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Broadcasting - Procedural Letter addressed to Jonathan Daniels (Bell Canada) & Peggy Tabet (Quebecor Media Inc.)

Ottawa, 2 September 2022

Sent by Email

Jonathan Daniels
Vice President, Regulatory Law
Bell Canada
Jonathan.daniels@bell.ca
bell.regulatory@bell.ca

Peggy Tabet
Vice-president, Regulatory and Environmental Affairs
Quebecor Media Inc.
Tabet.peggy@quebecor.com

Re: Part 1 Application (2022-0550-0) by Bell Media regarding the distribution by Videotron of the French-language discretionary services, Vrak.tv and Z

Dear Mr. Daniels and Ms. Tabet:

This letter concerns the application filed by Bell Media Inc. (Bell) on 11 August 2022 requesting that the Commission render a decision on allegations of undue preference against Videotron Ltd. (Videotron) concerning the distribution of the French-language discretionary services Vrak.tv (Vrak) and Z (“the Services”).

The purpose of this letter is to establish an expedited process, while providing the applicant and respondent an opportunity to resolve their outstanding issues in a collaborative way. This letter does not set out the Commission’s determinations with respect to the matters alleged in the application or dispose of the arguments raised by the parties.

Bell’s application

In its 11 August 2022 application, Bell indicated that Videotron desired to cease distribution of the Services, and as a result requested that:

  1. The Commission determine that Videotron has conferred an undue preference on itself and a corresponding undue disadvantage on Bell, such that Videotron is prohibited from discontinuing the distribution of the Services unless and until it remedies the undue preference by removing its own discretionary services with worse viewership than the Services; and
  2. The standstill rule apply until the parties resolve their dispute or the Commission makes a ruling.

Bell explained that it is not trying to maintain a de facto access right for the Services and argued that ceasing distribution of the Services will have a “significant negative impact” on the French-language media ecosystem. Consequently, it stated that Videotron's proposed removal of the Services is contrary to section 9 of the Broadcasting Distribution Regulations and constitutes an undue disadvantage or preference contrary to the achievement of the broadcasting policy objectives set out in the Broadcasting Act.

Videotron’s response

On 12 August 2022, Videotron requested that the Commission immediately dismiss the current application without further consideration, and instead, rule on the standstill notice of dispute filed by Bell on 1 June 2022. Videotron argued that Bell has not been subjected to an undue disadvantage and no undue preference has been shown to the services belonging to Quebecor Media Inc. In Videotron’s view, the performance of the Services supports Videotron’s decision to discontinue their carriage, and Bell is attempting to rely on the standstill rule to secure a de facto access right. Videotron further argued that Bell is attempting to force it to continue to pay royalties for services that it no longer wishes to carry and that if the Commission accepts the filing of the undue preference application, this will cause Videotron an undue disadvantage.

Videotron requested that the Commission:

Considerations

While Videotron has asked that the application be dismissed immediately, according to the CRTC Rules of Practice and Procedure, undue preference complaints are considered Part 1 applications and as such, must be published and processed according to the Commission’s normal procedures. Commission staff acknowledges that this extends the application of the standstill rule, despite its best effort to expedite the process, but due process dictates the next steps.  That said, Videotron has raised valid arguments about the possibly abusive timing of Bell’s application. Commission staff notes in particular the late filing of the undue preference application before allowing the Commission to render a decision on the standstill dispute. Therefore, Commission staff is expediting the deadlines as described below, and will process the application in as timely a manner as possible.

The Commission’s dispute resolution regime, enacted pursuant to section 10(1)(h) of the Act, is designed to ensure a healthy and dynamic wholesale market, and maintain a level playing field during negotiations to foster outcomes that serve the public interest and advance the objectives of the broadcasting policy for Canada. That said, the Commission generally expects parties to make reasonable efforts to resolve their disputes before bringing such matters to the Commission for disposition.

In staff’s view, the course of action that would best serve the public interest and make most efficient use of Commission resources would be for both parties to return to bilateral dialogue to fruitfully resolve all pending matters as regards the Services. Commission staff is concerned that there may have been insufficient constructive engagement between the parties, particularly in relation to these services, as suggested by the lack of evidence of recent meaningful negotiations and the sudden announcement of the dropping of services without prior warning.

Therefore, the parties are strongly encouraged to return to the mediation table at their earliest convenience to seek a mutually acceptable resolution to this dispute.

Procedural directions

Staff notes that the standstill rule remains in effect until such time as the parties resolve their dispute or the Commission renders a decision on any unresolved matter. The temporary application of the standstill serves to ensure subscribers are not deprived of the Services while the parties are in dispute and while the Commission considers Bell’s undue preference complaint.

As noted above, staff expects the parties to return to mediation as soon as possible and to report back on the progress of their negotiations no later than 30 September 2022. The mediation team will be in touch to find mutually acceptable dates.

In order to expedite the consideration of Bell’s application, the following deadlines will apply:

Interventions and Videotron’s Answer: 12 September 2022
Reply by Bell: 19 September 2022

A copy of this letter, Bell’s application, Videotron’s 12 August response, and submissions filed as part of the process established in this letter will be added to the public record of the proceeding. Any correspondence, argument or justification filed as part of other or prior Commission dispute resolution processes regarding the Services will not be considered.

Sincerely,

Amy Hanley
A/Executive Director
Broadcasting

cc: Bernard Montigny
Patricia Prince

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