CRTC issues standstill "policy" on carriage agreements

July 11, 2011

In an attempt to preserve the status quo leading up to its decision on the regulatory framework for vertical integration in the broadcasting industry, the CRTC has indicated that existing carriage arrangements between broadcasters and distributors should remain in place for now.

On July 8, 2011, the CRTC issued Broadcasting Regulatory Policy CRTC 2011-415 (the Policy), coincident with the filing of final written comments respecting the recent CRTC public hearings on vertical integration in Canada.

The Policy states that where a programming undertaking (a broadcaster) is in terms of carriage negotiations with a broadcasting distribution undertaking (a cable or DTH system) or the operator of an exempt distribution undertaking, the programming undertaking should continue to provide programming services on the same terms and conditions as their last agreement with the other party. Similarly, broadcasting distribution undertakings in such negotiations should continue to distribute the programming services of programming undertakings on the same terms and condition as the last agreement. These requirements are to remain in effect until 30 days after the CRTC publishes its decision on the vertical integration hearings.

The policy also reminds broadcasting distribution undertakings and pay and specialty service licensees of the requirement in sectoral regulations that signal carriage must continue during a dispute between the parties over terms of carriage.

Interestingly, however, the standstill policy itself may be more in the nature of an expectation by the regulator, rather than an enforceable directive.  Under the terms of the Broadcasting Act, the CRTC could impose restrictions on the terms of carriage agreements through the imposition of conditions of licence, the publication of regulations, or the issuance of mandatory orders; but each of these carries procedural obligations that require a comment period - and in some cases a public hearing - before giving the restrictions legal effect.

The vertical integration hearing, held in late June, was prompted by several recent instances of industry consolidation, including the acquisition of Canwest Global (now Shaw Media) by Shaw Communications and the reacquisition by Bell Canada Enterprises of full control of in CTVglobemedia (now Bell Media).  In commencing the public hearing, the CRTC noted that the possibility exists in vertically integrated broadcasting enterprises to provide preferential treatment to affiliated entities or to engage in anti-completive conduct generally.   It also noted that a number of parties had proposed various safeguards to discourage or prevent anti-competitive behaviour.  Much of the discussion at the hearings focused on the terms and conditions for carriage for unaffiliated broadcasters and broadcast distributors.

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