"NEVERTHELESS, THE SYSTEM is not working well in 2010 in ensuring that conventional television broadcasters have the means to continue to meet their obligations under the Act."
That quote – from paragraph 162 in yesterday’s decision on “A group-based approach to the licensing of private television services”, which set out new rules for a number of things, but all most appeared to care about was the fee-for-carriage/value-for-signal donnybrook – says it all. Private broadcasters are pleased. Carriers are not.
Whatever the outcome of the Federal Court filing that will need to happen before the broadcasters can solicit new wholesale fees for their signals, the Commission came down solidly behind the conventional ’casters Monday afternoon in its decision stemming from the 2009-411 November hearing. Assuming the court sides with the legal opinion that states the Regulator does have the authority to establish a new compensation regime and that there’s no intervention from the federal government, the customers of cable, satellite and telco TV carriers could well be paying for the signals of conventional broadcasters by this time next year.
“(The CRTC has) caved to the broadcasters in a big, big way,” said Rogers Communications vice-chair Phil Lind, in an interview with Cartt.ca. “It’s a total win for the broadcasters and a total loss for consumers.
“We’re going to make sure that this takes a while to happen," he added, saying the company is pondering a cabinet appeal already. "We’ll be talking with the government as well and taking their temperature, too.”
"The CRTC is prepared to have Canadians pay even more to subsidize profitable broadcasters and their ever-increasing spending on U.S. programming," added Kevin Crull, president of Bell Canada Residential Services. "It is outrageous for the CRTC to completely ignore the huge profits broadcasters are making from their specialty channels, not to mention the fact that they are increasing what they spend in the U.S. while they are actually cutting Canadian content at the same time."
“Today’s decision recognizes that there is a value to local television and there’s an importance to protecting programming rights,” retorted Canwest Global’s regulatory chief Charlotte Bell in an interview.
The decision, as we reported here, sets out a new value for signal regime where conventional broadcasters could opt to give up their current advantages of mandatory carriage, basic placement on the dial and simultaneous substitution of their signals over foreign ones when the programming is the same, in order to fight for a wholesale fee (the broadcasters have insisted, however, that simultaneous substitution is not really a regulatory advantage but a legal “must” due to the Canadian copyrights it acquires for its foreign programming, so that’s a battle potentially still looming).
The new VFS regime will mean Canadians will likely face rate increases on their TV carrier bills, and if a contract dispute turned ugly, it could mean the loss of a local TV signal for some (as has happened Stateside) and potentially various other blackouts on U.S. stations.
“They want blackouts?! At this stage when everybody is looking for TV everywhere?” said an incredulous Lind.
“You can watch on the Internet. You can the shows free over the air, but no, ‘we’re going to impose blackouts,’ they say. It’s silly.”
Lind also noted that while the CRTC is just getting under way with a VFS system, the U.S. Federal Communications Commission is now investigating its similar retransmission consent regime, with the view that it doesn’t work and harms consumers.
“It’s ironic that (CRTC chair) Konrad (von Finckenstein) thinks imposing this U.S. system in Canada is a good idea while at the same time the FCC chairman is instituting an investigation on the very subject," said Lind.
"The FCC is saying, we’ve got a bad system here and we have to get it fixed… That’s sort of typical is that we are about five years behind the curve in Canada.”
With the financial figures from Canadian broadcasters and BDUs released last week (which show the full brunt of the recession borne by conventional TV broadcasters), it’s easy to see why the networks say they desperately need more cash. Their single-source of revenue business model is under serious pressure, while carriers have branched out so that they have multiple revenue sources and are doing just fine.
However, revenue is not the problem, says Lind. While the financials released by the CRTC last week paints a rough picture for broadcasters’ ad revenue, it also showed no slowing in spending on American TV content.
“They spent another $100 million on U.S. programming last year. If they hadn’t done that, their results wouldn’t be bad at all,” he said.
“They spent their brains out on U.S. programming.”
As for the other aspects of the decision, which defined spending requirements for Cancon and the dumping of “priority programming” for programming of “national interest”, actors union ACTRA fears broadcasters will air nothing but U.S. shows in prime time.
“We’ve been fighting for 10 years to get Canadian scripted programming back into prime time, we’re completely gobsmacked that there’s nothing in this policy to ensure that,” said Ferne Downey, ACTRA national president.
“It’s great that broadcasters are being told to spend money on Canadian drama, but they’re not being told they have to air it. Instead they’ve been given free-reign to dump all of their drama on their specialty channels while feeding Canadians a steady diet of made-in-the U.S. programs in prime time,” said Canadian TV star Nicholas Campbell.”
Those fears are misguided, said Canwest’s Bell. While the new regs do allow for more scheduling flexibility within ownership groups, 50% of programming between 6 p.m. and 12 a.m. on convention TV has to be Canadian.
“You’re not going to spend all that money (30% of gross revenues) on Canadian programming and then bury it at midnight on Movietime,” she said.
There will be more to come on this story (obviously) as folks chew on the near 20,000 words of the decision and decide what they really think…
