CRTC Roundup: The American retransmission consent model

Another term to add to the zeitgeist of CRTC talks about conventional television funding is the “American retransmission consent model,” thanks to a comment from Rogers during hearings this week on whether conventional television broadcasters should be allowed to collect fees from cable and satellite companies for retransmission of their channels.

Asked by the commission a House committee whether Rogers would approve of a U.S.-style system in which cable companies have to seek permission (and therefore pay fees) to carry conventional television stations, Rogers said it would, provided carriage was optional.

CTVglobemedia pounced on this, issuing a press release in which it praised Rogers for agreeing to fee-for-carriage in an “industry-to-industry solution” that follows the “American retransmission consent model.”

I personally think this is a better idea and could live with this kind of compromise. If broadcasters choose to demand fees that are too high for carrying their signals, the cable and satellite companies (or better, the consumers themselves) could decide it’s not worth it and use their rabbit ears instead to get the channels for free.

Not that I think the CRTC and all the players involved would support such a system.

Michael Geist also weighs in on this issue.

Conventional television pros and cons

For those who want to keep track, here are the various pros and cons to running a conventional television station instead of a cable specialty channel:

Pros

  • Over-the-air reception: This used to be a no-brainer, but with only 10% of Canadian TV viewers still using antennas (and most of them probably not watching TV all that much), this incentive becomes a lot less powerful than it once was.
  • Simultaneous substitution: Hated by most Canadian TV viewers, it’s the practice of replacing U.S. feeds with Canadian ones when both are running the same programming, in order to ensure that only Canadian commercials are watched (and Canadian networks get all the ad money). The problem is that it’s not done properly a lot of the time (especially during live events) and can end up cutting off programming. Still, it’s a huge cash cow to have a monopoly on the Canadian ad money when you air a new episode of House.
  • Spot on the dial: It’s mentioned often, though I think its effects are trivial. The CRTC requires that conventional television stations have low spots on the cable dial (channels 3, 4, 5 etc.). Perhaps there’s a minor psychological effect, but my TV viewing patterns are the same whether it’s channel 3 or channel 125.
  • Mandated carriage: Simply put, the cable companies must include these channels as part of their basic packages. This means there are no homes in a local area that don’t have access to these channels. (Well, almost. Satellite carriers don’t have to carry all channels, and Bell still doesn’t carry Global Quebec.)

Cons

  • Cost of transmitters: This is serious because of the mandated switch to digital television. It’s not an issue so much in major centres like Toronto and Montreal, but small markets don’t have enough size to justify such huge capital expenditures. A recently-released report puts the cost of converting all stations in the country to digital at between $200 million and $400 million.
  • Cost of local production: The CRTC mandates a minimum amount of local production, usually in the form of local newscasts. Even with huge cuts to newsrooms and increased use of technology to reduce the need for technical jobs, broadcasters say being forced to produce local programming is hurting their bottom line. With some exceptions, local newscasts are money-losing operations.
  • Lack of subscriber income: Ironically, even while being forced to spend more on programming, conventional television doesn’t get access to subscriber fees from cable and satellite companies, having to rely on advertising alone for income. Before the explosion of cable and the Internet, that wasn’t a problem. Now it is.

A plea for local TV

Richard Therrien in Le Soleil asks what purpose the CRTC serves, which is kind of a misleading title because his article advocates stronger regulation of private broadcasters. He argues that TVA is abandoning Quebec City, asking the CRTC to reduce its local programming requirements and producing generic non-regional shows out of its Quebec City studios.

Journalistic Independence is here (kinda)

Global TV, TVA and Sun TV have received final approval from the CRTC to suspend parts of their licenses relating to cross-media ownership (Canwest and Quebecor also own newspaper properties) and replace it with a standard policy called the Journalistic Independence Code. The code provides for an independent body (half controlled by the industry it’s regulating) to adjudicate complaints related to independence of co-owned media outlets. The outlets are to have completely independent news management, but there are no restrictions on news gathering, which means corporate management is free to force as much convergence as it likes, provided editorial boards are separate.

The CRTC mentioned it got complaints from concerned citizens who were up in arms over these firewalls being taken down, but the commission essentially argued (as I have) that these complaints should have been brought up when the Journalistic Independence Code was discussed in the first place.

Minority-language communities are well-served

The Governor-in-Council has issued a report about minority-language broadcasting in Canada (English programming in Quebec and French programming outside Quebec). The report, which is in no way binding, concludes that in general, language minorities have sufficient access to programming, mainly due to the CBC, national specialty channels and the Internet.

It does, however, also bring up a few suggestions for strengthening access to French-language programming in English areas. Among them:

  • Requiring Ontario cable companies to distribute both CBC French-language stations in the province (CBOFT in Ottawa and CBLFT in Toronto)
  • Encouraging cable and satellite companies in English-language areas to provide the option of a single package of all francophone services to subscribers
  • Encouraging negotiations between the CBC and CTV/Rogers/TQS consortium regarding distribution of French-language Olympics programming to minority French communities outside Quebec using CBC transmitters. (The consortium has already said it would air all programming on RDS and allow cable and satellite providers to distribute the station for free during the Games)
  • Requiring that TFO be distributed as part of the basic service on all cable and satellite services.
  • Consider expansion of CBC Radio Two to serve minority linguistic areas
  • Find a way to support funding of minority-language community radio stations
  • Find ways of increasing spectrum available for radio stations, either by reassigning TV channels 5 and 6 (which sit just below the FM broadcast band) or by encouraging the adoption of digital radio

None of these are binding, and most aren’t even formal suggestions. But they might come up in more formal contexts at the CRTC in the coming months and years.

