ARCHIVED - Telecom Procedural Letter addressed to Peggy Tabet (Québecor Media Inc., on behalf of Videotron G.P.) and Aldo Di Felice (Telelatino Network Inc.)

Ottawa, 18 December 2014

Application number: 2014-1195-9

By email

Peggy Tabet
Senior Director, Regulatory Affairs
Broadcasting
Québecor Media Inc., on behalf of Videotron G.P.
tabet.peggy@quebecor.com

Aldo Di Felice
Chairman
Telelatino Network Inc.
aldo@tlntv.com

Re: Application by Quebecor Media Inc., on behalf of Videotron G.P., for Final Offer Arbitration with Telelatino Network Inc.

Pursuant to sections 12 to 15 of the Broadcasting Distribution Regulations and to Broadcasting and Telecom Information Bulletin CRTC 2013-637 (Information Bulletin 2013-637), this letter is to advise the parties that the request by Quebecor Media Inc. (QMI), on behalf of Videotron G.P. (Videotron) for final offer arbitration (FOA) regarding the dispute with Telelatino Network inc. (TLN) has been accepted by the Commission.

This letter sets out the dates upon which the FOA process is to be conducted, the matters upon which the Commission will make a determination as well as the procedure to be followed.

The Application

In an application dated 25 November 2014, Videotron indicated that the Commission needs to make a determination on seven major elements of its distribution deal with the ethnic Category A television service TLN.

Videotron submitted that the dispute meets all the criteria for resolution by final offer arbitration, namely:

• the dispute is bilateral;
• the parties have been unable to resolve the dispute by alternative methods;
• the dispute is relevant to the regulation and supervision of the Canadian broadcasting system, primarily to matters of interpretation or application of an existing Commission decision, policy or regulation;
• resolution of the dispute does not require a new policy or a change to a current policy;
• the dispute concerns monetary issues only.

In a letter dated 27 November 2014, Commission staff asked Videotron to refine the scope of its application, since the initially proposed scope was too broad and included elements that did not only concern monetary issues.

In a letter dated 1 December 2014, Videotron proposed a more narrow scope that, according to it, only dealt with monetary issues.

In a letter dated 8 December 2014, TLN indicated that it does not support the scope of issues defined for arbitration by Videotron. TLN submitted that several unresolved questions in the dispute are not appropriate for an FOA process. In the event the Commission decides to follow through with an FOA process, TLN proposed an even more limited scope than the one proposed by Vidéotron.

Determinations

The Commission is of the view that the public interest is best served by the quick and efficient resolution of disputes that could affect the offering of programming services to the public. The Commission, accordingly, accepts the FOA request.

The Commission considers, however, that neither party has proposed an appropriate scope for the FOA process. In particular, the Commission feels that the scope proposed by both parties includes elements that do not lend themselves to an FOA process. In particular, not all elements concern monetary issues only.

The Commission notes, that, as per paragraph 21 of Bulletin 2013-637, when the Commission accepts an FOA request, it sets out the matters upon which it will make a determination. The Commission’s establishment of the disputed matters ensures that the parties will be submitting comparable offers.

Therefore, in the current proceeding, the Commission will make a determination concerning the following matters:

• appropriate wholesale rates for Videotron’s distribution of TLN:
  • when TLN is offered in prepackaged bundles; and
  • when TLN is offered individually (pick and pay).

The parties’ offers must therefore include only the proposed wholesale rates for Videotron’s distribution of TLN when TLN is offered in prepackaged bundles and when it is offered individually (pick and pay).

The Commission notes that there may be other rate elements in the intended affiliation agreement between the parties, such as the applicable wholesale rate when TLN is offered within a build-your-own bundle-package (BYOP) offering, but these will not be decided by the Commission in this proceeding. In the circumstances of this case, the Commission is of the view that the wholesale rate for a service offered on a BYOP basis would be higher than that for a service offered in a prepackaged bundle but less than that when offered individually. The Commission expects parties to continue to negotiate these other rate elements.

The Commission will examine the final offers submitted by the parties and will select one in its entirety. The Commission’s decision will be binding on the parties.

