Cable / Telecom News

Local avails rules liberalized



OTTAWA – Cable and satellite companies can now advertise their Internet and voice offerings on CNN, A&E, SpikeTV and other American cable channels, the CRTC has ruled.

The American channels make two minutes per hour available for local ad sales – which is a multi-billion-dollar business for U.S. MSOs. However, Canadian cable companies are not allowed, by regulation, to sell the time here.

Seventy-five percent of the time has to be given – at cost – to Canadian broadcasters, while 25% of the time could be used to promote cable’s video offerings – meaning the cablecos could not advertise their own triple- or quad-play bundles. Friday’s decision lets the cable companies advertise their high speed Internet and wired or wireless telephony services, too.

The cable industry has visited this issue on several occasions, and had a request to be able to sell that ad time turned down by the CRTC last summer, as reported by cartt.ca.

This time, EastLink and Rogers had all asked that the rules governing local avails be changed to encompass voice and Internet services, too. MTS, on the other hand, had complained to the Commission that Shaw was already doing this, in violation of the stated regs.

MTS also objected to the Rogers and EastLink request, saying, "use of local availabilities is a privilege extended to BDUs for the purpose of promoting programming services, rather than non-programming services, and approval of the applications would not contribute to the attainment of the objectives of the Broadcasting Act. In its view, the applications are essentially requests to ‘air significant amounts of advertising, absolutely free of charge.’ It argued that approval would provide the applicants with further tools to maintain their dominance in the BDU market. According to MTS, even if all BDUs were given the ability to use local availabilities to advertise their non-programming services, the benefits of this ability would be greater for incumbent cable BDUs than for any other BDUs, due to the incumbents’ market dominance," says the decision.

The Association of Canadian Advertisers opposed the request as well, but for different reasons, saying that MSOs shouldn’t be allowed to have exclusive use of such valuable ad time (and the sizable Canadian audiences). The ACA said the local avail time should be for sale to all advertisers. "(E)xclusive access by BDUs to this ‘substantial marketing and promotional resource’ is anti-competitive and fundamentally unfair to other advertisers," reads the Commission’s decision.

The Commission dismissed both of those interventions.

The Commission also set aside the Canadian Association of Broadcasters’ request that the costs for insertion of its members promotional material should be examined and specified.

"With respect to the CAB’s request that the Commission specify that programming services should not be required to meet ‘minimum buy’ requirements set by BDUs, the Commission notes Rogers’ response that minimum buys are necessary administrative mechanisms and are consistent with the Commission’s policy and industry practices," says the decision. "In any event, the Commission also notes that this request pertains to the 75% of local availabilities that are used to insert promotions from programming services. Accordingly, this request is outside the scope of the current proceeding."