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Let’s Talk TV – Day 5

Day 5 of the Canadian Radio-television and Telecommunications Commission’s (the “Commission”) Let’s Talk TV hearing could be categorized as the day with unique perspectives. The last four days has seen relative similarity between the type of intervener (e.g. broadcaster, distributor, content creator) and their positions. By contrast, today saw a number of speakers with different perspectives compared to their counterparts, or speakers with relatively unique roles in the broadcasting system.

First up was TELUS Communication Company (“TELUS”), a relatively new competitor in the broadcasting industry due to their recent entry with IPTV technology (i.e. TV over an Internet connection). They also lack of a content production subsidiary unlike peers Bell, Rogers or Shaw. Despite their lack of vertical integration, TELUS has created significant competition in western Canada, as noted by Shaw yesterday.

TELUS’ position in the market and resulted in a unique submission to the Commission, and was the subject of significant questioning. TELUS noted their current service offerings are already very similar to the Commission’s proposed ‘skinny basic’ and pick-and-pay regime, but like many speakers have noted, they have faced significant obstacles in the wholesale market, preventing them from offering increased choice to consumers. Specifically, they cite the issue of sports programming which have some of the highest wholesale costs and often have the most demanding (or unreasonable) contractual requirements. The Commission’s questioning in the past days have often used sports services as an example of a service causing significant issues in the wholesale market, and TELUS’ submission further confirms this perception.

Second up was the Canadian Broadcasting Corporation (CBC), which took the seemingly now-unpopular position of shutting down local Over-The-Air transmitters in order to save costs. They also suggested a few ways to increase funding for the CBC such as a local TV fund and requiring contributions from Over The Top providers such as Netflix, noting declining advertising revenues. The Commission’s questioning probed the CBC’s proposals, noting they seem somewhat at odds with the role of the public broadcaster. Some of the CBC’s answers suggested they had not considered the full implications of their proposals.

Small and regional broadcast distribution undertakings (“BDUs”) Access Communications Co-operative, Eastlink and Groupe V Média inc. also spoke today, highlighting some of the same issues in the wholesale market as others have mentioned earlier in the week. However due to their size, these BDUs face extra challenges in dealing with the vertically integrated BDUs, especially since the vertically integrated BDUs have a competing retail service in the same market.

For this reason, Eastlink suggested the commission create a ‘default’ affiliation agreement that contains standard terms, excluding pricing, that BDUs could fall back on if negotiations break down. This would give smaller BDUs some leverage against the vertically integrated companies who, according to Eastlink, may have no incentive to negotiate in good faith. The Commission seemed interested in this proposal, but questioned whether a default agreement would create a larger regulatory burden.

Offering a wholly different perspective on some of the issues was the TV Nunavut Educational Broadcast Society. They agreed with the Commission’s skinny basic proposal, noting that affordability is a significant challenge in Nunavut, since television service is only available by satellite. The Commission noted that much of the proceeding has been focused on competition in the urban markets, and that it may have been overlooked that the Canadian broadcasting system may not be serving Northern communities at even the most basic level.

Several content creator groups also spoke today, including RNC Media Inc. and Télé Inter-Rives ltée, Stornoway Communications, and Anthem Media Group Inc., who largely echoed the concerns of their peers who spoke before them; mainly that pick-and-pay will make it more difficult for them to be seen in the new broadcasting world proposed by the Commission, and they are all very concerned with the declining revenues available for production and promotion of content (local, Canadian or otherwise).

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