GATINEAU – Independent distributors Cogeco Cable, Telus, EastLink, MTS and the Canadian Cable Systems Alliance still hate the terms of carriage offered to them by Bell Media for its specialty channels and so the parties will soon face mandatory mediation in front of a CRTC commissioner as the carriers continue to allege undue preference against Bell.
The carriers, together they are calling themselves the Canadian Independent Distributors Group (CIDG), all object to the carriage agreement put before them by Bell Media for all of the company’s specialty channels, as we have previously reported. Bell Media insists that this is the same deal signed by the likes of Rogers, Shaw and many others but the CIDG insists the deal is a bad one that it will not sign for the carriage of channels such as TSN, Comedy Network, BNN, MuchMusic, Discovery, Bravo, Space, RDS and many others.
The carriers say it isn’t just about the wholesale rates being demanded, as we reported in December, but about the iron-clad insistence on how Bell Media wants its channels packaged. A February 6 letter from the CRTC to the CIDG and Bell Media sets out four main points of dispute between the parties, which were identified by the CIDG:
i. Flexibility regarding the distribution and packaging by CIDG members of specialty television services controlled by Bell Media during the term of the affiliation agreement, including concerns relating to packaging restrictions and minimum penetration requirements;
ii. Inclusion of non-linear program distribution rights to programs comprised in the linear programming of the Bell Services for distribution on CIDG members’ video-on-demand (VOD), IP broadband video and mobile platforms to their television distribution service subscribers during the term of the affiliation agreement;
iii. Commercial reasonableness of carriage terms for the distribution by CIDG members of the Bell Services, including the elimination of proposed penalties such as re-contracting fees, step-up fees and other commercially unreasonable fees; and
iv. Wholesale rates for the distribution by CIDG members of the Bell Services over the term of the affiliation agreement.
As one of the CIDG members told Cartt.ca in December: “It says we have to agree to the status quo for the next five years… Five years is an awful long time in this world. You don’t want to be locked into those packaging deals for that long… and the minimum penetration requirements in it means you can’t move channels around.”
The independent BDUs feel that Bell Media is not abiding by the Code of Conduct set out by the Commission in the Vertical Integration policy decision in September. That code says, among other things, that a programmer should not in its agreements demand “minimum penetration or revenue levels that force distribution of a service on the basic tier or in a package that is inconsistent with the service’s theme or price point;” nor refuse “to make programming services available on a stand-alone basis.”
Bell Media, on the other hand, in a reply to the Commission February 21st says: “the CIDG seeks access to the Bell services at lower than the established market rates, as well as complete packaging flexibility, at their sole discretion, regardless of the harmful impacts on Bell Media and the Bell Services and without regard to the future financial viability of specialty services and the impacts on the Canadian broadcasting system more generally, including the Canadian production community.
“The CIDG’s position is not commercially reasonable, nor is it reflective of the industry standard that has already been established through months of negotiations between Bell Media and the 159 other BDUs with whom Bell Media has already entered into agreements.”
If the mandatory mediation in front of one of the commissioners doesn’t work, the matter will go to an expedited hearing where the CIDG wants the Commission to set the non-monetary terms and to final offer arbitration for the wholesale rates where the CRTC picks a winning side, often known as “baseball arbitration”.
– Greg O’Brien
