GATINEAU – That broadcast distributors would increase the price of basic packages if the CRTC licensed new 9(1)(h) services is a red herring, according the Canadian Media Production Association (CPMA) told commissioners on Tuesday.
“We believe that the impact of 9(1)(h) services on ‘affordability’ is a red herring that threatens to overshadow the achievement of more significant objectives under the [Broadcasting] Act,” Michael Hennessy, president and CEO of the CMPA, said during his opening remarks.
The association acknowledges that licensing additional services with mandatory carriage orders may trigger basic package rate increases, but it says this isn’t the sole reason broadcast distribution undertakings (BDUs) raise rates, which have been climbing steadily for years, regardless. “It would be a stretch to blame consumer dissatisfaction with the price of their BDU service on your rare decisions to add new, exceptional Canadian services to basic,” said Hennessy. “That may be the spin, but the reality is that the cost of basic is already heavily inflated by inclusion of the BDUs’ own services, including their high-cost sports services.”
Besides, the CMPA notes that even if services such as Starlight were given 9(1)(h) status were licensed and APTN was granted its proposed wholesale rate increase, the cost to consumers would be a fraction of the basic service package price. “And arguably if past is prologue, rates (because they are unregulated) will go up even if no services are added. So from a pure cost/affordability question we need to ask whether the basic service needs to be as ‘fat’ as it is today,” argued Hennessy.
The CMPA also took the opportunity to highlight some concerns with respect to APTN and Starlight during its testimony. It noted that while it supports APTN’s renewal, the association is worried that independent producers aren’t being given a fair shake on the channel since they have to partner with, and sometimes relinquish control of projects to Animiki See, the channel’s affiliated, for-profit production company.
“That is why we continue to submit that, without your investigation of these allegations, these issues will remain unresolved. There is a real need for transparency here regarding the role of Animiki See, particularly given APTN’s special 9(1)(h) status,” Hennessy argued. The transparency push is to ensure that “the revenues associated with that work flow through substantially to the independent producers that do the work. Without the money, the concept of the indie producer has much less meaning,” added Hennessy.
An all Canadian movie channel proposed by Starlight also received support from the CMPA. It noted that the service can play a big role in addressing accessibility to Canadian feature films, but says that Starlight should do more in licensing Canadian films rather just funding emerging film makers.
Hennessy described the licensing element as the third-leg is Starlight’s business model. “A defined and well-funded plan to license new films through this traditional broadcast licensing model will ensure the creation and presentation of the kinds of films that are now receiving critical acclaim in Canada and around the world,” he said.
Under questioning, Hennessy noted that the Starlight Fund is a good thing for emerging artists, but the licensing approach will also help mid-range producers and directors such as Sarah Polley. “I think that the licensing allows you to increase the stock significantly at a lower cost for the producers that are actually starting to show us established success in the market below that top echelon that was sitting at the table. So I think a mix is the right thing,” he said.
Sun News was also the subject of some criticism on Tuesday. Telus took the news channel to task over claims that the BDU refused to carry it. In fact, Telus says, it’s the other way around: Sun News refused to be carried by Telus.
Anne Mainville-Neeson, director of broadcast regulation at Telus, says there is no reason for Sun News to get mandatory carriage because the news segment is already competitive, enough so that the Commission has deregulated this market. Besides the other news services were licensed at a different time with a different broadcast environment. “Now that other news services have blazed the trail, a competitor like Sun News cannot expect to turn back the clock and have its profit margin subsidized by Canadians,” she said.
