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Here are some recommendations that have been made at CRTC's BDU and Specialty Hearing:
Fee-for-Carriage
Channel Packages
Genre Protection
Free HD
Advertising
Children's Programming
Distant Signals/Time-Shifting
Simulcasting
Canadian Content
Access
Fee-for-Carriage
Rogers Communications said that it would fight a carriage fee for conventional over-the-air broadcast signals in the Supreme Court of Canada if it has to. It did come up with a scenario it would accept, however. Rogers said that it would work in a system where conventional broadcasters can choose either mandatory carriage with no fee (the system currently in place) or negotiate terms of carriage and fees, but with no carriage guarantees if negotiations break down (Tech Media Reports, 04/09/2008).
The Bell Video Group, which is a BDU through ExpressVu and Bell Aliant, argues that carriage fees should not be the answer to economic problems of broadcasters (Cartt, 04/09/2008).
The CBC, on the other hand, said that carriage fees could be issued on two levels: the first to compensate broadcasters for their loss of ad revenue, and the second to increase spending on local programming (Tech Media Reports, 04/09/2008).
The Association of Canadian Advertisers (ACA) proposed to reduce carriage fees for specialty channels and not introduce them for conventional broadcasters. The result is that broadcasters will make more money from advertising and consumers will pay less for cable and satellite services.
Bob Reaume, ACA's vice-president of policy and research, explains that " 'advertising money is flowing away from conventional broadcasters to specialty channels because they offer better rates. They offer better rates because they are over-subsidized. (Advertisers) would put more expensive ads on specialty channels if the CRTC reduced those channels' wholesale rates.' "
Specialty channels have higher profit margins than conventional broadcasters because they have high carriage fees and a sizable amount of advertising. As a result of this subsidy, they can sell ad time for less. So, if carriage fees drop, advertising rates will go up. Reaume points out that it is the lower ad rates that are pushing advertisers towards specialty channels and not some perceived niche audience (Tech Media Reports, 04/14/2008).
Quebecor Inc. feels that all broadcasting services (conventional broadcasters and specialty channels) should be entitled to collect carriage fees. The broadcaster should be able to meet with the distributor to come up with a fair price for the product, terms and conditions for the distribution of the service, and its inclusion in the packages offered to consumers. Quebecor believes that broadcasters should be entitled to a fair price for its products, which means the right to withhold permission for a distributor to carry its channel(s). The result would force broadcasters, producers, and distributors to excel in order to claim their place in an industry that might not have any borders in the future (Broadcaster, 04/15/2008).
Telus Corp. rejects the idea of fee-for-carriage, except in the case of Quebec broadcasters such as TQS (Cartt, 04/16/2008).
CTVglobemedia and CanWest urged the CRTC to allow them to start charging cable and satellite carriers for their signals. They both want to charge distributors 50 cents a month per subscriber (Cartt, 04/17/2008).
Shaw Communications is opposed to any kind of fee-for-carriage for conventional broadcasters. Shaw president Peter Bissonnette says, " 'there shouldn't be fee for carriage. There is nobody restricting (OTA broadcasters) from making their local broadcasts better but themselves' " (Cartt, 04/24/2008).
Channel Zero and The Fight Network are both against a fee-for-carriage (Tech Media Reports, 04/24/2008).
The Communications, Energy and Paperworkers (CEP) union told the CRTC that broadcasters should be held to their commitments to stronger local news if subscribers are forced to pay more for local TV stations. Peter Murdoch, vice-president of media for the union, says that the " 'lack of oversight, transparency and accountability in the current system has let broadcasters across Canada downgrade or eliminate their local news operations whenever they want' " (Broadcaster, 04/24/2008).
Even though it owns three CBC-affiliated over-the-air TV stations, Corus Entertainment is opposed to a fee-for-carriage. Company CEO John Cassaday says that it would create a regulatory imbalance for specialty operators unless they were compensated with mandatory signal substitution (Cartt, 04/25/2008).
