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Let’s Talk TV Day 3

Day 3 of the Canadian Radio-television and Telecommunications Commission’s (“CRTC”) Let’s Talk TV hearing, a packed day of eight speakers, quickly turned into ‘the Bell subsidiaries… and others.’ Bell Canada, speaker number two, started around 9:30am and finished at 3:15pm, split by a morning break and a lunch break. The remaining six speakers took until roughly 9:15pm to be heard, over 12 hours after the hearing began.

The amount of time and number of questions dedicated to Bell clearly shows the influence Bell has on the Canadian broadcasting system, as the largest vertically integrated media corporation in Canada (i.e. they create content, purchase content and distribute content through several platforms).

Bell Canada’s initial remarks were significantly less apocalyptic than Québecor Média Inc. yesterday, however as questioning went on, Bell made increasingly strong claims regarding the difficulty of competition in a Netflix world, the dangerous financial situation of local stations, and the negative consequences of the Commission mandating too much similarity in the skinny basic and pick-and-pay proposals. Bell offered candid explanations on its business strategy, the reasoning behind its proposals, and company statistics that otherwise might never have been placed on a public record.

The Commission probed every aspect of Bell’s submission and oral remarks, and what came through was a sense that while Bell wanted to provide consumers with more choice, Bell and the Commission did not see eye-to-eye on the way forward on several fronts. Similarly, there was significant discussion on the funding of local stations and Canadian content creation, such as the role of simultaneous substitution or some sort of hit media production fund, but no proposed solution was universally accepted. The one proposal that appeared to be accepted was a new working group to be led by Bell to address technical errors with simultaneous substitution, a source of significant complaints by consumers to the CRTC.

Simultaneous substitution was a popular topic today, with GroupM Canada, the Canadian Media Production Association and Friends of Canadian Broadcasting (along with Bell Canada) all emphasizing its importance as a revenue stream for the broadcasting system. These groups also largely focused on the importance of making only small and necessary regulatory changes to the system, in order to avoid the impact to Canadian jobs in the system.

Friends of Canadian Broadcasting also made several comments regarding the Canadian Broadcasting Corporation (CBC), suggesting that in a new broadcasting age where private broadcasters must market their content globally to compete, the public broadcaster’s role should be re-evaluated. The comments highlight a puzzling absence of the CBC from the Commission’s working document.

Independent broadcaster Blue Ant Media provided a unique perspective to the Commission, noting that since many players in the broadcasting industry are vertically integrated, it is the independent broadcasters who will likely be disproportionately affected by the proposed changes. They also requested changes to the Vertical Integration Code, stating that after a few years of experience dealing with vertically integrated players, they feel the code is not an effective tool to level the playing field. The Commission seemed especially interested in how Blue Ant Media was experimenting with new media, and how business models can transition into a global, online world.

Francophone interest groups Alliance des producteurs francophones du Canada and Union des Artistes; Société des auteurs de radio, télévision et cinema; and Association des réalisateurs et réalisatrices du Québec provided important views to the Commission from producers of French-language content. As with other interveners speaking on behalf of stakeholders in Québec, they were concerned that the changes proposed may result in unintended adverse effects on the Québec market, since it operates very differently than the rest of Canada. Specifically, both interveners (along with Bell Canada) were concerned with the elimination of genre protection, which plays a more important role in Québec than it may in other markets.

Corus Entertainment Inc. rounded out the day, with a strong focus maintaining the status quo. As a content producer who is not vertically integrated with a distribution platform, Corus depends on their broadcast partners for sufficient marketing of their channels and content. They were very concerned that in a pick-and-pay world as proposed by the Commission, it would be extremely difficult to compete for subscribers’ attention without the advantages of a vertically integrated player. Corus also focused on the high importance of a clear and explicit transitional plan for any of the Commission’s ultimate changes, stating that “how to manage the transition is as important as the changes themselves.”

The Commission agreed that the implementation of any potential changes needs to be carefully managed, but repeatedly questioned whether the status quo was sufficient, given that consumers expressed a need for change and that the Commission’s proposed changes do not prevent broadcast distribution undertakings from offering the types of packages they currently do.

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