in Calgary in October: Make Canada’s broadcast system 100% accessible by 2020. Funding would come from investing 1% ($2.2 million) of the benefits package.
“We ask that 1% of BCE’s purchase of CTV be invested in a trust fund governed by the accessibility community, to generate annual income for projects to make Canada’s electronic communications system 100% accessible by the year 2020,” said the Canadian Hearing Society’s Philippe Ramsay.
The hearing continues tomorrow morning with Quebecor Media, Rogers Communications and the Independent Broadcasters’ group up first.
