Telus Corp. is weighing in on a dispute over exclusive National Hockey League content and joining BCE Inc. in accusing Rogers Communications Inc. of trying to edge out competition under the guise of innovation.
The fight, which BCE took to the Canadian Radio-television and Telecommunications Commission last month, centres on Rogers's GamePlus mobile application, which lets smartphone and tablet users select customized camera angles for replays during NHL games.
The problem? While anyone can subscribe to the NHL streaming platform, the GamePlus app is only available to Rogers' customers.
BCE and now Telus say that is a violation of the CRTC's vertical integration rules, which require companies that both create and distribute media content to offer it to their rivals to distribute as well. (BCE owns 15 per cent of The Globe and Mail.)
"This exclusive is not a story of innovation, but rather one of foreclosure of competition," Telus wrote in a filing with the CRTC dated Nov. 14.
"If this exclusivity continues to be permitted, consumers will very quickly be forced to pay more for access to content as a result of being forced into multiple subscriptions for mobile and Internet services."
Rogers, which acquired the national NHL rights for 12 years in a $5.2-billion deal last year, says the features available on the GamePlus app – such as the "ref cam," which offers a view from the referee's helmet – were designed with an online experience in mind and therefore qualify for an exemption from the CRTC's broadcast regulations.
On Rogers's quarterly earnings call last month, CEO Guy Laurence referred to BCE as a "crybaby" and said his rival was trying to "stifle innovation" with its application, suggesting BCE lost the hockey broadcast rights last year because it did not put forth an innovative proposal.
"Having lost [the rights], here [BCE is] complaining and trying to stifle innovation in hockey instead of actually applauding it … Then [BCE has] taken this rather puerile attitude of filing a complaint," Mr. Laurence said. "Obviously, we don't believe we transgressed any rules and we will continue to focus on delivering innovation for consumers and not fighting little petty fights such as this."
Rogers took a different position on exclusive content on digital platforms in a 2011 dispute over a deal BCE struck to broadcast National Football League games solely to its own smartphone customers. The CRTC eventually ruled that such exclusive deals were not permitted (although BCE was able to continue its exclusive offering until that deal with the NFL expired as the contract did not permit sub-licensing of the rights).
In its filing last week, Telus pointed out that Rogers executive Phil Lind came out forcefully against such exclusive deals at the time.
"Imagine a world where exclusive content deals on ancillary platforms like iPads and iPhones are the norm. You could easily end up with a situation with Bell owning NHL rights, Rogers owning Major League Baseball and Shaw [Communications Inc.] owning NFL content. Sports fans would be forced then to … subscribe to three distributors to ensure they could catch all the action when they wanted," Mr. Lind said during the CRTC hearing in June, 2011.
"This is obviously unacceptable. No consumer should have to subscribe to multiple distributors in order to access the content they want to watch," Mr. Lind added.
Telus noted in last week's filing, "That was then, this is now. In a reversal of roles, Rogers is now the one holding consumers hostage, by using the coveted NHL rights to drive subscriptions to its network access services."
Rogers spokeswoman Patricia Trott said the content Mr. Lind was referring to in the 2011 application was programming designed for linear television while the GamePlus content is "completely different."
"It is not mainstream programming designed for linear television. It is interactive content designed for Internet and mobile platforms that allows users to customize their own viewing experience," Ms. Trott said Monday. "The CRTC has said this type of content can be exclusive because it wanted to encourage this type of viewer-friendly innovation."
Telus further argued that the content Rogers includes in the GamePlus app "can be compared to content which was created for broadcast television production but left on the cutting room floor."
"It should be noted that there is nothing particularly innovative about the 'Ref cam' in today's world," Telus continued. "It is really no different than video produced by a small $300-$400 GoPro, which many sports enthusiasts attach to their helmets."
The outcome of the CRTC application will be a crucial indicator for just how much Rogers and other content owners – including BCE itself – can leverage media rights for the benefit of their Internet, television and wireless businesses.
In addition to the NHL rights, Rogers also recently announced a $100-million partnership with Vice Media to build a studio in Toronto and produce certain content exclusively for its Rogers and Fido customers.
Rogers has until Thursday to respond to the application and BCE will have 10 days after that to reply. The commission could then issue a decision, ask for more information or call a formal hearing into the matter.