CRTC orders Bell to share mobile sports content, Bell says rights lie with the leagues

BCE Inc. subsidiary Bell Mobility went out of bounds when it offered its subscribers exclusive access to popular NHL and NFL games over their mobile devices, the CRTC ruled on Monday. The decision stems from a complaint filed by Telus Communications Co. earlier this year, in which Telus argued that Bell had given itself an undue preference by entering into a pair of agreements with the two professional sports leagues to distribute live content exclusively to Bell Mobile TV subscribers. Those exclusive rights cover a majority of the most widely-viewed NHL and NFL games, including all playoff games for both leagues, all prime time and Sunday afternoon NFL football games, as well as the Super Bowl and the Pro Bowl. This subjected Telus to an undue disadvantage, the company argued. “The inability to offer this premium content is having, and will continue to have, a material adverse impact on TELUS as video content, particularly sports, becomes more prevalent on mobile devices and tablets with the rollout of 3G plus wireless networks last year,” Michael Hennessy, Telus’ senior vice-president of regulatory and government affairs, wrote in a Jan. 26 letter to the CRTC. At the time, Telus said it had attempted to negotiate with NHL and NFL officials to secure rights to mobile distribution of the games but was told by the leagues that Bell alone had the rights to the content. A Dec. 29, 2010 email from Blair Miller, Telus’ vice-president of content, to Nauby Jacob, Bell Mobility’s vice-president of user experience and content, also shows that Telus' attempted to negotiate a sub-leasing agreement with Bell. “We are not in a position to engage in discussions regarding NFL and NHL mobile content,” Jacob wrote in a Jan. 7, 2011 email response. “The leagues, as you know, ultimately own those rights, and we don’t have any arrangements with them to sub-license their content.” In a decision Monday, the CRTC supported Telus, ruling that Bell conferred on itself an unfair advantage by making the content available exclusively to its subscribers. The commission ordered Bell to file a report by Jan. 30, 2012 “outlining the steps it will take to ensure TELUS access to the programming at issue at reasonable terms.” The CRTC ruling is the first under the commission's undue preference and reverse onus stipulations contained in a 2009 broadcasting decision (CRTC 2009-329), which laid out guidelines for new media enterprises offering exclusive content to the subscribers of a telco or linear broadcast distributor, CRTC chairman Konrad von Finckenstein told The Wire Report in a telephone interview Monday. “It’s the first time that we’ve found an undue preference ... under the new media exemption order,” von Finckenstein said. It is also the first ruling to utilize the reverse onus rules established in that decision, which require the accused company to prove that it didn’t break the undue preference rules, he noted. “hile Bell admitted to the popularity of the content under dispute, it provided no evidence that this content was not of significant value to mobile service subscribers,” the commission said in the decision Monday. Hennessy told The Wire Report Monday that the ruling “add colour and interpretation” to the commission's application of the undue preference and reverse onus rules. “It’s reaffirmed that the CRTC remains very serious in its commitment to competition and consumer choice, and the safeguards that it set out,” Hennessy said. “It adds meat to the bones.” Hennessy said it also ensures that large, vertically integrated companies—which own broadcasting as well as television distribution assets—cannot circumvent the CRTC’s rules by segregating their distribution of linear TV and new media content. “They have basically said that Bell Mobility itself is a new media broadcasting undertaking and, as such, is subject to the commission’s jurisdiction,” he said. “It forces people not only to negotiate, but to negotiate reasonable terms because they’re otherwise subject to baseball arbitration and in the interim can’t withhold the signals to force an unreasonable deal.” The complaint was originally filed in January and the commission did not examine it under the lens of its Sept. 21 guidelines for vertically integrated companies. But von Finckenstein said the outcome of the complaints would have been the same had been examined under the new framework. “This decision actually predates the vertical integration decision, but both totally consistent with each other,” he said. Von Finckenstein said the commission has not yet received any formal complaints under the new media exemption rules or the new vertical integration guidelines. “There’s always complaints,” he said. “ the only formal process that has been launched is the one by Telus, which we ruled on today.” Von Finckenstein said he expects the decision to guide vertically integrated companies’ behaviour and help them to avoid similar disputes. “Once we make a decision like that, people understand how the wind blows and how we interpret things and how we look at things, and they will govern their conduct appropriately,” he said. “They are in business to make money, not to fight the CRTC.” In a email statement following the decision Monday, Bell spokeswoman Jacqueline Michelis said the ruling asks Bell to share content it does not have the right to share. “We’re still studying the decision and can’t comment specifically on how we’ll move forward,” Michelis wrote. “However, Bell does not control how the major leagues sell their rights in Canada. We do not have the right to sub-licence or re-sell this content. 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’re demanding.” Telus’ initial CRTC complaint on the issue said the leagues would be willing to let Bell share the content if it asked to do so. “Both of the leagues have indicated that they would consider assigning sub-licensing rights to Bell at its request,” Hennessy had written at the time. nkyonka@thewirereport.ca

CRTC orders Bell to share mobile sports content, Bell says rights lie with the leagues

Broadcast | December 12, 2011

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