By Michael Janigan, PIAC
THE CURRENT SPECTACLE of Canada’s television networks engaged in a pie-throwing contest with the cable and satellite industry seems as confusing to the viewer as an episode of “Lost”.
For one thing, the mantle of “consumer champion” sits uneasily on the shoulders of the distributors – the cable and satellite companies, whose own offerings are crammed with services owned by them that hoover up ever-increasing subscriber fees. In turn, some Canadians are startled to learn that there still is significant local broadcasting, after over two decades of damaging cuts to such programming.
The facts are that the dynamics of the current controversy are not readily sorted out within the confines of the issue itself. Yes, carriage on cable and satellite assists television network stations in garnering advertising revenue. On the other hand, most subscribers insist that local stations are provided in any package sold by the distributors. Distributors chafe at paying for network services available free on an over the air basis, while the networks fume at the boutique distributor offerings getting carriage fees from escalating distributor rates made possible by their packaging with traditional network offerings.
Both the distribution and broadcasting components of Canada’s television industry face the harsh reality of declining interest in the traditional formats for receipt of video, and with it, diminishing advertising revenues for previous network stalwarts. While the cable and satellite distributors claim that networks have mismanaged their way to penury, their own stewardship of reasonable cable and satellite rates has been exploitative at best.
The catfight took on a somewhat farcical quality with the entry of Canadian Heritage Minister, James Moore, into the fray, asserting that his ministry “puts consumers first” and ordering the CRTC to conduct a review to assess the impact of consumers of providing additional monies for local television broadcasting through increased fees. A perusal of the department’s strategic outcomes, its organization, and described activities shows that “putting consumers first” is a well hidden objective. The concepts of reasonable rates, value for service and meaningful competition seem to be absent from Heritage Canada‘s operating lexicon. In fact, the word “consumer” seems to be missing altogether.
Minister’s Moore’s brief foray into consumer populism was quickly squelched by Heritage Canada officials who brushed off the CRTC’s request that funding be provided for meaningful consumer and public interest participation in a proceeding where the industry players are spending millions. One senior bureaucrat sniffed that consumer groups could make an appointment to discuss consumer concerns with department officials, in a similar fashion to the student cafeteria committee taking their lunch complaints to the high school principal.
The minister and his department do have reason to be nervous about a genuine no-holds barred review of the policies that gave rise to the current spat. A Faustian bargain has been historically cut with the distributors to allow the plunder of Canadian pocketbooks in return for carriage of the requisite Canadian content. As prices rise, and advertising revenues fall , the necessity to keep representatives of ordinary viewers from delving into the government-sanctioned shoveling of money into some rather deep pockets by policy makers becomes acute.
If such a review does occur, its first priority must be to make basic service basic and affordable. It should contain only those channels that are required to meet the minimum needs of Canadians to access television programming. This would include local broadcasting channels, coupled with services deemed essential to fulfilling the national objectives and consumer demand. It would be priced to ensure access, and all services carried would be treated the same in terms of carriage fees paid to channels from the basic service rate.
That rate, preferably less than $15 per month, would be set by regulatory review and capped by the CRTC in a similar fashion as basic service is capped in local service telephony. Together with controlling the content of basic service, these new practices would ensure that most Canadians can afford a television distribution service and halt the pattern of rates skyrocketing beyond the rate of inflation. This is particularly important when over 4 million Canadians are facing the loss of over the air analog broadcasting in 2011. Such measures would also bring some competitive pressure on the rest of the offerings of cable and satellite distributors.
“Putting the consumer first” in Canadian television will mean more than issuing a press release. Several generations of misguided bureaucrats and regulators have thought that the only role for consumers was to quietly pay their cable and satellite bills. We have just scratched the surface of their neglect that will require redress by way of genuine consumer-centred reform, not public relations.
Michael Janigan is the executive director and general counsel for the Public Interest Advocacy Centre (PIAC). www.piac.ca
