GATINEAU – Bell Canada is now prepared to allow the Canadian Broadcast Corp. to receive money from the Local Programming Improvement Fund (LPIF) as long as the pubcaster is the sole provider of local TV services in a particular small market.
The media and communications giant had argued in comments that since the CBC receives approximately $1 billion from the federal government it shouldn’t qualify for funds from LPIF. But during opening remarks, Mirko Bibic, executive VP and chief legal and regulatory officer at BCE, said private local TV remains in a difficult financial situation and could see station closures, with CBC becoming the only TV provider.
“We believe those communities deserve to receive quality local programming for as long as possible and this requires sufficient funding,” he said. “In the interest of these viewers, therefore, we can accept that the CBC continues to receive LPIF funding.”
CRTC vice-chair of broadcasting Tom Pentafountas wondered where the change of heart came from.
“We didn’t think it would hang together for us to come forward to say we have a viewer centric model where a viewer is a viewer wherever they live, whoever serves them, and then to turn around in the next breadth to say but not if it’s the CBC,” Bibic explained. He added other factors such as the CBC getting its budget cut by 10% played a part in Bell’s revised position.
While Bell is willing to cut CBC some slack, Shaw Communications has a specific issue with the national public broadcaster. Shaw noted that CBC Halifax station receives $5.7 million in LPIF funding, five times the amount that Shaw’s station in the city gets.
“Stations like CBC Halifax are not increasing the local programming audience, which on conventional TV is flat at best,” said Troy Reed, senior VP of news and station operations for Shaw. “They are simply taking audience share away from other stations and making the sustainability of private broadcasters even more challenging.”
Shaw argues that the current LPIF regime undermines the ability to “change the face of local programming and respond to evolving consumer demands” by minimizing the impact of innovation and investment. The company said LPIF should be eliminated by the end of the year.
Innovations such as its centralized news production facilities were done without subsidies, Shaw said, adding this means more money was spent on programming and putting reporters in the streets.
“None of these innovations would have happened if our operations were simply propped up with subsidies. Preserving LPIF – particularly with its current formula of ‘spend more, get more’ – will simply reward inefficient local news operations, deter innovation and distort the market,” said Reed.
Although Bell said it would benefit financially from the scrapping of LPIF, it noted doing so may not actually be to the benefit of Canadian TV viewers or the broadcasting system. Rather, the company argued for a modified LPIF framework to be extended two years that would be based on viewership: the greater the number of viewers, the more money the local TV provider would get.
If the LPIF is eliminated though, the company said that other condition would have to be put in place. For example, Bell would have to be treated just like Shaw and Rogers Communications Inc. in Ontario “one stick, one town, the whole province gets covered,” said Bibic.
Independent broadcasters Channel Zero (owner of CHCH Hamilton and CJNT Montreal) and CHEK Media Group (Victoria) characterized LPIF as “a phenomenal policy success for local television.” Jim Pattison Broadcasting Group (stations in Prince George, Kamloops and Medicine Hat) said the program came at an “absolutely critical time” and allowed the company to “expand and improve the quality” of local programming and news.
John Pollard, president of CHEK Media, said funding from LPIF has lead “directly” to more local programming and greater programming diversity in its markets. “It’s not an exaggeration for us to say that without LPIF it is highly likely that both CHEK and CHCH would not be on-air today,” he said.
Cal Millar, president and COO of Channel Zero, described LPIF as “a support wall that reinforces a building while it is being renovated. It does not have to be a forever thing, but it is necessary in the immediate term, while construction is underway.”
Commissioner Marc Patrone asked how long the renovation will last, suggesting that sometimes subsidies can last forever. Pollard noted that in 2007 CHCH and CHEK were losing millions and millions of dollars annually (under the ownership of the former CanWest Global), but the situation has gotten considerably better. “We have changed the model of local television and it’s a work in progress, but it’s not over,” he said.
Added Millar: “At some point we would agree with you that you can’t have a subsidy or support forever and we don’t disagree with that. We’re not certain that the time is now.”
The LPIF hearing continues tomorrow.
