TORONTO — Bell Canada and the National Football League are crying foul against the CRTC, claiming the Regulator is trying to push forward with its Super Bowl simultaneous substitution (simsub) ban via a distribution order, before Bell and the National Football League’s appeal of the CRTC’s broadcasting decision makes its way to Federal Court.
When the CRTC announced in January 2015 (in Broadcasting Regulatory Policy CRTC 2015-25) that Canadian TV distributors would no longer be allowed to perform simsub for the Super Bowl, starting with the February 2017 broadcast of Super Bowl LI, the Commission indicated it would amend the broadcasting distribution regulations to enact its policy changes regarding simsub, which would include a singular exemption for the Super Bowl broadcast, in order that Canadians would be able to watch American advertisements. In issuing its policy decision, the CRTC said it was responding to complaints from Canadians about the frequency of simsub errors and the inability to see those ads.
(Simsub has been practiced for years in the Canadian TV industry as a way to protect programming copyrights purchased by Canadian television companies wishing to air U.S. shows here. As long as the show airs at the same time, conventional broadcasters can have their signal substituted by Canadian cable, satellite or IPTV carriers in place of the U.S. broadcast signal. Of course, anyone with an OTA antenna within range of a border station, can view the U.S. signal uninterrupted. The simsub regime is remaining in place, except for the Super Bowl.)
In March 2015, Bell filed a motion to appeal the CRTC’s decision with the Federal Court of Appeal, and last summer the NFL requested intervener status. In December, the NFL filed its own motion to appeal, asking that its filing be consolidated with Bell’s and expedited through the court. However, in early February of this year, the CRTC pressed on and announced a notice of consultation asking for feedback on a proposed distribution order that would implement the its Super Bowl simsub prohibition decision.
In separate interventions submitted last week, Bell and the NFL now argue the CRTC is changing its game plan (“reversed course”, in the words of the NFL) by proposing a distribution order rather than amending the broadcasting distribution regulations to achieve its Super Bowl simsub ban. They suggest it would be inappropriate for the CRTC to issue such an order before the Federal Court makes a decision about their appeals.
“The decision is not only wrong… it is unreasonable, and it is the result of the Commission acting outside its jurisdiction.” – Bell Canada
Calling the CRTC’s decision to prohibit simsub for the Super Bowl “astonishing”, Bell’s intervention stated: “The decision is not only wrong, it was arrived at without the necessary regard for procedural fairness, it is unreasonable, and it is the result of the Commission acting outside its jurisdiction.”
Bell said in its intervention the CRTC acted unfairly by not giving adequate notice prior to issuing its simsub decision that it would prohibit simsub specifically for the Super Bowl. In addition, the company argues the decision was unreasonable because it was based on what it calls “an irrelevant factor: the fact that a very small number of Canadians had indicated that they preferred to watch American advertising on the Super Bowl,” Bell wrote.
Furthermore, with regards to the issue of jurisdiction, Bell argued: “The Order singles out the Super Bowl and subjects only that program, and the one licensee that broadcasts it, to a prohibition on simultaneous substitution while all other programs and licensees of the same class continue to benefit from it… The substance of any order must relate to carriage of a Canadian service and not the treatment of a particular program like the Super Bowl on an American service. The Order amounts to unjust administrative law discrimination that is outside the jurisdiction of the Commission.”
Bell Media, which airs the game nationally on CTV and French-language sports channel RDS, has said it could lose up to $20 million in revenue for each of the four Super Bowls it won’t be able to simsub after next year (Bell’s contract with the league ends after the 2019 season, sources have told Cartt.ca).
The NFL argued the same point in its intervention, saying the CRTC is authorized to make orders regarding “the carriage of ‘programming services’, i.e., the entire broadcasting output of a programming undertaking. The Super Bowl is not a programming service, but rather a program, i.e., an individual television show; the CRTC has no jurisdiction to issue a carriage order regarding an individual television show,” the league stated.
