Broadcasting Commission Letter Addressed to Mr. Aldo Di Felice and Mr. Dennis Sentes (Telelatino Network Inc. and Saskatchewan Telecommunications)

Ottawa, 7 November 2017

BY EMAIL:

Mr. Aldo Di Felice
President
Telelatino Network Inc.
aldo@tlntv.com

Mr. Dennis Sentes
Regulatory Affairs Manager
Saskatchewan Telecommunications
dennis.sentes@sasktel.com

Re: Dispute regarding the continued carriage of TLN by SaskTEL

On 21 August 2017, Telelatino Network Inc. (Telelatino) filed a notice of dispute advising the Commission that it was in a dispute with Saskatchewan Telecommunications (SaskTel) concerning the ongoing carriage of the discretionary service, TLN.  Telelatino noted that it had received a notice of non-renewal from SaskTel on 29 June 2017 indicating that SaskTel did not wish to renew the affiliation agreement between the parties beyond the current term, which expired 30 September 2017.  Telelatino stated that it was committed to discussing the possibility of renewed carriage on SaskTel in hopes of avoiding the complete disruption of their service, however, to date, SaskTel had not responded to Telelatino’s requests to discuss the matter further. 

Commission staff wrote to the parties on 26 September 2017, setting out the applicable regulatory framework, as follows:

Sections 12(1) of the Broadcasting Distribution Regulations (BDU Regulations) and Section 14(1) of the Discretionary Services Regulations (Discretionary Regulations) permit one or both parties to a dispute concerning carriage or terms of carriage of a programming service to refer the matter to the Commission for dispute resolution.

Section 15.01 of the BDU Regulations requires that, during a dispute between a broadcasting distribution undertaking (BDU) and a programmer, the BDU continue to distribute the programming service at the same rates and on the same terms and conditions as it did before the dispute (the “standstill” rule).

Based on the foregoing, Commission staff found that the parties were engaged in a dispute and that the standstill rule applies until the parties resolve their dispute or the Commission issues a decision concerning this unresolved matter. 

To assist the Commission in considering this matter, the parties were asked to demonstrate that fair commercial negotiations have taken place and to submit the following information:

The parties responded on 2 October 2017.

Position of Parties

Telelatino stated that SaskTel’s decision to remove TLN from its list of services would have a significant impact on TLN, and would not be consistent with the letter and spirit of the Broadcasting Act.  According to Telelatino, the service has been carried by SaskTel since 2004 and has over 13,000 subscribers.  It argued that the financial impact on TLN and the impact on its subscribers would be significant should SaskTel remove the service.  It also noted that SaskTel currently offers some ten multicultural channels on both a standalone and pre-determined package basis.  Telelatino stated that SaskTel has not been willing to negotiate any new terms and that it cannot understand SaskTel’s arbitrary decision to unilaterally remove TLN without any notice or the opportunity to discuss the matter further.  In its 2 October 2017 letter, Telelatino also requested staff-assisted mediation.

In its 2 October 2017, SaskTel submitted that there is no dispute between the parties within the meaning of either the BDU Regulations or the Discretionary Regulations.  It noted that TLN no longer has genre protection or carriage rights.  It stated that it has determined that it does not want to enter into an agreement to carry the service, therefore, in its view, no questions of carriage or terms of carriage have arisen that can be the subject of a dispute.

In a letter dated 5 October 2017, SaskTel indicated that, for similar reasons, it did not support Telelatino’s request for staff-assisted mediation.

Analysis and Determinations

The Commission’s dispute resolution regime is designed to ensure a healthy and dynamic wholesale market, one in which negotiations are conducted fairly and in good faith.  Similarly, the standstill rule was put in place to level the field during negotiations between programmers and distributors and to ensure that subscribers are not deprived of services while parties are engaged in negotiations.

The Commission is prepared to intervene where it finds that parties are acting in an anti-competitive manner.  Such targeted intervention may be necessary to ensure a healthy, dynamic retail market that maximizes consumer choice and flexibility and provides Canadians with access to a diverse range of programming.

The BDU Regulations contemplate dispute resolution on the question of carriage as well as disputes regarding terms of carriage (including rates, packaging, marketing).  Therefore, the parties are indeed in a dispute, and, under the standstill rule, SaskTel is required to distribute TLN at the same rates and on the same terms and conditions as it did before the dispute, until the parties resolve their dispute or the Commission issues a decision concerning this unresolved matter.

SaskTel is correct that TLN no longer has access rights. This means that SaskTel is under no obligation to carry the service. Further, the Commission did acknowledge in its Let’s Talk TV framework that with an increased reliance on market forces for the distribution and packaging of discretionary services, and an environment marked by greater subscriber choice, some services may not survive.  At the same time, the Commission is conscious that in the absence of carriage rights, dispute resolution is the last resort for programming services.  Accordingly, consistent with the approach applied in Decisions 2016-38 and 2016-74 regarding the continued carriage of Avis de recherche, the Commission must be assured that the programming service has had a fair chance at negotiation and that the BDU has valid commercial reasons for its decision to terminate the affiliation agreement.

In this case, the Commission has received no assurances from SaskTel that there has been a fair commercial negotiation or that SaskTel has valid commercial reasons for dropping the service.

Under these circumstances, the Commission wishes to ensure that the parties fully engage in a conversation about whether or not the service should continue to be carried, and if so, under what terms and conditions.

Accordingly, in accordance with section 12(4) of the BDU Regulations, the Commission requires the parties to participate in a mediation with Bernard Montigny, Senior Director, Dispute Resolution.  Mr. Montigny’s staff will be in touch shortly to confirm dates.

Yours sincerely,

Scott Hutton
Acting Secretary General

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