Filing of documents

The Commission requires that, by 9 January 2015, the parties each file their final offers with the Commission. As set out in paragraph 22 of Information Bulletin 2013-637, parties are reminded that these submissions must include concise supporting arguments stating all the facts, Commission requirements, and regulatory decisions or jurisprudence relied on in support of the party’s position. These submissions must be no longer than ten pages, excluding any attachments.

Once Commission staff has confirmed that the offers respond to the identified disputed matter, Commission staff will forward to each of the parties a copy of the other party’s offer, on 14 January 2015

To complete the record, Videotron is also required to provide the following information, by 9 January 2015:

1. The most recent affiliation agreement reached with Telelatino;
2. The actual number of Telelatino subscribers a) in each prepackaged bundle,  b) in customized bundles, and c) on a pick and pay basis, as well as the current rate for each of those offerings;
3. The current number of subscribers for each third-language or ethnic service (Canadian or foreign) distributed by Videotron, as well as the packaging options for each one (prepackaged, customized, or pick and pay);
4. The wholesale rates paid to other third-language or ethnic services (Canadian or foreign) distributed by Videotron a) in prepackaged bundles,  b) in customized bundles, and c) on a pick and pay basis;
5. The retail rates charged by Videotron for all third-language or ethnic services (Canadian or foreign) when they are offered individually;
6. The current number of subscribers for each programming package offered by Videotron that includes a third-language or ethnic service, including the identity of the services included in each package;
7. The retail rate for each programming package offered by Videotron that includes a third-language or ethnic service, and the individual wholesale rates for each service included in such packages; and
8. Current tuning or viewership for Telelatino and all other third-language or ethnic services distributed by Videotron (e.g., Average Minute Audience, total hours tuned), if available.

To complete the record, Telelatino is also required to provide the following information, by 9 January 2015:

1. A list of the wholesale rates paid by all Broadcasting Distribution Undertakings (BDUs) to Telelatino a) in each prepackaged bundle,  b) in customized bundles, and c) on a pick and pay basis, whether set out in existing affiliation agreements or any other arrangements for distribution;
2. For each BDU that distributes Telelatino, the penetration rate a) in prepackaged bundles,  b) in customized bundles, and c) on a pick and pay basis;
3. The current affiliation agreements between Telelatino and the following BDUs (Bell, Cogeco, and TELUS); and
4. The current tuning or viewership to Telelatino (e.g. AMA, total hours tuned).

The parties will be able to file observations on the other party’s final offer with the Commission, serving a copy on the other party, by 19 January 2015. However, parties will not be authorized to amend their offers. Parties are reminded that these submissions should be no longer than ten pages.

Any documents filed with the Commission should be filed via the secure service “My CRTC Account (GCKey or Partner Log In)” using the “Broadcasting Online Form and Cover Page” on the web page and quoting the application number noted above.

Mediation

Noting that parties have participated in CRTC staff-assisted mediation in attempting to resolve this dispute, and that the parties have indicated that they wish to continue working in this manner during the final offer arbitration proceeding, the Commission appoints Bernard Montigny, Senior Director, Alternative Dispute Resolution and Processes, to continue in his capacity as mediator over this dispute.

The Commission therefore directs the parties to participate in mediation, after the final offer arbitration record is complete, to be held during the week of January 26 to 30, 2015. Parties should familiarize themselves with the Commission’s expectations with respect to their participation in the mediation as set out in paragraph 129 of Broadcasting Regulatory Policy CRTC 2011-601.

Confidentiality

As noted in paragraph 40 of Information Bulletin 2013-637, existing Commission confidentiality rules and practices apply during the course of final offer arbitration proceedings. The applicable rules and practices are set out in the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the Rules of Procedure) and described in Broadcasting and Telecom Information Bulletin 2010-961. The parties are reminded to provide sufficient justification for their claims of confidentiality and to file abridged versions of submissions, when possible.

Responsibilities of the Parties

Parties may contact Mr. Claude Brault at 819-997-6064, or at claude.brault@crtc.gc.ca, if they require additional information regarding the organization and conduct of the final offer proceeding.

Where a document is to be filed or served by a specific date, the document must be received, and not merely sent, by that date. In addition to filing with the Commission, parties are requested to send all copies of submissions to claude.brault@crtc.gc.ca.

John Traversy
Secretary General

Date modified:

2014-12-18