Looking North for Ideas to Solve Programming Woes

Ensuring the voices of the smaller independent television distributors (e.g. cable, telco, municipal operators) and the voices of their customers are heard among policy makers and vendors is what the CCSA (Canadian Independent Communications) does. In this release, the voice of the CCSA voice is heard in its firm opposition against the proposed merger of Bell with Astral. CCSA suggests that continuing down a path of media consolidation will lead to the disappearance of locally based, independent communications operators and the associated broadband networks they provide.

As background, in the above interview, filmed at the 2012 ACA Summit, CCSA president Alyson Townsend discusses the challenges faced by the small, Canadian broadband service provider. At the time, the hot-button issue was a CRTC-led mediation between the Canadian Independent Distributors Group (CIDG) (of which the CCSA is a part) and Bell regarding programming rights for the some 29 networks controlled by Bell. The issues were around packaging control (e.g. content tiers, ala-carte), non-linear rights, online streaming and pricing and the process for determining a Final Offer Arbitration.

In this interview, she suggests that U.S. operators should take a close look at the CRTC promulgated rules about how vertically integrated program provider/distributors deal with smaller distributors. Highlights of these rules, excerpted from the CRTC’s findings, are as follows:

“A programming undertaking, BDU [Broadcasting Distribution Unit] or new media exempt undertaking should not require a party that it is contracting to accept terms or conditions for the distribution of programming on a traditional or ancillary platform that are commercially unreasonable, such as:

  1. requiring an unreasonable rate (e.g., not based on fair market value);
  2. requiring minimum penetration or revenue levels that force distribution of a service on the basic tier or in a package that is inconsistent with the service’s theme or price point;
  3. refusing to make programming services available on a stand-alone basis (i.e., requiring the acquisition of a program or service in order to obtain another program or service);
  4. requiring an excessive activation fee or minimum subscription guarantee;
  5. imposing, on an independent party, a most favoured nation (MFN) clause or any other condition that imposes obligations on that independent party by virtue of a vertically integrated entity or an affiliate thereof entering into an agreement with any vertically integrated entity or any affiliate thereof, including its own.”

The CRTC basically punted the mediation case suggesting the parties continue to negotiate and come to an agreement under their  guidance and analysis outlined in their decision,

“The Commission expects parties to be guided by the Commission’s analysis and determinations set out in this decision and to engage in direct negotiations with each other with the purpose of reaching an agreement.”

Freelance journalist Steve Faguy’s analysis of this decision suggests a short-term win for Bell, but over the long-term there could be a silver-lining for consumer choice, as the CRTC suggested an adjustment period where the existing distribution model should evolve to give consumers more choice in content packaging.

It will be interesting to see how the recent merger-fueled expansion of Bell programming impacts future content negotiations and whether it will mean a CRTC that takes a more hands-on role in the content negotiations between Bell and the small operators. U.S. operators should watch closely to see what lessons apply to their programming and associated regulatory ecosystem.

2012 ACA Summit coverage brought to you by the ACA and ViodiTV.