CRTC Prohibits Telecom Giants from Offering Exclusive TV Programming – But is the Intervention Really Required?

by Yuyutsu Sen on September 23, 2011

Canadian Radio-Television and Telecommunications Commission (CRTC) passed a new rule this week – telecom giants such as Quebecor, BCE, Rogers and Shaw can’t offer exclusive TV programs to their internet and mobile subscribers. This means that if Quebecor manages to get the ownership of a Quebec City NHL team and broadcasts the games on its TVA network, it cannot limit the broadcast to its own subscribers. Bell subscribers will also have access to the broadcast on their network and devices. Similarly, BCE can’t broadcast games on an exclusive basis to Bell subscribers on platforms like iPads and smartphones.

Although a fair ruling, it doesn’t seem like CRTC intervention was really necessary. Until now, telecom conglomerates have never actively tried to limit the potential audience for their TV programs and there doesn’t seem to be any reason why they would try to do so in the near future. Regardless of who holds the broadcast rights, people get to watch all the games and programs on their cable system. This is applicable to internet and mobile subscribers as well.

It’s true that telecom companies consider owning content to be a competitive advantage. This is the primary reason behind BCE going out and purchasing CTV network besides its RDS and TSN units. But this doesn’t mean that telecom conglomerates are going to start charging unreasonable fees and prevent distributors who do not pay up from broadcasting. If Konrad von Finkenstein, CRTC chairman, believed that in the absence of such a rule people would have to subscribe to a number of different internet service providers and cell carriers to gain access to all the games and programs, the fears seem to be a bit far-fetched.

Telecom industry heavily depends on advertising revenue and advertisers obviously want their ads to be viewed by the maximum possible number of people. This ensures that telecom companies do not try to hold back content from each other. According to Seaboard Group consultant Iain Grant, there is no proof that telecoms are considering such a move. Besides, any benefit that a telecom company would get from an ‘exclusive’ policy would be far less than the amount of money it earns from additional audience.

The broadcast right holders are required to provide the largest possible number of viewers to their sponsors and it would not be possible if they withhold content from each other. More importantly, people are sure to protest in case a company tries to restrict content. For instance, if a rights holder announces that the Olympics would be broadcasted exclusively on its properties, consumer protest against such a move is likely to be so strong that a back down would become necessary.

All these points suggest that CRTC may have acted prematurely. The latest move may also be an attempt to gain favor with consumers as the time for the renewal of CRTC chairman’s mandate draws closer. Telecom giants are smart enough to know that withholding content is not in their favor, with or without the ruling.

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Written by: Yuyutsu Sen.

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