By Ahmad Hathout
The country’s largest broadcasters are asking the CRTC to wait until it has implemented the rules from the Online Streaming Act before it does anything to the rate that broadcasters must pay to carry certain television programs.
Not-for-profit media company Accessible Media Inc. filed a Part 1 application in February asking the regulator to up the price broadcasters pay it to carry its English-language AMI-tv and French-language AMI-tele programs, citing financial difficulties. It is asking for “modest” 1 cent and 2 cent increases per subscriber per month for the programs, respectively, until the next licence renewal period of August 2026.
But Rogers, Bell, Quebecor and Cogeco warned in separate responses to the application that the request should not be considered before the commission has implemented the rules of the Online Streaming Act, which will impose regulatory obligations on online platforms and include payment into the mandatory carriage system known as 9.1(1)(h) under the Broadcasting Act.
Under the Online Streaming Act, “the Commission can require online undertakings to make expenditures for the purposes of supporting broadcasting undertakings offering audio or video programming services that are of exceptional importance to the achievement of the policy objectives set out in subsection 3(1) of the Act,” Bell said in its response.
“As such, the Commission has the power to require online undertakings to contribute financially to 9.1(1)(h) services, since those services are of exceptional importance to the achievement of the Act,” Bell added.
Bell and other traditional broadcasters are recommending the creation of a fund supported by online undertakings to pay for the programs to be carried by the BDUs.
“Allowing AMI Services to increase their wholesale fees will open the door for other 9.1(1)(h) services to do the same prior to licence renewal, and could result in a much higher incremental cost for BDUs in the short term,” Bell said in its application.
It added that there is another application to increase the mandatory carry rate for the Aboriginal Peoples Television Network Incorporated and another application for the CRTC to consider adding Ugavut TV and Inuit TV to the roster of must-carry programs.
“These three applications, in addition to the request of AMI, would result in an increase to the wholesale fees of 9.1(1)(h) services of 37.1% in the English-language market and 82% in the French-language market compared to eight years ago,” Bell said.
“We further note that the existing competitive disadvantage between traditional BDUs and [virtual] BDUs is exacerbated by the fixed regulated price traditional BDUs must charge for the small basic service,” Bell added. “BDUs are not able to pass along incremental charges to customers for new and existing 9.1(1)(h) services because the amount they are permitted to charge for the small basic service is capped at $25.
“However, the wholesale fees of 9.1(1)(h) services continue to rise. Since the first decision of the Commission on the retail price of the basic service, eight years ago, the wholesale fees of 9.1(1)(h) services have increased by 21% in the English-language market and by 65.8% in the French-language market.”
The broadcasters made central in their responses to AMI’s application that BDUs have suffered for years from cord cutting and revenue declines as online platform competition increased. Increasing the rate they pay for these programs before the implementation of the new rules and before a uniform examination at the next licence renewal period will not just add to their financial burden, they say, but will also be unfair.
Part of the unfair argument comes from the fact that these broadcasters have asked the CRTC to reduce their Canadian content obligations or at least give them the flexibility to move money to different program categories in a quest to offset a bad advertising market. The commission, however, has said that it is focused on implementing the new rules first, which would presumably solve a lot of the problems raised in those applications.
“BDUs’ payment of regulated wholesale fees to 9.1(1)(h) Services represents a significant financial burden,” Rogers said in its response to AMI’s application. “It is critical that the regulatory framework be recalibrated across all undertakings, both foreign and domestic. In this modernized regulatory environment, foreign online streaming services must share the burden of financially supporting 9.1(1)(h) Services.”
Cogeco and Quebecor added that AMI’s “modest” increase request isn’t actually modest, especially as increased inflation has lowered the purchasing power of Canadians.
They say the consequence and irony of that is fewer people will see the programs because there will be further cuts to cable subscriptions. That, in turn, means less money to support Canadian programming and the development of local culture and talent.
The regulator denied last year an application by Bell, Cogeco, Eastlink and SaskTel to index to inflation and raise the price from $25 to $28 for the basic television package that includes mandatory carriage programs.
Rogers, Cogeco and Quebecor further argued that AMI has not proven that this type of financial assistance is urgent.
Despite the opposition to AMI’s application, the broadcasters noted that they support the mission of the media company that showcases programming dedicated to Canada’s disability community.
