CRTC encourages ‘consumer friendly packaging options’

The CRTC said Thursday that it encourages TV distributors to adopt “consumer friendly packaging options” but that specialty channel owners would need time to adjust to a more consumer-focused approach to the packaging of their channels. “The Commission considers that a programming service should not expect to be completely insulated from the effects of consumers exercising choice,” the CRTC said in a preliminary ruling intended to guide a carriage dispute between the Canadian Independent Distributors Group (CIDG) and BCE Inc. subsidiary Bell Media Inc. The distributor group—representing Bragg Communications Inc., the more than 100 members of the Canadian Cable Systems Alliance (CCSA), Cogeco Cable Inc. and Telus Communications Co.—are in a dispute with Bell over the carriage rate and terms involved in negotiations to carry Bell's 29 specialty services. The carriage dispute became public this year after the distributors filed an application with the CRTC in January asking for mediation to help resolve it. A public hearing with the two sides was held last month. The commission said Thursday that “a balance must be struck” between allowing broadcast distributors to provide their TV subscribers with more choice and flexibility and permitting specialty channel operators “reasonable and predictable levels of revenue for each of their programming services.” The CRTC said it is concerned about vertically integrated companies “affording themselves undue preference” in their use of on-demand, new media content rights and providing consumers exclusive access on the distribution platforms those companies control. Vertically integrated broadcast companies, such as Bell, own both content and TV distribution services. As part of the dispute, the CIDG says Bell is refusing to negotiate separate, non-linear distribution rights for its channels, covering online and mobile rights. The commission noted that, at the hearing for the dispute last month, Bell and the CIDG acknowledged that there is a fair market value to non-linear, on-demand rights. “CIDG wanted the ability to access these rights on a going-forward basis provided that it could be done at a fair market value,” the CRTC said. “For its part, Bell Media wanted to ensure that it could develop business models for commercial distribution of non-linear rights.” The commission said the evolution of non-linear rights would require the development of new business models. It said that when on-demand rights “are made available to distributors, they will be provided on commercially reasonable terms” and must comply with its rules for vertically integrated companies. The commission said it expects the parties to use the analysis as a guide to reach an agreement. In response to a separate commission request for information last year, vertically integrated broadcast distributors submitted briefs to the CRTC this week to share their views on offering more consumer choice in the TV subscription market. Rogers Communication Inc. reported the results of a trial it ran in London, Ont., which offered TV subscribers more control over the channels they pay for. The company said the trial drew new cable customers and helped offset losses caused by some channels' lower penetration rates. Bell wrote in its brief to the CRTC this week that consumers now “enjoy a great deal of broadcasting choice and flexibility” and that there is no need for the commission to regulate packaging structures. “ a regulation requiring that all programming services must be made available to consumers on a stand-alone basis would have far-reaching ramifications on many elements of the broadcasting system,” the company said, referring to mandated “pick-and-pay” specialty channel options. “Undoubtedly, a market shake-out, causing many specialty services to exit the market, would ensue. The current regulatory infrastructure built up by the Commission over decades, and designed 'to provide a supportive and structured environment' in which specialty services can 'maximize their contributions' to the system, would be compromised,” Bell said in its brief. news@thewirereport.ca

CRTC encourages ‘consumer friendly packaging options’

Broadcast | April 5, 2012

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