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CRTC’s new code of conduct will address broadcast integration

The rules that govern Canada's broadcast industry are in need of a reboot.

That's the idea behind a new set of guidelines – officially known as a "Code of Good Commercial Practices" – to be released by the Canadian Radio-television and Telecommunications Commission this week.

The CRTC is responding to new challenges raised by technology, as well as by vertical integration – the term for cable and satellite companies that have bought up many of the television channels they distribute to customers through TV subscriptions. It held a hearing in June to examine these issues, and asked companies for suggestions as it formulates a new code to regulate a changing media industry. It is also an attempt at balance: the CRTC has been pushed to de-regulate as much as possible, and the code may be an experiment, to put new guidelines in place without writing an entire new set of rules. How easy such loose guidelines will be to enforce, could be a recurring question for the regulator going forward.

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The code will address whether new rules are needed to ensure integrated giants don't abuse their market power. Among the other issues it will address: whether cable and satellite companies should offer cheaper "skinny basic" packages for their services and more "pick and pay" options allowing customers to choose which channels they want, and how to regulate TV content on new platforms such as the Internet and mobile phones.

In March, the CRTC declared a ban on companies making exclusive deals on new platforms until it decided on how – and whether – it should regulate this new world. That ban will now be lifted, replaced by whatever recommendations the new code sets out. The CRTC has been considering making the ban permanent, preventing integrated players from locking up their content to serve only their own wireless customers.

"Vertically integrated carriers have the means and incentives to behave in an anti-competitive fashion and that can harm competition and consumer choice," Telus Corp. – which offers Internet, telephone and mobile phone services but is one of the companies that did not invest in media recently – wrote in its final submission following the hearing.

Predictably, the companies that are most opposed to new rules are the integrated companies themselves. In its submission to the CRTC following the hearing, Shaw Communications Inc. said the call for more regulation of integrated companies – including Shaw, because of its ownership of the former CanWest broadcast assets – is based on "vague, speculative and exaggerated concerns." And BCE Inc., which owns the CTV network and a host of specialty stations, said in its final submission that companies who did not make the strategic decision to buy media assets to complement their distribution businesses, such as Cogeco Cable Inc. and Telus Corp., were looking to the CRTC to protect them against competitive risk. "This is not, nor should it be, the Commission's role," BCE's submission stated. "…There is simply no evidence of a problem in need of a regulatory fix."

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