GATINEAU – Final replies by broadcasters to the many, many, many things which were uttered over two-and-a-half weeks of the conventional TV license renewal hearing were due into the Commission Wednesday and to no one’s surprise, no minds have been changed.
We’ve been told by two sources with knowledge of the timing that the Commission will issue a decision on its 1:1 idea on Friday (tomorrow) – just as Canada’s broadcasters are headed to Los Angeles to buy American programming for next fall’s TV schedule.
One of the key “broader policy” questions the Regulator put to the industry was whether or not a dollar-for-dollar spending ratio should be a new condition of license for the conventional stations. That would mean if the broadcasters spend $750 million on foreign shows, about what they spent last year, they’d have to spend the same amount on their Cancon.
The idea was roundly criticized during the hearing by the broadcasters as completely unfair and unworkable – especially for this year since CTV and Canwest in particular already are party to longer term content agreements with American studios that would preclude them from abiding by a 1:1 rule unless they dramatically increased their Cancon spend, something which everyone acknowledges they can’t afford.
As for the full decision(s)? The rest of the “broader policy issues” may be released at or just before the Banff World TV Festival next month (June 7-10) and a decision on the license renewals themselves around the end of June or into July.
In the meantime, Canwest’s written reply had a neat “gotcha” moment that refuted what the Communications, Energy and Paperworkers Union had to say about their remote production. CEP complained that Canwest’s moves over the past 24 months or so to centralize its production in a few centres, rather than having production capabilities at all of its stations.
CEP believed that if the historic Halifax Explosion happened today the Halifax Global Television station “would have to rely on the Edmonton production centre to get the news to air.”
Actually, having production centres in Edmonton, Calgary, Vancouver and Toronto is a very good thing, reads Canwest’s reply submitted yesterday. “This means we can get on the air with breaking news at a moment’s notice around the clock – a vast improvement over the situation in most standalone television stations which would need to call in a full shift and wait for at least five people to arrive at the station before being able to break in with the news,” it reads.
The CEP folks went on to say: “depending on when that fire happens in Halifax will depend on when you see it. If it happens after everyone has gone home you won’t see it till the next day because when the show goes to air in Halifax there are two people in the station. There is an engineer and there is an anchor in front of a green wall.”
That exact day, noted the Canwest reply, a huge wildfire actually broke out in Halifax, “forcing a large-scale evacuation even as our newscast went to air. We were proud to provide live reporting on the fire, not the next day, but as it happened during our 6:00 p.m. newscast.”
While the broadcasters continue to insist they need more regs that will bring them more money, the carriers, in their replies, continue to resist. The two main sources of new revenue could come from a fee for carriage (which technically was not to be a part of this hearing, but surely was) and a tripling of the size of the Local Programming Improvement Fund.
If the two proposals were granted at their highest contemplated levels, broadcasters could see an additional $500 to $600 million a year from Canadian TV subscribers.
Both ideas need to be junked, says Rogers Communications’ reply. “Consumers should not be required to underwrite the investments and operations of highly integrated and successful broadcasting ownership groups,” it reads. “The industry consolidation among OTA broadcasters and specialty services has had its intended effect by strengthening the Canadian broadcasting industry overall. This is borne out in the recent financials statistics published by the Commission, which show the specialty sector generating a significant profit before interest and taxes (PBIT) margin of almost 24% in 2008.”
The current LPIF, which hasn’t even been launched yet, adds Rogers (a 1% tax on BDU revenues which is projected to bring in $60 to $70 million for small market broadcasters) is more than adequate to see those stations through the current recession.
“On the other hand, CTVgm and Canwest both determined that an LPIF of exactly 3% would be required for their small market OTA television stations to off-set losses and break-even,” continues the Rogers reply. “However, these losses are not caused by any increase in the cost of producing local programming. These losses are caused by the recession, by bad decisions made by the broadcasters and by a lack of DTH carriage. There is no reason why cable operators should be asked to underwrite any and all losses incurred by small market broadcasters. Furthermore, when asked whether they would produce incremental local programming in return for LPIF funding, CTVgm and Canwest flatly declined.”
Finally, Telus stuck to its guns, as unpalatable as their opinions may be to some. The BDU insisted that some TV stations are failing simply because viewers don’t find them to be good enough to watch.
“Telus is merely suggesting that as audiences shift, some channels will no longer be viable and band-aid subsidies are not enough to turn that around. At the end of the day, audiences dictate success or failure,” reads the Telus reply. “The only viable response is to adapt to the audience or exit the business. And Telus submits that if the system is redesigned to subsidize channels that do not attract audiences, better, more successful channels are penalized by artificial regulatory-induced fragmentation.
“Nothing in the Broadcasting Act requires certain television services to continue to operate, or to be operated by the same licensee, if they aren’t successful in reaching audiences. The Commission must not seek to implement a rigid Canadian broadcasting system propped up by ever increasing subsidies to fill the widening gap left by audience shifts. Instead, the Commission should regulate the broadcasting system in the fluid manner intended by the Broadcasting Act and accept that some traditional broadcasting services will begin to disappear as new platforms emerge.”
