Bell says retroactive regulation can’t be basis for simsub ban

The CRTC can’t retroactively apply regulations established almost a year after the fact to justify its prohibition simultaneous substitution during the broadcast of the National Football League’s (NFL) Super Bowl, BCE Inc. argued in court documents filed in its joint appeal of the decision. In a memorandum of fact and law filed with the Federal Appeal Court April 5, Bell said that the Simultaneous Programming Service Deletion and Substitution Regulations, which came into force Dec. 1, 2015, aren’t applicable to the Jan. 29, 2015 CRTC policy that first said the practice was being eliminated as of the 2017 NFL championship game. The regulations allow the CRTC to make a decision to ban simultaneous substitution of a programming service if it decides that the substitution is not in the public interest. The CRTC took its consideration of comments made during the consultation on the distribution order as satisfying its requirements for determining simultaneous substitution during the Super Bowl wasn’t in the public interest, Bell said in the memo, adding it disagreed and that the notice of consultation “called for comments only on the language of the order” and in it, “the CRTC acknowledged that the substantive decision was to ban simultaneous substitution for the Super Bowl had already been made.” It added: “The substantive decision was therefore not made in the Final Decision; it was made in BRP 2015-25, which was released before the Regulations were promulgated. The Regulations can only operate prospectively; the CRTC cannot use a decision made before the Regulations were promulgated to establish an exception under the Regulations.” An explanatory note appended to the simultaneous substitution regulations said the late 2015 rules “will give effect to the policy determinations” set out in the January regulatory policy, but it also said that “this note is not part of the Regulations.” According to court records, the Association of Canadian Advertisers (ACA) applied last week to intervene in the proceeding. The association has been actively opposed to the CRTC’s decision since the earliest days, Ron Lund, ACA president and CEO, said in a phone interview. A key reason for their involvement is that Canadian advertisers need access to Canadian audiences, Lund said. Bell Media holds the Canadian broadcast rights to the Super Bowl. In its first year under the new rules, it said its channels — CTV, CTV Two and TSN — saw a 39-per-cent decrease in viewership for the game. “This drop in audience is the audience that we would like to access. That’s very important; it’s been the underpinning of the Canadian broadcast system,” Lund said. “Everybody says, ‘well jeez, it’s just the Super Bowl,’ but it’s the Super Bowl this year, it’s the Academy Awards next year, it’s golf the year after, then it’s Criminal Minds, and it’s everything.” If broadcasters can’t monetize their purchase of high-profile event programming by selling Canadian ad space, they might stop buying it altogether, Lund added. “It’s a foreboding of the end of the Canadian television system as we know it because there’s nothing in place to replace those audiences, which, in fact, pay for the broadcasts,” he said. “It may seem small just because it’s the Super Bowl, but it’s just the beginning of a dismantling of what has, in fact, built the Canadian broadcast system. It may have to change someday but right now, respectfully, the CRTC, Blais do not have anything to replace it with.” The United States' 2017 National Trade Estimate report on foreign trade barriers, released at the end of March, highlighted the CRTC’s decision as one of those barriers. “U.S. suppliers of programming believe that the price Canadian networks pay for Super Bowl rights is determined by the value of advertising they can sell in Canada, and that the CRTC’s decision reduces the value of their programming,” the report said, adding that the “United States is highly concerned about this policy.” Blais, in a February letter to American legislators, denied that the decision raised any trade issues with respect to the Copyright Act or the North American Free Trade Agreement (NAFTA). The U.S. government was also not impressed that Canada requires data to be stored domestically. It highlighted in the report, regarding digital trade, that the government is currently “consolidating information and communication technology (ICT) services across 63 Canadian federal government email systems under a single platform,” and that the tender for the project cited national security as a need for the contracted company to store data in Canada. The report noted that the “public sector represents approximately one third of the Canadian economy and is a major consumer of U.S. services,” so the requirement “is likely to have significant impact on U.S. exports of a wide array of products and services.” It also cited Canada’s foreign ownership rules for telecommunications as a service barrier, calling it “one of the most restrictive regimes among developed countries.” And in picking apart the country’s Canadian content rules, the report also highlighted the CRTC’s Wholesale Code, which came into effect in January 2016 and governs the business relationship between TV service providers and channel operators. Bell is also currently contesting the code in the Federal Court of Appeal. A proposal in the Wholesale Code to “apply a code of conduct designed for vertically-integrated suppliers in Canada… to foreign programming suppliers (who by definition cannot be vertically integrated, as foreign suppliers are prohibited from owning video distribution infrastructure in Canada) has raised significant stakeholder concerns,” the U.S. report said. — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Bell says retroactive regulation can’t be basis for simsub ban

Broadcast | April 11, 2017

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Bell says retroactive regulation can’t be basis for simsub ban

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