By Ahmad Hathout
As Corus and Rogers battle in court over carriage of programs, both urged the CRTC Friday to take a closer look at how the regulator reviews the issues that give rise to such disputes.
The CRTC is currently reviewing the dynamics between the distributor and the programmer as the regulator moves to incorporate online streamers into the regulatory fold.
One issue the commission is examining – and one that has embroiled Rogers and Corus for nearly two years – is the use of the standstill rule, which stipulates that disputing parties must maintain carriage of programs on the same terms and conditions until their issues are resolved.
Rogers has been seeking to remove several Corus channels from some of its TV packages and to move others down the dial for what it says are commercial reasons. But the cable giant has been held up by the standstill rule, which is the subject of a challenge Rogers filed to the Federal Court of Appeal.
Corus told the CRTC Friday that it should closely examine those reasons because packaging in and of itself can determine how well the services will do.
“So when considering … the performance of the service over time, consider how it’s been packaged,” Matt Thompson, Corus’s vice president and associate general counsel, regulatory, said Friday. “When considering whether there are valid commercial reasons for a request to remove, consider the commercial agreement. Are there mitigants in the commercial agreement for channel performance that the BDU might be able to realize? I think the reality of termination requests for programmers is that loss of carriage … can be very, very harmful, more harmful in fact for the programmer, to our mind, than the continued carriage in the case of BDUs.
“So I think the commission should respond to requests to remove with a healthy dose of skepticism and recognition that this is a tactic in many cases; that it’s not necessarily genuine that a BDU doesn’t want to continue to carry a service; that it’s a tactic in negotiations; and that it doesn’t necessarily serve consumer choice.”
Corus executives did, however, say that there are circumstances where it is legitimate for distributors to no longer want to carry a service, and that it is not in the business of continuing to maintain channels that are underperforming.
Corus is recommending the regulator revisit the Wholesale Code, which it says gives distributors “an incredible amount of discretion over how they package channels,” which they said determines how much revenue those channels generate.
The independent media giant is asking the CRTC to update the Wholesale Code to “support more balanced negotiations,” introduce new requirements for distributors to carry a fixed number of independent discretionary services, and establish “discoverability and prominence requirements” for both linear and online BDUs.
The company is also asking the CRTC to ignore the calls to terminate the Wholesale Code, weaken the standstill rule, and raise the bar for undue preference complaints “impossibly high.”
A higher standard for undue preference complaints, though, is exactly what Rogers is asking for.
It said undue preference complaints should not trigger the standstill rule and should not be used to “secure access rights at non-commercial rates or to prevent BDUs from responding to the demands of our customers.” It also said alternative dispute resolution (ADR) rules should not apply to how distributors package and realign channels.
Rogers executives, who appeared after Corus on Friday, claimed the standstill rule is currently “being used as a tactic to delay negotiations and secure de facto access rights.” They said the company is being subject to multiple standstills that have “frozen carriage and packaging, at expired and highly inflated rates” and are asking for “strict safeguards” to prevent the rule’s “abuse and limit its applicability in a manner that respects contractual agreements.”
Rogers is recommending that the rule only apply to disputes where both parties have agreed to continued carriage and be limited to a “strict 90-day period that is solely for [final offer arbitration].”
The cable giant is urging the commission to modernize the ADR rules to “respect commercial relationships,” “encourage negotiations based on the value of the content and the distribution opportunity being offered,” and “support, rather than impede, innovation and dynamic competition in Canada’s broadcasting industry.”
As a distributor, Rogers just wants the ability to negotiate a wholesale rate for programming services “that’s based on their value to Canadians,” the company’s senior vice president of regulatory affairs, Dean Shaikh, said.
Bret Leech, president of residential services, said the company determines how well services are performing by getting customer experience feedback and using behind-the-scenes data.
Rogers Sports and Media President Colette Watson added that, in one example, it was offered just 20 hours of original content to carry a year. “There’s a market value assessed to that,” Watson said. “We’re trying to put some of that accountability back on the programmer. You have to serve my customers a little better than 20 new hours a year or we renegotiate the rate.”
The cable giant’s overall position is for the CRTC to lift restrictive regulations that, it said, will allow it to compete against foreign streaming services and float not just its own boat, but all boats in the Canadian broadcasting system.
“That’s going to require, going forward, the ability to more quickly negotiate rates that reflect the value of services that we intend to continue carrying,” Shaikh said. “It also in some cases requires greater ability to drop certain services when they’re no longer demanded by our customers, which will free up revenue and eliminates the cost to focus on the services that are demanded by our customers.
“With a more flexible regime that doesn’t include a litany of packaging obligations and uncertainty, there’s actually a greater opportunity to partner with new services,” he added. “We’d like the regime that actually lets us partner with programming services so we’re able to compete with online streamers.”
Screenshot of Rogers team presenting in the foreground with Corus team watching in the background
