Broadcasters differ on usefulness of CRTC’s undue preference, standstill rules

Rogers Communications Inc. and its fellow broadcasters in the Canadian market are at odds on how the CRTC could alter its dispute resolution framework for fights over things like where their channels sit on TV guides. For some players in the sector, competitive disputes between them rise to allegations of undue preference—claims that a company is giving its own business favour over that of another—made to the CRTC. In response to a consultation launched by the CRTC exploring the dynamics of the Canadian broadcasting market, Rogers has taken aim at the commission’s framework for dispute resolution between broadcasting distribution undertakings (BDUs) and programming undertakings, including the regulator’s undue preference and standstill rules. According to Rogers, some players—big and small—have taken advantage of the regulatory measures. The standstill rule, according to the CRTC, is meant to avoid Canadian consumers losing access to programming services they enjoy while BDUs and programmers argue over the conditions of that programming’s carriage on a BDU’s platform. “It is not intended to protect or defend the interests of either party,” the regulator said about the rule in a previous decision. “The commission will intervene if it suspects that parties are invoking the standstill rule in such a manner, to thwart good faith negotiations or to insulate a given service from the impacts of greater consumer choice.” As recently as a March 14 decision, the CRTC sought to remind broadcasters that the undue preference mechanism “should not be relied upon to insulate a given service from the impacts of greater consumer choice such as through the provision of an effective access right or to create leverage in negotiations.” Rogers was one of dozens of companies and advocacy groups to respond to the consultation, which is looking for detailed input on challenges that small, medium, and large broadcasters, including online streaming services, are facing in today’s ecosystem. Rogers asserts that while making their own suggestions for changes that could be made to the standstill rule, most other interveners in the consult did not address the rule’s “use as an anti-competitive weapon to prevent legitimate and reasonable BDU business decisions. “ extensive and unchecked use has, in many cases, undermined fair and balanced negotiations, encouraged gamesmanship and anti-competitive behaviour, and prevented BDUs from implementing legitimate and commercially reasonable packaging and channel realignment decisions,” Rogers wrote. The CRTC “must” reform the standstill rule, Rogers argues, so that it applies for a maximum of 90 days while the parties fighting go through a final offer arbitration process, after which the standstill rule would automatically expire. Among other suggestions, Rogers says the rule should be updated to only come into effect after the parties’ previous mediation efforts fail and they have entered final offer arbitration, not through undue preference complaints or other types of disputes. It also wants to see “clear rules of engagement” governing standstills, “including confirmation that parties are permitted to conduct themselves in accordance with their contractual rights.” In its own case, Rogers says there are multiple standstills in place forcing it to carry almost 60 Canadian discretionary services, with some having been in place for years, “freezing carriage at expired wholesale rates that no longer reflect market value, while prohibiting packaging changes despite clear contractual rights,” Rogers said. “There is no question that these regulatory conditions are extremely competitively harmful and diminish Rogers' BDUs' ability to effectively compete against both Canadian and foreign competitors in the modern broadcasting landscape,” it continued. “Rogers is being very blunt. They're saying let freedom reign, let the free market reign, don't hold us back,” said Howard Law, former media director of Unifor, in an interview with The Wire Report. He writes on policy matters affecting Canadian media and authored Canada vs California: How Ottawa took on Netflix and the streaming giants. Law’s book covers, in part, Bill C-11 which resulted in the Online Streaming Act. The act was passed into law in spring 2023 and is the driver behind changes to the Broadcasting Act and thus consultations such as this one. Rogers has been accused of undue preference in favour of its own services in more than one case before the CRTC. READ MORE: - CRTC dismisses WildBrain undue preference complaint against Bell; Rogers facing new complaint - After months of dispute, Rogers & Corus take fight over channel placements, repackaging to Federal Court of Appeal - WildBrain accuses Rogers of unfair treatment of its children’s programming - Rogers alleges WildBrain ‘cannibalized’ its own offerings, in response to undue preference claims - Accusations fly between Rogers, sports programmer Timeless Inc. in carriage dispute In this proceeding on market dynamics, Rogers repeats arguments it has previously made while responding to undue preference claims against it, alleging that some Canadian programmers rely on the standstill rule to “insulate their service(s) from consumer choice” and block BDUs from dropping underperforming services from their channel lineups. According to Rogers, instead of promoting fair and balanced negotiations and dispute resolution, the standstill rule has “more often resulted in prolonging disputes that enrich one party at the expense of the other.” Rogers suggests that BDUs such as itself end up “forced to pay inflated retail rates for those services that offer little value to them and their subscribers.” Rogers stands alone in wanting dispute rules heavily altered, Bell argues Despite Rogers’ arguments that the dispute regulations are unfair and applied by the CRTC in a “one-sided” way, BCE Inc. suggests that Rogers stands alone in its pitch for big changes to the regime. “We note that Rogers' perspective may be informed by its dominant share of the English-language BDU market and its incentive and ability to foreclose competition in the market for programming signals,” Bell wrote. Rogers in turn accuses Bell of misusing the regime itself, as Bell suggested in its initial submission to the proceeding it would be appropriate to re-evaluate the “ongoing need” for the standstill rule in two years “to see if the revised regulatory regime, including standstill, has had the desired impact.” “BCE has been actively using the standstill against Rogers in an anti-competitive manner to retain legacy privileges, maintain inflated wholesale rates, and gain unfair leverage in the parties' negotiations,” Rogers alleges in one of its filings to the proceeding. The company further alleges that Bell’s “true intentions” are made clear as Bell recommended that the “ongoing need for the standstill rule should be reviewed in two years time.” “In other words, once Bell has finished exploiting the standstill for its own narrow self interest in its dispute with Rogers,” Rogers alleges. Corus Entertainment Inc., which is currently fighting Rogers in court over allegations of undue preference regarding channel placements and repackaging, also takes issue with the company’s arguments. “If Rogers' deregulation proposal reads like a wish list from a dominant industry player that ignores past conduct and the actual state of the Canadian broadcasting sector, that is because it is,” Corus argues. “Rogers' recommendations would enable vertically-integrated BDUs to leverage their scale to 'cut out middle companies,' abuse their dominant positions to imperil competitors, and enter into exclusive arrangements with international streaming and technology giants thereby centralizing decision-making in the Canadian system to a select few of the largest organizations,” Corus worries. Other intervenors also stood on the opposite end from Rogers, saying that the standstill rule should be expanded or maintained as it is. Telus Corp. told the CRTC that the standstill rule should be maintained but requires “urgent updates.” The company argues that Rogers’ pitch to narrow the scope of the rule to come into effect only if both sides are interested in negotiating would effectively allow vertically integrated companies to withhold access to programming under their control “simply by stating an intention not to negotiate.” “The commission should thus reject this proposal and instead clarify that the standstill rule applies as soon as a BDU confirms its intention to renew an agreement for existing services,” Telus states. Telus says it’s worth considering a pitch from the Canadian Association of Broadcasters (CAB), which suggested the creation of a standing sub-committee of CRTC commissioners to speed up decisions on standstill disputes, “potentially within a 5-8 week timeline.” Timeliness of individual CRTC decisions aside, Law notes how much time has passed since the Online Streaming Act came into force and where the CRTC has gotten in implementing related changes to the Broadcasting Act. “Here we are, a piece of legislation that was passed in , and we're not even halfway through implementing it, and now we're in a trade war. It would have been better had the CRTC been able to move way quicker. But I don't know if that's 100 per cent in their control,” Law said. hdaley@thewirereport.ca

Broadcasters differ on usefulness of CRTC’s undue preference, standstill rules

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By Hannah Daley
| March 20, 2025

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