By Steve Faguy
MONTREAL — Quebecor is demanding the CRTC order CBC/Radio-Canada’s Tou.tv Extra paid streaming service to “cease its activities” because it goes outside the mandate of the public broadcaster and is an unfair competitor against Videotron and other regulated television service providers.
The CRTC isn’t about to go that far, but it has decided to look into whether there is an undue preference case to be made, in particular with a deal Radio-Canada has with Telus that provides Telus’s Quebec customers “exclusive” free access to the service.
Tou.tv Extra is the $7/month paid version of Tou.tv, which offers premium video programming, including some from broadcasters like Bell Media, TV5, Télé-Québec and V. Radio-Canada says 51.35 hours of content out of 3,500 hours (1.5%) on Tou.tv requires a paid subscription. It’s the main competitor in Quebec to Quebecor’s platform Club Illico. Both services drive subscriptions by premiering original TV series, which usually get a second airing on the associated conventional TV network about a year later.
In the complaint published by the Commission on Thursday, Quebecor argues Tou.tv Extra violates articles 3 and 5 of the Digital Media Exemption Order, which states that a programming service cannot subject a party to an undue preference or disadvantage, and that it cannot “offer television programming on an exclusive or otherwise preferential basis in a manner that is dependent on the subscription to a specific mobile or retail Internet access service.”
Quebecor’s argument is that by exclusively providing Telus customers free access to Tou.tv Extra, Radio-Canada is providing undue preference to Telus and making free access dependent on a subscription to a Telus service. (Telus offers Tou.tv Extra to mobile, internet and Optik TV customers in Quebec.) Radio-Canada does this, Quebecor says, “while short-circuiting the Canadian broadcasting system with taxpayer money” and “creating two-tier public television: enriched content, exclusives and offers first to the better off, and regular content and reruns to the masses.”
It even goes so far as to say that by encouraging Canadians to leave the regulated system, which would mean less in required contributions to the Canada Media Fund, Radio-Canada “imperils the production of Canadian programming and the very existence of the CMF, one of its main sources of financing.”
Quebecor also notes that in the CBC’s last licence renewal in 2013, before Tou.tv added a paid tier, the CRTC noted the broadcaster’s digital media undertakings “do not charge Canadians fees to access content that was financed through parliamentary appropriations,” which Quebecor interprets as a condition of acceptance.
The argument about CBC going beyond its mandate seems a bit much for the Commission, which said those issues were best dealt with in the context of the CBC’s licence renewal proceeding, which is currently under way. However, in a letter dated Tuesday it said it would examine whether articles 3 and 5 of the exemption order were violated.
Quebecor argues there was undue preference because “by exploiting this platform, Radio-Canada gives itself a major preference in the form of additional revenue that adds to its many other sources of revenue, to the detriment of Canadian broadcasting distribution undertakings that see their revenues and number of subscribers falling year after year.”
What’s more, the Telus offer “guarantees Radio-Canada a pool of millions of subscribers to its service, encouraging them to leave the regulated broadcasting system while creating unfair competition to BDUs, including Videotron.”
But how does Tou.tv Extra differ from Club Illico, Quebecor’s own streaming service?
“We respectfully argue that this reveals the anticompetitive, frivolous and vexatious character of Quebecor’s argument.” – Bev Kirshenblatt, CBC
Quebecor argues Club Illico is a hybrid video-on-demand service as defined by the CRTC in a 2015 exemption order, and is also distributed through Videotron’s Illico TV service while Tou.tv Extra is not directly distributed through any BDU. Illico is also registered with the CRTC as a HVOD service, while Tou.tv is not.
How that difference matters in this case is not entirely clear. HVOD and DMEO-exempt services have similar rules banning undue preference.
In a response to Quebecor’s complaint, CBC’s executive director, corporate and regulatory affairs Bev Kirshenblatt writes Quebecor was offered the same deal as Telus and made no effort to reach a commercial agreement to offer Tou.tv Extra for free to its customers.
It simply assumes that because Telus markets the deal as “exclusive” it is not available to other companies. “We respectfully argue that this reveals the anticompetitive, frivolous and vexatious character of Quebecor’s argument,” Kirshenblatt writes, demanding that the complaint be thrown out entirely.
Kirshenblatt also notes Rogers reached a similar deal as Telus for Tou.tv, though it did not renew its agreement. CBC’s deals with Telus and other broadcasters were filed confidentially with the commission.
The Part 1 undue preference complaint is open for public comment until February 18th.
