Broadcasting Procedural Letter Addressed to Ann Mainville-Neeson and Susan Wheeler (TELUS Communications Company and Rogers Media Inc.)

Ottawa, 1 August 2017

BY EMAIL

Ms. Ann Mainville-Neeson
Vice President, Broadcasting Policy and Regulatory Affairs
TELUS Communications Company
Ann.Mainville-Neeson@telus.com

Ms. Susan Wheeler
Vice-President, Regulatory, Media
Rogers Media Inc.
susan.wheeler@rci.rogers.com

Dear Mesdames,

Re: Procedural request in the final offer arbitration proceeding (2017-0309-1) between TELUS Communications Company and Rogers Media Inc.

This letter is with respect to the 25 July 2017 request by Rogers Media Inc. (Rogers) to strike from the record of the above noted proceeding the set-top-box (STB) data filed by TELUS Communications Company (TELUS) and two reports also filed by TELUS as appendices to their final offer, namely: a report by Sean Riley entitled Regional Appeal of US Sports Networks, OTT Offerings and the Impact on Wholesale Pricing (the Riley report), and a survey by Michael Ryan entitled Control of Premium Content by Programming Services – An International Survey of Regulatory Responses (the Ryan survey).

Positions of Parties

In its request, Rogers argued that the STB data should be removed from the record on the grounds that in its raw form and as interpreted by TELUS, the data is not a reliable or industry-accepted source of subscriber viewership data. Rogers also argued that the Riley report and the Ryan survey should be struck from record on the basis that they were specifically commissioned by TELUS to advance TELUS’ arguments in a way that exceeds the Commission’s 10-page limit on final offer submissions. 

TELUS replied that the STB data was specifically requested by the Commission and filed by TELUS accordingly. TELUS noted that it is well within the Commission’s powers to request this information and consider it as part of this arbitration. With regard to the reports, TELUS submitted that they serve to support arguments already put forward in its submission and are indeed independent expert advice. It also stated that it is common practice to include appendices like these in final offer arbitration (FOA) and specifically permitted by the Commission in its FOA practices and procedures, as set out in Information Bulletin CRTC 2013-637.

Commission Determinations

The Commission notes that it is standard procedure to request STB information as part of FOA proceedings. This information is used in conjunction with other viewership data to help to assess the value of the service to subscribers, in itself, and in comparison to similar services. Such analysis is one factor among several in determining which of the two offers best reflects the fair market value of the service. As noted below, parties have the opportunity to make arguments about how such data should be interpreted and the weight that should be assigned to it by the Commission.

With respect to the Riley report, the Commission is of the view that this report constitutes evidence filed in support of TELUS’ arguments in its 10-page submission. As supporting evidence to TELUS’ arguments on regional viewership and regional pricing, Riley’s report is complementary to TELUS’ final offer submission.

As for the Ryan survey, the Commission is of the view that it goes beyond the criteria for FOA, which is designed for disputes that, among other things, are bilateral, exclusively monetary, and do not require a new policy or change to an existing policy. The Ryan survey deals more broadly with public policy issues of access to and affordability of premium programming services. These are issues that concern more than just the two parties to this dispute. Moreover, the fact that other jurisdictions may have more specific regulations in place with respect to premium content has no bearing on the wholesale price that TELUS should pay for Rogers’ services.

Accordingly, the Commission strikes the document written by Michael Ryan entitled Control of Premium Content by Programming Services - An International Survey of Regulatory Responses from the record of this proceeding. TELUS will have three (3) days from the date of this letter to provide the Commission, copying Rogers directly, with revised versions of its final offer submission, removing at minimum from paras 44 and 45, references to the contents of the study (no other amendments to the final offer submission may be made). 

Consistent with the approach articulated in Information Bulletin CRTC 2015-440, Interpretation of the Wholesale Code, parties may make submissions regarding the appropriate weight to be given to the Riley report and the STB data in their final comments.

Parties will have five (5) days from the date of this letter to file comments on the other party’s final offer, serving a copy on the other party.

Yours sincerely,

Danielle May-Cuconato
Secretary General

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