OTTAWA – TV and film production stakeholders are urging the CRTC to not lose sight of its Canadian programming expenditure (CPE) benchmarks when considering the group-based licence renewals of the large, vertically integrated, broadcasters.
The Canadian Media Production Association tells the Commission that it shouldn’t acquiesce to any demands to deviate from its proposed 30% CPE requirement and argues that the CRTC should reject outright broadcasters’ demands to have CPE requirements lower than 30%.
“Since the broadcaster groups all compete for the same types of programming (both Canadian and foreign) and for the same advertisers, they should all be subject to the same requirements related to CPE for the sake of consistency and competitive equity,” the CMPA writes.
The Directors Guild of Canada (DGC) agrees. The Guild believes “a common CPE for each group is appropriate towards achieving what was one of the original objectives behind a group-based approach to Canadian programming expenditures, namely to act as a brake on foreign programming expenditures.”
With respect to the newly proposed category of Canadian programming (programs of national interest or PNI), the CMPA notes that there is sufficient evidence to suggest that the 5% spending requirement on PNI should actually be much higher than the proposed level. According to an analysis done by the DGC, vertically integrated broadcasters could do much better than 5%. Besides, including documentaries and award shows into the PNI category actually leads to a decrease in CPE for all three genres.
The DGC argues that a 10% PNI CPE is more appropriate.
“As the name implies, these genres of programming are of significant importance to Canadian culture, and it is not unreasonable to expect Canada’s highly profitable vertically integrated broadcast groups to commit to strong support for these types of programming,” states the Guild.
Without a commitment to maintain at least the 5% rate, DGC adds, would result in “a significant reduction in the most difficult to produce and most important types of Canadian programming. While the broadcast groups seek more flexibility, they are proposing to do even less Canadian programming, a situation which should be unacceptable to the Commission.”
The Ontario Media Development Corp. notes that in both cases – the 30% CPE and the 5% PNI CPE should be considered minimum requirements. “The expenditure requirement should be considered a floor for Canadian content spending, not a cap intended to limit the amount broadcasters spend on Canadian content,” the OMDC states.
Of the big, vertically integrated broadcasters, only CTV has committed to the 30% CPE with Shaw Media, Corus Entertainment and Rogers Broadcasting suggesting they be allowed comply with lower Canadian programming expenditure requirements. Shaw suggests it be subject to a CPE level of 29%; Corus either 29% or 27.75% and Rogers 25%.
In addition, CTV argues that all major broadcast groups should have to comply with the same CPE requirements. Rogers disagrees, noting that this type of policy wouldn’t take into account the differences among the broadcast groups which are party to the proceeding.
Pointing to Broadcasting Public Notice 2010-167, Rogers states the 30% CPE requirement was derived from “aggregate spending” of CTV, Shaw and Rogers and represents an “approximation” of the average historical spending of the three companies on a collective basis.
Rogers argues that the CRTC isn’t trying to establish an appropriate CPE percentage for all groups, but rather “a final CPE requirement specific to each group” that takes into account the historic operating results of each group.”
“A case-by-case determination of each group’s CPE obligation is the only fair and equitable way to proceed,” Rogers submits. “It is the only way to ensure that the CPE obligation for each group is based on that group’s recent historical expenditures on Canadian programming and is commensurate with the financial health of the services involved, which has historically been the Commission’s approach in determining CPE obligations for individual stations and services.”
Astral Media agrees with Rogers that a one-size fits all approach to CPE requirements is the wrong one. It notes that there are differences with respect to holdings of each broadcaster including conventional TV and specialty services. “We do not believe that ignoring this reality would promote the establishment of fair competition among these different groups,” the company says.
On the matter of PNI expenditures, Astral urges the commission to ensure that there is enough flexibility in the new rules to deal with the variety of discretionary services a specialty channel operator may have.
“Each service individually may or may not have obligations in this area, according to its particular nature of service,” says Astral. “Some services must devote, according to the definition of their nature of service, a sizable percentage of their programming to drama and documentaries, while other services simply are not allowed to broadcast drama and documentaries.”
(While a pay TV and radio giant, Astral also owns two tiny broadcast stations, CJDC TV in Dawson Creek, B.C. and CFTK TV Terrace, B.C. Corus – another pay, specialty and radio biggie – owns just three OTAs, all in Ontario: Kingston’s CKWS TV; Peterborough’s CHEX TV and Oshawa’s Durham 12.)
The smaller, independent broadcasters note that added regulatory flexibility for the larger, vertically integrated broadcasters may provide benefits to the Canadian broadcasting system, but it could also cause disadvantages for them. They say they need additional flexibility as well.
“It is important that the CRTC recognize that advantages for Canada’s largest broadcasting groups, will lead to disadvantages for independent broadcasters unless mechanisms are put in place to provide for comparable treatment and a regulatory environment that takes into account the circumstances of independent broadcasters,” the Independent Broadcasters Group says in its comments.
IBG (whose members include VisionTV, Stornoway, TV5 and the like) believes that if the big players gain additional flexibility regarding CPE requirements, then they, too, should have some shackles loosened. They point to CPE obligations that have historically been topped up by the Canada Media Fund.
To deal with this inequity, independent broadcasters want the Commission to “consider applications brought by independent broadcasters on an expedited basis to alter conditions of licence and expectations that place independent broadcasters at a disadvantage.”
The CRTC’s group-based licence renewal hearing is set to start on April 4.
