As the first game of the NHL playoffs got underway on Wednesday night, Quebecor Inc. pulled the signal for its TVA Sports channel for Bell TV subscribers, defying warnings from the federal broadcast regulator that such a move would violate regulations.
Just in time for the puck drop, Quebecor followed through on the threat to yank the channel, which it had publicized early this week in an advertising campaign. On Wednesday morning, the federal broadcast regulator had ordered the company to maintain Bell subscribers’ access to the channel.
TVA Sports holds the French-language broadcast rights to NHL games; viewers’ other options for watching playoff hockey would be in English. Depending on the game, the playoffs are broadcast on the CBC and on Rogers Communications Inc.-owned specialty channel Sportsnet.
The dispute is over the terms under which Bell carries the TVA Sports channel. That carriage deal expired in 2016 and the companies have been in negotiations for its renewal since then, according to Bell. In the meantime, Bell had continued to carry the channel under the terms of the old deal, which Quebecor argued publicly were not good enough.
Quebecor alleges that Bell has given itself an unfair advantage by placing the French-language sports channel it owns, RDS, in its most popular TV package while TVA Sports remains an à la carte add-on that costs extra for subscribers. The company argued in an application to the Canadian Radio-television and Telecommunications Commission in February that this constituted “undue preference,” which is prohibited under the broadcasting distribution rules in Canada.
Quebecor took that fight to the court of public opinion this week, launching an advertising campaign warning Bell subscribers that TVA Sports would be inaccessible to them starting Wednesday evening. The campaign blamed Bell’s “unsportsmanlike conduct.”
In place of the channel on Wednesday night, Bell displayed a message in French saying "Quebecor, the owner of Videotron and TVA, is denying access to its TVA Sports channel to customers of Bell TV. This measure is illegal.” The message offered people who subscribe to TVA Sports access to Sportsnet, Sportsnet One and Sportsnet 360 at no additional cost in order to allow them to watch the NHL playoffs.
On Wednesday, the CRTC sent a letter to both companies reminding them that Canadian regulations prevent both channel owners and TV providers such as cable and satellite companies, from pulling channels off the air as a result of such disputes. The CRTC determined that this rule applies to the fight between Quebecor and Bell, the letter stated, adding that the regulator “is prepared to use the means at its disposal to enforce its regulations.”
The CRTC issued a similar directive on Monday, but strengthened its language on Wednesday by warning that it is “prepared to intervene where it finds that parties are acting in a manner that is inconsistent with the public interest.”
The rule against such disruptions in TV service “was put in place to level the field during negotiations between programmers and distributors, and to ensure that subscribers are not deprived of services while parties are engaged in negotiation,” CRTC secretary-general Claude Doucet wrote in the letter on Wednesday.
Now that Quebecor has gone ahead with its plans, the regulator could have options for penalizing the company. Channel owners operate under broadcast licences controlled by the CRTC, which can suspend or even revoke a licence if companies break the rules or ignore orders. Continuing to broadcast without an active licence could lead to prosecution and fines.
The CRTC can also ask for federal court orders requiring companies to follow regulations, allowing the court to pursue penalties if it is not followed. Channel owners can also be taken to court under the Broadcasting Act, which can lead to fines as well.
Negotiations between Bell and Quebecor continued as recently as last Friday, according to Karine Moses, president of Bell Media Québec. In an interview on Wednesday before the channel went dark, she said Quebecor rejected a number of offers from Bell on the new terms of TVA’s carriage. Bell claims that Quebecor is demanding a higher per-subscriber fee for its channel than its cable service, Videotron, pays to carry RDS.
A Quebecor spokesperson did not respond to requests for an interview. The company issued a statement on Wednesday evening saying that it had welcomed the CRTC’s proposal to undergo mediation but negotiations with Bell had not resulted in an agreement that puts RDS and TVA Sports on equal footing. The statement said Quebecor had “no choice" but to pull the channel.
“Quebecor regrets having to take this action, but given the current obsolete regulatory framework, the survival of specialty channels is at stake,” the statement said.
“We’re talking about a commercial business dispute,” Ms. Moses said on Wednesday afternoon. “It’s unfortunate that fans are caught in the middle.”
She rejected the argument that TVA Sports is being treated unfairly by not being carried in Bell’s most popular package alongside RDS.
“Videotron has a very good base of subscribers. I don’t think it’s changing anything about their rating and market share,” she said.
According to the most recent statistics available from the CRTC, TVA Sports drew $61.8-million in subscriber revenues in 2016, while RDS had $125.2-million.
“We have the same amount of investment and almost the same market share. But we’re not paid appropriately,” Quebecor CEO Pierre Karl Péladeau said in a speech in Ottawa on Monday.
Mr. Péladeau has been sharply critical of the media industry in Canada, including the federal broadcast regulator. In the same speech on Monday, he said Canadian media companies are “buried” under a regulatory regime that leaves them ill-equipped to compete with foreign companies such as Netflix. Such streaming services are not subject to broadcast regulations, but the CRTC “refuses innovation” by continuing to regulate carriage terms for specialty networks, he told an audience at the Canadian Club in Ottawa.
“They’re taking a very aggressive position. It’s a little bit childish in my perspective,” Ms. Moses said. “You cannot change things, and push the industry, by not following basic rules.”
While pulling a channel off the air is a relatively rare move, it has happened before. In 2011, Quebecor asked Bell to pull the signal for its 24-hour Sun News channel, which had launched just weeks before, in a dispute over subscriber fees that Bell said were “excessive.” In that case as well, Quebecor complained that Bell was favouring competing channels that it owned, such as CTV News Channel.
“We take this issue very seriously and are taking steps to protect Canadians,” CRTC spokesperson Patricia Valladao said in an e-mail Wednesday evening.
With reports from Nicolas Van Praet in Montreal
Susan Krashinsky Robertson