Consumer groups file complaint saying Shomi, CraveTV are anti-competitive

A joint complaint by two consumer advocacy groups to Canada’s broadcast regulator is raising concerns over how CraveTV and Shomi sell their streaming video services.

The Public Interest Advocacy Centre and Consumers’ Association of Canada say three of the country’s biggest telecommunications companies are operating online video services which “unduly prefer” their own customers.

The document, filed to the Canadian Radio-television and Telecommunications Commission on Friday, says both services require subscribers to purchase TV or Internet from the telecom providers on top of the streaming video platform.

They argue that runs against rules put in place by the CRTC to promote competition and consumer choice.

Both services are “designed to favour legacy business models and to discriminate against customers who wish to only view programming through an Internet service provider of their choice,” Geoffrey White, counsel to PIAC-CAC, said in a statement.

Canada’s telecom providers unveiled video streaming products last year as an answer to the growing popularity of Netflix, which doesn’t require its subscribers to pay for any other service.

In December, Bell Media (TSX:BCE) launched CraveTV to Bell TV subscribers and a limited number of the country’s other providers, including Telus (TSX:T), Bell Aliant and Eastlink. CraveTV’s lineup includes HBO shows like “Sex and the City” and network hits including “Seinfeld” and “30 Rock.”

The advocacy groups highlighted that CraveTV emphasizes its subscription price of $4 a month, even though they estimate it actually costs between $38 and $112 per month once viewers factor in the extra fees for Internet or TV services required to use the service.

Bell Media spokesman Scott Henderson called the complaint against CraveTV “unfortunate” for “an innovative product that is offered at a very competitive price.”

“Our objective is to make CraveTV available to as many Canadian TV subscribers as possible,” he said in an email.

Shomi, at $8.99 a month, hit the market last November as a partnership between Rogers Communications Inc. (TSX:RCI.B) and Shaw Communications Inc. (TSX:SJR.B). It has secured a number of exclusive deals on new series like “Jane the Virgin” and “Transparent,” but is only being made available to viewers who pay for Internet or TV from either Rogers or Shaw under what the company calls a “beta” test.

The complaint highlighted that Shomi has been in “beta” testing for months and appears to be in that state for “an uncertain duration and unclear justification.”

Rogers spokeswoman Patricia Trott said Rogers and Shaw are “evaluating various distribution models” for Shomi in the future.

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