PART OF THE RATIONALE behind Bell Canada’s purchase of CTV is that the mobile and broadband spaces are unregulated – and that content exclusives will be part of the game when attracting and retaining subscribers who want to see their video content on their iPads, BlackBerrys or PCs, as well as their TVs.
Bell CEO George Cope told us as much when we asked him about it during the press conference announcing the deal last week.
However, to paraphrase what Telus has been saying for a while now: “Not so fast, consolidators.”
The Bell/CTV deal was excellent timing for the folks at BMO, who held their annual media and telecom investors conference in Toronto on Tuesday. And of course, investors and analysts alike wanted to know from Joe Natale, chief commercial officer at Telus, just how the big western telco planned to respond to the fact that every major carrier has a large content division, except for Telus.
Gee, that content question “is not one I was actually expecting today,” said Natale, to much laughter.
Of course, being the last carrier without content (paging Mr. Greenberg, Mr. Ian Greenberg, CEO of Astral Media…), Telus is so far standing firm in saying it doesn’t need, nor want, to own a content company the way that Rogers Communications, Shaw Communications and Bell Canada apparently do.
“Our role in the marketplace is to be the aggregator and integrator of content and applications for the enjoyment and support of customers and the services that they want on these platforms,” said Natale on Tuesday. “We don’t believe you need to own content in order to provide content to the industry and consumers as a whole.”
Fair enough. As a pipe provider, Telus is primarily concerned with building up broadband speeds (Natale also said the company plans to launch the dual carrier mode of HSPA+ in January, bringing its wireless data to 42 Mbps, and that 90% of the homes in Western Canada will be able to access its Optik IPTV service by the end of the year), picking cool new handsets, bundling applications and products for discounts and providing good customer service.
Besides, when it comes to exclusive content and the potential for Telus to be shut out, it believes it has the CRTC firmly on its side – even when it comes to the unregulated mobile and Internet platforms.
“There’s no question that through precedent rulings for broadcast and video on demand services, there’s been a prohibition around exclusivity with respect to content,” Natale pointed out to the investors in the room.
“The regulator has been very, very clear as it relates to new media – although there’s not a precedent ruling on new media – that it does not support undue preference as it relates to media overall and that open access is at the centre of their philosophy and ethos.”
Besides, he continued, “it’s not really clear that the synergies of owning content necessarily outweigh the negative synergies of limiting the audience of that content through exclusivity.”
The argument that the CRTC must take a stand exclusive content on unregulated platforms is one Telus will also push next week when it faces commissioners during the hearing into Shaw Communications’ purchase of Canwest.
In its submission to the Regulator for that proceeding, Telus pointed to the CRTC’s 2009 new media policy, which says:
“The Commission considers… the ownership structure within Canada’s wireless industry suggests that the potential for unduly preferential treatment needs to be addressed because the industry structure comprises vertically integrated companies with ownership interests in content providers.
“Despite assurances from the wireless industry that walled gardens are being replaced with open Internet access, the Commission notes that closed services are the norm in advance of greater mainstream adoption of more sophisticated devices. As such, the process of selecting content for those services must not subject unaffiliated programming undertakings to undue disadvantage with respect to reaching mobile audiences,” the decision reads.
And while the CRTC didn’t see any undue preference concerns at all on the broadband side, it was wary of changes in business models that could happen. “The Commission therefore considers the imposition of an undue preference provision to be appropriate,” in new media, reads the decision.
“Accordingly, in Broadcasting Notice of Consultation 2009-330, the Commission proposes amendments to the New Media Exemption Order, prohibiting new media broadcasting undertakings from conferring an undue preference on themselves or another person, or subjecting any person to undue disadvantage.
“The Commission considers that allegations of undue preference in the new media broadcasting environment should be subject to the same reverse onus provision as elsewhere in the broadcasting system. The party alleged to have engaged in preferential behaviour will generally be in the best position to provide information on its own practices. Once the complainant has established the existence of a preference or disadvantage, the onus should shift to the allegedly infringing party to demonstrate that its actions were not undue.”
This hardly sounds like, as Cope said Friday about CTV content, that “we don’t have to offer any of it,” to other carriers.
Looks from here that if Bell (or any of the other vertically integrated carriers) try to play the exclusive content card, Telus will haul them in front of the Regulator for a decision.
