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CRTC Vertical Integration Hearings

September 28, 2011

In CRTC 2011-601 issued on September 21, 2011 the CRTC issued their decision on a framework for media integration of large companies in Canada: the “vertical integration” hearings. According to the CRTC, vertical integration refers to “the ownership, by one entity, of both programming and distribution undertakings, or, both programming undertakings and production companies.”   This has been a pressing issue especially as the integration of broadcasting-telecom-internet companies has been increasing in Canada, with the big 4 integrated companies (Bell, Shaw, Rogers and Quebecor) dominating the market. In their decision, CRTC Commissioner Konrad von Finckenstein wrote that

“Given the size of the Canadian market, there are benefits to integrating television programming and distribution services under the same corporate umbrella..At the same time, we felt that some safeguards were needed to prevent anti-competitive behaviour. In particular, Canadians shouldn’t be forced to buy a mobile device from a specific company or subscribe to its Internet service simply to access their favourite television programs.”
http://crtc.gc.ca/eng/com100/2011/r110921.htm

 

 

 

 

The CRTC decision:

Prohibits companies from offering television programs on an exclusive basis solely to their mobile or Internet subscribers. Programs broadcast on television must be made available to other media company competitors under ‘fair and reasonable’ terms. This includes hockey games! And other live events.

Allows media companies to offer exclusive programming to their Internet or mobile customers if it is produced specifically for an Internet portal or a mobile device – and this can include extra programming including ‘behind-the-scenes’ clips.

Requires media companies to adopt a code of conduct in order to prevent anti-competitive behavior. This code will also ensure that all distributors, broadcasters and online programming services ‘negotiate in good faith’. When firms are in the process of negotiating, subscribers/users will be protected, and broadcaster must continue to offer the service to their subscribers.

Requires media companies to create measures so that independent distributors and broadcasters are treated fairly by the large integrated companies. 25% minimum of specialty services1distributed by large integrated companies must be owned by an independent broadcaster. Any new pay or specialty services launched by a broadcaster must be available upon request to all distributors as an individual service, even if commercial agreements have not yet been finalized.

See Susan Krashinsky, CRTC Rewrites Rules for Mobile Broadcasting, Globe and Mail, September 21, 2011

 

CRTC Broadcasting Notice of Consultation 2010-783: Review of the Regulatory Framework Relating to Vertical Integration.
http://www.crtc.gc.ca/eng/archive/2010/2010-783.htm

CRTC Simplified Index of Media Ownership Charts
http://crtc.gc.ca/ownership/eng/title_org.htm 

Some media coverage in Globe and Mail – also check out CBC.ca

Susan Krashinsky. (June 28, 2011). CRTC Faces Regulating a Confounding ‘New World’. Globe and Mail.
http://www.theglobeandmail.com/report-on-business/crtc-faces-regulating-a-confounding-new-world/article2079262/ 

Susan Krashinsky. (June 19, 2011). Rogers Urges CRTC to Reign in Broadcast ‘Wild West’. Globe and Mail.
http://www.theglobeandmail.com/news/technology/tech-news/rogers-urges-crtc-to-rein-in-broadcast-wild-west/article2067263/ 

Dwayne Winseck. (June 20, 2011). Big Media in the Hot Seat at CRTC Hearings. Globe and Mail.
http://www.theglobeandmail.com/news/technology/digital-culture/dwayne-winseck/big-media-in-the-hot-seat-at-crtc-hearings/article2067311/ 

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