Bell's NHL, NFL mobile streaming deals breach CRTC rules

Deals that make Bell Mobility customers the only wireless users able to stream National Hockey League and National Football League games on their mobile devices are breaking Canadian broadcast rules, the CRTC says.

Deals that make Bell Mobility customers the only wireless users able to stream National Hockey League and National Football League games on their mobile devices are breaking Canadian broadcast rules, the CRTC says.

"Canadians shouldn't be forced to subscribe to a wireless service from a specific company to access their favourite content," said Konrad von Finckenstein, chair of the Canadian Radio-Television and Telecommunications Commission in a news release Monday announcing the decision.

Telus vs. Bell

Telus argued that given the popularity of the content in dispute, Bell's exclusive mobile access to it could have a "material adverse impact on Telus" as mobile access to video content, especially sports, becomes more popular with consumers.

Bell responded that Telus had previously had opportunities to acquire the exclusive rights that Bell held as part of a competitive process and failed to secure them. It added that Telus could get access to other professional sports content.

However, the CRTC found that other available professional sports content was "not comparable" to NFL and NHL content, given their popularity, and ruled in Telus's favour.

When asked about Telus's opportunities to bid for exclusive NHL and NFL rights, Michael Hennessy, the company's senior vice-president of regulatory affairs, said the company is against exclusivity because "it's bad for consumers."

Companies such as Bell have argued that exclusivity spurs innovation by allowing companies to take risks to differentiate their products from those of their competitors.

Hennessy said the tradition in Canada is that while individual broadcasters can make exclusive content deals, distributors such as cable and satellite companies have been able to access that on a non-exclusive basis.

Without that safeguard, he said, "Some customers get locked into services they don't want" and large distribution companies with bigger media arms have a competitive advantage over smaller competitiors that may have few or no media operations.

Telus wanted to negotiate with Bell for the rights to NHL games and video highlights and NFL prime-time and playoff games, as well as NFL Network programming, for its own mobile customers.

It filed a complaint with the CRTC in January after negotiations were unsuccessful.

According to Michael Hennessy, senior vice-president of regulatory and government affairs for Telus, Bell told Telus that it didn't have the right to sub-licence the content and therefore could not negotiate.

The CRTC found that Bell Mobility's exclusive deals gave the company a "significant competitive advantage" and subjected Telus to an "undue disadvantage," violating 2009 rules that prohibit "undue preference" when dealing with internet or mobile content.

The commission has ordered Bell to file a report within 30 days explaining how it will ensure Telus has access to the NHL and NFL content "at reasonable terms."

"It's definitely a victory for Telus," Greg O'Brien, editor of CARTT, an online news site about the telecommunications industry, told CBC News.

"It will also help the likes of Wind and Mobilicity as well, because what it means is that those exclusive deals where Bell, for example, will get the NHL and the NFL rights, those rights will have to be made available to Mobilicity, to Wind, to Telus so they can offer that kind of content to their customers as well."

Bell said Monday that it is studying the decision and can't comment on how it will move forward.

However, the company maintained that it doesn't have the right to sub-licence or resell the NHL and NFL content.

"Bell does not control how the major leagues sell their rights in Canada," the company said in a statement. "The CRTC is imposing itself directly in how independent and in this case international content owners sell their content rights in Canada. We don't have the ability to act on the CRTC's behalf in the way they'e demanding."

However, Hennessy questioned whether that was true.

"All they have to do is get the permission of the content owner," he said. "The sports leagues are probably more than open to obeying whatever the laws of Canada are."

The CRTC ruled in September that companies such as Bell with rights to certain TV content must offer those rights to competitors at a reasonable price if the competitors want to broadcast content on mobile devices.

At that time, it proposed a code of conduct banning "anti-competitive behaviour" such as charging an "unreasonable rate," requiring the buyer to have minimum revenue or market penetration levels, or requiring the buyer to buy other programs in order to get the content that they want.

That ruling wasn't referenced in the latest decision because the complaint was filed before the ruling was made.

Companies are still allowed to offer exclusive programming to their internet or mobile customers if that content was produced specifically for the internet or a mobile device, such as behind-the scenes video clips.