Channel Packages
The CBC recommended a basic tier channel package of 10 to 12 channels for under $15 before customers can pick what other services they want (Tech Media Reports, 04/09/2008). The channels that should be included in this smaller basic package are Canadian, local, over-the-air TV services and channels deemed of significant importance. U.S. networks, time-shifted channels, specialty TV channels and audio channels would become part of discretionary packages. With this smaller package, consumers would have more choice, pay less, and a core set of Canadian programming channels would get priority distribution (Cartt, 04/08/2008).
Cogeco warned the CRTC that if consumers weren't given flexibility and more choice, they will turn to the black market. Roughly 5% to 6% of Canadians are currently active in the black market.
Leonard Katz, CRTC Telecom vice-chair, is concerned about the rising rates of basic cable. They were $17 to $20 five years ago, and now they are in the low $30s. He suggests that BDUs provide a uniform level of service in addition to packages where consumers can choose the channels they want, but also be allowed to "roll back" (Cartt, 04/15/2008).
Telus Corp. said that changing the size of the basic TV package by removing American channels will only fuel the black market for foreign TV services. They pointed out that Canadians would complain if they are forced to buy an all-Canadian basic package before they are allowed to purchase other services they really want.
Ann Mainville-Neeson, director of broadcast regulation for Telus, says that there is a misconception that by reducing the size of a basic TV package, the price of TV would be significantly lower. She explains, " 'it is not the cost of programming that comprises the biggest part of the cost of offering the basic service. What goes into the determination of the cost of the basic service are our network and just the whole infrastructure' " (Toronto Star, 04/16/2008).
The east coast company Bragg Communications has over 700 cable systems, most of which are exempt or Class 3 systems. The company suggests that all exempt systems should just be required to carry 50% Canadian programming and a minimal but core of basic services. Packages should also have 50% Canadian services. The company adds that the CRTC should not mandate carriage of new services just because they are new. Nathalie MacDonald, EastLink's director of regulatory affairs says " 'the CRTC should instead provide an opportunity to seek carriage, with the onus on the service to establish it is essential. If guaranteed access is granted, it should be for a limited timeframe' " (Cartt, 04/17/2008).
CTVglobemedia and CanWest proposed the option of a small basic Canadian TV service, including all local and regional channels, educational services, and other channels that are deemed mandatory (Broadcaster, 04/17/2008).
Astral Media recommended a model that would guarantee a place for newly licensed specialty services. It also proposed one that would consist of all 20 of the French-language channels. This would not change existing offerings though, all of which should have 50% plus one Canadian channels (Cartt, 04/18/2008).
The Aboriginal Peoples Television Network (APTN) proposed an all-Canadian basic service, made up of fewer channels at a lower price. It also suggested that the Canadian basic channels be lined up contiguously, so consumers could find them easily. Despite its 9(1)(h) status, APTN is not often carried beleow channel 30, and with some distributors, it's carried above channel 100 (Cartt, 04/23/2008).
Shaw Communications is against a limited, less expensive package of basic channels that would be mainly or entirely Canadian because it doesn't think it would be appealing to their customers (Cartt, 04/24/2008).
The Public Interest Advocacy Centre (PIAC) urged the CRTC to create a streamlined basic service that's affordable and Canadian. It also recommended to set a price ceiling on basic cable that is similar to what exists for basic, local telephone service.
Michael Janigan, executive director of PIAC, points out that since cable rates were deregulated in 1997, fees have risen beyond the rate of inflation and more channels have been crammed into the basic cable package, while the quality of service has declined. He says, " 'cramming is not a principle that is advanced as policy objective in the Broadcasting Act' " (Cartt, 04/25/2008).
Joseph Chan, president of Fairchild Television, urged the CRTC to consider a small basic cable service so that subscribers to third language pay services don't have to pay any additional costs. He is not against the over-the-air fee-for-carriage proposal, but he believes it should only be considered if an inexpensive basic service is offered (Cartt, 04/29/2008).
Genre Protection
Rogers Communications told the CRTC that the current restrictions on Canadian specialty channels have outlived their usefulness and viewers will leave TV for the Internet if major changes are not made. Rogers vice-chairman Phil Lind says that the Commission " 'should eliminate the genre protection rule as between Canadian services.' " He explains, " 'it would allow them to compete for customers, like other businesses do.' " This does not mean that restrictions should be lifted on foreign cable stations like HBO and ESPN, however (Marketing Daily, 04/08/2008).
