April 18, 2006 10 years 10 months ago

Dalfen on the TV Review: A Cartt.ca Exclusive

THIS TV POLICY REVIEW will not be an easy thing.

The new Conservative government certainly wants a say. The CBC's TV licenses are up for renewal at the same time. Private broadcasters are demanding a fee for the carriage of their signals, a way to deal with distant signals, more ad time per hour and since the high definition conversion is under way and very expensive, maybe the right to abandon tower transmission. Televised dramatic programming is resurgent Stateside but there are few new Canadian-made dramas and not enough money in the current system to make enough of them. New technologies like PVRs and Slingboxes and mobile devices are altering the ways people consume TV, redrawing the ad-supported TV model.

Coming up with a coherent, strong, yet flexible policy on television in Canada that can be carried forward for many years is going to be a huge, complex, task. Commission staffers have already met with senior Canadian broadcasters to try to get a handle on the many issues sitting atop those executives' in-boxes.

In fact, the industry was expecting a public announcement last Wednesday. During Astral Media's quarterly conference call with financial analysts that morning, Astral chairman André Bureau – when asked about a potential TV policy review – said "we'll find out about that in a few minutes." It was about 10:55 a.m. and CRTC releases are typically at 11:00. But, the major announcement that day was the Commission's decision to stay out of regulating the transmission of video to cell phones. The fact there was no TV policy announcement was a bit of a surprise to some.

It is coming, however (which was first reported back in February by www.cartt.ca). The CBC has been told that its license renewal hearing set for this summer will be put off (it'll get an administrative extension when it expires in August) and the call for applications for new TV stations in Calgary has been extended indefinitely. Plus, CTV and Global Television face license renewals in 2007 and need to know what the new regulatory landscape is going to look like before they begin paying consultants and lawyers untold millions to prepare their applications.

"We were toying with the idea of indicating to the industry what we wanted and what we were going to be doing. We're going to be looking at industry-wide issues and to that extent start doing homework about variety of issues," CRTC chairman Charles Dalfen told www.cartt.ca last week, explaining the announcement expectation and then delay. "We were toying with that idea because consulting work needs to be done and time frames always end up short but frankly, in light of ongoing conversations, it would probably be more helpful to everybody if we can be absolutely certain that it be government wishes to make policy."

And that's the key. The new federal government, with experienced industry veteran Bev Oda as Heritage Minister, seems in the mood to change a few things about the broadcast industry in Canada.

"I think that there is certainly a mood on the part of the government, which is a positive thing, to do policy making. It may be a perception that policy has been left to agencies to make but now there are issues that they would like to take a top down view of. I think both our acts (Telecom and Broadcast) allow for policy direction and… I think it would be a good thing on some issues if (the government) did take hold," says Dalfen.

"I don’t think there’s any intent to (interfere with licensing), but there is an intent to make policy in the broadest sense… and I think that’s something that should happen," he continues. "So for now we'll hold off (on the review announcement) – and obviously the clock is marching. I think everyone is aware of that."

How long will the announcement be delayed? "Not too long," he added.

As mentioned, there are almost as many issues facing a review as there are TV channels but two biggies are: Does the government wish to change the role of the CBC? Does it wish to alter the TV production funding arrangements?

"Contributions to the CTF (Canadian Television Fund) are shared between the industry and the government – and this government seems to want to examine the policies – and to us that is helpful because they know that our licensees, public broadcasters, and certainly those that depend on the CTF, which is very important for us because of our emphasis on drama, are inter-linked," explains Dalfen.

Besides the Canadian content funding conundrum, the Commission, when licensing the likes of CBC and CTV and Global and so on, has to somehow try to be flexible enough to contemplate what TV in Canada will look like beyond 2010. Given the changes in the past seven years since the CBC's last license renewal, for example (broadcast licenses are generally seven years long), the TV landscape in 1999 seems so much easier. So much more orderly.

But looking beyond a fiscal quarter or a year can sometimes provide only a very hazy outlook. For example, the Slingbox – a device which lets viewers watch their home TV wherever they are in the world on their laptop or PDA – didn't even exist 10 months ago. And with the growth of video on demand along with PVRs and their quick ad-skipping ability gaining acceptance, not to mention the impact of gaming, it's difficult to paint an overly rosy picture of the TV industry a few years from now.

The only certainty is that it will be more complex.

One thing chairman Dalfen is counting on is that the content rights holders themselves will largely set the market. The content creators or owners want to make money off their creations of course and can mostly control how it is consumed – or at least how it's first broadcast.

As an example of rights holder control, he pointed at the upcoming online test by ABC to offer shows like Desperate Housewives and Lost for free on the Internet. Geographic tagging technology means Canadians generally won't be able to get access to the online broadcasts because the U.S. broadcaster doesn't hold the rights to show those programs in Canada (both are owned by CTV).

"It's interesting because the usual question we get is 'how are you going to regulate with the Internet? You can't control it," says Dalfen. "The truth is, you can program it and the rights holders have an interest in doing that to control their private property.

"It's interesting how the rights holders continue to want an orderly market."

Of course, Dalfen acknowledged, there are ways around such technology but most viewers don't know, don’t understand or don't want to bother with getting around the system.

With all this facing the Commission and those companies that use the public airwaves, it's no wonder the new federal government wants a say before new policy is set.

"If the government wishes to make general policy in this area… they have the democratic right to do it and they have the legal authority under our act to do it," reminds Dalfen. "If they wish to do it, that’s exactly fine… I, frankly, am confident that there will not be any confusion in this understanding. I think the government does have to wait to hear what the ministers say in the next weeks and months."

However, since two large Canadian broadcasters (CanWest and Quebecor) have already repeatedly voiced their opinions on fee for carriage, how will the Commission address that particular hot-button issue?

"It would mean changes," says Dalfen. "The history going back to the beginning of cable was cable was seen as a medium that perfected the broadcaster’s signal. Now the broadcaster is saying because cable is being brought in, 'Wait a minute. The specialties are getting two strains of revenue? What about us?'

"And cable says, 'Well, you guys have a lot of advantages, such as priority carry and back and forth it goes," he continues. "There’s a whole series of things that flow from it like simultaneous substitution, which for us it goes to the heart of creating and financing top drawer programming.

"The system is healthy but it always is facing fragmentation in its services and new technologies and new methods of exhibition. You know, it’s a very interesting time," adds Dalfen.

"It is a good thing the government seems to be embarking in this direction and taking a look at it with a minister who knows this sector… I think this is a good thing for the entire industry."

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