ARCHIVED - Broadcasting Commission Letter Addressed to Peggy Tabet and Kevin Goldstein (Québécor Média inc. and Bell Canada )
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Ottawa, 18 October 2017
Our reference: 2017-0908-1
Senior Director, Regulatory Affairs, Broadcasting
Québécor Média inc.
Vice-President, Legal and Regulatory Affairs
Re: Request for final offer arbitration (2017-0908-1) with respect to TVA Sports
Dear Ms. Tabet and Mr. Goldstein:
Pursuant to sections 14(1) of the Discretionary Services Regulations, sections12 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 Québecor Média inc. (Québecor), on behalf of Groupe TVA inc. (TVA), for final offer arbitration (FOA) with Bell TV, a subsidiary of BCE inc. (Bell), has been accepted by the Commission.
This letter sets out the matter upon which the Commission will make a determination, the dates of the FOA process and the procedure to be followed.
The Commission strives to release FOA decisions as expeditiously as possible. However, any procedural issues that arise may result in delays to the applicable timelines (see details in the attached Procedural Appendix).
On 15 September 2017, the Commission received an application for FOA from Québecor, pursuant to section 14(1) of the Discretionary Services Regulations and sections 12 to 15 of the Broadcasting Distribution Regulations, to establish the rate for linear distribution of TVA Sports 1, 2 and 3 (TVA Sports) by Bell in the Francophone market.
Québecor noted that, despite negotiation efforts to reach a mutual agreement, the parties were at an impasse, and third-party intervention had become necessary. Québecor indicated that the dispute is an appropriate matter for the Commission’s dispute resolution process, for the following reasons:
- the dispute is bilateral;
- 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.
In its response dated 20 September 2017, Bell indicated that it also wished to use the Commission’s FOA process. However, Bell also indicated that it did not agree with the rate structure proposed by Québecor, or with the length of the agreement for which the FOA rates would apply.
On 22 September 2017, Québecor asked the Commission to address these two issues regarding the structure and term for the FOA.
On 27 September 2017, Bell indicated that it was ready to accept Québecor’s proposal (with respect to FOA rate structure and term), to facilitate the process.
Upon review of the record, the Commission considers that FOA 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, 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:
- rate for the linear distribution of TVA Sportsby Bell in the Francophone market
The Commission advises parties that other matters relating to the distribution of TVA Sports by Bell will not be considered as part of this proceeding and are left to negotiation between the parties.
Accordingly, the parties’ offers must be limited to per subscriber rates for linear distribution of TVA Sports in the Francophone market.
The Commission will examine the final offers submitted by the parties and will select one in its entirety. Footnote1The Commission’s decision will be binding on the parties.
Filing of documents
The Commission requires that, by 2 November 2017, the parties each file their final offers with the Commission. Refer to the attached Appendix for the procedure to be followed in the filing of documents, in addition to Information Bulletin 2013-637.
When preparing your arguments, please refer, where applicable, to the criteria for fair market value set out in the Wholesale Code, Broadcasting Regulatory Policy CRTC 2015-438. As noted in the Interpretation of the Wholesale Code, Broadcasting Information Bulletin CRTC 2015-440, the Commission will determine which fair market value factors are applicable in a given case and assess proposed rates or final offers in relation to those factors. In addition, the Commission will apply, where appropriate, a public interest test that examines whether the proposed wholesale rates are consistent with the relevant public policy objectives.
To complete the record, Québecor must also provide the following information, in Excel format if possible, by 2 November 2017:
- affiliation agreements in effect between TVA and other BDUs in the Francophone market for the distribution of TVA Sports;
- for each BDU that distributes TVA Sports:
- wholesale rates broken down by distribution a) in a preassembled or build-your-own package, and b) on a standalone basis;
- current number of subscribers and actual penetration level of TVA Sports; and
- applicable volume discount.
- data on the tuning or viewership to TVA Sports 1, 2 and 3, separately, including a) average minutes watched, and b) total number of hours watched, for each month since the beginning of the last agreement to the present.
