TORONTO – The Canadian broadcast and telecom industries appear to have plenty to say about the proposed merger of Bell and CTV. With comments and interventions due on Tuesday, three weeks in advance of the CRTC hearing, most stakeholders offered their conditional support, but only with safeguards in place to preserve industry competition.
Rogers tied its support of the deal to Bell’s continued opposition to the issue of value-for-signal (a.k.a. fee-for-carriage). Bell, Rogers, Cogeco, Shaw and Telus at one point banded together to challenge the CRTC before the Federal Court of Appeal arguing that the Commission lacks the power to introduce a VFS regime.
“This proceeding has reopened the issue of VFS," said Rogers’ vice chair, Phil Lind, in a statement. "CTV and Global argued for some time that value for signal was required in order to support the economic viability of their operations. With both broadcasters being acquired by large distributors, the rationale for this fee is no longer evident.
"Our support of the Bell application is conditional upon Bell continuing its previously articulated adamant opposition to the concept of VFS and not allowing the stations of the CTV network to seek to enrich themselves (and BCE) at the expense of Canadian consumers by participating in any future VFS regime."
Cogeco said that the CRTC must implement specific safeguards designed “to prevent abuse of the new conglomerate’s dominant market position” if it plans to approve the acquisition.
"Vertical integration raises a number of concerns regarding the relationships between the owners of content and the owners of distribution networks," said president and CEO Louis Audet, in a statement. “It is essential that the CRTC take immediate steps to allow non-vertically integrated distributors to remain competitive and to allow their subscribers to continue receiving TV channels and content under fair, non-discriminatory conditions, regardless of which wired or wireless distribution service provider they choose.”
Telus largely echoed those sentiments, calling open access to content “a small price to pay for approving another transaction that will make Canada the most vertically integrated communications market in the free world”.
“Telus believes that exclusives held by carriers (cable, satellite, wireless providers) run counter to the public interest as they restrict consumer choice by potentially tying access to content subscriptions to new carriage platforms, e.g. a wireless contract”, wrote spokesperson Amélie Cliche in an email to Cartt.ca. “Establishing a status quo of “no exclusives on carriage of content allowed” on any platform would be in keeping with the undue preference regime under the Commission’s New Media Order and would also further ensure the greatest number of participants (broadcasters, distributors, creators and consumers) in the development of business models for content exhibition and delivery on new platforms.”
The Independent Broadcasters Group/ Le groupe de diffuseurs indépendants (IBG/GDI) offered its collective support of the deal, but called for stronger regulatory measures to protect against “the negative consequences of vertical integration – especially in connection with ensuring a diversity of voices in the broadcasting system.”
The group also reiterated its request for moratorium on hearing applications for 9(1)(h) services, describing their must-carry status as “a highly effective tool to ensure that certain exceptional services…are treated fairly by their large, vertically integrated competitors”.
IBG/GDI member Bill Roberts, who is also president and CEO of Vision TV, offered a more personal take on the matter.
“Whereas the CRTC offers mostly politic platitudes about “diversity of voices and ownership”, it seems paralyzed (or too fearful) to do anything significant or game-changing about the growing hegemony of the BDUs”, he wrote in an email to Cartt.ca, noting that he does not “for a second, blame the BDUs”.
“But let me make a sad prediction – if this continues undeterred, without the intervention of balanced public policy, those Canadian BDUs, within 10 years, will have sold out to Comcast and other U.S. giants at a 40% premium. I hope I’m completely wrong, but if not, the BDU family businesses will have made themselves and their future kin, for many generations, richer than Croesus”, he continued.
The Writers Guild of Canada (WGC) expressed conditional support for the deal, though noted that its support “is contingent on BCE revising what is in large part a self-serving benefits proposal”.
“BCE’s tepid proposal misses the mark”, said executive director Maureen Parker. “The allocation to onscreen programming, the centrepiece of the benefits policy, is woefully inadequate. Most of what BCE is proposing as benefits are really benefits for BCE – to cover infrastructure costs such as conversion of facilities to HD production – and that’s not what the CRTC policy is about.”
The WGC suggested that BCE re-file its benefits proposal with “a more appropriate allocation” of 85% – 90% to be spent on onscreen programming, 65% of which should be allocated to drama, which it says is most difficult to finance in the marketplace.
Last September BCE announced its intention to acquire the 85% of CTVglobemedia that it doesn’t already own in a deal valued at $3.2 billion ($1.7 billion of which is debt). Cartt.ca will have more on this story prior to the hearing which is scheduled to begin February 1st in Gatineau.
– Lesley Hunter
