CRTC’s New Vertical Integration Rules Won’t Stop the Price-Gouging, OpenMedia says

The CRTC’s decision on vertical integration today is nothing more than a "half-measure," according toO penMedia.ca.

While the examination of vertical integration was an important step in itself, the results are less than impressive, the organization believes. The code of conduct established today prevents some anti-competitive content hoarding, but the CRTC is "still allowing companies to offer exclusive Internet and mobile content to their customers, unless it was originally produced for television or another unrelated medium," CRTC states in a release.

The term "vertical integration" refers to companies that own both content and the methods of distributing it. Excessive vertical integration can mean there would be nothing to prevent big companies from hoarding and giving preferential treatment of their content, thereby creating an anti-competitive content environment. The CRTC had issued this review of vertical integration following their approval of Shaw’s acquisition of Canwest Global in October, and Bell’s acquisition of CTV one month earlier.

The CRTC’s measures fail to meaningfully address the reality that concentration in Canada is extremely high by global standards. For instance, four companies—Bell, Shaw, Rogers and QMI—control 86% of cable and satellite distribution, 70% of wireless revenues, and 54% of Internet Service Provider revenues. 

 “With this kind of power, the Big Four has both the incentive and the means by which to exercise undue preference when it comes to content,” says OpenMedia.ca executive director Steve Anderson, “and to price-gouge Canadians in the markets they jealously cling to. Without strong rules from the CRTC, large vertically integrated corporations will severely impede competition in Canada, and ultimately prevent Canadians from accessing diverse content.”