ECG, TLN, urge the federal government to intervene
OTTAWA – A total of four companies which had hoped to win a coveted must-carry licence for a national, multi-ethnic, multi-language TV channel have now asked the federal Cabinet to set aside the CRTC’s decision to grant the license to Rogers Communications, which says the vertically integrated company gets to hang onto OMNI for an additional three years.
On Monday, both Ethnic Channels Group (whose proposal was called Voices) and TLN Media Group (whose joint application with Asian Television Network was called CanadaWorld), joined Corriere Canadese and ICTV in new appeals to the Governor-in-Council. Monday was the deadline to file a Cabinet appeal.
ECG’s petition says, among other things, that the CRTC’s decision to grant the 9(1)(h) license to Rogers has left it and the others wondering why they weren’t selected because no official reasons were given. ECG notes it already operates more than 80 channels in various languages and it currently makes content in 16 languages, making it more than capable of running such a channel.
“There is simply no analysis in the Decision to explain why the OMNI Regional application was preferred over any of the other applications in relation to any area. It is impossible, therefore, to determine on what basis the Commission reached its decision and how that decision will be carried forward with the development of ethnic and third language broadcasting in Canada.” reads the ECG petition to the GIC.
“Without appropriate reasons, it is impossible to determine whether the Commission has considered or given appropriate weight to multiple broadcasting policy objectives set out in the Broadcasting Act, and how these objectives are best met through the Decision.”
“Rules have been bent and exceptions made with the sole purpose of providing Rogers with the financial subsidies it has repeatedly and openly demanded.” – TLN Media Group
TLN was more blunt in its assessment, saying “rules have been bent and exceptions made with the sole purpose of providing Rogers with the financial subsidies it has repeatedly and openly demanded under threat of a shutdown and abandonment of its OMNI Multicultural Free TV stations. This has tipped the already unbalanced competitive scales even further in Rogers’ favour at the expense of Canadian independent ethnic channel operators whose sustainability has been seriously endangered by the CRTC Decision.”
Voices, CanadaWorld and the others, all proposed to offer more multilingual content and more Canadian content, than Rogers. As well, Voices offered an innovative solution to the inherent scheduling problems where the number of cultures and languages needing programming far outnumber the available prime time viewing hours. It’s channel would have used existing technology to carry multiple audio feeds over a single video feed so that a content would always be in the proper language of the viewer, up to a total of 25 languages. Denying Voices shows the Commission is ignoring the television industry’s technological future to support the old way of delivering TV.
The TLN petition to the GIC also referenced the lack of analysis afforded to the rejected applications as well as missing explanations as to why Rogers was granted the licence, why it was allowed to combine its conventional OTA stations into the licence, which means OMNI now receives a fee-for-carriage, why an ethnic operator was not granted the licence, and why Rogers will now be allowed to target local advertising (which will likely take significant existing ad revenue away from independent ethnic TV operators).
“The CRTC has unjustifiably permitted Rogers Media to tie its conventional Free TV operations failure to this specialty channel selection process, in order to subsidize the former through the latter. This results in the payment of a fee for carriage for the over-the-air television stations which is legally prohibited. Although the Rogers conventional Free TV stations were not properly the subject of the proceedings, the CRTC Decision… expressly makes the Free TV stations a condition of the Pay TV license. This has never been done before,” reads the TLN petition.
As well, “(t)he CRTC Decision fails to entrust an exceptionally important ethnic Pay TV mandate to a qualified ethnic operator. Nor does it explain why every ethnic applicant was considered unqualified,” when the notice of consultation specifically asked for applicants with a “diverse governance structure.”
Further, the decision “provides Rogers Media with unprecedented and unwarranted competitive advantages, perversely ensuring a future with less competition and reduced cultural diversity. It grants Rogers permission to sell 100% of its TV commercials to local advertisers, a concession never before granted to any Pay TV channel. It does so without explaining whether the systemic impact was considered. And it does so in favour of a conglomerate with existing huge competitive advantages over small independent ethnic TV channel operators,” adds TLN.
“Ethnic Canadian broadcasters as a group rely for most of their advertising revenue on local advertising (even though they are limited by the CRTC to only 50% local advertising). That figure in 2017 amounted to over $15,000,000,” reads the TLN petition, quoting CRTC figures. “And PBIT… amounted to just over $7,000,000. So if Rogers OMNI, subsidized and guaranteed 100% visibility in all Pay TV (and all free TV) homes, with unlimited ability to sell local advertising, takes just half of the local advertising business from Canadian ethnic channels, the group will become unprofitable and unsustainable.”
