Videotron giving itself undue preference, but unnecessary to suspend BDU Vrai service: PIAC

The Public Interest Advocacy Centre (PIAC) is supporting a BCE Inc. complaint that Quebecor Inc.’s Videotron inappropriately benefits from its Vrai service being registered as an exempt hybrid video-on-demand (HVOD) service, but is arguing that Quebecor should be allowed to “expeditiously” revise its direct-to-consumer (DTC) offering rather than having to remove the service. PIAC’s comments come in a Feb. 15 intervention on a November Part 1 application filed by Bell, which claims that Videotron is not complying with the regulator's rules on HVOD services. There are certain differences in the marketing of Vrai platform on a DTC basis compared to the offer intended for Videotron’s cable subscribers. Bell argued that at a cost of $15.99 per month, the DTC Vrai service is “significantly more” expensive than the Vrai service available to Videotron’s broadcast distribution undertaking (BDU) subscribers. “PIAC agrees with Bell that the DTC Vrai offering is far inferior to the BDU Vrai offering, constituting provision of a programming service on an exclusive or otherwise preferential basis dependent on an undertaking’s BDU subscription,” the organization wrote. PIAC told the CRTC it disagrees with Bell’s proposed solution to have Videotron suspend the provision of the BDU Vrai service, calling the move “unnecessary”. “This would deprive consumers of Vrai programming, and content creators of an audience. Rather, Videotron should be given a chance to expeditiously revise its DTC offering,” it wrote. Quebecor, in its Thursday response to the Part 1, argued that Bell “intentionally omitted” to mention that its customers, and all consumers in Canada, can access the Vrai service through Quebecor’s new QUB web platform which is available to everyone and whose registration is free. Quebecor also argued that the offer of content is exactly the same whether it is accessed through the Vrai platform, offered to Videotron subscribers through Hélix TV, or in a direct-to-consumer mode by accessing it via the QUB platform. “There is no content offered exclusively to Videotron subscribers,” the company wrote in its response. The CRTC’s HVOD Exemption Order stipulates that a DTC version of a BDU’s video-on-demand service must have substantially similar programming, and does not require that the price and platform features be the same. The Digital Media Exemption Order (DMEO) stipulates that an undertaking cannot offer television programming “on an exclusive or otherwise preferential basis in a manner that is dependent on the subscription to a specific mobile or retail internet access service.” PIAC argued, however, that Videotron’s operation of Vrai as an exempt HVOD service “contravenes the spirit” of the exemption order and noted that there is an undue preference provision in the expanded VOD exemption order that deals with all other instances of programming offered on a preferential basis. “PIAC submits that the manner in which Videotron has differentiated the BDU version of Vrai from the DTC online version constitutes an offering of Vrai’s television programming on an “otherwise preferential basis” on its BDU platform,” PIAC wrote to the commission. PIAC argued that the HVOD Exemption Order is meant to help Canadian companies compete “on an equal footing” in the on-demand environment against unregulated foreign streaming services and said that Videotron’s DTC Vrai offering does not achieve those goals. The advocacy group argued that consumers can get two concurrent streams of Netflix Inc. for $16.49 per month, or one stream for $9.99 per month, while the DTC Vrai offering only allows one stream for $15.99 per month. It added that Amazon Inc.‘s Prime Video and Walt Disney Co.’s Disney+ allow for three streams at $7.99 per month and four streams for $11.99 per month respectively. Videtron’s BDU Vrai service allows for five concurrent streams for $7 per month but consumers must first subscribe to Videotron’s internet and Hélix TV service, which PIAC argues “completely blunts its competitive edge.” “PIAC finds it difficult to believe Videotron’s DTC Vrai, with its high cost and limited functionality, competes on equal footing with these streaming services… Only the BDU version of Vrai truly competes with the foreign streaming services,” it wrote. PIAC noted that since Bell’s filing, Quebecor lowered the cost of its BDU Vrai service to $5 per month, which makes the DTC Vrai service more than triple the cost of its BDU version. “Therefore, Videotron is reaping the benefits of the HVOD Exemption Order while avoiding providing a DTC service that offers consumers value for money, and competes with foreign streaming services on equal footing,” PIAC argued. PIAC did note that Bell, in its application, did not offer any metric as to assess comparability when the incumbent argued that consumers should be able to buy the DTC Vrai service for a “comparable price” as is offered to Videotron BDUs. Bell’s Crave streaming service is priced around $20 per month whether a customer subscribes for it as a standalone service or as an add-on to their existing Bell TV services. “PIAC submits that perhaps a better standard to enforce under the HVOD Exemption Order is to require that the DTC service is overall substantially similar to the BDU service such that the value of the two service options is comparable to consumers,” the advocacy group wrote to the CRTC. PIAC argued that the QUB platform, where the DTC Vrai option is available, consolidates all of Quebecor’s news and entertainment content, “therefore users who only want to access Vrai content nonetheless must register into the Quebecor entertainment ecosystem.” PIAC also took issue with QUB’s privacy policy which it claimed is “premised on an egregious mischaracterization of personal information” as it characterizes user’s IP address, browsing history, viewed content, clicks, device type, incoming and outgoing sites, geographic location, among other information, as “browsing data that is anonymized.” The data is then used to generate statistical data and may be shared with advertisers. “A user accessing the QUB site or app to only watch Vrai content will nonetheless have their browsing data be collected without their consent, and then used to benefit the QUB ecosystem and feed targeted advertising. It is well-accepted in privacy law and discourse that simply removing an individual’s name does not render data anonymous; multiple pieces of data… can together or even individually easily identify users. Therefore, by simply using the QUB platform, DTC Vrai subscribers are exposing themselves to serious privacy risks,” PIAC wrote. In addition to its argument that DTC Vrai only offers one price for one concurrent stream, whereas foreign streamers provide tiered options, PIAC argued that there is no direct subscription page to Vrai DTC for prospective customers. Prospective customers must first click through Videotron’s website and advertisements before being redirected to the platform. It also noted DTC Vrai customers can only stream on another screen through Google Chromecast or Apple Airplay from an iOS device, whereas BDU Vrai customers can stream on through the Helix TV app and set-top box. “Perhaps each of these discrepancies individually would not constitute undue preference towards the BDU version of Vrai, but taken together, the DTC offering provides much less value for more money such that the BDU offering is clearly preferable to the DTC offering,” PIAC stated. While the DTC and BDU services do not need to be identical, PIAC concluded, they must at least be of comparable value and suggested Videotron offer its DTC Vrai through a dedicated site and app available for at $7 per month with five concurrent streams. “To allow otherwise sets the precedent that a Canadian company can take advantage of the HVOD exemption by simply providing a DTC service that is both comparatively unattractive to consumers and uncompetitive in the online streaming market. This benefits neither consumers nor Canadian content creators,” PIAC wrote. – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca.

Videotron giving itself undue preference, but unnecessary to suspend BDU Vrai service: PIAC

Broadcast | February 15, 2022

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Videotron giving itself undue preference, but unnecessary to suspend BDU Vrai service: PIAC

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