Rogers and Cogeco urge lowering regulatory burden and need to sustain local news
By Ahmad Hathout
OTTAWA – Representatives from Rogers argued Tuesday that if online streamers are not required to commit a base financial contribution to the enhancement of Canadian content, traditional Canadian broadcasters must not be required to do the same.
Broadcasting distribution undertakings are required to commit a certain percentage of their previous year’s revenues toward Canadian content funds – for example, a chunk of the base 5 per cent goes toward the Canada Media Fund every year. The CRTC is now asking whether it should similarly require a base contribution on eligible online streamers, how much that should be, and to which funds that should go to – questions that are the subject of the current three-week hearing.
“There have been some suggestions from the online streamers that they should not have a mandated contribution – they should have creative flexibility; they should have flexibility within something defined as a [Canadian programming expenditure],” Dean Shaikh, Rogers’s senior vice president of regulatory affairs, said during week two.
“If you find that argument compelling and there should be no base contribution and they should have complete flexibility, then a fair and equitable framework demands that you do the same for traditional broadcasting undertakings, otherwise we won’t be able to compete,” he said, adding Rogers would still be contributing to the system because of its vested interest in it.
Unlike a number of other parties proposing 5 per cent, Rogers is proposing a base 2 per cent for foreign streamers. The cable giant said it arrived at that percentage by examining data that showed that direct financial contributions as a percentage of total revenue in the broadcast years of 2021 and 2022 was close to 2.7 per cent.
The 2 per cent, Rogers says, is only a starting point, and would be imposed exclusively on those foreign video and audio services with $50 million and $25 million in revenue, respectively (the CRTC has imposed a $10 million threshold for regulation). The final contribution requirements must factor in online streamers’ “impact across the Canadian broadcasting system” and “allow the Commission to materially reduce the financial contributions currently imposed on Canadian ownership groups,” Rogers said.
Some representatives from foreign streamers said no such base contribution is necessary because they are already contributing meaningfully to the Canadian content ecosystem. In fact, trade group the Motion Picture Association (Canada) argued that such a requirement would burden that collaborative effort.
But representatives from Cogeco, which has a slate of struggling radio properties, argued these streamers have a vested financial interest in the Canadian market. The situation, it said, is one of unfairness because online platforms are not contributing equally to the system.
“These platforms have no contribution to pay, have no requirement for spending on Canadian content, have no local programming obligation, and have no quota to respect,” Caroline Paquet, president of Cogeco Media, said Tuesday.
Cogeco, which has urged the CRTC to reduce the regulatory burdens on radio stations, said financial contributions on traditional media properties in Canada must come down, and the regulator must allow for flexibility and relook at its quota framework. (The CRTC will look at what constitutes Canadian content in another phase of the implementation of the Act.)
Cogeco, for example, says its quotas for broadcasting vocal music is “completely disconnected from the listening habits of listeners.”
The company, like Rogers, also complained about administrative costs that go toward forms that they must fill out to ensure they are complying with the regulatory requirements.
“We ask the [commission] to immediately reduce the financial contributions of commercial radio stations,” Cogeco said Tuesday. “We also ask the [commission] to put in place, without further delay, a mechanism to return to commercial radio stations a share of the contributions they pay to the various funds.”
Representatives from both Rogers and Cogeco painted a portrait of a crisis pertaining specifically to news production, a high-cost endeavor.
Rogers pitched an Interim News Fund administered by the Canadian Association of Broadcasters to, at least temporarily, give local news producers something to sustain themselves on.
Cogeco is requesting a support mechanism for radio access to local news funds, like ones set up for print and television news.
Before the hearing, major broadcasters and media companies have implored the CRTC to move quickly on reducing their regulatory obligations or give them the financial flexibility to move money to productions they believe their audiences are moving – or they will lose them.
Rogers and Bell have filed Part 1 applications asking for such flexibility.
But the CRTC has said it is focused on the implementation of the new Broadcasting Act. (Bell, which said last week that the CRTC has its priorities backward, filed a judicial review request to see if the regulator was allowed to auto renew its broadcasting licences for two more years.)
The narrow light at the end of the tunnel, some recognized, was when the regulator proposed to reduce Corus’s regulatory obligations, which involves reducing required revenue spending on PNI – a result that effectively acknowledges the pure-play media company’s dire financial position. This position is an exception, the regulator noted, because unlike the likes of Rogers and Bell, Corus is not a vertically integrated company.
The CRTC is also proposing that if those subject to regulation do not contribute all their obligations to the base amount, they would also be able to make contributions to a category of various programming, such as local news and training and development. A third category would be “intangible” contributions, which could involve making Canadian content more prominent and discoverable, creating a back catalogue of that content, or pitching an idea of equivalence to the regulator.
