BDUs say Shomi has not been made available

Some companies have disputed the notion put forward by Rogers Communications Inc. and Shaw Communications Inc. that their video-streaming service Shomi has been made available to other service providers. In filings to the CRTC that were due this week in an undue-preference complaint against Shomi, Telus Corp. said that Rogers and Shaw did not make Shomi “available to BDUs other than Rogers and Shaw in a timely manner.” It said that when BCE Inc. offered its CraveTV service to other TV providers, it did so with “sufficient notice to facilitate commercial negotiations and allow BDUs to undertake the operational work necessary to properly ingest the content into their own BDU platforms to meet a common launch timeline.” In comparison, Rogers and Shaw “provided extremely limited notice to other BDU’s of launch,” even though as operators of VOD services themselves, they are “well aware of the time and effort that is necessary to launch a new SVOD service.” “It is therefore clear to TELUS that Rogers and Shaw had every intention of leveraging their content ownership to grant themselves an anti-competitive temporary exclusive by making it next to impossible for other BDUs to negotiate a commercial agreement and operationalize the service to launch simultaneously with Rogers and Shaw.” Telus said that Rogers and Shaw are “exclusive providers” of Shomi and that such “a blatant violation of consumer choice … should not be tacitly condoned by the Commission,” asking the CRTC to find that the companies violated the digital media exemption order. Telus argued that Shomi’s launch is “an attempt to circumvent the vertical integration safeguards set out in the DMEO.” Rogers and Shaw told the CRTC that the undue preference complaint regarding their streaming service, launched by the Public Interest Advocacy Centre (PIAC), is “completely unfounded” in part because Shomi is available to other TV and Internet service providers. In a joint intervention, Rogers and Shaw said that the claim that Shomi “has been made available exclusively to Rogers and Shaw is simply untrue,” and that the service is “currently available to any terrestrial and any third-party Internet service provider (ISP) that enters into an agreement with to give its subscribers access to the platform.” It added: “On that basis alone, PIAC’s unfounded accusations that is conferring an undue preference on Rogers and Shaw, or that the availability of is tied to a subscription to a Rogers or Shaw cable or Internet service, must be dismissed.” The Part 1 application by PIAC argues that by tying access to Shomi with Rogers or Shaw Internet or TV subscriptions, the companies are conferring an undue preference on their own services and discriminating against other providers. At the moment, only Rogers' and Shaw’s cable or Internet customers can subscribe to the service. The companies said that making Shomi accessible directly to all Canadian consumers over the Internet, as they announced last week would happen this summer, was “always the plan.” The companies said they had presented “terrestrial BDUs … with an offer and rate card for ,” though they noted that the recent announcement that Shomi will be available to consumers directly online “has probably made the offer less attractive to BDUs.” Shomi's owners said that “PIAC’s complaint is completely unfounded and is based entirely on a misleading and mistaken characterization of ’s distribution model and its phased deployment, and a misinterpretation of the applicable regulatory regime.” Eastlink said it agreed with PIAC that Rogers and Shaw are subjecting other providers to an undue disadvantage and took issue with the claim that they are engaged in negotiations to make Shomi available through other providers’ VOD services. “While the Shomi Partnership did send Eastlink a preliminary rate card, it has consistently indicated to us that it is not yet in a position to provide full contract terms,” Eastlink said. “Accordingly, it is clear that Rogers and Shaw had no intention of making available to independent BDUs/ISPs, and their customers, in a timely manner.” Independent ISP TekSavvy Solutions Inc. said in its intervention that “Shomi is not known to have made an offer to all other Canadian Internet access providers to make its programming available to our end-users. TekSavvy, for instance, received no such offer.” TekSavvy said that restricting access “to a portal combining a broad range of blockbuster television programming, which the Shomi partners were able to assemble as cross-platform rightsholders, to particular Internet access providers” is “exactly the kind of platform exclusivity that the seeks to guard against.” The Canadian Networks Operators Consortium said that through the “tied-selling” of Shomi, Rogers and Shaw are conferring an undue preference on themselves, which then “manifests as unjust discrimination against independent ISPs and their subscribers.” “Even if Rogers and Shaw eliminate their unlawful practices going forward, they will still benefit from a significant head start, in contravention of section 7 of the DMEO. For independent service providers, this head start translates into a loss of customers and missed opportunities to attract new customers,” CNOC argued. Rogers and Shaw have characterized its launch since last November as "beta" testing of the service, and said in their intervention it would have been “completely irresponsible” to fully launch Shomi without testing it this way. It said a streaming service is “not like launching a programming service that relies on decades-old technology that has been tried and tested.” If Shomi had launched fully without such testing, and failed to meet customer expectations, those customers may not have been willing to try the service again, the companies argued, stating that the service’s “long-term success and viability … depends on a smooth commercial launch.” They added that Shomi has been available to other TV and Internet service providers “even during the beta testing phase.” “The fact that has not concluded a distribution agreement with any other BDUs and ISPs does not change the fact that it is being made available and discussions with potential distribution partners are on-going,” the companies said. They added that Shomi can’t be made available directly to consumers right now because it doesn’t have its own billing system yet, and must rely on the billing services of partner TV or Internet providers. The companies asked the CRTC to keep the planned date when the service will become available directly to Canadians confidential. The two companies clarified that Shomi will operate under the CRTC’s proposed new VOD hybrid model, which allows services to offer exclusive content to certain TV service providers and operate under the digital-media exemption order, as long as they also offer that content online to all Canadians. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

BDUs say Shomi has not been made available

News | June 4, 2015

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BDUs say Shomi has not been made available

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