Screens, not scale, key to competing with OTT providers, Rogers says

Consumer-friendly content distribution platforms are more important than scale to Canadian broadcasters and broadcast distributors competing against large, over-the-top (OTT) service providers like Netflix, Ken Engelhart, senior vice-president of regulatory affairs at Rogers Communications Inc., said Wednesday. As the weeklong CRTC hearing into BCE Inc.’s intended $3.38-billion acquisition of Astral Media Inc. continued in Montreal on Wednesday, Engelhart told commissioners Bell’s argument that it needs more scale to compete with foreign content providers like Netflix Inc. is “absurd.” He told commissioners that a “gigantic scale” is not needed to compete, but rather “what you need is attractive content platforms for your customers.” During the first day of hearings on Monday, George Cope, Bell’s president and CEO, told commissioners that the intended acquisition would protect Canadian content producers from increasingly competitive online, foreign services that are not bound by Canadian content requirements. Cope said Bell would launch a competing online service that it will make available through other broadcast distributors if the deal is approved. David Purdy, Rogers’ vice-president of video products, said in the company’s opening remarks that Bell has slowed Rogers’ efforts to offer premium content on its Rogers Live TV application, which allows Rogers cable TV and Internet subscribers to stream live TV content to their tablets. He said Bell has “steadfastly refused” to include its services in the new product offering, while other large broadcasters, such as Astral, Shaw Communications Inc., Corus Entertainment Inc., and CBC/Radio-Canada, have made their content available. Purdy added that the company’s Rogers On Demand service also only has access to a “limited amount” of “out-of-date” content from the programs offered on Bell’s 29 specialty channels, and that this does not include any content from the most popular programs, such as MTV’s Jersey Shore and Discovery Channel’s Deadliest Catch. “The same is true for our mobile service,” Purdy said. “Bell has offered its content on terms that are completely unreasonable and, as a result, we are not able to offer any Bell programming on our wireless platform.” In a March CRTC hearing into a Bell carriage dispute with a coalition of independent distributors, Bell Media president Kevin Crull said his company had not yet decided how to licence the “non-linear” online and mobile rights to its programming content. Following that hearing, the CRTC said in April that Bell was permitted to withhold its non-linear content rights during carriage negotiations with broadcast distributors. In the company’s opening remarks, Pamela Dinsmore, Rogers’ vice-president of regulatory affairs, said that allowing Bell to acquire Astral’s broadcasting assets will give the company “overwhelming control” of the Canadian broadcasting market. She reiterated Rogers’ position that the CRTC should require Bell to sell off Astral’s English-language broadcasting assets as a condition of the deal’s approval. Engelhart said if the commission does require Bell to sell Astral’s English-language assets, which include popular pay-TV services such as The Movie Network and HBO Canada, Rogers may be interested in acquiring them, though he added that the company is not “lusting” after them. “If the only way for us to keep Bell from buying it, then yes,” he said, when asked by CRTC chair Jean-Pierre Blais if the company would pursue those assets. Cogeco Cable Inc. also appeared before the commission Wednesday to voice its opposition to the deal. Louis Audet, Cogeco’s president and CEO, said in opening remarks that it is not in the public interest to allow the growth of a conglomerate and to then try to control it through regulation. “Past experience, particularly in telecommunications, clearly demonstrates that once the monster is created, it is impossible to control and regulation is doomed to failure,” he said. A day earlier, Peter Bissonette, president of Shaw, told commissioners his company supported Bell’s acquisition of Astral and that it would be “short-sighted to adopt the insular and protectionist approach” that would increase regulation of vertically integrated companies, such as Bell, Shaw and Rogers. He said commissioners should instead allow companies to expand their reach to deliver the benefits of scale and integration. “This approach will preserve and strengthen the Canadian broadcasting system,” he said. Northern telcos SSi Micro Ltd. and Iristel Inc. also appeared before the commission on Wednesday to voice their opposition to Bell’s proposal to feed $40 million in tangible benefits money from the sale to its northern subsidiary NorthwesTel Inc. The CRTC requires companies purchasing broadcast assets to spend about 10 per cent of the value of those assets on projects and programming that benefit the Canadian broadcasting system. Bell has asked to use $40 million of its proposed $241.3 million in tangible benefits to help NorthwesTel roll out advanced wireless services to remote and rural northern communities that do not currently have access to broadband Internet. Dean Procter, SSi Micro’s chief operating officer, said that plan would give NorthwesTel an unfair advantage over its northern competitors. He proposed that the $40 million should be directed towards projects that would be open to a competitive process. “In that way, the Commission will be able to ensure that the ‘public benefit’ really does benefit the public, that it maximizes social and economic value, and does not distort or even destroy the developing competitive telecommunications sector in the North,” he said. Mirko Bibic, Bell's chief legal and regulatory officer, told the commission on Monday that the company would sooner withdraw the NorthwesTel component of its tangible benefit plan than allow the money to go towards a public fund that could be accessed by its competitors. The hearing continues Thursday with Telus Corp., the Canadian Cable Systems Alliance Inc. and Blue Ant Media Inc. scheduled to appear. dgrenier@thewirereport.ca

Screens, not scale, key to competing with OTT providers, Rogers says

Broadcast | September 12, 2012

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Screens, not scale, key to competing with OTT providers, Rogers says

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