Lind says that one restriction that should be upheld is the requirement that Canadian signals comprise at least a majority of those carried by cable and satellite distributors (Marketing Daily, 04/08/2008).
The Canadian Association of Broadcasters (CAB) warned the CRTC that cable companies could try to use subscription video-on-demand to sidestep the rules preventing American networks from directly broadcasting in Canada. It wants only programming acquired from Canadian broadcasters to be made available on subscription video-on-demand (SVOD). Pierre-Louis Smith, CAB's chief regulatory officer, says that Canadian broadcasters that hold the rights to foreign programs, should be allowed to put that content on video-on-demand, just like TMN does with its on-demand service (Toronto Star, 04/11/2008).
Pelmorex Communications, the parent company of the Weather Network and MétéoMédia, says that the removal of genre protection and must-carry rules would have a detrimental impact on its stations. It feels that the market-forces regulatory approach would lead to public fighting amongst players in the broadcast system, so it is recommending a status quo approach.
Score Media, which owns The Score, also thinks that the CRTC shouldn't abandon genre protection or eliminate guaranteed access. John Levy, chairman and CEO of Score Media, doesn't see the need to change the current system. He is also against allowing market forces determine line-up and access. It would just result in money being taken from programmers and given to BDUs. If the CRTC did opt for change, Levy suggest that it treat small independent programmers differently from big broadcasters (Tech Media Reports, 04/15/2008).
Quebecor Inc. wants to see the end of genre protection. It feels that specialty channels aren't niche players that need to be protected anymore. According to Statistics Canada, operating sales for private conventional broadcasters were flat at $2.2 billion, while those for specialty channels grew 11% to just over $2 billion (Globe and Mail, 04/16/2008).
CTVglobemedia and CanWest feel that genre protection maintains diversity and works for Canadians, so it should be upheld. Ivan Fecan, president and CEO of CTVglobemedia, says that " 'genre exclusivity simply keeps the specialty in Canadian specialty TV' " (Broadcaster, 04/17/2008).
The Directors Guild of Canada (DGC) feels that the genre protection rules should remain in place (Cartt, 04/18/2008).
Maureen Parker, executive director of the Writers Guild of Canada (WGC), says that " 'foreign genre protection helps keep the 'Canadian' in the Canadian broadcasting system. If competing U.S. broadcasters are allowed in, Canadian broadcasters will be forced out " forced out of acquiring rights to programs the U.S. channels will offer directly, and forced out of the revenues those rights generate. Because their revenues are tied to their contribution to Canadian programming, if Canadian broadcasters lose rights and revenues, we lose Canadian shows.' "
Allowing more U.S. channels in would not mean more choice for Canadian viewers, argues WGC president Rebecca Schechter. Research finds that of the top 200 cable telecasts in the U.S. by audience in the first half of 2007, 97% were already available in Canada. She points out that " 'Canadians, abandoned to 'market forces' in the interest of even greater profits for the cable companies, would experience a diminished offering because there would be less money in the system to make Canadian TV shows.' "
Schechter adds that " 'without genre protection, broadcasters -- to reduce the cost of programming and increase profits -- will air programs they licence across every channel they own. The result will be common denominator TV; multiple channel schedules full of the same shows.' "
The WGC also wants the CRTC to establish enforceable rules to ensure genre protection, with fines and penalties imposed for infractions. The CRTC's only recourse right now is to pull or shorten a licence, but this usually never happens. As a result, broadcasters push the limits of their licences to maximize profit and minimize original programming (Broadcaster, 04/18/2008).
Stornoway Communications supports genre protection. If it was taken away, that would allow other Canadian broadcasters the ability to move into ichannel's public service issues-based niche, and the channel would be unable to continue operating.
The Ethnic Channel Group (ECG), which owns 10 third language category two digi-nets, complained about CRTC's decision to relax the genre protection rules for Canadian third language services in 2004. This move severely impacted the company's business since foreign channels in the same niches were allowed in.
