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Broadcasting - Secretary General Letter addressed to Peggy Tabet (Quebecor Media Inc.) and Jonathan Daniels (BCE Inc.)

Ottawa, 15 May 2024

BY E-MAIL

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

Jonathan Daniels
Vice-President
Regulatory Law
BCE Inc.
jonathan.daniels@bell.ca

Re: Request for final offer arbitration (2024-0157-9) with respect to the distribution of RDS and its multiplex RDS 2 and TVA Sports and its multiplex TVA Sports 2 and 3

Dear parties:

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 following requests for Final Offer Arbitration (FOA):

This letter sets out the matters 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 17 November 2023, Bell requested that the Commission immediately start the FOA process concerning the distribution of RDS and TVA Sports # #.

The parties agree that this case meets all the criteria for FOA set out in paragraph 4 of the Bulletin:

Commission Decision

Upon review of the record, the Commission considers that FOA is an appropriate method of dispute resolution in this case, as the dispute is exclusively monetary, involves two vertically integrated Broadcasting Distribution Undertakings and otherwise meets the criteria for dispute resolution set out in paragraph 4 (as listed above). Furthermore, the Commission considers that a simultaneous approach to FOA for the distribution of the above services, would be the most expedient and effective course of action (i.e. Quebecor will submit one offer for TVA Sports and one offer for RDS, while Bell will do the same for the services as well).

Accordingly, the Commission accepts the present application for FOA and will proceed with a simultaneous FOA for the services as explained above.

In accordance with paragraph 22 of the Bulletin, the matter upon which the Commission will make a determination is as follows (FOA scope):

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, in its entirety.Footnote1 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 3 June 2024. 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. 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.Footnote2

Quebecor:

To complete the record, Quebecor must provide the following information, by 3 June 2024Footnote3:

  1. The affiliation agreement between Quebecor and Bell for the distribution of RDS currently in force and any applicable amendment (or whatever term sheet may apply);
  2. The wholesale rates, including associated multiplatform rights, paid by Quebecor for RDS when offered in a preassembled and/or build-your-own package (as applicable);
  3. The average monthly number of subscribers to Quebecor licensed and exempt BDUs, and the average monthly number of subscribers to RDS, in preassembled and/or build-your-own package (as applicable);
  4. The retail rate for packages (including build-your-own) offered by Quebecor that include RDS;
  5. Quebecor’s subscribers’ viewership of RDS via set-top-box data, including average minute audience and the total number of hours watched (as available);
  6. The wholesale rates paid by Quebecor for other comparable services (Canadian and foreign) in a preassembled and/or build-your-own package (as the case may be);
  7. The average monthly number of subscribers (linear and multiplatform) to each comparable service (Canadian and foreign) distributed by Quebecor;
  8. The retail rate, both for preassembled and build-your-own packages (as applicable) on each comparable service (Canadian and foreign) distributed by Quebecor; and
  9. Quebecor subscribers’ viewership to all other comparable services offered by Quebecor (e.g., set top box data, average minute audience, total number of hours watched).

In addition, Quebecor must also provide:

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

Bell

To complete the record, Bell must provide the following information by 3 June 2024Footnote4Footnote5.

  1. Theaffiliation agreement between Bell and Quebecor for the distribution of TVA Sports currently in force and any applicable amendment (or whatever term sheet may apply);
  2. The wholesale rates, including associated multiplatform rights, paid by Bell for TVA Sports when offered in a preassembled and/or build-your-own package (as applicable);
  3. The average monthly number of subscribers to Bell licensed and exempt BDUs, and the average monthly number of subscribers to TVA Sports, in preassembled and/or build-your-own package (as applicable);
  4. The retail rate for packages (including build-your-own) offered by Bell that include TVA Sports;
  5. Bell subscribers’ viewership of TVA Sports via set-top-box data, including average minute audience and the total number of hours watched (as available);
  6. The wholesale rates paid by Bell for other comparable services (Canadian and foreign) in a preassembled and/or build-your-own package (as the case may be);
  7. The average monthly number of subscribers (linear and multiplatform) to each comparable service (Canadian and foreign) distributed by Bell;
  8. The retail rate for preassembled or build-your-own package packages on each comparable service (Canadian and foreign) distributed by Bell; and
  9. Bell subscribers’ viewership to all other comparable services offered by Bell (e.g., set top box data, average minute audience, total number of hours watched).

In addition, Bell must also provide:

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

By 10 June 2024, 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 offer. Should clarification questions be required, staff will notify the parties and specify the timeline for a response.

The parties will have until 25 June 2024 to file comments on the other party’s final offer with the Commission, and to serve a copy of those comments on the other party. However, neither party will be authorized to amend its offer.

If necessary, Commission staff will communicate with the parties to schedule a 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” on that same webpage and quoting the application number 2024-0157-9.

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

Responsibilities of the parties

The parties may contact Martin Joly at 613-290-0438 or at martin.joly@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”, including referencing the appropriate application number, the parties must send copies of all the documents in question to Differends-disputes@crtc.gc.ca and martin.joly@crtc.gc.ca.

Yours sincerely,

Marc Morin
Secretary General

CC

Frédérique Couette, Quebecor, frederique.couette@quebecor.com
Anais Beaulieu, Quebecor, anais.beaulieu@quebecor.com
Bell.regulatory@bell.ca
Scott Shortliffe, CRTC, scott.shortliffe@crtc.gc.ca
Daniel Pye, CRTC, daniel.pye@crtc.gc.ca
Martin Joly, CRTC, martin.joly@crtc.gc.ca
Valérie Dionne, CRTC, valerie.dionne@crtc.gc.ca
Jonathon Greenberg, CRTC, jonathon.greenberg@crtc.gc.ca
Julie Moreau, CRTC, julie.moreau@crtc.gc.ca
Lina Cipro, CRTC, lina.cipro@crtc.gc.ca

Procedural Appendix

Information Bulletin CRTC 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 following naming convention in filing documents via GC key:

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

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:
    1. to result in material financial loss or gain to any person;
    2. to prejudice the competitive position of any person; or
    3. to 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.

[These sections are only an excerpt of the applicable Rules.]

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