To complete the record, Bell must also provide the following information, in Excel format if possible, by 2 November 2017:
- the latest affiliation agreement between Bell and TVA for the distribution of TVA Sports;
- current number of subscribers to TVA Sports by Bell, for each month since the beginning of the last agreement to the present, a) in a preassembled or build-your-own package, and b) on a standalone basis, as well as the applicable rate for each;
- wholesale rates paid by Bell for other sports services (Canadian and foreign) in preassembled or build-your-own packages;
- current number of subscribers to each sports service (Canadian and foreign) distributed by Bell;
- current number of subscribers to each package offered by Bell that includes a sports service, as well as the names of the services included in each package;
- the retail rate for each package offered by Bell that includes a sports service, and the individual wholesale rates for each service included in such packages; and
- current tuning to TVA Sports 1, 2 and 3, separately, as well as all other sports services offered by Bell (e.g., set top box data, average minute audience, total number of hours watched), if the data are available, for each month since the beginning of the last agreement to the present.
By 7 November 2017, 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.
The parties will have until 14 November 2017 to file comments on the other party’s final offer with the Commission, and to serve a copy of these comments on the other party. However, parties will not be authorized to amend their offers.
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.
Responsibilities of the parties
Parties may contact Julia Bresee at 819-997-1194 or at firstname.lastname@example.org 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 email@example.com.
Acting Secretary General
Parties should be aware that deviation from the final offer arbitration process set out in Information Bulletin CRTC 2013-637 may result in delays to the applicable timelines.
As set out in the Information Bulletin CRTC 2013-637, FOA usually involves a two-step process: (1) the submission of the final offer and (2) comments.
Parties are responsible for including concise supporting arguments stating all the facts when they file their final offers. Since the purpose of the comments is to allow each party to comment on the other party’s final offer, procedural fairness requires that the parties’ entire positions be put forth at the beginning of the process (i.e., as part of the final offer). It is inappropriate to file new evidence and formulate new arguments as part of the comments, if such evidence or arguments could have been filed or formulated when filing the final offers.
Accordingly, the process does not generally provide for parties to file a reply to comments as part of the usual final offer arbitration process.
In the event that a party considers that new evidence or argument has been filed in the context of the comment phase, parties may request from the Commission, in writing, a right of reply, with supporting rationale for the request.
Filing of documents
Generally, there are three versions of each document filed with the Commission in the context of an FOA proceeding: a version to be placed on the public record (which generally omits details pertaining to the final offers, for instance), a version to be provided to the other party to the FOA (which generally omits certain details which are commercially sensitive), and a full version (containing all confidential information) for the CRTC.
The onus is on each party to ensure that its own sensitive information has been treated appropriately by the other party to the FOA, in reviewing the public versions submitted to the CRTC.
In submitting their filings, parties must clearly designate each version, by marking the following at the top of every page of the submission:
- “Public version,”
- “Confidential version for party X,” or
- “Confidential CRTC version.”
Parties must follow the following naming convention in filing documents via GC key:
- Application number – FOA – Filing party – Document name – Document date – Document version – Filing date
All public versions of documents must be provided at the same time as the confidential version, as well as any translations that may be provided.
In accordance with paragraph 40 of Information Bulletin CRTC 2013-637, existing Commission confidentiality rules and practices will apply throughout the FOA proceedings. The applicable rules and practices are set out in the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the Rules) and described in Broadcasting and Telecom Information Bulletin CRTC 2010-961.
Section 31(1) of the Rules provides that in broadcasting matters, a party may designate information related to the following as confidential:
- information that is a trade secret;
- financial, commercial, scientific or technical information that is confidential and that is treated consistently in a confidential manner by the person who submitted it; or
- information the disclosure of which could reasonably be expected
- to result in material financial loss or gain to any person;
- to prejudice the competitive position of any person; or
- to affect contractual or other negotiations of any person.
Section 31(2) of the Rules provides that the party must make the designation at the time that they file the document that contains the information. Moreover, the party that designates information as confidential must provide reasons, as well as any supporting documents, why the disclosure of the information would not be in the public interest, including why the specific direct harm that would be likely to result from the disclosure would outweigh the public interest.
[These sections are only an excerpt of the applicable Rules.]
Matters with respect to confidentiality can be set out in a covering letter to the party’s final offer or comment submission, and will not be counted toward the page limits set out in Information Bulletin 2013-637.
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