TORONTO " Striking an unexpectedly interventionist tone, the federal broadcast regulator Wednesday slapped a host of new conditions on the country's biggest telecommunications conglomerates.
In a bid to curb "anti-competitive" behaviour between BCE Inc., Rogers Communications Inc., Shaw Communications Inc. and Quebecor Media Inc. " firms with considerable market power through their collective control of most of the country's TV, Internet and wireless networks as well as the television content flowing over them " the regulator has enacted a new "code of conduct" and other provisions designed to guard the market place from disruptions, such as programming black outs.
"We felt that some safeguards were needed," said Konrad von Finckenstein, the Canadian Television-radio and Telecommunications Commission's chairman.
Perhaps the most important is a permanent ban on exclusive content deals between the TV arms of an integrated carrier and its mobile and Internet distribution arms, such as between the new Bell Media and Bell Mobility.
CRTC's strict program to keep integrated telcos in line:
Prohibit companies from offering television shows on an exclusive basis to their mobile or Internet subscribers.
Companies can offer exclusive programming to their customers if it is produced specifically for an Internet portal or a mobile device.
At least 25% of specialty services distributed by a large integrated company must be owned by an independent broadcaster.
Adopt a code of conduct to prevent anti-competitive behaviour.
"That is for our business the most critical part of the decision," Michael Hennessy, senior vice-president of regulatory affairs for Telus Corp. The Vancouver-based company is the third-largest wireless operator in the country and a primary TV and Internet provider in Western Canada, where it competes with Shaw.
Telus as well as other independent television distributors such as Cogeco Cable in Ontario share concerns content would be denied to them on both television and emerging platforms, such as online or on smartphones and tablets.
At minimum, they warn costs to their customers would soar as vertically integrated competitors seek price increases. While costs may still climb for those carriers unaligned with content and who must still negotiate for carriage, TV signals cannot now be pulled, a fear substantiated by recent black-outs in the United States.
Wednesday's decision removes the incentive to cut programming if negotiations break down " a scenario that could potentially be exploited to drive consumers to switch carriers " by mandating access during talks as well as demanding unresolved talks be subject to "binding" arbitration.
The "standstill" access rule extends to on-demand, mobile and Web-based viewing options, meaning recently introduced video packages such as Bell's Mobile TV and Shaw's online Movie Club must also be made available to competitors.
The decision was trumpeted by market observers and consumer advocates as a victory for the viewer, who now avoids being forced to select a service depending on what shows are available on it.
"This approach will ensure that customers will not have to subscribe to several distributors in order to view the most popular programming," the CRTC said.
The CRTC's move is a significant blow for integrated carriers such as BCE and Shaw, who have built business models around using their broadcast content in "innovative" and largely exclusive ways on tablets and other viewing platforms.
"The outright ban on exclusives in our view … prevents parties from trying to innovate, test things out and try to differentiate," Mirko Bibic, senior vice-president of regulatory affairs said.
The executive railed against the standstill and arbitration stipulations, suggesting the regulator is not pursuing its own mandate of allowing the market to operate under minimum intervention.
"It's heavy regulation " when you get down to regulating price that's the heaviest form you can have," Mr. Bibic said.
The decision from CRTC comes after months of deliberations following BCE's successful acquisition in April of the CTV network, a deal pairing the largest broadcaster in the country with the biggest provider of TV, Internet and wireless services.
The commission also said Wednesday television providers must begin moving toward offering more "a la carte" channel packages, another pro-consumer move.
"What jumps out here is how activist the CRTC is in setting up new rules of the game," Stephen Zolf, a media lawyer at Heenan Blaikie said. "The death of regulation has been greatly exaggerated."
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