GATINEAU – Shaw Communications used its submission to the CRTC on 2011-344 (the Commission’s fact-finding exercise on over-the-top video) to make some very specific requests the company says will bring regulatory parity between it and OTT providers such as Netflix.
The country’s largest BDU and second-largest broadcasting company wants the Commission to scale back and then eliminate the Canada Media Fund and abolish the Local Programming Improvement Fund, among other things.
Characterizing the entire Canadian TV regulatory framework as “no longer sustainable” in the face of global competition where Canadians can increasingly get access to media from anywhere at any time, “what is needed now is a coherent scheme for the support of Canadian content and the development of a flexible, competitive and innovative system that provides access to programming on the customer’s chosen delivery system,” reads Shaw’s submission.
According to Shaw, most ex ante regulation (up-front policies to guard against future actions) should be replaced by ex poste (where complaints are dealt with after the fact, the LPIF (the $100 million local programming fund created in 2009 designed to help small broadcasters fund their news divisions) has to be eliminated, as does the recently granted Commission okay on value for signal.
“Such subsidies are no longer warranted when key players have already vertically integrated and compete directly not just with each other but with OTT services that have no parallel financial burdens,” says the Shaw submission.
Perhaps most contentiously, Shaw has called for the phase out of the $325 million-plus Canada Media Fund. It first wants BDU contributions to the fund cut to 2% (from up to 4% now) “followed by the phased elimination of this subsidy, in recognition of the new competitive realities of the OTT world,” reads the submission.
(Readers will recall Shaw was at the centre of what ended up being the total restructuring of the fund when it withheld payments in 2007 for a few months. The company claimed the then Canadian Television Fund was broken and eventually, after a hearing and many, many arguments and meetings, the CMF was created.)
“Today, licensed BDUs are required to contribute to the creation and presentation of Canadian programming through must-carry obligations, the mandatory offering of a regulated basic service, access rules and, for cable, the provision of a community channel. In addition, BDUs are required to make significant direct financial contributions comprised of payments to the Canada Media Fund, the Small Market Programming Fund, the LPIF, and subject to judicial confirmation, payments to OTA broadcasters through the value for signal regime. Broadcasters are also required to subsidize Canadian programming through exhibition and expenditure requirements,” it continues.
“In Shaw’s view, now is the time to ask whether this aging regulatory model of subsidies and obligations in exchange for increasingly ineffectual protections remains useful.
“Is it reasonable to ask BDUs to invest billions of dollars building the broadband infrastructure for a digital broadcasting system and digital economy, and to contribute millions of dollars annually to Canadian programming when unregulated OTT services are reaching Canadians using those same networks and operating as direct competitors, but with no parallel obligations?” it asks.
“Similarly, can licensed Canadian programming services really be expected to re-invest large portions of their annual revenues into the production of Canadian programming when services like Netflix have no such obligations and yet compete for the very same programming, audiences and subscribers?”
(Ed note: If we were prognosticating, and we are, we’ll be having an OTT hearing this fall. How’s everyone’s November looking?)
– Greg O’Brien
