The Canadian Radio-television and Telecommunications Commission (CRTC) has announced a new framework for large integrated companies that will allow them to innovate and respond to new opportunities in a fast-changing environment. The CRTC is also establishing measures to eliminate the potential for these companies to harm their competitors or restrict consumer choice.
“Given the size of the Canadian market, there are benefits to integrating television programming and distribution services under the same corporate umbrella,” said Konrad von Finckenstein, Q.C., Chairman of the CRTC. “At the same time, we felt that some safeguards were needed to prevent anti-competitive behaviour. In particular, Canadians shouldn’t be forced to buy a mobile device from a specific company or subscribe to its Internet service simply to access their favourite television programs.”
Following its examination of consolidation in the broadcasting industry, the CRTC has decided to:
- Prohibit companies from offering television programs on an exclusive basis to their mobile or Internet subscribers. Any program broadcast on television, including hockey games and other live events, must be made available to competitors under fair and reasonable terms.
- Allow companies to offer exclusive programming to their Internet or mobile customers provided that it is produced specifically for an Internet portal or a mobile device. This includes supplementary programming such as behind-the-scenes video clips of a television program, as well as original content.
- Adopt a code of conduct to prevent anti-competitive behaviour and ensure all distributors, broadcasters and online programming services negotiate in good faith. To protect Canadians from losing a television service during negotiations, broadcasters must continue to provide the service in question and distributors must continue to offer it to their subscribers.
- Implement measures to ensure that independent distributors and broadcasters are treated fairly by large integrated companies. At least 25 per cent of specialty services1 distributed by a large integrated company must be owned by an independent broadcaster. In addition, broadcasters launching a new pay or specialty service must make it available upon request to all distributors as an individual service, even if a commercial agreement has not been finalized.
Finally, the CRTC strongly encourages television distribution companies to give Canadians more flexibility in choosing the individual services they want as part of their packages. The CRTC has called on Bell Canada, Quebecor Media, Rogers Communications and Shaw Communications to submit a report by April 1, 2012, detailing the steps they have undertaken to respond to consumer demands.
“Canadians enjoy watching programs online as it gives them the freedom to effectively pick and pay for what they want. They find it difficult to accept that their cable and satellite television providers do not offer similar choice and flexibility. If the industry fails to demonstrate that it has made significant strides in introducing consumer-friendly options, we will hold hearings on this issue in six months and take regulatory action,” Mr. von Finckenstein added.