The commercial relationship between BDUs and content providers took centre stage at the Canadian Radio-television and Telecommunications Commission (CRTC) hearings on the broadcasting system in Gatineau, Que. last Friday (June 20).

Representatives from Rogers Communications argued in their opening remarks that the Commission should heavily reduce the volume of regulations on broadcast distribution undertakings (BDUs), relying on “market forces to achieve broadcasting policy objectives, whenever possible,” according to Bret Leech, president of residential services at Rogers.

Among the proposals is a reduction of Canadian ownership groups’ contributions to 5% of revenues, equivalent to the decision set out for foreign-owned online undertakings. Currently, large Canadian BDUs are required to contribute 30% of revenues. The reduced contributions should include the cost of 9.1(1)(h) wholesale fees as well as apply to local news programming, said Dean Shaikh (pictured), Rogers’ SVP, regulatory affairs.

On the topic of conflict resolution, Susan Wheeler, Rogers’ VP, regulatory, broadcasting, said the CRTC should limit its scope of involvement on commercial disputes, echoing Bell’s earlier call for faster decision-making through arbitration. Wheeler also called for changes to the standstill rule, stating that Rogers has been “subject to multiple standstills that have frozen carriage and packaging, at expired and highly inflated rates for as long as two years.”

Rogers and Corus Entertainment are in the midst of a dispute over the carriage of several Corus lifestyle channels, including Home, Flavour and Slice, with Corus challenging Rogers’ decision to remove Slice from certain packages and move Home and Flavour’s channels. At press time, the channels remain in their current placement and packages due to the standstill rule, a decision that Rogers is challenging at the Federal Court of Appeal.

Similar to Quebecor Media’s proposal, Rogers has called for the standstill rule to be limited to 90 days and only in the context of final offer arbitration.

Corus representatives offered a differing view on the need for regulation in their remarks on Friday, arguing that regulation is necessary while the industry is in a transitional period into a hybrid model of traditional broadcasting and online distribution.

“I don’t think a race to the bottom of regulations is where we want to go,” said Matt Thompson, Corus’ VP and associate general counsel, regulatory.

Corus, as well as Bell in its appearance on June 18, took the position that Rogers has become the largest player in Canada’s broadcasting system following its acquisition of Shaw in 2023. According to Corus CEO and CFO John Gossling, Rogers has up to 70% of the national subscribership of some of its discretionary services.

“Plainly, Rogers has the market power to decide which channels succeed and which ones fail,” said Gossling.

Joanne Levy, commissioner for Ontario and Manitoba, questioned how some of Rogers’ proposals will support the company in the bigger picture of the content landscape. “It seems odd that the streamers are your major source of competition, yet you seem to want to meet the moment by turning the firing squad internally … [on conflict disputes] with domestic players,” she said.

Shaikh argued that the way to compete with foreign-owned streamers is to provide a “rich variety of innovative programming services.” Flexibility to negotiate certain rates and drop services is necessary to free up investments into other innovative offerings. Leech added that Rogers needs to “ebb and flow” with changing consumer demand.

Rogers Sports & Media president Colette Watson added that Rogers is “perceived as big, therefore bad,” but they “want to come to the table” to give solutions to partners without the need to comply with decades-old wholesale rules.

Discussions with Corus also touched on working with virtual BDUs and connected device manufacturers. Drew Robinson, Corus’ VP, content distribution and revenue management, said negotiations have been “complex,” since they’re not simply about the wholesale rate, but about data, marketing and discoverability, including the ability to add a service like StackTV as a remote control button, as an example.

Thompson argued that a “clear piece of authority” that the CRTC has with the amended Broadcasting Act is to use its undue preference rules to “address competitive imbalances in the market.” Corus’ legal counsel Kevin Goldstein added that the CRTC could create a non-exhaustive list of instances of undue preference to clarify to online undertakings how they might be applied.

Speaking of online discoverability, Thompson suggested that online undertakings should propose how they can make Canadian services more prominent based on their specific business model, rather than seeking a one-size-fits-all method.

In the proceedings, it was also revealed that Corus is no longer the Canadian ad representative for Pluto TV. Gossling told commissioners that the partnership concluded at the end of April.

The hearing will continue on Wednesday (June 25) with appearances from Google, APTN and WildBrain, among others.