TELUS to CRTC: Rogers and Shaw’s Shomi Launch “Anti-Competitive”

Earlier this week TELUS and Eastlink filed complaints to the CRTC, both claiming the “beta” launch of Rogers and Shaw’s shomi streaming service was “anti-competitive”, as it gave the owners an unfair advantage in the race to sign up users, reports The Globe and Mail.

The filings made by TELUS and Eastlink suggest Rogers and Shaw did not try to negotiate with the former in a sincere manner. TELUS gave the example of Bell and their CraveTV streaming service, which provided ample time for TV distributors to line up commercial negotiations and implement it into video-on-demand platforms prior to the announcement.

Rogers and Shaw, on the other hand, “provided extremely limited notice”, which made it nearly “impossible” for other TV distributors to get ready in time for the launch:

“It therefore is 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 [television distributors] to negotiate a commercial agreement and operationalize the Shomi service to launch simultaneously with Rogers and Shaw,”

Eastlink noted in their filing despite a preliminary shomi rate card sent to them by Rogers and Shaw, the latter have “consistently indicated to us that it is not yet in a position to provide full contract terms. Even with the recent announcement, Rogers and Shaw have still not provided a distribution agreement to us for review,” concluding the joint operators had no intentions to make shomi available to independent TV distributors “in a timely manner.”

Rogers and Shaw, in their formal response to the complaint on Monday, argued there was nothing unfair about the beta launch:

“There is absolutely no head-start advantage conferred on Rogers and Shaw during this period. The fact that Shomi has not concluded a distribution agreement with any other [television distributors] … does not change the fact that it is being made available and discussions with potential distribution partners are ongoing,”

The consumer group PIAC previously filed a complaint to the CRTC to say shomi violates the Telecommunications Act and the Broadcasting Act due to its restrictive nature, as it was only available to Rogers and Shaw’s cable TV or Internet customers during its “beta” phase.

Despite Rogers and Shaw recently announcing shomi would exit its beta stage and launch publicly this summer, the CRTC has stated this won’t stop the Commission from hearing about the subscriptions complaint.

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  • CMfly

    Am I the only one confused by this. Why would they even offer it to other companies to sell? Netflix doesn’t offer out it stuff why should Rogers? I can understand why they would want to in order to reach a larger market but I think they are just being nice offering others to resell their service.

  • ojamali

    Netflix is not regulated by CRTC bcc it’s a US based company and operates in Canada under an exemption order by CRTC. Rogers is regulated by CRTC. Part of the requirement of their CRTC license is that Rogers must make the platform available to other broadcasters and ISP’s.

  • CMfly

    Interesting! Why has Rogers not spun off it’s broadcasting to a separate company that complies with the crtc and run the rest of this stuff standalone?

  • CanucksGoals

    You are thinking like a real businessman. LOL! Why doesn’t Rogers own a US broadcasting company and sell its products back to Canada like Netflix?

  • ojamali

    I would like to make a slight correction. Netflix does not operate in Canada at all. It does not have a office or an employee in Canada. Netflix does not benefit from offering any Canadian content either or get any government handouts/grants. Hence it qualifies to participate under the exemption order from CRTC. That’s why you don’t pay any taxes on your netflix subscriptions.

    In my opinion it would be unfair for Rogers to operate as a US based company to compete with Netflix. It would prove to be more beneficial if they instead invested in Netflix and also offering some of their Canadian content on Netflix.

    Instead Rogers and other broadcasters decided to invest their energies and $$$ in somehow blocking (or limiting) Netflix operations in Canada now that the online streaming has proven to be a profitable business and there is incredible demand for it and faces very little risk of failure. The growing pains and risk was all faced by Netflix. At the same time the broadcasters are hurting bc their viewerships are falling and their business of selling eyeballs (advertisements) has been impacted due to the micro segmenting of the mass market into 100’s of TV channels and streaming services (free and paid). Unfortunately their plans backfired when CRTC had the massive argument with Netflix exec and ultimately CRTC decided to let Netflix operate as is — for now.

    I would be opposed to Rogers trying to defeat CRTC by operating from overseas for their streaming service bc Rogers and all other broadcasters have reaped immense rewards by getting govt funds from our tax dollars which helped them expand their cable networks, cellphone towers/networks and various grants for producing And broadcasting Canadian content all while earning advertising dollars along side. It was all fair bc in return these broadcasters did employ a lot of Canadians and created opportunities for numerous other organizations and start ups.