OTTAWA – Industry protests over recommendations in the just-released Dunbar-Leblanc report are bound to follow fast and furious in the next few days.
After all, the report recommends the CRTC re-examine simultaneous substitution, possibly reduce the amount of independently produced programming required, and be more pro-active in adjudicating competitive disputes, including distributor undue preference with regard to affiliated TV channels.
The Canadian Association of Broadcasters (CAB) on the eve the 315-page report, entitled “Review of the Regulatory Framework for Broadcasting Services in Canada,” was released was already voicing its opposition.
Stating it had “significant concerns” with the report prepared by lawyers Laurence Dunbar and Christian Leblanc on behalf of the CRTC, the CAB in a media release declared the “report’s far-reaching recommendations, if not properly applied, could fundamentally undermine the foundation of the Canadian broadcasting industry.”
The CAB is particularly concerned about the report’s recommendations regarding simultaneous substitution.
Dunbar and Leblanc urge the commission to re-evaluate its simultaneous substitution policy because it encourages over-the-air Canadian broadcasters to schedule American TV shows in peak viewing times to the detriment of Canadian programming.
“In a very real sense, simultaneous substitution appears to be dictating the scheduling of Canadian English-language over-the-air television networks – pushing Canadian programs into non-peak viewing periods or into the summer months,” reads the report.
“We do not believe that the report has displayed a necessary depth of analysis, nor an appropriate rationale or context for some of the sweeping recommendations contained within,” said CAB president and CEO Glenn O’Farrell in the media release. “The CAB appreciates the value of launching a dialogue on broadcast regulations, but on a preliminary review, this report launches the discussion on the wrong trigger points.”
Ken Engelhart, vice-president of regulatory for Rogers, was a little more encouraged by the report but still had reservations.
“It’s a very good report and there’s a lot of food for thought. I thought, in general, the recommendations to use a preponderance test, to do away with complex tiering and linkage rules and to give specialty TV channels more flexibility to encroach on each other’s genres were good,” he told cartt.ca. “But the report also recommends giving a bigger role to the CRTC in resolving anti-competitive conduct. That would be an important change. We need to have more time to examine it.”
The report agrees with the CRTC proposal that distributors simply be required to carry at least 51% of Canadian TV channels. This simpler form of regulation will ensure consumer demand plays a greater role in the Canadian broadcasting system, states the report.
The authors feel forcing Canadians to subscribe to “discretionary” services they don’t want will drive them to the Internet, pay-per-view and on-demand services. Thus, the report calls for the elimination of additional tiering and linkage rules currently in place.
As a safeguard against anti-competitive practices by the distributors though, the report suggests the commission should have more powers and be prepared to adjudicate disputes over such things as appropriate carriage fees and distributors’ possible undue preference to affiliated TV channels.
Dunbar and Leblanc also want the CRTC to be given the ability to impose “credible sanctions,” such as being able to levy fines, in dealing with disputes.
The report, however, calls on the basic service and the “buy-through” requirement to be maintained.
It also recommends such things as compulsory carriage, inclusion in the basic package and perhaps better channel placement for discretionary TV channels that spend more on Canadian programming or perform a public interest function.
Another bound-to-be controversial recommendation – at least in the production community – is the one calling for a re-examination of prohibitions on broadcaster-affiliated in-house production.
“There are signs that this policy (production by independent producer requirements ranging from 75% of priority programming on conventional TV to 25% on Category 1 specialty services) may not be working in a manner that is most conducive to the production of Canadian content in the current economic and technological environment,” states the report.
The two lawyers recommend any reductions or rationalization of independent production requirements for different classes of television channels be transitioned in, and that the CRTC carefully monitor the impact of these changes.
Given that the Canadian Film and Television Production Association argued before the CRTC that 100%, not the proposed 85%, of benefits money should go to independent producers during the recent hearing on Rogers purchase of the Citytv stations, the organization is likely to take issue with Dunbar and Leblanc’s call to study the “high levels” of independent production required in the Canadian broadcasting industry.
Other recommendations in the report include providing less genre protection, rationalizing the different licence categories of specialty TV channels prior to complete digital migration in 2010-2013, eliminating advertising limits, licensing more over-the-air TV channels to new players in markets where spectrum is available (with less weight being given to economic arguments that protect the incumbent broadcasters), giving more flexibility to distributors to market discretionary TV channels, and developing more targeted and effective incentives for broadcasters to exhibit Canadian content during peak viewing hours. The report notes the CRTC’s decision to grant more ad time to networks broadcasting Canadian drama has been ineffective.
With regard to new media, the report states the commission should not impose new regulatory restrictions on Canadian companies, but should instead encourage them to produce Canadian new media content for the Internet.
“In our view, the answer also lies in ensuring that the Canadian broadcasting system adapts to some of the trends that the Internet has spawned in order to remain relevant,” states the report. “These trends include a desire on the part of many consumers for content ‘anywhere, anytime,’ the desire for younger consumers to have an interactive experience with digital media, the desire for advertisers to be able to target relevant audiences with interactive media, and the development of new ‘communities of interest’ that are not necessarily tied to local or regional geographic areas.”
The report urges the CRTC to work with other government agencies and departments to develop a national policy for digital media.
The Dunbar-Leblanc report will be considered by the CRTC in its January 2008 review of its policies for specialty and pay TV channels and for broadcast distributors. The CRTC said the report may also cause it to re-look at its radio and over-the-air television policies.
