By Ahmad Hathout
The Cable Public Affairs Channel (CPAC) has been approved Monday for a three-cent increase in the price broadcasters must pay to carry the service, despite the CRTC suspending that application months earlier until after it implemented changes to the regulatory system.
Broadcasters will now pay 16 cents per subscriber, per month to carry the channel, which is required of them under the Broadcasting Act’s 9.1(1)(h) rule. The new rate, which is what the not-for-profit asked for, will take effect on September 1, which is the start of the new broadcasting year.
“The Commission is of the view that, in the absence of an immediate rate increase, the political news coverage offered by CPAC Inc. would be compromised,” the CRTC said in its decision. “This would have an impact on CPAC Inc.’s ability to continue making an important contribution to the broadcasting system by ensuring that the Canadian population has direct access to parliamentary debates and political content.”
In an interview with Cartt, CPAC CEO Christa Dickenson said the bump is estimated to bring in $2.8 million for the next broadcasting year, giving the organization about $15.8 million to play with. The three-cent request, however, was based on 2023 numbers, when the service had subscriber revenues of $15 million, Dickenson told us. By Monday, the organization had been operating on $13 million.
As such, despite being “very pleased for the decision,” Dickenson said this “tiny bit of oxygen” is “only now going to meet the hole that has been created by subscriber losses, nothing more.”
She added this is a “bit of a reality check for ourselves and everybody else” about why this bump was so urgent, considering how far subscriber revenues had fallen since the application.
She expects that, with cord cutting not slowing down, that revenue could still dip below $15 million again within a year. If things get really bad, Dickenson said the “already emaciated” organization would have to freeze its micro marketing budget, would have to be more selective with which events they cover, and would have to increase the frequency of repeats.
CPAC, which is owned by broadcasters including Rogers, Quebecor and Cogeco, already warned that it would have to make substantial cuts to its programming that, without a pay bump, will impact its ability to fulfill its public interest mandate in the new broadcasting year. It reported a revenue drop of 11 per cent in subscription revenue – representing its largest base of revenue – between the 2018-2019 and 2022-2023 broadcast years, with further projected declines in that stream going forward with rising operating costs, such as fuel to produce live content.
The decision comes despite the CRTC deferring the application and those of two others – TV5 Quebec Canada and Vues & Voix – in November until it decided “whether the existing regulations remain suited to and effective in supporting services of exceptional importance, and is reassessing, among other things, the various regulatory levers available to the Commission concerning financing and distribution.”
The regulator, however, reserved the right to consider the applications before then, as it did here.
Last year, the CRTC launched a proceeding to review the relationship between programmers and distributors, now with the Online Streaming Act mandating streamers come under the fold. The CRTC said it would contemplate whether to require those newly regulated players to carry certain channels “of exceptional importance,” which are those governed by the must-carry rule.
Bell, Telus and Quebecor pointed to that reasoning in part for why CPAC’s application should be denied. They also argued that broadcasters themselves are under financial strain from cord cutters and that CPAC had received $5 million from the 2024 federal budget.
CPAC said while it has implemented cost-saving measures and received other sources of funding, those are not long-term solutions.
The commission has been fractured on how to tackle the rate increase applications.
In a dissenting opinion on the deferral decision in November, Adam Scott, vice chair of telecommunications, and Ontario Commissioner Bram Abramson said the CRTC needs to make decision on programs of exceptional importance sooner rather than later. Indeed they argued that, despite the ongoing improvements to the regulatory framework, these types of decisions can be done “in parallel.”
On Monday, Atlantic and Nunavut Commissioner Ellen Desmond and Quebec Commissioner Stephanie Paquette hit back in their own dissenting opinion, arguing that the CRTC should have held steady and let the implementation of the new framework take place – which is expected in the “coming months” – before making a decision on those applications.
“We understand that an 11% drop in subscription revenues may have a significant impact,” Desmond and Paquette wrote about CPAC. “However, the entire broadcasting system is in a state of rapid change, and all industry players are seeking ways to be sustainable in the long run,” noting broadcasters are also hurting.
“In this context and considering the important regulatory policies that will be published in the coming months, the potential reduction to CPAC Inc. programming (which is undoubtedly serious) must be weighed against the very urgent situation facing the entire industry. In our view, the majority have considered this CPAC Inc. application out of order; key policy decisions must first be put in place, allowing durable solutions for the entire industry.”
The implementation of the Online Streaming Act, which is expected to bring relief to programs of exceptional importance, had already been delayed. That was after the CRTC auto renewed CPAC’s licence by three years.
Dickenson, who acknowledged that broadcasters are going through it right now, said there was an expectation that, by the end of the three-year licence term, the new regulatory framework would have been implemented, including a fund for programs of exceptional importance – CPAC included.
That has, obviously, not come to pass.
While Dickenson expects the new framework to give CPAC an additional $15 million, she thinks – considering all the intricacies of implementing the funds – it’s at least another three years away.
As such, Monday’s decision doesn’t mean Dickenson is going to rest on her laurels. She said the organization is constantly exploring ways to increase its revenue streams, including being in communication with the federal government, and is prepared to steer an even leaner ship.
“As much as I am very grateful,” Dickenson said of the three-cent increase, “I remain in a state of alert, if not alarm.”
Photo of CPAC CEO Christa Dickenson