Its submission went on to say the intention of simsub is for it to be administered “as a general regime applicable to all U.S. programs, not as an ad hoc regime in which individual programs are exempted from the entire Sim Sub Regulations through one-time licensing orders.”
According to Bell’s intervention, the CRTC’s decision to prohibit simsub during the Super Bowl will result in losses of tens of millions of dollars to local TV stations, too, in addition to freezing Canadian companies out of arguably the biggest advertising event of the year and handing free advertising to American companies who won’t have to pay to reach Canadian audiences who can watch the game and the American ads on the U.S. broadcaster (which is FOX, next season).
Canadian companies being shut out of the Super Bowl’s advertising opportunity is also of concern to the Association of Canadian Advertisers (ACA) and the Canadian Media Directors’ Council (CMDC), who jointly submitted an intervention to the CRTC last week as well.
ACA represents more than 200 companies from a wide range of industry sectors, including manufacturing, retailing, packaged goods, financial services and communications. According to ACA, its members are among the top advertisers in Canada, with collective annual sales of products and services of more than $300 billion. The CMDC represents advertising agencies and media management companies, who collectively account for approximately 80% of the total media advertising spend transacted annually in Canada.
“TV commercials themselves… won’t be made, eliminating commercial production activity in Canada and reducing opportunities for Canadian performers appearing in and showcasing products and services.” – ACA/CMDC
“In Canada, advertising is one of the primary resources sustaining the broadcasting system. Net advertising media spend in Canada was estimated to represent $14 billion in revenue flow to media companies in 2014. Of this total amount, approximately $3.4 billion is invested annually in television advertising,” ACA and CMDC wrote in their joint intervention.
The substantial amount of revenue generated by advertising “is critical to a healthy and robust broadcasting system in Canada. Advertising is a consistent source of funding for the programs that inform, entertain, and educate Canadians,” continues the submission.
In addition, simsub in general provides marketing opportunities that are essential for many companies to grow their sales and build their businesses, and in turn create jobs and help to contribute to a productive economy. “This decision affects all parties in the advertising ecosystem, not just advertisers. Revenue to media advertising agencies, for instance, will be reduced. And TV commercials themselves (though maybe not judged as spectacular as our U.S. counterparts by some) won’t be made, eliminating commercial production activity in Canada and reducing opportunities for Canadian performers appearing in and showcasing products and services,” ACA/CMDC argued.
“It would seem the CRTC is on a path to eradicate simultaneous substitution, starting with the Super Bowl — based only on qualitative data arising from ‘conversations with Canadians’ during the Let’s Talk TV Hearings.”
However, ACA/CMDC along with Bell and several others who submitted interventions have pointed out any Canadians who want to see the American advertisements produced for the Super Bowl can find them on the Internet, typically even before the game is broadcast live.
One individual who submitted an intervention to the CRTC just days before Super Bowl 50 was played on Sunday, February 7, made just that point.
“The horse has left the barn. Today is Wednesday, February 3, 2016 and I’ve watched all the 2016 Super Bowl ads. This site actually links all the YouTube videos for easy viewing. You’re solving a situation that is no longer relevant,” wrote Douglas Hughes, of Oakville, Ont., who also submitted a February 1 screen grab image of SuperBowlCommercials2016.org to illustrate his argument.
However, the CRTC also received interventions from some Super Bowl fans in Canada who still want to see those American ads during the championship game’s broadcast. One such intervention was submitted by Stephen Mancer of Vancouver, who argued the advertising shown during the Super Bowl “is an integral cultural element” of the event.
In addition, Mancer said simsub has been executed poorly during live American sporting events, not just during the Super Bowl, resulting in missed plays and commentary on the Canadian simsub broadcast of the events. “This is particularly unacceptable for such a high profile event such as the Super Bowl,” Mancer said.
The CRTC deadline for interventions regarding its proposed distribution order has now passed, and while the Federal Court of Appeal has granted Bell and the NFL leave to appeal, a court date has not been set yet for either party.
