The Canadian Radio-television and Telecommunications Commission (CRTC) should keep public policy out of commercial negotiation disputes, according to Bell Canada Enterprises.

The Bell parentco appeared in front of commissioners on day one of the CRTC’s market dynamics hearing in Gatineau, Que., kicking off nine days of testimony on the sustainability of Canada’s broadcasting system.

In the company’s opening remarks, Ben Keys, director of content distribution at Bell Media, argued that it has become “increasingly challenging for parties to reach mutual agreement” in BDU negotiations. Part of the problem, according to Bell, is that the CRTC uses conflict resolution to achieve public policy objectives, rather than focus on commercial outcomes. Keys also criticized delays in the CRTC’s decision-making process and its reluctance to move to arbitration.

The company recommended that negotiations have a prescribed timeline, after which disputes will automatically move to arbitration, as well as have arbitration conducted by “independent commercial arbitrators” to ensure outcomes are based on commercial factors.

When Joanne Levy, commissioner for Manitoba and Saskatchewan, pushed back on the proposal, stating that public policy objectives are “fundamental” to what the CRTC does, Mark Graham (pictured), Bell’s SVP, legal and regulatory affairs, clarified that the company is not seeking a change to the wider regulatory framework as a whole, just in wholesale relationships between programmers and BDUs.

Among Bell’s other proposals is the creation of a fund for 9.1(1)(h) services such as APTN, AMI-tv and CPAC, paid into by both traditional and online undertakings as part of their contribution requirements. The fund would better support the must-carry channels by moving away from mandatory wholesale fees from BDU subscriptions, argued Jonathan Daniels, Bell’s VP, regulatory law, as revenues decline from continued cord-cutting.

Levy questioned the Bell executives on the sustainability of linear broadcasting and whether their proposals would create “stasis” in the system by focusing on the “commercial interests of big players,” adding that the CRTC’s modernization work is “not about shifting the deck chairs on the Titanic.”

Graham argued that achieving many of the CRTC’s policy objectives requires the health of the broadcasting system. “You want the traditional system to be commercially successful … to attract subscribers and increase audiences,” he said.

When asked about the opportunities for new channels and business in linear, Graham said companies are looking to the online ecosystem to grow their business. Steve Cummings, Bell’s VP, content distribution, pointed to the growth of free, ad-supported TV (FAST) channels as a key area of growth in the industry in the last few years, partially due to the lack of regulation in that space.

FAST channels were also addressed in the testimony from the Independent Broadcast Group (IBG), which represents the interests of several indie broadcasters in Canada.

OUTtv CEO Brad Danks said that, while the volume of FAST channels has rapidly increased in the last few years, the monetization of those channels has been slow. To avoid the concern of FAST channels cannibalizing its other services, OUTtv has kept its most premium content on linear and SVOD.

One core argument from IBG was that the biggest barrier for growth for smaller broadcasters isn’t necessarily access to online platforms, but fair negotiations with Canadian BDUs. Stingray strategic advisor Luc Perreault said the company has been able to expand internationally through deals with Sony and car manufacturers in Europe, Asia and the U.S., but the company wants to keep its base in Canada.

“What we’re looking for is stability and predictability within the Canadian system so we don’t have to spend so much time and energy fighting with the BDUs to maintain what revenue we have now so we can make the investments necessary to build online,” said Danks.

The testimony from IBG also touched on the topic of television manufacturers, with legal counsel Joel Fortune claiming that manufacturer revenues are largely drawn from advertising from FAST and other ad-supported channels rather than physical TV sales. Fortune suggested that manufacturers could be subject to regulation using the $25 million Canadian broadcasting revenue threshold currently imposed on foreign-owned online undertakings.

“We’ve seen [manufacturers] as a growing part of the distribution network,” said Danks. “Samsung says they have over one billion views a day … they’ll be growing as important players within our market, so they have to be identified as more on the platform side than the device.”

IBG members also argued for more data transparency between platforms and indie broadcasters. Danks said there are no rules around data gathering in the online space, so content providers see very little information about the performance of their programs. Fortune argued that there should be a standardized approach similar to how Numeris operates for linear, providing daily program data on a weekly basis.

The hearing process continues on Thursday (June 19) with appearances from Quebecor Media, the Youth Media Alliance and Stingray Group, among others. The hearing will conclude on July 4.

Image courtesy of CPAC