CRTC Chairman Konrad von Finckenstein in Ottawa, Nov. 16, 2009.
Rogers Communications Inc. urged Canada's broadcast regulator to rein in the "wild west" of new media by banning exclusive deals that make mobile video available only to certain wireless providers.
Smart phones and tablets are an unregulated corner of the television industry, and rules are needed to prevent companies from using these devices to gain an unfair advantage, representatives from Rogers told the Canadian Radio-television and Telecommunications Commission on Monday.
Industry players like Rogers, BCE Inc. and Shaw Communications Inc. will be testifying at a hearing this week and next looking into the ownership of media companies by national broadcasters – an increasingly important issue as more cable and satellite companies move toward controlling not just the signals and wires that feed TV into homes, but also many of the channels.
Rogers argued customers would be disadvantaged if they needed multiple subscriptions to get access to all of the content they wanted to watch on different devices. Especially with valuable sports content, rights holders such as sports leagues are looking to make extra money by selling mobile rights separately from TV rights, Rogers executives said.
"You want to sell your programming on [broadcast or specialty linear]TV in Canada, which is where 95 per cent of the revenue comes from, you better provide it to all the mobile providers," said Ken Engelhart, senior vice-president of regulatory for Rogers.
The media industry in Canada has transformed in the past year: BCE now owns CTV and a host of specialty channels, and Shaw bought the CanWest TV assets, including the Global network and specialty stations such as the History Channel. Rogers and Quebecor Inc. were already integrated since they own CITY-TV and TVA respectively.
The CRTC itself has had a hand in how the industry has become as integrated as it is. Most recently, it approved both the Shaw and BCE deals and is now attempting to figure out how it will cope with the transformation. In March, after approving the BCE-CTV deal, the CRTC put a temporary freeze on exclusive wireless content deals. It will lift that moratorium some time this summer, and must decide whether to regulate this kind of new media content, and how it will do so.
Another integrated company, Quebecor, followed Rogers by making a very different argument: Take away regulation, and let the industry compete.
"I'm a bit perplexed by Rogers's position," said Pierre-Karl Péladeau, Quebecor's president and chief executive officer. He argued that the vertical integration is "the only tool" to protect the Canadian broadcast system from "over-the-top" services such as Netflix and Apple TV, which provide TV programming over the Internet and on mobile devices such as tablets.
Companies need to be able to give themselves an advantage by putting exclusive content on mobile platforms, Mr. Péladeau said. He acknowledged that if this is allowed, consumers could need different companies' devices to access all the content they want: NFL on Bell phones, for example (a deal that already exists), with Blue Jays games only on Rogers phones and other programming or events on Quebecor phones.
"This is what competition is all about. Yes, at the end of the day, you will have different products on different devices. This is how you're going to be able to stimulate competition," he said following the presentation. "If not, it's going to be plain vanilla everywhere and only the large companies like Bell will succeed."
Quebecor asked for regulations to be relaxed in the traditional TV space as well as arguing that no new regulations are needed for new devices. Rogers disagrees.
"We think that rule should really apply to all television content. When you buy television content in Canada, it should be a standard clause in your contract that the mobile and ancillary rights should be available to all distributors," Mr. Engelhart said.