Slava Levin, president and CEO of ECG, explains that " 'in 2004, we had only just begun to benefit from the CRTC's rules for new Canadian third-language services...Then, the rules changed. There could, easily, be in excess of 100 Canadian third language channels in existence today. Instead, I believe there are about half that number in total' " (Cartt, 04/23/2008).
Maple Leafs Sports & Entertainment (MLSE) told the CRTC that the sports TV genre is very strong in Canada is is able to withstand competition. With the numerous sports channels on air and the large amount of sports content available online, the MLSE's category two digi-nets (LeafsTV and RaptorsTV), needs to be able to expand beyond their narrow genres to be prosperous.
Chris Hebb, MLSE's SVP of broadcast, points out that " 'the Internet is the ultimate niche programmer and has rendered our services slightly redundant to sports content consumers.' " His solution is doing away with the genre exclusivity policy for sports. Hebb says that the MLSE wants the opportunity to compete, invest, and contribute more. This policy, however, " 'leaves us with such a narrowly defined niche it gives us no options for growth within the sports broadcast industry,' " he explains.
Hebb adds the sports genre is so sliced and diced these days that genre exclusivity is almost gone. With the CRTC's approval of a TSN alternate feed channel, it is already being more flexible with the sports genre (Cartt, 04/24/2008).
Channel Zero believes that genre protection should be maintained, while The Fight Network and High Fidelity HDTV feel that it should be removed (Tech Media Reports, 04/24/2008).
Free HD
Bell Canada proposed the idea of FreeSat to the CRTC. It would provide a small line-up of free, local high-definition channels to consumers who paid for a basic ExpressVu system that could receive those channels, without any monthly fee. With this system, broadcasters wouldn't have to build their HD over-the-air (OTA) networks beyond their major centres and would instead distribute via satellite.
While this proposed system would deliver HD OTA to smaller centres at a very low cost, it wouldn't deliver the local broadcast signal of smaller regions to their towns and cities. There would likely be one OTA HD signal from each time zone in Canada delivered to consumers in this small package, whose only cost would be an ExpressVu satellite dish and set-top box (Cartt, 04/10/2008).
Advertising
Phil Lind, vice-president of Rogers Communications, told the CRTC that current conditions of license preventing ads from running on U.S. avails represented a " 'wasted opportunity.' " Allowing cable companies to insert ads would repatriate around $60 million a year in ad revenue. Half of the money generated would go towards Canadian programming. Rogers also proposed to carry advertising on its video-on-demand service.
Bob Reaume, vice-president of policy and research at the Association of Canadian Advertisers (ACA) supports this idea. He says it would be a great opportunity for advertisers since it would allow them to deliver geographically and demographically targeted ads. He explains, " 'targeted ads displayed to on-demand, high-value viewers would have more appeal for advertisers.' " This proposal would benefit broadcasters as well by allowing them to sell more of the total program audience.
The ACA urged the CRTC to make advertising time on U.S. channels available to Canadian advertisers, which would increase TV ad revenue in Canada without creating more greater audience fragmentation. The CRTC previously denied applications by companies such as 49th Media and Only Imagine to sell U.S. avails to Canadian advertisers.
The Canadian Association of Broadcasters (CAB) opposed Rogers' proposal to carry advertising on its video-on-demand service and the two or three minutes per hour of commercial time available on U.S. specialty channels like A&E and CNN because they contribute less to Canadian programming than broadcasters.
CAB president Glenn O'Farrell points out that " 'advertising revenues should remain the exclusive purview of broadcasters, on the simple basis that for every dollar of revenue earned, programming services contribute, on average, 30.5% to Canadian programming whereas BDUs contribute no more than 3%.' " He adds that broadcasters are willing to work with BDUs on developing business models for video-on-demand platforms, which hold " 'great promise for the future.' "
The ACA also urged the CRTC not to lift the 12-minute ad limit on Canadian specialty channels. Last year, it raised the limit on conventional channels to 14 minutes. Reaume explains, " 'a serious concern to advertisers is the issue of clutter on TV.' " He points out that " 'multiple regulatory exemptions from the 12-minute rule have created the environment today where dozens or more commercial interruptions per hour are quite common. This diminishes the effectiveness of the television medium for the advertiser and only encourages viewers to seek out ways to practice commercial avoidance' " (Marketing Daily, 04/11/2008).
