GATINEAU – This month the CRTC will provide a report to help the Government figure out the future of video consumption by Canadians, but our CRTC chairman started this week’s hearing by invoking the ghosts of hearings past.
Lots may have changed but issues and attitudes remain entrenched. To guess the outcome of a this hearing, you don’t need to look ahead, but back.
Not all CRTC hearings are created equal. Some attract national media and generate multiple stories. Others, not so much. The hearing held this week was of primary importance for the applicants, of course, but the odds of major changes for Canadian viewers resulting from this hearing seem slim.
Little surprise was expected, and little surprise was provided. Yet, some tension points throughout these three days were felt.
We noted a changing of the guard at Pelmorex as the retiring CEO, Pierre Morrissette, and Paul Temple, VP regulatory and strategic affairs will pass the baton to new CEO, Sam Sebastian and new director, regulatory and government relations Kurt Eby at future hearings.
They may be a little reluctant to let go so soon as that two minutes into the Pelmorex presentation, as Morrissette introduced Temple, the fire alarm went off and the hearing had to be suspended. The chairman facetiously asked if that was part of the Alerting System…
Once the Pelmorex presentation was completed, chairman Ian Scott started off by mentioning he recently re-read the transcripts of the previous hearing held in February 2011 where Morrissette and Temple had a rather long dialogue with then-chairman Konrad von Finckenstein, “and while it might seem like Groundhog Day, I can’t help but return to a couple of the questions or how Konrad characterized that—began that conversation and characterized the issue,” said Scott.
“If the Commission were to deny Pelmorex’s application of requests for mandatory distribution,” said the chairman,” what steps have been taken to ensure that public alerting systems wouldn’t be interrupted or negatively impacted?”
Pelmorex’s Temple responded, “I think the situation as it operates now is ideal and you know, there’s a saying, ‘if it ain’t broke, don’t fix it’ and I think we’re basically in that situation.” That response was echoed by the SOREM (Senior Officials Responsible for Emergency Management), in their intervention later, on Wednesday. Following their comment that the SOREM had issues about the governance of the alerting system, Scott replied there was a Catch-22 because the government did not want to fund the system yet wanted more input on the governance.
Also raised was Pelmorex’s profitability and the appropriateness of using mandatory carriage to generate profits. Paul Temple replied, “So the first question; do we rely on basic to meet the benefits we propose? Most definitely.
“You can’t buy a Timbit for the cost of The Weather Network and MétéoMédia on a monthly basis.” – Paul Temple, Pelmorex
“Then there’s the issue of profitability which really is—I mean, are we talking profitability or are we talking affordability? Whether we make $20 million or $18 million or $22 million, is the service affordable to the consumer? You can’t buy a Timbit for the cost of The Weather Network and MétéoMédia on a monthly basis. It’s affordable, it hasn’t changed; we’re not proposing it change. And if the suggestion is that maybe you should decrease the rate, who benefits if that happens? The Commission isn’t going to reduce the rate of basic service by a penny so the money just flows to the BDU.”
Yet, the Commission has asked Pelmorex in Exhibit 1 to provide scenarios for wholesale rates of $0.22, $0.20 and $0.18, instead of the requested $0.23 that has been in place for the last 25 years. In its reply, Pelmorex told the Commission that such a reduction of the fees could jeopardise the NAAD System.
TV5/Unis
Most of the discussion here was about the details of conditions of licence relating to expenditures on Canadian programming produced outside of Québec and outside of Montreal and the reflection of those communities. There were also questions relating to attribution of mandatory carriage only for Unis TV, instead of a common license TV5/Unis TV, which were met by strong resistance by TV5/Unis TV. However, they agreed to provide numbers to the Commission to reflect such a scenario.
APTN
The questions and interventions to APTN were about the need for such a rate increase (a five-cent jump to bring it to $0.36 per subscriber per month) to continue to fulfil their mandate and offset for the loss of subscriber base. The channel also requested a reduction in the amount of Canadian content that must be broadcast by the service, from 75% of the programming broadcast to 70% and a reduction in the amount of Canadian programming that must be produced by independent production companies, from 80% to 70%. This raised opposition from the production community.
In its reply, APTN said it would accept a condition of licence requiring 80% of expenditures on original programming except news, information and sports be made by independent producers.
Interventions by the Community Media Advocacy Centre and others and subsequent questions by the Commission indicate a possibility of requirements to promote a better accountability and transparency.
Although, it is expected that all service will be renewed, the question remains whether the requests for rate increases and modification will be granted as per the applicant’s requests.
All licences expire on August 31, 2018, so decisions should be issued during the summer.
