GATINEAU – The winds of criticism were blowing Pelmorex Communications’ way during the first day of its licence renewal hearing in Gatineau on Tuesday as CRTC chair Konrad von Finckenstein and Pelmorex senior VP of regulatory and strategic affairs Paul Temple sparred over aspects of the company’s licence renewal application.
In addition to asking for a seven-year licence renewal, Pelmorex is requesting an extension to the 2009 mandatory order on 9(1)(h) that would keep the Weather Network and MétéoMédia on basic carriage until 2018. The company says that it needs the extension to help offset the costs of operating the National Alerting Aggregation and Dissemination (NAAD) system, which launched last June. An order granting the extension would also coincide with the ending of its next licence term if the commission chooses to renew its broadcasting licence.
Pelmorex said in its opening remarks that without continued carriage on basic beyond 2015, it won’t be able to support the NAAD service “much less our continued quality service at a low price to small communities in both English and French. If even one large distributor moved us to a tier, the results would be devastating and would require dramatic adjustments to our small market pricing and operations.”
Under questioning, von Finckenstein asked whether that meant if 9(1)(h) status wasn’t extended to 2018 that Pelmorex would halt operations of the NAAD service. “It’s not going to go away. If you’re not operating it, either the government will take it over or somebody else will buy it from you and operate it. You’re not going to dismantle a national alerting system,” he said.
“We’re not going to be able to afford to provide that. Whether, how or if it continues, I don’t know,” responded Temple.
Pelmorex also noted that if the Commission were to refuse an extension to the mandatory order it would create a level uncertainty that would affect the ongoing development of the NAAD system. “
Temple noted during the question and answer session that if the CRTC is going to revisit the issue in a few years, it would send “a chill through the whole system.” But he added that if the application is approved as proposed, “there’s no doubt in anyone’s mind. There’s a clear signal to everyone to get on board and let’s get going. It’s full steam ahead.”
The CRTC chair pressed Pelmorex on the mandatory order extension request.
“I don’t want to give you a free ride when you don’t deserve one. It’s as simple as that,” he said, referring to the fact that Pelmorex didn’t meet the 9(1)(h) requirements but was granted the status only because of the NAAD system.
Temple discounted the free ride notion, pointing to all the company’s activities such as its broadcasting obligations, plans to improve programming, maintain service to small communities and francophone Canada, offer service in HD and the NAAD system.
“If you look at the business plan, it’s very reasonable and we’re not getting a free ride,” he said. “What we’re trying to explain is that we’re not getting a free ride.”
The large broadcasters and distributors also questioned the merits of extending the mandatory order, noting that the NAAD service and the order are in no way linked and are independent of each other. In a joint submission, Bell Canada, Bell Aliant, Cogeco Cable, Quebecor Media, Rogers Communications and Shaw Communications described the extension request as “wholly unwarranted” noting that nothing has changed that would warrant the granting of a three-year extension.
The companies say the Commission will have an opportunity to address the mandatory order in due course taking into account the broadcasting environment, the emergence of new technologies, the digital transition and the impact on consumers. Only after an evaluation of such issues will the CRTC be in a position to make a decision on the value and necessity of the mandatory order.
“Pelmorex will not suffer any harm as a result of having to respect the Commission’s decision to wait until 2015 to possibly apply for an extension,” the companies stated in their opening remarks. “Its broadcasting interests are profitable and will remain profitable for the foreseeable future. Genre protection and four more years of 9(1)(h)-generated cashflow make that abundantly clear.”
