OTTAWA-GATINEAU – The CRTC’s new policy on vertical integration, released late Wednesday, tries hard to balance the wants of Canadian television viewers with the commercial demands of the country’s largest vertically integrated broadcasters and television distributors, and the needs of the smaller and independent ones.
Following a five day long hearing in June, the new policy offers flexibility to the likes of Bell Media, Rogers Communications, Shaw Communications and Quebecor Media, but also includes a number of safeguards and a code of conduct.
Highlights of the new policy include:
- Companies are prohibited from offering television programs on an exclusive basis to their mobile or Internet subscribers. Any program broadcast on television, including hockey games and other live events, must be made available to competitors under fair and reasonable terms;
- Companies may offer exclusive programming to their Internet or mobile customers provided that it is produced specifically for an Internet portal or a mobile device. This includes supplementary programming such as behind-the-scenes video clips of a television program, as well as original content;
- A code of conduct must be adopted to prevent anti-competitive behaviour and to ensure all distributors, broadcasters and on-line programming services negotiate in good faith. To protect viewers from losing a television service during negotiations, broadcasters must continue to provide the service in question and distributors must continue to offer it to their subscribers;
- Measures must be implemented that ensure that independent distributors and broadcasters are treated fairly by large integrated companies. At least 25% Category B (specialty) services distributed by a large integrated company must be owned by an independent broadcaster. In addition, broadcasters launching a new pay or specialty service must make it available upon request to all distributors as an individual service, even if a commercial agreement has not been finalized.
“Given the size of the Canadian market, there are benefits to integrating television programming and distribution services under the same corporate umbrella,” said CRTC chairman Konrad von Finckenstein, in a statement. “At the same time, we felt that some safeguards were needed to prevent anti-competitive behaviour. In particular, Canadians shouldn’t be forced to buy a mobile device from a specific company or subscribe to its Internet service simply to access their favourite television programs.”
The CRTC also called upon the big television distributors to offer viewers more flexibility in choosing their programming packages. Bell Canada, Quebecor Media, Rogers Communications and Shaw Communications were instructed to submit a report due April 1, 2012, detailing the steps they have undertaken “to respond to consumer demands”.
“Canadians enjoy watching programs on-line as it gives them the freedom to effectively pick and pay for what they want”, von Finckenstein added. “They find it difficult to accept that their cable and satellite television providers do not offer similar choice and flexibility. If the industry fails to demonstrate that it has made significant strides in introducing consumer-friendly options, we will hold hearings on this issue in six months and take regulatory action."
However, what was also somewhat startling is the decision sets out an additional 12 follow-up CRTC proceedings into exclusivity, protection for independent broadcasters and BDUs, audits, confidential data, and dispute resolution and says if BDUs and programmers can get to a place where they share customer information, the Regulator may call a hearing into that, too.
So it's not quite over yet.