ARCHIVED - Telecom Procedural letter Addressed to Peggy Tabet (Québecor Média) and Kevin Goldstein (Bell Canada)

Ottawa, 2 March 2015

Our reference: 2014-1320-3

BY EMAIL

Peggy Tabet
Senior Director, Regulatory Affairs, Broadcasting
Québecor Média
tabet.peggy@quebecor.com

Kevin Goldstein
Vice President - Legal and Regulatory  
Bell Canada
Bell.regulatory@bell.ca

RE: Request for final offer arbitration (2014-1320-3) with respect to TVA Sports.

Pursuant to sections 12 to 15 of the Broadcasting Distribution Regulations and Broadcasting and Telecom Information Bulletin CRTC 2013-637 (Information Bulletin 2013-637), this letter is to advise the parties that the request by Bell Canada (Bell) for final offer arbitration with Québecor Média, in its name and on behalf of Groupe TVA Inc. (Québecor) has been accepted by the Commission.

This letter sets out the dates upon which the final offer 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 its application dated 16 December 2014, Bell requested final offer arbitration in order to determine the wholesale rates for the distribution of TVA Sports 1 (TVAS1) and TVA Sports 2 (TVAS2) (collectively the Services) by Bell. Bell submitted that, while the parties have made several attempts to negotiate an agreement for the carriage of the Services by Bell, the parties were too far apart for commercial negotiations to succeed.  Bell submitted that the dispute meets all the criteria for resolution by final offer arbitration, namely:

• The dispute is bilateral;
• The dispute concerns monetary issues only;
• The parties have been unable to resolve the matter by alternative methods, despite attempts to do so;
• The dispute is relevant to the regulation and supervision of the Canadian broadcasting system;
• The resolution of the dispute does not require a new policy or change to an existing policy.

Bell indicated that the issues for determination between the parties were the rate per subscriber for the French-language market when the Services are distributed in a package or on a build-your-own package basis^{Footnote 1} as well as the rate for distribution on a multiplatform basis.

In its 20 January 2015 response, Québecor submitted that it accepted the request by Bell for final offer arbitration but that the scope should also include the rate for the English-language market. Québecor further indicated that, in its view, the parties would benefit from a staff-assisted mediation.

On 22 January 2015, Bell replied to Québecor’s response stating it agreed with the scope proposed by Québecor and that it was prepared to participate in a staff assisted mediation.

On 23 January 2015, Commission staff requested that the parties participate in staff-assisted mediation, with a view to arriving at a mutually acceptable solution and suspended the final offer arbitration until the conclusion of the mediation.

On 26 February 2015 the parties submitted a joint letter in which they informed the Commission that they had come to an agreement with respect to the rate for the English-language market and for the multiplatform distribution. Accordingly, the only matter that remains unresolved is the French-language market subscriber rate.

Determinations

Upon review of the record, the Commission considers that final offer arbitration is the appropriate method of dispute resolution in this case, as the dispute is exclusively monetary, involves only two parties, and otherwise meets the criteria for dispute resolution set out in paragraph 4 of Information Bulletin 2013-637. Accordingly, as noted above, the Commission accepts the application for final offer arbitration.

In accordance with paragraph 21 of Information Bulletin 2013-637, the matter upon which the Commission will make a determination is as follows:

• The wholesale rate per subscriber for the French-language market for TVAS1 and TVAS2 when distributed in a package or on a build-your-own package basis for the period of 1 September 2014 to 31 August 2016.

The Commission advises parties that other matters relating to the distribution of the Services by Bell will not be considered as part of this proceeding and are left to negotiation by the parties.

Accordingly, the parties’ offers must be limited to setting out their proposed rate per subscriber for the French-language market for the distribution of the Services on a linear basis. The Commission will examine the final offers submitted by the parties and will select one in its entirety^{Footnote 2}. The Commission’s decision will be binding on the parties.

Filing of documents

The Commission requires that, by 17 March 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.

By 23 March 2015, 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.

To complete the record, Bell is also required to provide the following information, on 17March 2015:

1. The most recent affiliation agreement reached with TVA for TVA Sports;
2. The actual number of TVA Sports subscribers a) in each prepackaged bundle , b) in build-your-own packages, and c) on a stand-alone basis, as well as the current rate for each of those offerings;
3. Wholesale rates paid by Bell for other sports services (Canadian and non-Canadian) a) in prepackaged bundles and b) in build-your-own packages;
4. Current number of subscribers to each sports service (Canadian and non-Canadian) distributed by Bell;
5. Current number of subscribers to each programming package offered by Bell that includes a sports service, including the identity of the services offered within each package;
6. Retail rate for each programming package offered by Bell that includes a sports service, and the individual wholesale rates for each service offered within such packages; and
7. Current tuning or viewership for TVAS1 and TVAS2 and all other sports services offered by Bell (i.e., set-top-box data, AMA, total hours tuned, etc.), if available;

To complete the record, Québecor is also required to provide the following information, by 17 March 2015:

1. The affiliation agreements between TVA and other BDUs for the distribution of TVA Sports;
2. The rate cards (with penetration levels and volume discounts, if any), if any, paid by all BDUs to TVA for TVA Sports;
3. A listing of the actual wholesale rates paid by all BDUs to TVA for TVA Sports a) in each prepackaged bundle, b) in build-your-own packages, and c) on a stand-alone basis, whether set out in an existing affiliation agreement or any other arrangement for distribution;
4. For each BDU that distributes TVA Sports, the penetration rate a) in prepackaged bundles, b) in build-your-own packages and c) on a stand-alone basis;
5. The current tuning to TVAS1 and TVAS2 (AMA, total hours tuned, etc.);

By 30 March 2015, the parties may file observations on the other party’s final offer with the Commission, serving the other party. 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.

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 Shirley Ann Farley at 819-997-4603 or at shirleyann.farley@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 actually received, not merely sent, by that date. In addition to filing with the Commission via My CRTC Account, all copies of submissions are to be sent to shirleyann.farley@crtc.gc.ca.

Sincerely,
[Original signed by]

John Traversy
Secretary General

Date modified:

2015-03-02