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Commission to try to mandate "good commercial practices" while all wait for audit rules
8/26/2004
by Greg O'Brien

 
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CRTC/Regulatory - TV
OTTAWA - With specialty services and a certain BDU unable to play nice recently (and inevitably, dropping their disputes in front of the Commission), the CRTC issued a call for comments yesterday to look at adding provisions about proper notice when cable or satellite companies want to alter their packaging of specialty services.

A number of public disputes this summer between Shaw Communications-owned Star Choice and specialty services such as MusiquePlus, TSN, RDS, Talk TV, The Weather Network and M�t�oM�dia, has effectively led the Commission to ask for comment, "with respect to the measures that may be required to ensure that negotiations between distributors and programmers are conducted in accordance with good commercial practices," says yesterday's public notice (PN 2004-64).

Earlier this year Star Choice made what the broadcasters say were unilateral decisions to re-locate some channels, switching TSN and RDS to its Essentials package (in order to slash wholesale fees) and moving Pelmorex's TWN and MM from Essentials - in essence, Star Choice's basic tier - to a tier with far lower penetration levels. TWN, for example, was to be moved to a tier with about 100,000 customers, as compared to being available to all of Star Choice's 800,000-plus customers.

The channels say they received letters from the satellite company on April 28th of this year, saying they would be moved within a month and offered no negotiation on the matter. CTV and Pelmorex were not the only ones to receive such letters, as some of the other larger broadcast groups successfully fought channel realignments on Star Choice, albeit privately, say several industry sources.

Pelmorex and CTV, however, were the only ones to take the matter public and went immediately to the Commission. TWN even went to court this summer, gaining an injunction against the Star Choice relocation, which expired last week. Before the injunction expired, however, Pelmorex and Star Choice set aside the battle and TWN and MM will stay put in Essentials for now. TSN and RDS, however, have been officially transferred to Star Choice's basic tier.

At the same time yesterday, the Commission released the reasons behind its July denial of applications made by Pelmorex and TSN/RDS/Talk owner CTV Specialty. The broadcasters had requested that the CRTC issue an order under section 9(1)(h) of the Broadcasting Act (the gatekeeping rule) to stop Star Choice from moving the channels until the two sides could come to an amiable agreement or until they could wind their way through the Commission's official dispute resolution process. Both complaints are still on their way through the Commission's dispute resolution route, but are in a bit of a holding pattern.

The Commission said yesterday there wasn't enough to justify an order under the gatekeeping rules and suggested that it preferred Star Choice and the complainants to work it out.

Commissioner Andr�e Noel strongly dissented with that original decision, calling Star Choice's tactics "brutal" and "uncivilized".

The Canadian Association of Broadcasters followed up that July decision with a direct attack on Star Choice, calling on the Commission to end the DTH company's "bullying tactics and subscriber abuse."

All this has lead to the CRTC's call yesterday looking at "measures that may be required to ensure that negotiations between distributors and programmers are conducted in accordance with good commercial practices," it said.

Comments (and these ought to be interesting) must be submitted on or before October 6, 2004.

Overhanging all of this, however, is one word: audit. The broadcasters want hard and fast Commission rules surrounding periodic audits of customer numbers of the BDUs distributing their specialty services. The BDUs have resisted, saying that audit provisions are already in their contracts with the channels. The specialty services have countered that by saying, too often, Canadian BDUs make it overly difficult to get a timely audit properly done.

As reported, the Commission called for comments on a proposal filed by the CAB back in May and the industry is sitting on its hands, waiting for a ruling, or a next step.
 
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