In the first of two column’s last week I offered evidence and argument as to why the CRTC’s current vertical integration hearing is not likely to deal effectively with the question of telecom, media and Internet concentration in Canada. Sitting in on three days of hearings has convinced me that the prospects may be even dimmer than I thought.
The hearings had an Alice in Wonderland feel, mainly because the evidence offered by all sides was remarkably poor. Consequently, discussion meandered between speculative worries and rose-tinted visions brought to us courtesy of the great media corporations of Canada.
If you know how to say “voluntary code,” “case-by-case dispute resolution,” “skinny basic,” and “status quo,” then you’re in luck because that’s probably what the outcome will be. Some consumers will benefit with slimmed down and more affordable basic cable and satellite packages and there’s a 50-50 chance that a hands-off-Netflix approach is in store, if I am right. The pay-per Internet model and less than a handful of telecom, media and Internet behemoths, however, will still be left standing astride a set of highly concentrated industries, and we will be the poorer for this.
The CRTC’s refusal to do much original research of its own compounds this problem, and compares badly with research conducted by, for example, the FCC and Ofcom, respectively. The CRTC seems to worry that conducting original research might bias its decisions. Curiouser and curiouser.
Many of the top brass from Bell, Shaw, Quebecor Media Inc. (QMI) and Rogers attended, sometimes with as many as 10 to a delegation. With few exceptions, the Big Four stood as one against almost everyone else, but nonetheless they seem to have set the parameters of discussion around less than a handful of touchstone themes:
- That we should rely on market forces to the maximum extent possible.
- Canadian markets are competitive, small by global standards and big media companies are needed to compete.
- Problems that do arise should be settled one by one after they occur rather than establishing clear regulatory rules before hand.
- Concerns about the anti-competitive potential of vertical integration are mostly speculative.
Rogers allowed a crack of light to peak through when it broke ranks with Bell, QMI and Shaw to table a “code of conduct” that would require vertically integrated media firms to sell programming rights to traditional broadcasters, such as the five CityTV stations, not to cable and satellite channels, mobile video or IPTV services. While the others tried to belittle or ignore Rogers’ stand on this point, the CRTC seemed to like the code of conduct idea very much. I suspect we’ll have some version of it.
Otherwise, Rogers, Bell, Shaw and QMI united behind the view that smaller rivals should not be entitled to a regulated guarantee of fair and reasonable access to their networks or the content rights associated with TSN, Rogers SportsNet, the History Channel or any of the other 100-plus television channels they own between them.
QMI’s CEO and majority owner, Pierre Karl Péladeau, scoffed at the idea that exclusive content agreements were a problem. Bell’s chief regulatory front man, Mirko Bibic called the idea that audiences should be able to access content on any device from any provider, any time, “preposterous.”
Brad Shaw, the CEO and part of the family that controls Shaw Media, bristled when I intervened in a scrum to ask him to respond to the possibility that concerns with vertical integration and media concentration are not based on speculation and fear mongering but current evidence and recurring patterns. After shrinking back into my shoes, he returned to typical patter about how vital it is for Shaw to be consumer centric.
Over the course of the three days, Netflix was set up as a formidable threat to the Canadian broadcasting system. This may come as a shock, but I got the sense that the CRTC is not eager to tackle over the top services – not yet, at least – despite enormous pressure from Bell, Shaw, QMI and (less so) Rogers, the Over-the-Top Working Group, media unions, arts and culture groups, the Senate Committee on Canadian Heritage as well as a pending Supreme Court case.
