GATINEAU – Reply comments filed with the CRTC on Friday on its broadcasting distribution undertakings and specialty services policy review don’t show anyone has changed their minds. They’ve mostly dug right in, as expected.
(And, we’ll set aside the fee for carriage debate right away for this particular piece. Over-the-air broadcasters and producers who look to see more funds flow their way want consumers to pay a fee for conventional TV stations. Cable and satellite companies do not. We’ll dive deeper into the issue in a later story.)
This story, however, is a tale of two extremes. We looked at submissions from the CAB, CCSA, Rogers, Telus, Shaw, Bragg, Corus, Canwest, CTVglobemedia and a consortium of independent broadcasters and find that all the way on one side of the policy debate is Shaw Communications, which would all but abolish the regulations currently governing BDUs in Canada, citing increased competition from non-regulated media outlets like YouTube, Facebook and iTunes, and regulated competitors like telcos.
Shaw’s submission says its deregulation model is based on competition and consumer choice where, beyond the provision of a basic service, there would be no restrictions on the addition of non-Canadian services to the channel lineups here, and BDUs would only be required to offer a simple preponderance of Canadian specialty services to its customers with no restrictions on how they may purchase them. It also says the specialty services genre protection – or in Shaw’s words, “genre monopolies” – where there is but one Canadian channel per programming genre with no other allowed to compete with it, should be done away with.
In Shaw’s future BDU world, beyond a basic service with the local Canadian broadcasters and a few other channels, Canadians could build their TV packages without any other Canuck channel, if they wished.
“(W)e need to be able to compete with all domestic and international communications services, in whatever form they take,” reads Shaw’s reply. “… BDUs should not be forced to ensure that each customer ‘takes’ or ‘receives’ a majority of Canadian services.”
Shaw also wants to sell ads on its community channel, in video on demand streams and on the two minutes of “local avail” time on American cable channels like CNN and A&E.
All the way on the other side of the debate is the submission from a group of Canadian independent broadcasters which includes Channel Zero (Movieola, Silver Screen Classics), S-Vox (VisionTV, One: Body, Mind & Spirit, The Christian Channel); Ethnic Channels Group (a number of third-language channels); Fairchild/Talentvision; TV5 Quebec Canada and Stornoway Communications (ichannel, bpm:tv and The Pet Network).
Together, they drafted a new “Statement of Broadcasting Principles” which was submitted with its reply comments. The statement recognizes the goals of the Broadcasting Act, our proximity to the hugely influential U.S. media market, the recent merger and acquisition activity on the broadcast and cable side which means that 90% of BDU subscribers in Canada are served by five companies and that their size and influence means they are acting as gatekeepers in the system.
The independents’ Statement of Principles wants genre exclusivity maintained, a moratorium on the approval of any other non-Canadian service being added to the eligible satellite list, and a change in the local avail policy so that BDUs can’t use them to promote their own phone or Internet services, making them available only to Canadian programmers, and to prohibit BDUs from selling ad time on their video on demand platforms. They call it their “Canada First” strategy.
The Statement also insists that a simple preponderance rule like the one proposed by Shaw and other BDUs is not good enough. The independent ‘casters say each BDU should not only have to make sure 66% of their channel lineups are Canadian channels but also “ensure that a minimum of 66% of the discretionary programming services received by its subscribers are services offered by unaffiliated, licensed Canadian pay television and specialty service programming undertakings.”
Of course, when it comes to the other submissions we reviewed, other BDUs are closest to Shaw in their replies, while broadcasters were nearer to the independents. “The Commission should reject the BDU approach proposing the complete elimination of genre protection policies vis-à-vis Canadian discretionary services,” reads Corus Entertainment’s reply – proving perhaps that corporate sisters can disagree (the Shaw family owns both Shaw Communications and Corus).
Further, Channel Zero’s individual submission also calls for the standardization of all specialty service categories into just two: Category A and Category B, noting Pelmorex (The Weather Network) proposed something similar.
“Category A services would be required to contribute significantly to the creation and presentation of Canadian programming. In particular, they would be subject to a minimum Canadian content requirement of 50% and subject to an annual Canadian programming expenditure ("CPE") requirement of at least 50% of the previous year’s gross revenues. In return, the Category A services would be entitled to mandatory digital carriage by Class 1 and Class 2 and DTH BDUs,” reads the Channel Zero submission.
“All analog specialty services and all Category 1 digital specialty services that are currently in operation would be automatically converted into Category A licensees. Category 2 services that are in operation by April 7, 2008 would have a two year period in which to apply for conversion into a Category A service provided that the Canadian content and CPE requirements would be met.”
Category B services would be anyone else not meeting the requirements and would have no mandatory carriage on BDUs.
That said, “In light of market realities and commercial incentives to match competitive offerings, there is no compelling reason to impose a ‘double preponderance’ rule or to increase the proportion of services rendered by a subscriber that must be Canadian,” reads the Rogers Communications submission.
And that of course means new mandatory channels is not something the BDUs wish to accept, meaning fee for carriage will be but one of the many hot buttons the Commission will have to push during its few weeks of hearings beginning April 7th.
Watch for additional in-depth coverage of these issues as the hearings approach on Cartt.ca.
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