BCE says it will drop wireless version of upstart competitor CraveTV as a bundled offering
Cable company BCE Inc. has responded to a national advertising campaign launched by competitors such as Shaw Communications and SaskTel against its merger with Quebecor Inc’s Vérité wireless unit by promising to drop the wireless version of CraveTV, but not immediately.
Canada’s telecom and broadcasting regulator, the Canadian Radio-television and Telecommunications Commission, authorized the $3.65-billion transaction earlier this month but said it would not allow consumers to buy a bundle of services from rivals that includes a telephone, TV, internet or video streaming provider.
Telecom lawyer Robin Thompson said the CTVNext campaign is “the direct result of a petition by Shaw and SaskTel” but he cautioned that there is “nothing in the CRTC’s approval of the acquisition that bar networks from advertising on TV channels and therefore the campaigns are technically permissible.”
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The television ads counter BCE’s CraveTV wireless product with the tagline: “Bell only: Bell has everything — including a really weak wireless network.” BCE has said the product was built for its home wireless customers and was not intended to be a standalone wireless service.
CraveTV CEO Jim Delahanty did not respond to requests for comment but in a letter to the CRTC this week he argued that leaving wireless out of the product is tantamount to blocking competition.
CraveTV is carried by more than 100 TV networks, which is part of Bell’s argument that the deal is necessary to keep distribution a national champion for Bell, leaving Bell’s rivals dependent on Bell for access to channels. Shaw and SaskTel’s filings with the CRTC also argue that many of the channels Bell carries are very popular and do not cover all Canadians and so it’s not economically viable for these competitors to reach the majority of consumers.
The ads also question Bell’s commitment to neutrality but Bell noted that its content was free before it launched its own wireless network, and added that its service is “best positioned to offer innovative and differentiated value.”
“Recent short-sighted actions by our competitors in broadcasting leave them in a very untenable position,” Bell president Alan Horn said on a conference call Thursday with analysts. “Therefore we are happy to redirect some of the costs from the acquisition of Vérité to help them compete more effectively.”
Shaw, SaskTel and other wireless competitors began advertising their views on the competition between broadcast companies when the deal was approved and the CRTC agreed to allow Bell to use a customer complaint line to respond to their complaints. The regulator said the approach raised “considerable First Amendment concerns” and the Competition Bureau intervened but the CRTC said the bureau did not raise any material concerns.
“We will have a legal dialogue with Bell as we think the ad is misleading,” said Wiebe Lemire, chief marketing officer for SaskTel, in an interview. “We have a view that it is a question of Bell not having control of its wireless customers and they should have to answer for what is the worst situation in the business.”
Bell will add half a minute of ads to its existing campaign between now and Vérité’s launch in October. Bell said it will not show more of the ads next year when competing carriers launch their own wireless services. The company is also starting discussions with TV networks to include “relevant” advertising on its cable network ads but noted that it may also be necessary to purchase time to reach a larger national audience.
“It is the larger picture and one must work together to protect the vast majority of Canadian consumers’ welfare,” Bell wrote to the CRTC.
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