The CRTC vertical integration hearing continues today, following several full days last week in which the Commissioners repeatedly asked whether companies such as Rogers, Bell, and Shaw should be required to offer a “skinny basic” service – a cheaper television package with limited programming. The introduction of skinny basic appears to be one of the CRTC’s preferred responses to the issue, since it is concerned that vertically integrated companies will use their broadcast distribution services to require subscribers to subscribe to their broadcast properties. The major integrated providers have opposed the idea, arguing consumers aren’t interested.
While greater consumer choice is definitely needed, skinny basic, which still envisions a required basket of channels, isn’t good enough. A preferable approach would be to offer consumers real choice with a full pick-and-pay format. I discussed the option in 2009 during the fee-for-carriage fight:
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Dwayne Winseck has another great Globe column, this one focused on the CRTC’s vertical integration hearing.
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The CRTC’s vertical integration hearing opens today
with fifty groups scheduled to appear
over the next week and a half. I’ve written a couple of articles about the issue over the past year. Last September, I noted
the Canadian consolidation felt like a last stab at a walled garden approach that has consistently failed and argued:
The key to ensuring a competitive environment therefore rests on maintaining open platforms on all service providers. That may prove challenging, since the newly vertically-integrated companies will find it tempting to grant preferential treatment to their own assets. In addition to exclusivity, this could take the form of faster speeds on wireless services for company-controlled broadcasts, allowing users quicker access to the walled garden content.
Alternatively, it might mean excluding walled garden content from the bandwidth caps imposed by most providers. Under such a scenario, subscribers would find that accessing walled garden content would be “free” in the sense that it would not count against their monthly bandwidth allocation. By contrast, competing Internet services would effectively face an additional cost, since subscribers would have to factor in their bandwidth consumption.
These scenarios point to the possibility of greater regulatory intervention to ensure a fully competitive converged broadcast and telecom environment. Indeed, the Canadian Radio-television and Telecommunications Commission expressed concern about this direction in its 2009 New Media decision.
Notwithstanding assurances from the wireless carriers that walled gardens have not proven successful and “the industry is quickly moving toward the open Internet model, whereby mobile users can access content of their choice,” the commission worried that “the ownership structure within Canada’s wireless industry suggests that the potential for unduly preferential treatment needs to be addressed because the industry structure comprises vertically integrated companies with ownership interests in content providers.”
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Telus has called on the CRTC to establish new safeguards against the abuse of market power in light of the vertical integration that has occurred in the Canadian broadcast and telecom market in recent months. The company’s proposed safeguards include: Distributors should not withhold content from competitors. This will prevent […]
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The deadline for interventions into the forthcoming CRTC hearing on the Bell – CTV merger passed earlier this week with hundreds of submissions from across the country. Many cultural groups focused solely on the proposed benefits package associated with the transaction (e.g. Directors Guild of Canada
, Alberta Motion Pictures Industry Association
, the Documentary Organization of Canada
) but there are many others rallying to support the deal.
Local organizations and businesses are effusive with their praise for the transaction – everyone from the Ottawa Senators to retailer Tommy & Lefebvre to the Westin Hotel in Ottawa to the Surrey Honda auto dealership to Dodd’s Furniture and Mattress in Victoria, BC to the Soho Bar and Grill in Calgary took the time to chime in with support. Moreover, MPs from across the political spectrum write with their support including Conservative MPs Bruce Stanton, Bev Shipley, Patrick Brown, and Garry Breitkreuz, Liberal MP Marcel Proulx, NDP MPs Irene Mathyssen, Brian Masse, and Joe Comartin, Ottawa Mayor Jim Watson, Halifax Mayor Peter Kelly, Richmond Mayor Malcolm Brodie, and Ontario MPP Bob Chiarelli.
The views expressed by the politicians are remarkably consistent. For example, Chiarelli says:
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