The Canadian Radio-television and Telecommunications Commission last week announced much-anticipated plans to require cable and satellite companies to offer consumers basic television packages for an affordable $25 per month alongside the option of picking the television channels they want without requiring them to purchase expensive bundles.
Despite some hand wringing that the changes will lead to reduced revenues for broadcasters, my weekly technology law column (Toronto Star version, homepage version) notes that it is readily apparent that the CRTC is committed to reducing or eliminating outdated regulations in the hope of fostering a more competitive broadcast environment. Consumer choice for television channels, greater flexibility for broadcaster programming, adjustments to Canadian content requirements, and the enforcement of net neutrality rules all fall within the same broader strategy of exercising its regulatory muscle to enable a level playing field and encourage the development of globally competitive content.
What makes the latest CRTC decision particularly notable is that it identifies a new threat to a competitive broadcast environment. Much to the chagrin of many within the Canadian system, it isn’t Netflix. In recent months, seemingly everyone has had a turn taking shots at the enormously popular online video service: the Government of Ontario has called for a Netflix tax, Bell Media has asked for measures to block access to the U.S. service, and many creator groups have urged the CRTC to adopt new regulations for online media.
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I appeared on CBC News to discuss how Canadians are taking back the CRTC and our communications system. The CRTC, for the first time ever, included questions submitted by members of the public in the hearing. My interview can be found on Youtube or on CBC’s website for better quality.
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The CRTC yesterday issued a ruling
involving a Telus complaint over Bell’s exclusive rights over NFL and NHL content for its wireless services and its inability to negotiate similar rights for mobile carriage. The Commission found that Bell gave itself an undue preference contrary to its 2009 new media decision
and ordered Bell to take steps to ensure that Telus can access the programming on reasonable terms. While there are dangers of undue preferences in the mobile environment and of unfair behaviour arising from the vertical integration, it is hard to see how this case qualifies.
The CRTC analysis involves a two-step process. First, it considers whether an undertaking has given itself a preference or subjected another person to a disadvantage. If it finds a preference, it moves to a second step to determine whether the preference is undue. Note that the burden of demonstrating that the preference was not undue rests with the undertaking that has granted it.
In this case, the Commission found that Bell granted itself a preference by entering into an exclusive contract for NHL and NFL programming. Note that the NFL programming is not something that Bell produces or otherwise owns. There is also no indication that the Bell’s wireless access to the NFL is linked to similar licenses for its broadcasting properties (Bell says the NFL deal was concluded before its purchase of CTV). If this constitutes a preference, then any exclusive contract will seemingly rise to the level of a preference and the party that enters into it may be faced with the burden of demonstrating that it is not an undue preference (which appears to be precisely what the Commission has in mind).
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This past summer’s usage based billing hearing featured a critical moment when CRTC Vice-Chair Len Katz asked a question of independent ISPs that made it clear the commissioners were finally getting it. Katz started from the following premise
I guess I come from the position that we, the Commission, have already recognized there is a need to create competition, more competition in order to protect Canadians, and facilities-based competition is not yet here. So it’s our job to find a vehicle to create that competition and, in the simplest terms, it is to create an environment where broadband would be made available to a third party through a lease arrangement.
The acknowledgement about the state of Canadian competition and the responsibility of the regulator to address the issue was long overdue. While the UBB decision is still forthcoming, Katz’s comments provide some reason for optimism. Yesterday’s CRTC vertical integration decision contained a similar statement that offered a strong indication that the Commission got the concerns associated with vertically integrated media companies that can use their market power in a manner that harms consumer choice :
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Dwayne Winseck has another terrific column at the Globe, this time reflecting on the recently concluded CRTC vertical integration hearing.
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