Quebecor complains it was denied wireless Olympic coverage by Bell


Quebecor complains it was denied wireless Olympic coverage by Bell
Jamie Sturgeon | Aug 9, 2012 5:46 PM ET | Last Updated: Aug 9, 2012 7:08 PM ET
More from Jamie Sturgeon | @jasturgeon
Quebecor Inc. executives say the future of Canadian broadcasting has been on full display during the London Summer Games, but only for a select audience: Customers of rival Bell Canada Inc.

On an earnings call Thursday, Quebecor complained that Bell, the country’s largest telecom and media conglomerate, has kept live Olympic programming from being streamed to mobile customers of Quebecor’s wireless and cable unit, Vidéotron Ltee., making real-time viewing of events exclusive to customers of Bell Mobility.

Quebecor said exclusion from the Olympic content came despite the fact that Vidéotron users have access to Bell’s Mobile TV service.

“We did request it. It was refused,” Robert Dépatie, president for the Quebecor division, said. “I’ve got to be careful about what I can say and what I can’t say [but] it was refused. We’re upset about that, by the way.”
Bell’s refusal may violate rules set out by broadcast regulators, who established last September a code of conduct to prevent competing providers from hoarding television content from one another.

While programming made solely for online use is allowed to be offered exclusively, traditional “linear” TV content — like that Bell Media-owned CTV is producing at the Olympics — must be shared between providers regardless of the medium in a regulatory effort to preserve the Canadian broadcast system.

Bell spokesman Scott Henderson said rights for Olympic content were negotiated in 2005 and incorporated exclusive mobile carriage.

“Bell Media content is of course generally available to all carriers on commercial terms. Vidéotron already carries RDS and TSN on mobile for example, and has a VOD (video on demand) deal for Olympic content, which I’m pretty sure they publicly announced,” Mr. Henderson said in an email, adding that that was before the CRTC implemented its vertical integration rules.

“The CRTC confirmed that pre-existing exclusive content arrangements are acceptable. Videotron knew that Olympics were excluded when they purchased RDS/TSN for mobile. Keep in mind that all mobile customers from all providers can access consortium live and on-demand video with access to Wi-Fi – the mobility exclusivity is specifically for Bell Mobile TV subscribers.”

Nevertheless, Quebecor’s chief executive Pierre Karl Péladeau said the company is “reviewing all options” with respect to filing a complaint with the Canadian Radio-television and Telecommunications Commission.
Montreal-based Quebecor owns the biggest cable franchise in Quebec as well as a collection of mostly French-language media assets including the TVA broadcast network. It has been rolling out its own wireless network across its home province since September 2010, acquiring about 8% of the Quebec wireless market from Bell and other national incumbents Rogers Communications Inc. and Telus Corp.

Mobile programming distribution is a nascent business for the country’s integrated operators, which include Rogers and Quebecor. But that is changing, Mr. Péladeau said, with each entity looking to mobile video consumption as a key growth driver.

“Down the road and probably faster than expected the wireless [platform] will be the channel of the future for the distribution of content,” the executive said. “This is the reason why we’ve been investing in the segment.”

A day earlier, George Cope, Bell’s chief executive, said interest in the Games is delivering higher subscription revenues from the company’s Mobile TV service. Bell expects the event to push total subscribers of the service above 500,000 for the first time, each paying $5 for 10 hours of programming.

Quebecor’s Vidéotron is the only carrier that has cut a deal with Bell to carry the Mobile TV service, but the former phone monopoly says it is open for business with other wireless companies who want to negotiate for Bell Media content.

Bell’s decision to prevent Vidéotron mobile customers who have signed up for its TV service from accessing live Olympic coverage comes as the telecom giant seeks approval for the $3.38-billion purchase of Astral Media Inc.

If successful, the deal’s opposers warn that Bell Media would control a dominant share of the broadcast marketplace, allowing the firm to dictate terms to competing providers while using its programming to drive its own telecom businesses.

This week, Mr. Péladeau was joined by Louis Audet, chief executive of Cogeco Cable Inc. and Lee Bragg, the CEO of Atlantic Canada cable operator EastLink — which is preparing to launch a wireless service — in denouncing the merger, which faces public hearings next month.

The Quebecor CEO reiterated his position again on Wednesday. “We’re really seeing an uncompetitive environment taking place,” he said.

“What better way to illustrate the impact of the proposed acquisition of Astral by Bell on the Canadian broadcasting system than to remind you that only subscribers to Bell’s wireless services were allowed to watch on mobile phones the achievements of our great athletes at the London Olympics.”

Quebecor reported Thursday its profit rose 21% in the second quarter on growth in its telecommunications segment.

Net income attributable to shareholders rose to $67-million, or $1.05 per share, from $55.2-million, or 85 cents per share, a year earlier.

Quebecor, which launched a wireless service in late 2010 as the fourth element of a bundled offering that includes landline telephone, Internet and cable television, said revenue rose 3.1% to $1.09-billion. Revenue at its telecom segment rose to $651.8 million from $601.1-million a year earlier.

Adjusted income from continuing operations fell to 77 cents per basic share from 93 cents a year earlier. Shares of the Montreal-based company closed at $34.08 on Wednesday on the Toronto Stock Exchange.

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