FINAL SUBMISSIONS TO THE CRTC on its conventional television policy review were due in yesterday.
Cartt.ca managed to get our hands on eight submissions (unfortunately, none of the companies serving the Francophone market responded to our e-mails), which were filed by parties Wednesday in response to what they were asked – or what others were asked – during the seven-day oral presentations that began on November 27th.
(Ed note: Thank goodness broadcasting vice-chair Michel Arpin – who looks as though he’ll be the Commission’s Interim Chair for the time being as the PMO explores more candidates to replace departing chair Charles Dalfen – limited all respondents to just 10 pages this time.)
Most of the new writings were re-hashes of the companies’ original submissions. "Fee for carriage good, distant signals injurious," say (most) broadcasters. "Fee for carriage bad, distant signals great for consumers and broadcasters" say (most) cablecos. "We need more drama and local programming," say the producers, actors and unions.
However, with the new CRTC Radio Policy, the Commission’s report on new technology to the Heritage Minister and the Federal Court decision on Part II fees all having been handed down in the three weeks since the end of the TV hearing, the submissions jumped at the chance to reference the new decisions/documents.
The Telco TV Association (which is comprised of Telus, MTS, SaskTel and Bell Aliant) said the Part II fees decision can be a "win-win" for the industry. The court ruled that Part II fees collected by the CRTC over the years is an illegal tax. While the court did not order the return of funds in the neighborhood of $700 million, Telco TV said that the CRTC should urge federal government not to appeal and that the money should be paid back, directed at paying for Canadian content and high definition.
Even if the funds can’t or won’t be returned, "(a)t a minimum, the decision, if left to stand, means that similar levels of funds will remain with the broadcasters in the future and thus be available to them to help finance Canadian content and the HD transition," reads the Telco TV submission.
"Accordingly, Telco TV submits the CRTC should encourage the Government to leave the Court decision as is, i.e. not appeal it, since the additional funds that would, as a result, remain with the broadcasters going forward would significantly lessen any financial uncertainty or hardship they may face. Telco TV also submits that the Commission should encourage the Government to agree to reimburse the broadcasters for past Part II Licence Fees collected."
"Illogical," says CanWest Global. While Global pays in the range of $6-to-$8 million a year in Part II fees, an illegal tax can not a business plan, be. "It is illogical to suggest that the elimination of a now-proven illegal tax regime – with monies submitted under protest — is a benefit to the broadcasting sector. The end of this regime is not a business plan; nor is it a ‘solution to the challenges of over the air broadcasters.’ It is (potentially) the end of an unfair, unjustified, and illegal redistribution of broadcaster/distributor revenues," reads the CanWest submission.
Perhaps the most unintentionally comic aspect of the new submissions are a pair of the unvarnished claims about what "no party" to the process disputes.
"(O)n two key points, CBC/Radio-Canada’s evidence before the Commission stands uncontested: Conventional television is the cornerstone of the Canadian broadcasting system; and, the traditional revenue model of conventional television is failing. No party has disputed these points," reads the CBC’s report.
Then, from Rogers Communications: "The record of this proceeding confirms that the conventional broadcasting sector is not in crisis. No party disputes the essential facts: profitability for most conventional broadcasters is stable; advertising revenues have continued to grow over the last five years; and hours tuned to Canadian OTA stations has increased over the last five years."
The Canadian Film and Television Producers Association told the Commission it had to stay true to the principles of its recently released Radio Policy. Broadcasters, CTV for one, asked the Commission during the hearings, for time credits – like a 200% time credit applied to the priority programming exhibition requirement.
"(T)he CFTPA maintains its position that time credits undermine the goal of ensuring a preponderance of Canadian entertainment programming in prime time," says its submission, adding it " notes with interest that the Commission has taken a similar perspective in its recently released commercial radio policy… wherein it states… that ‘an incentive or bonus system such as that suggested by the (Canadian Association of Broadcasters), where a selection by an emerging artist would receive a 125% credit toward meeting requirements for Canadian selections, would lead to a decrease in the number of Canadian musical selections that are played’. The same logic applies to time credits for priority programming on conventional television."
Shaw Communications’ final submission seemed to be a jump-start on the specialty services policy review and broadcast distribution undertakings policy review, both of which are on the Commission’s radar for 2007. While reiterating the company wants a market-based digital TV transition, Shaw also asked for VOD ad insertion, the right to sell ads on U.S. cable channel local avails and the elimination of linkage rules and genre protection.
When it came to the fee-for-carriage issue, the flashpoint of the hearing, all sides held their ground. Rogers and Shaw remained adamantly opposed to any fee, insisting it will be passed to consumers while CanWest, the most vocal FFC proponent, continued to insist its business was in trouble and a wholesale fee is an absolute requirement that consumers will support.
"Not one consumer advocacy group opposed a subscription fee for over-the-air television services in this hearing (written or oral phases) despite the Commission’s clearly stated Public Notice that explicitly raised the subscription fee issue and the obvious media interest generated by this anticipated review," said CanWest.
While Corus said any fee-for-carriage determination had to first be examined in the context of the specialty services review, the two largest cable operators called it a new TV tax the Commission isn’t allowed to levy anyway.
The CBC insisted that the BDUs don’t have to pass the fee on if they don’t want to. "(T)he only issue would be whether the BDU would choose to pass through to its subscribers the fee paid by the BDU to a broadcaster… it is an open question whether a BDU would feel the need to pass through a wholesale rate of a relatively low magnitude."
(Ed note: We’re pretty sure the BDUs would feel that need.)
"As several observers noted at the oral hearing, fee-for-carriage is a solution in search of a problem," says the Rogers submission. "In short, there is virtually no common understanding among the parties to this proceeding with respect to the concept of fee-for-carriage, let alone its implementation. To proceed with a policy approach that is so poorly defined and understood would be a mistake, even in the absence of the strong evidence that exists regarding its harmful effects."
Adds Shaw: "There is no justifiable need or basis for the CRTC to introduce a fee for carriage for conventional broadcasters. OTAs have very significant regulatory and market advantages to support their businesses. They can be afforded additional support through changes that provide them with greater advertising and programming flexibility," reads the submission.
"To introduce a fee for carriage in response to cyclical business problems of certain conventional broadcasters would create serious economic problems for consumers, BDUs, pay and specialty services and the long-term health of the broadcasting system."
The new policy is expected to be released in May, 2007.
