Canadians may face restricted access to video services like Netflix and mobile access to Stanley Cup games unless new regulations are put in place, smaller telecommunications companies warn.
Canada's telecommunications regulator needs to set rules to prevent possible "cartel-like behaviour" from telecommunications companies such as Bell and Rogers that also own content such as TV shows that competitors would like to be able to offer online, said Chris Peirce, chief corporate officer for MTS Allstream.
"If someone owns the content and competing with someone who also needs that content to deliver the service, then there's obviously the propensity for anticompetitive behaviour," Peirce said while taking part in a panel discussion on telecom regulation at the Canadian Telecom Summit in Toronto Wednesday.
Companies such as Netflix that want to stream TV shows, movies and other video through the internet to devices such as TVs, computer tablets and mobile phones must first get the online rights for that content. However, the rights are often owned by TV broadcasters, including some that have their own online streaming services. Some telecommunications companies face similar problems negotiating rights as they expand services such as mobile TV for smartphones or video-on-demand.
Peirce said that in order to ensure choice for consumers, the CRTC needs to make rules that allow competition over such content to be fair.
Ed Antecol, vice-president of regulatory affairs and carrier services for Wind Mobile's parent company, Globalive, agreed that there needs to be rules for telecommunications companies that also have broadcast business, and use content from their broadcast business on internet-based platforms such as mobile phones — a strategy known as vertical integration.
Otherwise, consumers will be able to watch content anywhere, anytime, but only if they pay $100 a month for cable, he said.
He proposed rules that would require that content distributors license their content to online distributors at the same price as cable companies.
The CRTC is holding a hearing on July 11 to consider possible rules about vertical integration. The regulator approved Bell's takeover of CTV in March.
Greg O'Brien, editor of the trade publication Cartt.ca and moderator of Wednesday's panel, opened the debate by bringing up some recent announcements from Bell and Rogers. He noted that Rogers Mobile announced that it will no longer be offering Bell-owned CTV and BNN via mobile starting June 1, and Bell recently announced that it has the only mobile TV service that delivers live Stanley Cup games and highlights.
Bell willing to negotiate
Mirko Bibic, senior vice-president of regulatory and government affairs for Bell Canada, responded that Bell is "more than willing" to sell content to companies that aren't vertically integrated, and such companies just need to negotiate. For example, he said, Bell has a "reasonable" offer on the table to Telus, which wants to license some of Bell's content.
That led to a heated exchange with Michael Hennessy, senior vice-president of regulatory and government affairs for Telus, who said Bell's offer was "a lot more than reasonable."
Bibic criticized companies like Telus for choosing not to vertically integrate themselves.
He also argued that exclusive mobile deals are not a problem for consumers who can watch TV shows online, download them from iTunes or buy the DVD.
"There are so many choices available to the consumer … that the fact that that content only available from one wireless provider has no impact," he said.
But O'Brien wondered out loud whether consumers will eventually end up having to buy Bell, Telus and Rogers subscriptions just to get the content they want.
John Lawford, counsel for the Public Interest Advocacy Centre, which speaks on behalf of consumers, said he thinks that is a potential problem.
"We need rules so that people don't get locked into services they may not really want … or that impede competition," he said.
Lawford added that he doesn't think someone should have to maintain wireless service with a certain provider just to get mobile access to hockey games.
"That's not a fair situation. It certainly doesn't help competition," he said.
Integration 'logical': CRTC chair
Earlier in the day, CRTC chair Konrad von Finckenstein took the stage at the conference for a public chat with conference co-chair Mark Goldberg.
Von Finckenstein said vertical integration is a "logical industry reaction" to convergence, in which companies merged businesses in telecommunications and broadcasting.
He said the upcoming CRTC hearing will answer questions about what it means for consumers and small independents. However, he added that he wants to see the data before determining if regulatory intervention is needed.
Whether new regulations are needed to maintain competition in the telecommunications realm was a recurring theme in the regulatory panel discussion, which also touched on usage-based internet billing, the upcoming federal auction of new wireless spectrum, and the issue of foreign investment.
Von Finckenstein said many proposed solutions to enhance competition are "too interventionist" and regulations should only be used as a last resort.
However, he does think revamping Canadian telecommunications and broadcasting regulations should be a priority.
"Have we got the most efficient setup, institutionally or legislatively? No, I think both sides are in need of reform."