Search

Broadcasting - Commission Letter addressed to Pamela Dinsmore (Rogers Cable Communications Inc.) and Brian Cuff (WildBrain Ltd.)

Ottawa, 6 September 2022

By email

Pamela Dinsmore
Vice-President, Regulatory - Cable
Rogers Cable Communications Inc.
pam.dinsmore@rci.Rogers.com

Brian Cuff
Vice President, Television Distribution
& Strategic Partnerships
WildBrain Ltd.
brian.cuff@wildbrain.com

Re: Request for final offer arbitration (2022-0491-5) with respect to Family

Dear Pamela Dinsmore and Brian Cuff:

Pursuant to sections 12 to 15 of the Broadcasting Distribution Regulations, sections 14 and 15 of the Discretionary Services Regulations,and Broadcasting and Telecom Information Bulletin CRTC 2019-184 (the Bulletin), this letter is to advise the parties that the Commission accepts the request by Rogers Communications Canada Inc. (Rogers) for final offer arbitration (FOA) with WildBrain Ltd. (WildBrain).

This letter sets out the matter upon which the Commission will make a determination, the dates upon which the FOA process is to be conducted, 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).

The application

On 21 July 2022, the Commission received a request for FOA from Rogers with respect to the discretionary programming service branded as Family, pursuant to sections 12 to 15 of the Broadcasting Distribution Regulations, for the purpose of:

Rogers further asserted that this case meets all of the criteria for FOA set out in paragraph 4 of the Bulletin:

On 29 July 2022, WildBrain replied in support of the FOA request, but disagreed with the scope noted above. In summary, WildBrain proposed an expanded scope to include Family Jr., # #, and an acquisitions clause. WildBrain’s proposed scope includes:

Further correspondence was exchanged between the parties relating to the scope of the FOA. Rogers rejected WildBrain’s proposal to include a second discretionary TV programming service (Family Jr.) as inconsistent with the Commission’s past practice, and unduly increasing the complexity for the parties and the Commission. WildBrain asserted that the treatment of Family and Family Jr. “as a whole” for regulatory purposes is reflected in its combined licence and financial reporting for the two services (Family and Family Jr.).

In turn, Rogers argued that WildBrain’s request to # #, as well as the # # standard for renewing affiliation agreements in order to respond to the “massive upheaval” in the broadcasting industry. WildBrain referenced the intent of Let’s Talk TV Footnote3 to foster a “healthy wholesale market” as favouring a # # and the commercial stability it may provide.

Rogers maintained that a non-monetary provision relating to its potential acquisition of new BDU systems would expand the scope of the FOA beyond what was contemplated in (paragraph 4) of the Bulletin (namely that “the dispute concerns monetary issues only”). Rogers also argued that the terms of the new affiliation agreement, including a potential acquisitions clause, will be negotiated post-FOA and subject to Wildbrain’s consent. WildBrain countered that its proposed acquisitions clause is indeed a monetary provision as it specifies who will be subject to the rates accepted by the Commission.

Commission Decisions

Upon review of the current record, the Commission considers that FOA is an appropriate method of dispute resolution in this case, as the dispute is exclusively monetary, involves two parties (Rogers and WildBrain), and otherwise meets the criteria for dispute resolution set out in the Bulletin (and listed above).

The Commission therefore accepts Rogers’ application for FOA. In accordance with paragraph 22 of The Bulletin, the matter upon which the Commission will make a determination is as follows.

The Commission hereby notifies the parties that other matters relating to the distribution of Family and Family Jr. (or other WildBrain services) by Rogers will not be considered in this proceeding and are left to negotiation between the parties, including with the assistance of Commission staff, if necessary.

In the final offers to be submitted, the parties’ proposals must be consistent with the Commission’s characterization of the matter in dispute, as noted above. Staff may ask the parties to respond to clarifying questions following the submission of final offers, as needed, to ensure a complete record for Commissioners to make a determination.

The Commission will examine the final offers submitted by the parties and will select one for each service (Family and Family Jr.) in its entirety Footnote4 . The Commission’s decision will be binding on the parties.

Documents to be provided

The Commission requires that the parties each file their final offers with the Commission by 23 September 2022. A confidential template in Excel format is appended to facilitate the transmission of this information when applicable. Please refer to the attached Procedural Appendix for the procedure to be followed in the filing of documents, in addition to the Bulletin.