“Rogers’ total share of the ethnic television market will likely exceed 40% if not 45%. This is above the level of ownership concentration that the CRTC has indicated is unacceptable for English or French-language television.” – ECG
The new revenue also simply makes OMNI too big within the realm of ethnic broadcasting, say the petitioners. “With the new wholesale fee approved by the CRTC and the ability sell local advertising, Rogers’ revenue share within the discretionary ethnic sector will likely rise to more than 25% of total revenue, where it sits today,” adds the ECG document.
“When it is considered that Rogers also operates all but one of the over-the-air ethnic television stations available in Canada today, Rogers’ total share of the ethnic television market will likely exceed 40% if not 45%. This is above the level of ownership concentration that the CRTC has indicated is unacceptable for English or French-language television.”
TLN also backs the petition and court case filed by ICTV, which calls for the removal of the CRTC chair and one of the vice-chairs for meeting with Rogers officials, as we covered here.
ECG also noted that OMNI is now, and will remain, an afterthought in the Rogers empire, where such a licence would have instead been the top priority for ECG, as well as the other applicants. The financial terms imposed on Rogers will see OMNI wither, it notes. For example, the Commission approved a wholesale fee of $0.19 per subscriber, not the graduated rise to $0.21 Rogers had requested. “(T)he continued operation of OMNI Regional is based on the requirement that Rogers fund any shortfall required to run OMNI Regional and return any ‘profits’ to support OMNI Regional,” reads the ECG petition.
“These financial terms do not bode well for the future operation of OMNI Regional. In effect, the Commission has licensed OMNI Regional to operate as a non-profit service, but Rogers, manifestly, is a for-profit entity. This, and the fact that the Commission did not approve the wholesale fee or licence term Rogers indicated was necessary will raise an inevitable and profound tension between the substantial financial and operational needs to run OMNI Regional – and Rogers’ overriding mandate as a publicly-traded, profit-driven company to show value and investment returns to shareholders.
“Given the financial terms on which OMNI Regional was licensed, the service will be operated by Rogers, at best, so that it will lose the least amount of money – and require the least possible contribution from Rogers’ other businesses. With these constraints, it is difficult to understand why Rogers has chosen to continue to operate OMNI Regional at all – except perhaps as a defensive measure to foreclose competition from other applicants,” reads the ECG document.
TLN also noted it asked for just $0.13 per subscriber per month, well below OMNI, giving it another reason to be perplexed Rogers was selected.
At the very least, say both the ECG and TLN petitions to Cabinet, is the government must force the CRTC to re-examine its ethnic broadcasting policy (last examined in 1998-99), given this decision and the myriad other existential challenges facing ethnic broadcasters in Canada – all of whom, save OMNI – are small, independent organizations.
“The entire ethnic and third-language television broadcasting sector is now facing deep uncertainty and unnecessary levels of risk.” – ECG
“The broadcasting environment is significantly changed from what it was in 1998, as is the multicultural complexion and linguistic diversity of Canadian society,” reads the TLN petition. “The CRTC has failed to consider these changes. The last review in 1998 followed only 13 years after the previous 1985 policy… Even by that low standard, the CRTC is nearly a decade overdue in initiating a comprehensive review of ethnic broadcasting in Canada.
“The entire ethnic and third-language television broadcasting sector is now facing deep uncertainty and unnecessary levels of risk,” says ECG.
“A key risk posed by online distribution for Canadian third-language services is the prevalence of virtually unrestricted access to pirated content… Unless measures are taken to combat blatant and egregious piracy, there will be very little opportunity for Canadian providers to maintain any value within the Canadian rights market. Consumers will access their content online through illegitimate sources – which will become increasingly normalized due to the inadequacy of Canada’s legal protections for rights holders,” reads the ECG petition.
Also, the likes of ECG and TLN have Canadian content expenditures to make, something which competing non-Canadian services (legitimate or not) do not have to match. “What is the future for Canadian services if non-Canadian providers are able to access the Canadian market directly, while making no contribution to the creation or presentation of Canadian programming?” asks ECG.
The GIC has until August 22nd (90 days after the original decision) to respond to these petitions.
