No evidence suggests foreign streamers will enter into exclusivity with Rogers, incumbent tells CRTC

Rogers Communications Inc. executives told the CRTC that there is no evidence to suggest that its merger with Shaw Communications Inc. would result in content exclusivity with foreign streamers, if approved. Telus Corp. had urged the commission to reject the merger on those grounds Tuesday. On the closing day of the five day hearing Friday, senior vice-president of regulatory affairs Ted Woodhead told commissioners that the merger will increase competition with Telus and BCE Inc. -- which argued Thursday that no amount of proposed remedies will undo the damage of Rogers gaining 47 per cent of the English-language broadcast distribution undertaking (BDU) market -- while also expanding the reach of its BDU services to communities that have no alternatives. “Many parties to this proceeding would prefer to ignore the reality of the now, not to mention the future, and would like to return to an analog era of access rights and revenue guarantees,” Woodhead told commissioners. “For decades these two companies have consistently advocated for the notion of scale for themselves, but have now decided that scale is a bad thing," Woodhead said. "You will need to weigh their credibility.” Woodhead noted that interveners brought up the market power concerns raised nine years ago over the Bell-Astral Media merger, however, he argued those concerns are “patently false” in the Rogers-Shaw case. He argued that Bell and Astral both operated television services in the most popular genres and held exclusive rights to most of the popular programs and programming services in Canada. “It was that exclusivity that compelled the commission to issue its denial. Rogers is not acquiring any linear programming services from Shaw,” he said, adding that since then the commission has updated its regulatory framework which should alleviate any concern over the combined subscriber bases of Rogers and Shaw. Rogers Sports and Media’s vice-president of regulatory affairs Susan Wheeler also sought to address its competitors’ concerns over exclusivity. She said that none of the intervenors “provided credible evidence that Rogers would have the means, or that foreign streamers would have the desire, to enter into such an arrangement with Rogers post-closing.” Telus senior strategy manager Wayne Lindo told commissioners earlier this week that the CRTC’s Digital Media Exemption Order (DMEO) does not prohibit exclusivity that is tied to a video subscription, and only prohibits exclusivity when it is dependent on subscription to a specific mobile or retail internet access service. That means, he said, that Rogers could air hockey games on an online service rather than on Sportsnet, and then make that service exclusively available to their cable subscribers. Wheeler said the CRTC has rules in place that prohibit exclusivity, including the DMEO, and that any changes that would be made to the exemption order need to be considered at a separate proceeding so parties would have the opportunity to comment on that specific issue. She also noted that Rogers recently concluded an arrangement with Disney+, before the announcement of the Shaw transaction, and that the foreign streamer did not provide Rogers with exclusive BDU distribution rights. “The fact that Telus failed to negotiate a deal with Disney+ is not evidence of exclusivity,” Wheeler said. Wheeler said that independent distributors who intervened in the case also “refuse to acknowledge the many effective safeguards that the CRTC has introduced to ensure fair negotiations” with Rogers Sports and Media (RSM). “RSM cannot withhold a signal from any BDU and is required to negotiate with every BDU for carriage of its services with the backstop of CRTC dispute resolution and undue preference. Their only real tangible issue seems to be the length of time that the dispute resolution process takes to resolve matters, which in every case involving RSM is a result of their own negotiating tactics,” she said, adding that the incumbent has no incentive to delay renewal negotiations because they require the financial certainty for investment and programming services. She also said that intervenors’ suggestions that the commission eliminate retroactive payments to programmers after the expiry of a carriage agreement “would provide little or no incentive to independent BDU to ever renew their carriage agreements for RSM services” and would create “significant risk” in Rogers’ ability to invest in programming and keep it out of the hands of foreign giants. Throughout the hearing, concerns were also raised about local news funding, specifically $13 million in funding which Telus argued should be left in the hands of Global TV (whose parent company is Corus Entertainment Inc.) over CityTV. Wheeler said that Rogers would be opposed to diverting that funding to competing local television stations, and would rather "ensure that City News provides a stronger and more competitive editorial voice in the West” that rivals CTV and GlobalTV. On Monday the company plans to submit to the commission a full list of commitments it is willing to make to local news as part of its condition of approval. Rogers’ vice-president of regulatory affairs Pam Dinsmore said the company recognizes the transaction would have an indirect impact on independent programmers because Corus’ services would no longer be triggered by 1:1 linkage rule. The rule requires that vertically-integrated BDUs distribute at least one non-vertically-integrated service in the same language for each service of its own that it distributes. “We proactively entered into negotiations with various independent programmers to address it. We successfully negotiated renewal agreements with a number of them prior to the hearing,” she said, adding they were unable to come to terms with the Independent Broadcasting Group and will pursue separate agreements with its members. On Monday Rogers proposed to carry a minimum of 40 independent programming services for three years, however, Dinsmore said the company was willing to add an additional five independent programming services on Shaw Direct and Rogers’ and Shaw's terrestrial BDUs for three years -- limited to its IPTV platform because and Shaw's legacy platform is at capacity. -- Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

No evidence suggests foreign streamers will enter into exclusivity with Rogers, incumbent tells CRTC

Broadcast | November 26, 2021

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No evidence suggests foreign streamers will enter into exclusivity with Rogers, incumbent tells CRTC

Broadcast | November 26, 2021

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