OTTAWA – After absorbing a few regulatory blows the past two weeks, CCTA president Michael Hennessy says he’s happy to be moving forward with, “a new regime at the Commission.”
The run of bad news, from the Canadian Cable Telecommunications Association point of view, began with the August 31st decision to grant the Aboriginal Peoples Television Network its requested 10-cent per month wholesale rate increase.
The must-carry-by-everybody-no-matter-what channel will now cost Canadian TV subscribers $0.25 a month instead of $0.15, boosting APTN’s annual revenue stream to about $30 million, not counting its ad sales. Since cable will feel the consumer blow-back from the rate increase, the CCTA had argued against the rate jump.
“We’d done some very good analysis on why they hadn’t made their case (for an increase) and it was ignored,” Hennessy told www.cartt.ca. “I guess the best I can say on that is it’s probably not surprising nobody wants to fight that fight.”
Next was the tariff approval for Bell’s recently launched Bell Digital Voice products, which came in two stages within the past couple of weeks, days after the applications were made.
Hennessy added that it’s odd Bell is saying that it’s offering digital voice over IP, when in his view, the service is essentially the same as what it offers now – just with a new name. “The really astonishing thing about the primary Bell Digital Voice service is that fundamentally, it’s just a primary exchange service bundle. It’s totally non-IP… Basically, it’s just very rapid approval for something they’re calling digital voice – but it’s digital in the sense that the network has been digital for the last 25 years with touch-tone.”
Then last Friday, the CRTC denied Videotron’s and the CCTA’s request to be able to sell ads during the two minutes of ad time made available (local avails) on U.S. cable channels CNN, A&E, The Golf Channel and others.
“The Commission came to two conclusions after three years. Number one is that we were right, there is no evidence that it would cause material harm, but any harm could be bad, particularly in an environment where you’ve licensed 200-odd services,” says Hennessy.
The CCTA also asked the CRTC that if it would not let cable sell ads on the avails, that the MSOs should at least be able to take the avail time they’re allowed to use in order to promote its Internet and telecom services. Current regs say cable gets 25% of the local avail time and that only video may be promoted. The remaining 75% must be given to Canadian specialty services, at cost.
But, “we got one paragraph. One paragraph after three years of debate that says ‘you didn’t make a compelling case…’ Working backwards, the reason (the CRTC) wouldn’t be able to deal with it is because they have no jurisdiction under the Broadcasting Act to deal with telecom matters to begin with,” said Hennessy.
“Even the broadcasters that commented on this supported us.”
“The response was ‘we’re not going to allow you to do this because the telephone companies said that could give you a competitive advantage,’” he said.
Look for the CCTA to re-apply within weeks for permission to promote telephony and Internet in the avail time. “In terms of using our avails to promote our services, there is no impact on the broadcasting side, the Commission has admitted that,” said Hennessy. “Promoting our bundles through the avails is a totally appropriate response when you’re a new entrant in the telephone business and promoting the bundles has to be good for the broadcasting system too because that’s how we’re selling digital.”
However, the real capper for CCTA staffers came when the CRTC demanded a response on a Bell request – within three business days.
Bell wants to change the regulations that force it to offer the same prices for phone service in all regions it serves. The telco is under severe pricing pressure in Quebec from Videotron (whose basic phone rate is just $16) and wants to respond without cutting rates in Ontario, too.
The Commission issued the public notice Friday and asked for responses by yesterday, no extensions. “This is a fundamental question of geographic de-averaging,” says Hennessy. “Without talking at all about the merits, and just about the process, it has a fundamental impact on their price-cap regime… and we have three business days to deal with this?”
Lastly, “the final glove in the face,” says Hennessy, was that the Commission told MSOs it expected them to dedicate 5% of the local avail time for Canadian broadcasters to freely air promotional material for mandated channels APTN, TVA and Voice Print.
“My frustration at the end of the day is we’re now on two totally different tracks,” said Hennessy. “On the telecom side, things are being approved at lightning speed – three days to comment on geographic de-averaging – and on the broadcast side, three years to get one paragraph that says we didn’t make a compelling case (on local avails).
“When the telephone companies need a competitive advantage, snap your fingers, it appears. I understand why they’re moving so quickly and I don’t disagree that you’ve got to kick-start the regulatory process. The telephone companies have put such huge political pressure on the Commission and – with it’s new regime – the Commission wants to demonstrate that they’re responsive to the market,” Hennessy explained.
“This is a new Commission and I’m willing to accept that the new Commission will be as responsive to us on competitive issues as they have been to the telephone companies.”
This new CRTC leaves Hennessy hopeful. “You have to realize that at the end of the day, the APTN decision, the local avails decision, really reflect a Commission regime that doesn’t exist any more. Most of the four or five new commissioners (including commissioner Elizabeth Duncan, a former cable exec – and former Astral executive Michel Arpin) that we’ve gotten over the past few months probably had no part in those decisions.
“A lot of where we’ve been hammered in the past in terms of broadcasting decisions may be the result of circumstances that no longer exist at the Commission,” he continued.
“In the new Commission there is no sort of systemic bias to cable and that’s all we’ve ever looked for.”