As for the flip side – English programming in Quebec – the report concludes that anglo Quebecers have ample access to English-language programming.

Fox Business coming to Canada

The CRTC has approved a request from Rogers to add Fox Business Network to the list of foreign channels eligible for rebroadcast on Canadian cable and satellite services. This means that Rogers Cable and others can add FBN as an option on digital cable or satellite (assuming they can negotiate a reasonable price for carriage).

Fox Business Network is a competitor to CNBC (and a really bad one at that if you look at the ratings). CTV argued to the CRTC that it would also be a competitor to its Business News Network (formerly Report on Business Television). The CRTC determined that this was not the case because BNN focuses on Canadian business and there is no programming common to both networks.

Besides, they’d already approved CNBC, which is a far more formidable competitor than Fox Business will be.

Specialty channels raking in the dough

The CRTC has released financial figures for specialty, pay and video-on-demand services. It shows increases in both revenues and profits, but no increase in the number of people employed (in fact, it went down by six people). The headliner was that for the first time ever, spending on Canadian programming by these services topped $1 billion.

Community TV station in Laval?

Télévision régionale de Laval has asked for a license for a low-power (50W) television station serving the Laval area, on which it would air programming it is currently producing for Videotron’s Vox TV.

The station, which currently has a budget of about $400,000 a year and is affiliated with local media and the city of Laval, would broadcast on Channel 4, which would cause interference problems with CBOT (CBC) Ottawa and CFCM (TVA) Quebec City, both on the same channel (not to mention analog cable reception of Radio-Canada’s CBFT for homes very close to the transmitter).

The main motivation for this move, according to TRL, is that Vox isn’t giving its programming enough play, especially during prime time viewing hours.

It’s an ambitious move, and one wonders if the small group behind it would be up to the task of keeping such a station running (they’ve already asked for an exemption from a 100% closed-captioning requirement). But it’s nice to see some people still think locally-produced over-the-air television is worth something.

Al-Jazeera trying again

Though the CRTC hasn’t issued a call for public comment yet, news about Al-Jazeera English’s bid for CRTC approval is making its way around. It started in the Globe and Mail back in February, and has since hit the Toronto Star, Sun Media, LCN and Cyberpresse.

Al-Jazeera’s Arabic-language network is authorized for distribution in Canada, but with unique special requirements that put the onus on distributors to monitor its content. That made it too difficult (read: expensive) for cable and satelllite operators to abide by, so none have picked up the channel.

Al-Jazeera is trying to clean up its image as a radical jihadist network, launching an online campaign and even lobbying the Canadian Jewish Congress, which says it’s on the fence about supporting the network’s bid. Despite its reputation (many of its critics have never even watched the network), it is based in a relatively pro-U.S. country (Qatar), employs Western journalists for its English network, and reports on a lot outside the Israeli-Palestinian conflict. Even PBS affiliates have used some of its reports (though that caused a kerfuffle).

Canadians will have their say when the CRTC opens the application for comments. The issue probably won’t be whether the network is approved, but whether the same onerous restrictions will be placed on its carriage.

General changes to broadcasting laws

The CRTC is asking for comments about a list of minor but general changes to its broadcasting laws, which provide for:

  • Cable and satellite companies inserting targetted ads into programming (with the agreement of the broadcaster)
  • Establishing the Local Programming Improvement Fund, which will be funded by a 1% tax from broadcasters to help small-market stations
  • Prohibiting networks from withholding programming from cable and satellite companies during a dispute
  • Removing the distinction between small cable companie (fewer than 20,000 subscribers) and large ones when it comes to minimum financing rules for community television initiatives (such as Videotron’s Vox network).

In other news

And on the telecom side

The CRTC has approved changes to the National Do-Not-Call List so that numbers added to the list stay for five years instead of three. It also clarified that independent politicians (who are not connected to political parties) are also exempt from the do-not-call rules. Arguments for these decisions are here.

The commission has also launched a public consultation on ISP traffic management, namely asking whether Internet providers should have the right to use traffic shaping during high-usage times to slow down peer-to-peer file sharing so that regular users have a chance to use more bandwidth. This comes at the same time Bell says it will charge independent providers metered rates instead of flat ones, effectively ending the idea of unlimited Internet access.

5 thoughts on “CRTC Roundup: The American retransmission consent model

  1. Horonymous

    How old this fee for carriage impact out of area signals? In the US you get your local affiliitate. No time shifting to the west coast feed.

    Reply
    1. Fagstein Post author

      The CRTC has already said that broadcasters can charge for carrying distant signals. So it’s up to the broadcaster and carrier to agree to a fee for those signals.

      Reply
  2. Alastair Yates

    I’m wondering why Videotron doesn’t carry Fox News Channel yet? I doubt they’ll pick up Fox Business Channel either.

    Reply
  3. Mark A.

    Very good question and let’s say that the low ratings for FBN can be explained by is young age. The network was launched last year and they are working hard to get people to watch them. During easter or weekends they went live at the edge of the economic crisis, something cnbc didn’t bother to do. FBN, as FOX News, will attract listeners a lot. They are agressive, like it or not, and it works.

    Reply

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