Quebecor Inc. feels that change is needed regarding video-on-demand (VOD) services. The CRTC doesn't allow new commercials to be inserted in TV programs running on VOD, only recently permitted original ads. Changing the rules would allow broadcasters and distributors to collect more advertising revenue (Globe and Mail, 04/16/2008).
Under Telus' proposed model for a new advertising framework, new ad opportunities " 'can only stem from content sourced from Canadian rights holders with their explicit consent,' " explains company director of broadcast regulation, Ann Mainville-Neeson. She explains that this provides incentives for distributors to pursue rights through Canadian broadcasters, and for Canadian broadcasters to make their content available on-demand (Cartt, 04/16/2008).
The Aboriginal Peoples Television Network (APTN) feels that advertising rights on VOD and SVOD outlets should remain with the broadcaster, rather than the broadcast distributor. With regards to local avails, the network believes that there is no benefit to the system to allow BDUs to sell them. It would only expand advertising inventory and move ad dollars away from the broadcasters and towards the BDUs (Mediacaster, 04/23/2008).
Channel Zero believes that advertising by BDUs on local avails should be allowed (Tech Media Reports, 04/24/2008).
Children's Programming
The Shaw Rocket Fund believes that the CRTC should reinstate Canadian children's TV programming as a priority. Annabel Slaight, Chair of the Fund, says that " 'regulators, broadcasters and funders are missing the boat by not making investments in this sector. This needs to be addressed. Specialty broadcasters cannot meet the needs alone.' "
To read more on the Shaw Rocket Fund, click here.
Distant Signals/Time-Shifting
CTVglobemedia and CanWest asked the CRTC to end the carriage of distant signals and time-shifting, which robs them of roughly $93 million in advertising revenue. Ivan Fecan, president and CEO of CTVglobemedia, points out that distant signals have been ruled unlawful in the U.S. (Toronto Star, 04/17/2008).
APTN urged the CRTC to limit the importation of distant signals. Remote and underserved communities should be treated differently, however. It is not proposing to stop the distribution of distant signals in these communities (Mediacaster, 04/23/2008).
Corus Entertainment points out that distant signals contributed to the loss of $80.7 million to over-the-air broadcasters (OTA) in 2005/2006. It recommends that BDUs gain the consent of and pay the OTA station to have its distant signal retransmitted. This fee would be market-driven. If the BDU doesn't get consent from the OTA station, the signal could not be distributed outside its local market. Corus suggests that a portion of the retransmission fees be put into the small market local programming (SMLP) fund. Since satellite companies currently pay into this fund, cable companies would also have to start paying into it (Cartt, 04/25/2008).
Simulcasting
Bragg Communications Inc. proposed that the simulcasting rules should be changed for the Super Bowl so that Canadians can watch the American advertising. Co-chief executive officer Dan McKeen, says " 'we believe the Canadian broadcasting system would be the net winner by encouraging consumers to remain within the regulated system in the Super Bowl was exempt from simulcasting requirements' " (Toronto Star, 04/17/2008).
Canadian Content
The Alliance of Canadian Cinema, Television, and Radio Artists (ACTRA) urged the CRTC for more Canadian drama on TV. Robb Wells of "Trailer Park Boys" says, " 'if the CRTC changes the rules, not only will Canadian creators be out of work, our country will lose its capacity to tell our own stories. The rules are working. Please don't import the drama disaster from the conventional side onto the specialty side. It takes too long to fix.' "
Wells adds, " 'broadcasters will not spend on drama unless they are regulated to do so. We know this from the fallout of the CRTC's disastrous 1999 Television Policy that caused Canadian English drama to virtually disappear from primetime conventional TV.' "
ACTRA feels that strong rules need to be put in place in order to achieve the cultural objectives of the Broadcasting Act. According to the Alliance, the CRTC needs to:
- "Maintain current Canadian programming spending requirements on pay and specialty TV services.
- Maintain the current regulatory framework that supports a strong Canadian pay and specialty sector to enable these services to meet the spending requirements.
