OTTAWA – You could tell that Thursday’s CRTC policy release was still a pretty fresh wound for those whose jobs are rather directly affected by the Commission’s new directives.
The policy folks heading the panel entitled: The Buzz Around the BDU Regulatory Framework Monday morning at the Canadian Association of Broadcasters annual convention were still digesting the new framework and maybe just a little touchy about what it will mean to them and their companies.
Before she heard CRTC chairman Konrad von Finckenstein make his speech at breakfast, where he touted conventional broadcasters as “the cornerstone of the system,” Canwest’s head of regulatory, Charlotte Bell, said she was a little perturbed the decision didn’t mention the overall importance of over-the-air broadcasters to Canadians – even as that decision denied the broadcasters’ request for a fee for carriage of their conventional stations.
Those “cornerstone” words, she coolly noted, were “very absent from the decision,” and while she said she was grateful that von Finckenstein also recognized there are serious challenges facing OTA broadcasters, there are only two ways to address them: “add revenue or cut the costs.”
And with access to the new Local Program Improvement Fund, which was also set out in the decision last week, being tied to maintaining existing spending on local news, “it may preclude many of us from taking advantage of it,” said Bell.
Rogers Communications SVP regulatory Ken Englehart also criticized the Commission for establishing the LPIF in the first place “with not much of a record in to support it… and there’s a ton of money going to it ($60 million a year).
“It may be a worthwhile use of the funds but we really didn’t have a hearing on it,” he added.
Besides, no one knows if local news is really that important to Canadians anyway, said Bell Canada’s chief regulatory officer, Mirko Bibic.
Bell, it should be added, looks to get hit especially hard on the bottom line of its direct-to-home satellite service (formerly called Bell ExpressVu and now just Bell TV). Not only will it have to pay the increased LPIF levy, it faces a serious hit for having to pay for distant signals, something the company has not had to pay for in the past.
Indeed, one of the strong attractions for consumers purchasing satellite instead of cable is that they have been able to time-shift (i.e. watch out-of-market broadcasts at different times of day) from the beginning. While cable has also been able to add out of market broadcasters over the past few years, they have always had to get permission from the broadcasters and they do pay a small fee for adding those signals to their channel lineups.
That fee is to compensate broadcasters for lost ad revenue when Ontario viewers watch The Simpsons at 11 on Sunday and see Western Canadian ads, rather than the local commercials broadcast by the Toronto-based station.
“The decision completely fails to take into account the economics of DTH,” said Bibic, whose company will have to pony up millions more as compensation for the many distant signals they carry.
Bibic also questioned the need for the LPIF, saying there is no evidence in the record that consumers value their local news as much as this fund – and the Commission – say they do.
“I’m worried about the impact on the consumers’ wallet,” he explained. None of the evidence or surveys submitted to the Commission for this hearing asked consumers “about whether they value their local news enough to pay extra for it,” said Bibic.
Only one questioner in the audience stood up to defend local news and CRTC executive director, broadcasting, Scott Hutton added that such programming is “good for democracy, good for the country.” He also noted that the public has made their feelings known to the Commission and turned out strongly in Quebec City when the fate of private broadcaster TQS was up in the air.
But, added Rogers’ Englehart, “to me, that is not evidence that (local news) needs a fund. It could be evidence that they are happy with the news that they’ve got.”
Saying the Commission takes its evidence from various places, Hutton insisted that ordinary Canadians “are concerned,” about local news. “I’m realty concerned about people getting their (over-the-air) television in a few years time,” he added, referencing the digital transition conventional broadcasters must make on August 31, 2011.
“As long as you’re with cable, you’re OK,” added Englehart.