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, and justify their relative importance in this instance. As noted in the Interpretation of the Wholesale Code, Broadcasting Information Bulletin CRTC 2022-140, 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 that end, the parties can make submissions on which public policy objectives are relevant to this case. Footnote5

To complete the record, Rogers must also provide additional information, as set out below, by 23 September 2022. As applicable from # # please provide:

  1. the corresponding affiliation agreements and any applicable amendments (or whatever term sheets that may apply) between Rogers and WildBrain for the distribution of Family and of Family Jr.;
  2. the wholesale rates paid by Rogers for Family and for Family Jr., including associated multiplatform rights, when offered in preassembled and/or build-your-own package (as applicable);
  3. the average monthly number of subscribers to Rogers’ licensed and exempt BDUs, and the average monthly number of subscribers to Family and to Family Jr., in preassembled and/or build-your-own package (as applicable);
  4. the retail rate for packages (including build-your-own) offered by Rogers that include Family and/or Family Jr.;
  5. Rogers’ subscribers’ viewership of Family and of Family Jr. via set-top-box data, including average minute audience and the total number of hours watched (as available);
  6. the wholesale rates paid by Rogers for comparable services (Canadian and foreign), in preassembled and/or build-your-own package (as applicable);
  7. the average monthly number of subscribers to each comparable service (Canadian and foreign) distributed by Rogers;
  8. the retail rate for packages on each comparable service (Canadian and foreign) distributed by Rogers; and,
  9. Rogers’ subscribers’ viewership to all comparable services offered by Rogers via set-top-box data, including average minute audience and total number of hours watched (as available).

To complete the record, WildBrain must also provide additional information, as set out below, by 23 September 2022. As applicable from # # please provide:

  1. affiliation agreements in effect between WildBrain and other BDUs in the Canadian market for the distribution of Family and of Family Jr.;
  2. the wholesale rates broken down by distribution in a preassembled and/or build-your-own package (as applicable) for each BDU (other than Rogers) that distributes Family and/or Family Jr.;
  3. the average number of subscribers and actual penetration levels for each BDU (other than Rogers) that distributes Family and/or Family Jr.;
  4. the monthly number of subscribers and the monthly cost of each subscription, as applicable, for over-the-top (OTT) services provided directly by WildBrain (excluding services provided through a BDU and day-pass data);
  5. subscribers’ viewership of Family and of Family Jr. via set-top-box data, including average minute audience and the total number of hours watched; and,
  6. total payments received by WildBrain from each BDU (including Rogers) that distributes Family and/or Family Jr.

By 30 September 2022, once Commission staff has confirmed that the offers respond to the identified scope of the proceeding, they will forward to each party a copy of the other party’s offers. Should clarification questions be required, staff will notify the parties and specify the timeline for a response.

The parties will have five days following receipt of the other party’s offers, to file comments with the Commission on the other party’s final offers, and to serve a copy of those comments on the other party. However, neither party will be authorized to amend its offers.

As soon as possible after the filing of comments, Commission staff will communicate with the parties to schedule a mandatory mediation session to support reaching a mutually-beneficial solution. Should the mediation not be successful, the Commission will proceed to render its final decision.

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 and quoting the application number 2022-0491-5.

A redacted copy of this letter will be added to the public record.

Responsibilities of the parties
The parties may contact Anastasia Gould at 819-962-6434 or at Anastasia.Gould@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 received, not merely sent, by that date. In addition to filing with the Commission via “My CRTC Account”, the parties must also send copies of all the documents in question to Differends-disputes@crtc.gc.ca and to Anastasia.Gould@crtc.gc.ca.

Yours sincerely,

Claude Doucet,
Secretary General

Procedural Appendix

Information Bulletin 2019-184 sets out the practices and procedures to be followed in FOA (par. 17-33), as well as matters relating to the filing of documents and confidentiality (par. 58-64). Parties should be aware that any deviation from the FOA process may result in delays to the applicable timelines.

Filing of documents

Parties must follow the naming convention noted below when filing documents via GC key.

Application number – FOA – Filing party – Document name – Document version – Filing date (yyyy-mm-dd)

In the confidential CRTC version, parties are to highlight any text that is designated confidential: in green to denote confidential to the other party, and in yellow to denote confidential to the public.

Confidentiality

In accordance with paragraph 59 of Information Bulletin CRTC 2019-184, 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 2010-961.

Subsection 31(1) of the Rules provides that in broadcasting matters, a party may designate information related to the following as confidential:

  1. information that is a trade secret;
  2. 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,
  3. information the disclosure of which could reasonably be expected to:
    1. result in material financial loss or gain to any person;
    2. prejudice the competitive position of any person; or
    3. affect contractual or other negotiations of any person.

Subsection 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.

[Note that these sections are only an excerpt of the applicable Rules.]

Date modified: