Viacom threatens to bolt Canada if a la carte rules adopted, warns pay-TV faces 'death spiral'

Making it rather clear that he doesn't support new rules proposed by Canada's version of the FCC that would unbundle pay-TV programming, Viacom's Keith Murphy, SVP of government relations has told the commission that so-called "pick and play" mandates would set off a "consumer welfare-destroying death spiral" for the Great White North's TV industry.

Oh, and Viacom would bolt from Canadian pay-TV and take its services over-the-top, too, if the rules were adopted … eh.

The stern threats were rendered in a filing last week to the Canadian Radio-television and Telecommunications Commission (CRTC), which is pondering a sweeping overhaul of the country's TV business. The initiative is called "Let's Talk TV."

Viacom isn't alone: A+E Networks also filed a similar brief  Friday saying it "may determine that Canadian distribution rights are too expensive and may have to seek blackout rights for licensed programming or forego programming expected by A&E viewers."

In the Viacom filing, Murphy cited recent statements by high-ranking Canadian officials, indicating that SVOD services like Netflix (NASDAQ: NFLX) will not be regulated.

"Due to this lack of regulation, Viacom is seriously considering distribution in Canada through [over-the-top streaming] or the Internet as a possible solution if traditional distribution becomes uneconomical due to new rules being imposed by the Commission," Murphy wrote.

In September, Phil Lund, a high-ranking regulatory executive for Canadian pay-TV powerhouse Rogers Communications, warned the CRTC that the a la carte rules are "nuts" and would force American programmers to pull out of the market.

The CRTC has not commented, but a spokesperson for Canadian Heritage Minister Shelly Glover reiterated to the Toronto Globe and Mail the government's position that viewers should "not be forced to pay for channels they don't want to get the ones they do."

The Globe and Mail says Let's Talk TV likely won't render any new legislation for several months.

For more:
- read this Toronto Globe and Mail story
- read this Hollywood Reporter story

Related links:
Rogers: U.S. channels will leave Canada if 'nuts' regulators render them a la carte
A la carte on the menu as Canadian regulators look at pay-TV
Canada's Rogers and Shaw team up to take aim at Netflix

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