OTTAWA – There will be no new fee for the carriage of broadcast signals in Canada. But a new levy is being imposed to help boost local programming.
No fee, but a new fee
* One of the first items in the press release announcing the new policies governing broadcast distribution undertakings and specialty services (and the over-the-air fee-for-carriage issue) was the Commission’s desire to boost local programming. “The desire for better local programming in Canada’s smaller markets was clearly made evident during this proceeding,” CRTC chair Konrad von Finckenstein said in the Commission release today. “We have taken concrete steps to make sure that viewers in these markets continue to benefit from a diversity off local programming.”
To that end, the CRTC has established a brand new Local Programming Improvement Fund (LPIF) by increasing the amount BDUs must pay to contribute to local programming to 6%, up from 5% of revenues. That will create a $60 million fund that amounts to a contribution of $0.50 per month per satellite, cable and telco TV consumer. The CAB has been asked to fire up administration of this fund (which will take flight September 1, 2009) – and is aimed at smaller market broadcasters (in centres with populations of less than a million).
But, that increased cost can not be directly passed on to the end customer (but BDUs can change rates at will, so…). It has to be absorbed by the BDU, technically, (or at least not identified on customer bills) – and the new fund also means the requests made by conventional broadcasters to be paid a fee for their local signals (by about 50-cents per sub per month) have been summarily denied.
Broadcasters will, however, be allowed to charge a fee for the carriage and distribution of their distant signals, a change which will impact Bell TV (still wanting to call it ExpressVu…) and Star Choice.
Small cablecos get exemption
* Canada’s small cable companies (most of them, anyway) will like this decision as all cable systems with under 20,000 customers will now be exempt from licensing requirements. That means that except for the likes of Access Communications (80,000 subs), Mountain Cablevision (40K) and Westman Communications (28K), all 194 other Canadian cable operators will not have to pay the new fee mentioned above and will be largely exempt from licensing requirements.
A basic, basic
* The basic package can be whatever BDUs want it to be, but it must include – at the very least – about 12-15 stations, according to this decision, even after the digital transition. Those include the local OTAs, CBC, provincial educational OTAs, and 9(1)(h) services The Accessible Channel (to be launched in 2009); RDI (in English markets); CBC Newsworld (in French markets); Avis de Recherche (French); CPAC; Voice Print; APTN; and TVA.
The Commission decided not to mandate an all-Canadian basic, as many suggested.
Genre protection protected, mostly
* Genre protection among Canadian channels is going away for general interest sports and national news services while other genres will continue to be protected. So while ESPN still has to stay out, the CBC, for example, can launch a general interest sports channel. However, TSN won’t, for example, be able to swing in the other direction and launch a fishing channel in competition with independent broadcaster World Fishing Network Canada.
Any international news channel can be added, however, which is an alteration to the eligible satellite list regs.
As well, the types of programming which channels may offer in their genre is being opened up. So, more movies and game shows for many existing channels.
50-plus-one is the only package rule
* Packaging rules, as of August 31, 2011 – the same day the OTA TV world in Canada goes HD/digital – will largely disappear. The rule that there must be a Canadian channel for every foreign channel offered in each package by cable to their customers is to be gone. Satellite, cable and telco TV companies just have to make sure that no matter what their customers choose, that each one has a channel lineup which is 50%-plus-one Canadian channels.
It remains to be seen how BDUs will work this. One doubts that the a-la-carte offerings will be very cheap – and we figure new contracts from broadcasters will more concretely define where and how certain channels must be packaged. Expect many more disputes needing resolution.
Third language services rules are also simplified and will require that one Canadian third-language service must be offered for every three non-Canadian services in the same languages. As well, BDUs will have to offer at least one minority language service for every 10 offered in a market’s majority language. Finally, the requirement that BDUs must carry five non-affiliated channels for every one of their own is being lowered to 3:1.
New rules target new forms of advertising
* There will be a new public proceeding into targeted advertising (a prediction we got right…) where BDUs may be allowed to insert ads into the two minutes per hour of local avails on American cable channels, too. Those ads may be allowed to specifically hit certain demographics identified by BDU technology.
A proposed framework for advertising in the video-on-demand streams of BDUs has also been released today, where the Commission has signaled it wants to allow such ads, as long as the time is sold by Canadian broadcasters – or producers who may want to take their content directly to BDUs. VOD ads could also be used for targeted advertising, which will be part of the new proceeding referenced above.
Undue complaining alteration
* The CRTC will still require broadcasters to prove any undue preference or disadvantage when attempting to resolve a dispute between a BDU and broadcaster – but the BDU will now have to show why its actions were not undue.
Cable regs = satellite regs
* The regulations governing satellite and cable will be harmonized as much as possible. That means, for example, that while cable may find the new packaging rules liberating, satellite will face more onerous minimums of the number local broadcasters to be carried. No matter what happens on the HD front, satellite companies will have to carry at least 50 local broadcast stations.
Watch Cartt.ca tomorrow morning for much more on this landscape-shifting decision, including Commissioner Peter Menzies’ objection to the LPIF and Commissioner Morin’s 50-page dissent, the “longest dissent ever written by a Commissioner in the CRTC’s 40 years,” he writes.