- Remove the ability of specialty and pay television licensees to use Canadian Television Fund license fee top-up monies to reach their Canadian programming expenditure targets.
- Increase cable industry contributions to Canadian programming to 6 per cent of their revenues from the current 5 per cent.
- If fee-for-carriage, then fees for drama. Direct any new revenue to the production of the hardest genre of programming to produce: Canadian drama. In addition to this, broadcasters should be required to spend 7 per cent of ad revenue on Canadian drama."
(Cartt, 04/18/2008)
The Directors Guild of Canada (DGC) urged the CRTC to increase the support for original Canadian dramatic programming by the licensees under review (Cartt, 04/18/2008).
Astral Media supports measures to reinforce Canadian programming. It endorses the idea of double preponderance and urges the CRTC to " 'go slow' " on accepting additional foreign services (Cartt, 04/18/2008).
In their joint presentation, the Government of Ontario and the Ontario Media Development Corporation (OMDC) said that "current CRTC policies have helped foster investment in the production and showcasing of innovative Canadian content," reports Broadcaster magazine.
Culture Minister Aileen Carroll explains, " 'our creative industries, including TV and film, are important economic drivers and contribute to our quality of live. Ontario recommends that the CRTC stay the course to ensure Canada maintains its position as a global leader in cultural industries.' "
Kevin Shea, chair of the OMDC, points out that " 'pay and specialty television services have become a critical element of the Canadian broadcasting system. In 2007, they spent over $300 million on Canadian programming by independent producers.' " He adds that, " 'Ontario, as a leading centre of excellence for screen-based content creation, is a major beneficiary of this economic and cultural activity. Decisions made in this proceeding could have a direct bearing on this economic activity and on support for Ontario's independent producers. We urge the Commission to make the support of Canadian content a priority' " (Broadcaster, 04/22/2008).
Access
Stornoway Communications president and CEO Martha Fusca, urged the CRTC to create new polices that would allow category two digital channels to move up a category into "must-carry" range by spending more on Canadian content and showing more Canadian programming. She explains that without more distribution and access, and without a mandated minimum wholesale fee, Stronoway's Pet Network and bpm " 'won't exist in a couple of years, even if they don't throw me off the systems I am already in' " (Cartt, 04/23/2008).
S-Vox president and CEO Bill Roberts points out that small and independent specialty channels such as his VisionTV, " 'will have no assured carriage or guaranteed access on terms that permit sustainability' " under the digital distribution plan proposed by cable and satellite providers (Cartt, 04/22/2008).
Channel Zero feels that all programming services with 50% Cancon overall, 50% Cancon in primetime and contributing 50% of the previous year's revenues to Canadian programming should receive mandatory carriage by all BDUs (Tech Media Reports, 04/24/2008).
According to The Fight Network, guaranteed access should be removed, but BDUs should be monitored to ensure they don't give preference to their own stations (Tech Media Reports, 04/24/2008).
Joseph Chan, president of Fairchild Television, which owns Fairchild TV and Talentvision, told the CRTC that it was crucial to maintain the "buy-through requirement" that was put in place three and a half years ago for the five analog third language specialty services. Anyone who wants to purchase a non-Canadian third language service must first subscribe to the analog service operating in the same principal language. He says it would be disastrous to eliminate the buy-through rules, especially since the Commission's open entry approach has allowed 15 new Chinese services into Canada. Chan points out, " 'in the absence of the buy-through, BDUs will have no incentive to carry any Canadian third language services at all.' " Under current rules, Shaw doesn't even carry Talentvision.
Chan believes that a one-to-one rule should be adopted so that if a BDU distributes a non-Canadian third language service, it should also distribute at least one Canadian service in the same language unless no service is available.
Shan Chandrasekar, president and CEO of Asian Television Network (ATN) asked the CRTC to maintain access and linkage rules. He pointed out that the current linkage rules provide a lot less protection than the exclusivity that English and French language analog services have had for many years. Without access rules, Chandrasekar says that ATN " 'would not be carried at all in certain cable systems, in spite of market demand.' " If 10% or more of the population within a licencee's area is of South Asian origin to which ATN is aimed, the BDU must offer the channel in that area (Cartt, 04/29/2008).
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