With TV, Telus suddenly a big fan of regulation

29 Apr

You have to feel bad for Telus. Really, you do. After losing out to its wireless/internet/television provider rivals in the sweepstakes to snap up every major television broadcaster in the country, the company has gone crying to regulators to make sure the TV playing field stays even. It’s sort of like Telus wasn’t attractive enough to score a date to the prom, so now it’s asking for special rules to ensure it still gets to dance with someone.

Over the past few years, Canada’s big telecom companies have kept themselves busy “converging” by snapping up TV broadcasters. Quebecor, which owns French media assets and telecom provider Videotron, has been joined by Rogers (which bought Citytv), Bell (which bought CTV) and Shaw (which bought Global). Each company went out and got themselves a broadcaster for the purpose of having some special advantage in their telecom business. Telus, meanwhile, got shut out and is on the outside looking in.

The company has now asked the CRTC to enact rules that would prohibit these companies from discriminating against competitors with things like exclusive rights and preferential treatment. The ultimate fear is, of course, that such discrimination will lead to a situation where consumers have to switch TV providers just to watch their favourite show.

Telus is right, in a sense. Left to their own devices, it’s a situation the companies will inevitably devolve into.

But it’s hard to take the appeal seriously given the source. The run-up to the 2008 wireless spectrum auction, where the big debate was whether new companies should get a regulatory hand-out in the form of reserved airwaves, comes to mind. Telus naturally opposed such a move and in a letter to the Ottawa Citizen headlined “Government should let market decide spectrum auction” said:

We strongly believe that the competitive playing field should be free from government intervention so that companies can compete fairly for customers. Over the span of a few years, Telus evolved from a regional provider of wireless services in Alberta and B.C. to a leading national carrier. We accomplished this not by seeking regulatory benefits, but by investing more than $7 billion in a national wireless network that delivers advanced wireless services like mobile TV and satellite radio across the country.

Hmm. It seems Telus could have avoided its current TV predicament by following market forces and buying its own broadcaster. Better yet, if the company is such a staunch believer in the market, why doesn’t it start its own broadcaster? Why go crying to the regulator?

While the company does have a point, that this sort of vertical integration is theoretically dangerous, in reality it doesn’t really matter because the future of television doesn’t lie with broadcasters anyway. It’s all about Netflix and BitTorrent.

On one front, Netflix and services like it - some of which already exist and some of which have yet to arise - are quickly becoming competitors for the rights to air TV shows and movies. Content producers are increasingly going to have to choose between selling rights to services such as Netflix and traditional broadcasters. On another front, the more that vertically integrated companies try to lock down content through exclusive and discriminatory treatment, the more they will fuel the growth of illegitimate sources.

This can’t be discounted - most people under 30 are quite comfortable, morally and technologically, in using BitTorrent to acquire their content. When it comes to how people want to get their TV shows and movies, it’s perhaps best to paraphrase the Borg from Star Trek: The Next Generation: broadcasters are irrelevant, laws are irrelevant, regulations are irrelevant. Telus’s crying to the regulator, while rich, is also irrelevant.


2 Responses to With TV, Telus suddenly a big fan of regulation

  1. Hub

    April 29, 2011 at 11:17 am

    The future of television still lies within broadcast. Just that they will have to change how they broadcast. Keep on thing in mind: broadcaster are still the one who “own” the right to programing. Want to watch the latest CSI? Ask CTV. Want to watch the latest House? Ask Global. And so on. And that’s what Telus is having issues. It is also part of the issue that Netflix has given that the deal in the US are not the same in Canada.

    Naturally, the broadcasters, as right holders have a lot of leverage. But they will get a fierce competition on both content and service. That’s why Netflix is entering the production business: they need exclusive content to attract more viewer.

    As for Telus crying about it, well, they just deserve it. They have been playing ball in the telecom monopoly game. They just don’t get the ball in that game. Maybe they should realize they should be different from the others.

  2. Marc Venot

    April 29, 2011 at 4:34 pm

    “why doesn’t it start its own broadcaster?”
    Would they be allowed to present the Blizzard products (WoW, Starcraft, …) like in South Korea? then the price to enter would be minimal with a large clientele.


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