TORONTO – It’s not just about choice, it’s about how that choice is defined.
According to the Canadian Independent Distributors Group (CIDG), which lost its final offer arbitration dispute against Bell Media just over a week ago, the CRTC appeared to agree with the communication giant’s definition of choice which, simply put, is the more television channels that Canadian viewers can buy, the better.
But is choice about volume, or is it the ability to pick only the channels that viewers actually want to watch?
According to the CIDG, made up of Cogeco, MTS and the Canadian Cable Systems Alliance (CCSA), their consumers want to select channels either on a la carte basis or through smaller themed programming packages. And that is not something that Bell Media, the keeper of 29 specialty channels, wants them to offer.
“The main reason we were before the CRTC at all was Bell did not wish to give any kind of flexibility in the packaging (of their channels)”, Teresa Griffin-Muir, vice-president regulatory affairs for MTS Allstream, told Cartt.ca. “Essentially Bell is saying ‘this all the programming services that I have today and I want everybody to continue to buy them’ – meaning us, the distributor, and you, the customer. And we just didn’t necessarily agree with their definition of choice. As opposed to ours which is ‘here are some theme packs – if you like sports or movies, you can just buy these theme packs’”.
The CCSA did not respond to our interview requests. Eastlink, the largest member of the CCSA, echoed MTS’s sentiments, noting that Bell’s version of the agreement curtails its ability to offer consumer choice as its contracts “include very specific limitations on how we, as distributors, can offer Bell’s services including how these specialty services are packaged”.
“This decision relates to a dispute that arose when this group of independent cable distributors tried to negotiate fair and reasonable terms and conditions for carriage and distribution of Bell Media’s specialty services”, said company spokesperson Dan MacDonald in an emailed statement to Cartt.ca. “We have always sought reasonable terms and conditions in order to provide our customers with more flexible product offerings and packages. Unfortunately, the CRTC decision requires that we sign Bell’s version of the agreement, which limits our ability to introduce more flexibility for these specialty services to consumers.”
A senior executive at Cogeco told Cartt.ca that the company would not comment on the decision. Cogeco, which, according to sources has been operating without a signed affiliation with Bell for over a year, may suffer the biggest financial hit of the group. A line item in its quarterly report to shareholders shows nearly $21 million in accrued programming costs not yet paid out – an amount that has been growing for about four quarters – and it is assumed most of that money is earmarked to pay the fee increases for Bell Media’s specialty channels.
But the CIDG’s concerns extend beyond just the ability to package channels in the way that they say their customers want. It’s also about the rates Bell Media wants for that flexibility, and the potential for undue preference.
“We were disappointed that the CRTC didn’t recognize that there is a certain amount of dominance that Bell has just from the concentration of the services they provide, both in terms of programming content and also in terms of their ExpressVu service, and the fact that they’re a dominant provider of Internet and wireless in their territory”, added MTS’s Griffin-Muir. “So we would say that the CRTC didn’t take enough of a step back to realize that when we’re paying for programming, we should have similar rights to them.”
Now, according a report in the Financial Post, Eastlink (whose parent is Bragg Communications) has asked the Competition Bureau to step in to this matter.
More to come.
