Rogers charges OUTtv using regulatory system to stop it from making commercial decisions
By Ahmad Hathout
LGBTQ+ TV broadcaster and streamer OUTtv is alleging Rogers is violating Wholesale Code rules by shuffling the network into a less popular cable TV package.
The subscription-based service is alleging in a Part 1 application dated March 5 that the cable company is violating section 9 of the code by not putting the network in the “best available” package, negatively impacting its wholesale fee revenue. The complaint alleges that Rogers shuffled the service it must carry out of a “Premier” package and “into a different and much less penetrated package.”
OUTtv claims it learned about this change after the fact, when the service realized a dramatic drop in subscribers in December 2024. Between January and November of that year, it said it was seeing a gradual decline in subscriber numbers, which it said was “likely” due to overall subscriber losses on the “applicable Rogers package due to subscriber attrition and turn over since the Premier package was no longer marketed … as an active package.”
The service alleges Rogers violated the advanced notice rules to let it know about any packaging channels with respect to its service. It claims it asked what specific change was made but alleges it did not receive a response from Rogers.
“Had OUTtv received prior notice, we would have initiated discussions with Rogers and advised the Commission of the potential breach of section 9 of the Wholesale Code and a related dispute,” the complaint says.
The service says the two had been engaged in negotiations over the existing affiliation agreement, suggesting the CRTC’s status quo rule – the standstill – was in effect. “In other words, the standstill rule was undoubtedly in place and Rogers should not have changed OUTtv’s packaging in the way it did, without OUTtv’s agreement, while the standstill was in effect.”
In a statement to Cartt, a Rogers spokesperson said: “OUTtv is available for customers to add to their TV lineup, either as a standalone channel or in the Lifestyle and Entertainment or Variety theme packs, complying with our regulatory obligations. It’s unfortunate they’re trying to use the regulatory system to restrict our ability to make decisions that meet changing viewership trends.”
In October, OUTtv filed an application with the CRTC complaining about low penetration rates across the broadcasters with which it has affiliation agreements. “OUTtv’s subscriber penetration across the English-language BDU environment is unjustifiably – scandalously – low at just 6%,” it said in the application.
The service, which said it has only been able to negotiate a fair carry fee with one unnamed BDU, reported one million subscribers and generated $4.2 million in subscription revenue in 2019. In 2023, it said it reported just over 400,000 subscribers and generated $3.3 million in said revenue. Despite this, the network said its advertising revenue has soared by 786 per cent from 2019 to 2023, illustrating that there is value in its programming.
As of a 2022 licence renewal decision, the CRTC forced BDUs to carry the service, but left it up to their subscribers to pay for it. Citing low numbers, OUTtv requested in its fall application that the CRTC consider broadening its distribution into must-carry status with a guaranteed wholesale fee that is available to all subscribers of the BDUs or at least set a base wholesale rate for negotiations with distributors. The CRTC had previously rejected OUTtv’s request in that same licence renewal decision to be carried at a rate of 12 cents per subscriber per month. If not that, then it wants the 12 cents to be the floor for negotiations with BDUs.
But in responses to the application, major BDUs have asked the CRTC to reject the application, with some saying the issue with the numbers lies elsewhere.
Eastlink pointed to the cord-cutting phenomenon that saw an overall decline of subscribers to BDU packages and the increasing number of Canadians watching TV exclusively online, where they can purchase an OUTtv subscription.
Similarly, the Canadian Communication Systems Alliance, which represents smaller BDUs, said forcing its members to carry the service – or any new service – with a guaranteed wholesale rate will hurt them financially in an especially difficult time when more Canadians are cutting the cord and going online.
Bell, Telus and Cogeco have rejected claims that they have mistreat the service, with Telus even claiming that it is OUTtv’s conduct that has resulted in delays in carriage negotiations. The three, including Quebecor, also suggest that a proper avenue for its grievances is final offer arbitration (FOA) with the commission, not more of these applications.
“Instead of actively negotiating with Rogers and referring the matter to the Commission for dispute resolution where the parties failed to agree, it is apparent from the comments filed by other BDUs in this proceeding that it was always OUTtv’s strategy to improperly rely on the Commission’s s. 9.1(1(h) [must carry status] regulatory tool as a means to establish wholesale rates without consideration of its Service’s fair market value,” Rogers said in an follow-up February submission requested by the CRTC.
“The fact that the significant subscriber growth OUTtv achieved on Rogers’ BDUs did not attract larger audiences to its Service meant that Rogers was continuing to pay [redacted] per subscriber per month for a Service that added no real value to those customers who subscribed to Premier,” the cable giant added in that submission.
OUTtv’s CEO Brad Danks alleged in a later November reply submission that “all of the BDUs required that OUTtv accept a steeply reduced per subscriber wholesale fee before they would meet their regulatory obligation to distribute OUTtv in the highest penetration suitable package,” and that the “most efficient and direct remedy to address both the non-compliance by BDUs … and to establish a reasonable rate for OUTtv, either through negotiation with BDUs or through carriage of OUTtv as a basic service.”
He also said that a FOA process “on its own would not address OUTtv’s packaging – which is a fundamental issue on all BDUs. OUTtv does not have the resources to engage in what would, in effect, amount to an extended battle of attrition on this scale.”
