OTTAWA – After dominating the three months worth of hearings earlier this Spring, the House of Commons committee on Canadian Heritage left out any recommendation on the controversial issue of fee for carriage in its report on the state of local television released Friday.
The committee heard testimony from 45 different groups in March, April and May about the issues and challenges facing Canada’s TV industry, from the importance of local television, to the fragmentation of TV audiences, through to declining advertising revenues.
Made up of MPs from all of the federal parties, the standing committee’s report made 18 recommendations including:
– contributions to the Local Program Improvement Fund (LPIF) increase from 1% to 2.5% of BDU revenues beginning this September (a suggestion made by CRTC chair Konrad von Fickenstein), and that the CRTC should enforce that the increased fund be used exclusively to create "new, original local programming in small- and media-sized markets";
– any program designed to assist local broadcasting be open to CBC, Aboriginal and educational broadcasters and community television;
– CBC/Radio-Canada receive “stable, multi-year, and predictable financing” – including nearly half of the LPIF, and that the government consider reducing the pubcaster’s reliance on commercial advertising;
– the elimination of Part II licence fees;
– that the CRTC address the “growing discrepancy” between foreign and Canadian program spending;
– that the government allow the CRTC to impose fines on broadcasters or BDUs who do not comply with their licence agreements;
– that the CRTC add the number of hours broadcasters air original, local content to its annual monitoring report statistics;
– that the CRTC “consider the impact” of concentration of media ownership during its licence renewals of the private conventional TV broadcasters;
– that satellite operators carry the same local signals as cable systems, and the distribution of distant signals be either stopped altogether or restricted so that a prime-time show cannot be seen in any region before the local affiliate has aired it first;
– that public, community, Aboriginal, and educational channels be part of the basic cable package, that CBC/Radio-Canada be available outside major urban centres, and that beyond the basic package, subscribers be free to choose channels individually;
– that the government assist broadcasters and BDUs on the upcoming transition from analog to digital TV, as was the case in the U.S. where the federal government spearheaded a massive public awareness campaign and offered a discount on digital set-top conversion boxes to over-the-air TV consumers.
But not all committee members agreed with the reports recommendations. The Conservative members filed a dissenting opinion, claiming the report failed to address some major issues identified by the majority of the groups that testified at the hearings.
On the contentious issue of fee for carriage, the Conservatives expressed their “fervent and rigorous opposition to any potential fee for carriage system, either negotiated or imposed, that would have a detrimental effect on the consumer.”
“We believe it is fundamentally unfair to expect Canadian consumers to pay new and substantial charges each month to their cable or satellite distributor to reflect such a system,” the dissention continued. “We further believe that Canadians should not be expected to pay new fees to support local programming when no firm commitment was offered that such a fee would lead to improved access to, or quality of, local programming, the rehiring of laid off employees or the return of cancelled programs. In fact, no evidence was presented that such a system would lead to any additional Canadian content commitments of any kind.”
The Conservatives also called for the removal of the current regulations against pharmaceutical advertising, and do not support either a cap on broadcasters’ foreign TV spending, or permitting the CRTC to issue fines against broadcasters and BDUs.
Response to the report from industry stakeholders arrived in Cartt.ca’s inbox in short order.
"The number one issue from our perspective was the proposal to tax consumers put forward by the broadcasters,” said Rogers’ vice chairman Phil Lind, in a statement. “Despite a non-stop lobby effort by CTV to influence federal politicians, the report did not endorse the fee for carriage concept”.
Bell echoed Lind’s sentiments.
"We’re pleased that the Committee saw through the smokescreen of broadcaster hype to see fee-for-carriage for what it is, a tax on consumers," said Mirko Bibic, SVP of regulatory and government affairs, in a statement. "BDU customers should not have to pay for something that it available for free over the air."
CTV, on the other hand, was quick to point out that “the committee report does not reject or endorse fee for carriage”.
“While we find many of the recommendations constructive, we are deeply disappointed that the Conservative government members of the committee choose to protect the record profits of cable companies over the interests of consumers and their local television stations,” CTV’s comments read. “Additionally, we encourage the government to immediately adopt the recommendation on the elimination of Part II fees which could help mitigate the current crisis in conventional television.”
ACTRA said that it welcomed the report, and urged the government to “give these recommendations serious consideration and act on them immediately”.
“This report puts forward some positive ideas that we believe will help strengthen our broadcasting system as a whole,” said national executive director Stephen Waddell, in a statement. “I’d hate to see this important work go to waste. Too often these reports sit on a shelf and gather dust.”
The CBC called the beefed up LPIF an “important source of revenue”, and urged the CRTC to create a new framework allowing “conventional broadcasters to negotiate fair market value for the programming they provide.”
“The report leaves to the CRTC the wider issue of the essential role played by conventional broadcasters in ensuring that the broadcasting system, as a whole, delivers an acceptable quantity and quality of Canadian programming,” said CBC president and CEO Hubert T. Lacroix, in a statement. “This remains a fundamental weakness in the system, and needs urgently to be resolved. CBC/Radio-Canada believes there is enough margin in the distribution system to provide conventional broadcasters with value for their signal while protecting consumers from undue financial burden.”
Perhaps the Communications, Energy and Paperworkers Union (CEP) summed it up best – it’s all up to the CRTC now.
Calling the increased funding proposed for the LPIF “a good first step”, the media union maintained that “the real answer” is fee for carriage.
“MPs clearly understood that while this issue is thorny, it should not be left to backroom negotiations by big media shareholders”, CEP’s response read.
For more on the report, click here.
