GATINEAU – One option for getting over-the-air television to every Canadian when the transition to digital happens come August 31, 2011, appears now to be off the table.
Both Shaw Direct (formerly Star Choice) and Bell TV (formerly ExpressVu) have told the CRTC that since the Regulator insists on pushing ahead with distant OTA signal charges and increasing the Local Programming Improvement Fund, they no longer have any interest in offering up their satellite platforms to help small market local broadcasters serve everyone in their contours once the transition to digital happens in 2011.
Since Bell has twice presented this “Freesat” model to the Commission, as we’ve reported, we’ll stick with re-describing theirs (although Shaw’s was the same offer).
As envisioned by Bell, Freesat would offer smaller local broadcasters the ability to distribute their signals digitally, via satellite, covering their entire traditional over-the-air contours, without upgrading a single transmitter. And beyond paying about $450 for the required dish, set top box and installation for a handful of channels, FreeSat would not cost the tens of thousands of OTA-only consumers any monthly subscription fee to Bell TV (unless they want one). There was also no explanation on how those who can’t afford the $450 would be able to opt in.
Bell estimated the total number of small market OTA-only consumers at about 80,000 nationally.
Bell pitched it as a solution for conventional station signals outside of major urban centres where transmitters and studios are being upgraded – or already have been. Broadcasters have repeatedly complained that upgrading to digital OTA in areas beyond the big cities is not economically feasible and want satellite and cable companies to carry their signals even though they won’t be available off-air – so that new digital transmitters won’t have to be upgraded in smaller communities.
And in its July decision on an increased LPIF, the Commission ironically also noted that communities with market bases of less than 300,000 wouldn’t have to go digital OTA (except for the provincial and territorial capitals which are smaller than that) and that BDUs would have to be relied upon to deliver the signals. It’s estimated that less than 10% of Canadians in total rely solely on off-air television.
“Consumers would replace their traditional antenna with a compatible satellite dish and digital receiver, which Bell TV would authorize to receive Freesat’s OTA signals free of charge,” explained Bell Canada’s senior vice-president of regulatory and government affairs Mirko Bibic earlier this year during the CRTC’s hearing into private conventional TV station license renewals. “The result would be an extremely efficient method of solving the broadcasters’ digital transition issue, while saving them significant costs. Bell TV could also make the Freesat signals available to other BDUs provided that they follow the Freesat model.
However, Bell wasn’t offering to deliver high definition and it certainly wouldn’t have been free for the broadcasters who would have had to pay for the terrestrial backhaul of their signal to Bell’s broadcast centre in Toronto. Bell would have footed the spectrum costs and moved ahead if the Commission would have kept the LPIF at its previously announced level of 1% – and if the Regulator had indicated that providing the Freesat could be payment in lieu of direct cash to the broadcasters for distant or local signals.
In a submission to the Commission after the April hearing, Shaw said it, too, could offer a freesat model, but “if an LPIF is in fact introduced we, like Bell, would require that the direct costs of the OTA Satellite Delivery Service, including a portion of the capacity costs used in association with the service, be deductible from any obligations,” it reads. “Under no circumstances, however, would we support an OTA Satellite Delivery Service if the LPIF is increased above the current proposed level of 1%.”
In a letter to the CRTC dated July 16th and made public last week, Bell said that it was “very disappointed by the Commission’s determinations of Monday 6 July 2009. The Commission not only decided to increase the level of the LPIF without the ability to redirect a portion of our CMF contribution, but it also reinforced an unacceptable distant signal consent regime and stated in Broadcasting Notice of Consultation CRTC 2009 411, Policy proceeding on a group-based approach to the licensing of television services and on certain issues relating to conventional television, relative to fees for carriage, that ‘safeguards need to be established so that the negotiations are… restricted to the issue of a negotiated fair market value for the conventional signal being distributed,’” says the Bell letter.
“In effect, the Commission has denied our ability to use our contributions to FreeSat as a consideration, in whole or in part, for financial transfers to the broadcasters that we simply cannot afford. Further, the Commission has effectively moved up the implementation date of the consent regime for distant signals by marrying it to a new scheme to impose a negotiated fee for carriage of local signals.
“In light of the Commission’s findings, Bell TV will not be in a position to offer a FreeSat service, and we are advising you that we are withdrawing our proposal.”
Added a Shaw letter: “In view of the Commission’s decision in Broadcasting Notice of Consultation 2009-411 to introduce fee-for-carriage (described as “negotiated fair market value” for local broadcast signals), increase the LPIF levy to 1.5% of BDU revenue, and reconfirm the distant signal retransmission consent entitlement of over-the-air broadcasters, Shaw Direct is unable to move forward with its OTA Satellite Delivery Service Proposal.”
It may now be back to the drawing board on how small market OTA-watching Canadians will watch TV after August 31, 2011.
