Throughout the Canadian Radio-television and Telecommunications Commission TalkTV hearing, Canadian broadcasters such as Bell (CTV), Rogers (CITY), and Shaw (Global), tried to assure Canada’s regulator that they were ready to embrace the digital future and prepared for regulatory change. Yet in recent weeks, it has become increasingly apparent that Canadian broadcasters plan to fight change every step of the way.
The effort to keep core business models intact are sometimes obvious. For example, new services such as Shomi and CraveTV are often characterized as Netflix competitors, but given their linkage to a conventional cable or satellite television subscription, are a transparent attempt to persuade consumers to retain existing services and not cut the cord. The viability of those services remains to be seen, but more interesting are the regulatory and legal fights, where Canadian broadcasters are waging an ongoing battle against change.
Bell Media leads the way with the two legal challenges against recent CRTC decisions. Yesterday it asked the Federal Court of Appeal to overrule the CRTC on its decision to ban simultaneous substitution from Super Bowl broadcasts starting in 2017. The Bell motion for leave to appeal strikes me as weak:
- it argues that the decision is unreasonable based largely on the grounds that it interprets broadcast policy differently than the CRTC
- claims procedural unfairness on the basis that the CRTC did not give notice on the prospect of targeting simsub for the Super Bowl (it did)
- says that Bell is being discriminated against by singling out one licensee (the CRTC decision does not do that)
- suggests that it interferes with Bell’s commercial agreement with the NFL (Bell remains the exclusive Canadian broadcaster).
Bell claims that “the policy reasons for which simultaneous substitution was introduced apply as much, if not more, today than they did in the early 1970s.” I do not think that is correct (my post on why simultaneous substitution is less relevant), but Bell is effectively saying that nothing has changed and that the broadcast rules should not either.
Bell’s other legal challenge – over the application of the Telecommunications Act undue preference rules to its MobileTV service – features the company arguing that it should be entitled to engage in undue preferences for its own services provided that it is a broadcasting service. While there are good arguments that its service is covered by the Telecommunications Act (which prohibits undue preferences), this seems like a position that cannot last long term. Even if Bell wins in court, the Canadian government would surely step in to ensure that undue preference rules apply in these circumstances. For all the talk of change, Bell will spend enormous sums of money to argue that the rules should stay the same and that the largest media organization in the country should be permitted to grant itself undue preferences.
Bell is hardly alone in this regard. Last week’s post on a Rogers executive calling on the Canadian government to block the use of virtual private networks to stop Canadians from accessing U.S. Netflix reflects broadcaster frustration with consumers using technologies to circumvent geographically-based rights restrictions. Given that television licensing has long been based on geographic borders, the gradual elimination of the effectiveness of those limitations leaves broadcasters looking for new rules to stop the use of those technologies in an effort to re-affirm their longstanding business models. Rather than adapt to change, the focus is on government intervention to stop what are viewed as technological threats.
In fact, at the same Content Industry Connect conference, Barbara Williams, Shaw Media’s President, argued that if we really cared about the Canadian broadcast system, Canada would have blocked U.S. signals (tweets reporting on the comment that the “mistake” was not blocking U.S. television signals in the Canadian market here, here, and here). Leaving aside the irony of an executive of a cable company arguing against U.S. television signals in Canada (the cable industry was built on delivering U.S. signals), the comment reflects the lament over the loss of control and the shift in power from broadcaster to consumer.
The CRTC has made it clear that it plans to reform broadcast regulation with policies that place “Canadians at the centre of the communication system.” Broadcasters have claimed to support the shift, but scratch below the surface of the soundbites and you find they want things to stay the same. Consumers have paid the price as broadcasters have benefited from foreign investment restrictions, simultaneous substitution, and a myriad of other rules. Content creators are also invariably prepared to defend the status quo (ACTRA even wrote a letter supporting Super Bowl simsub), since any decline in broadcaster revenues are ultimately viewed as a loss in support for new content creation. The regulator, government, and public are clearly ready for change. For the broadcasters, the playbook for retaining existing rules is seemingly down to lawsuits and government intervention.