Tag Archives: CRTC

CBC gets to keep some analog TV running

José Breton must be happy.*

He’s the guy in Quebec City who protested that CBC was going to shut down its TV transmitter there and not replace it with a digital one. Being a hockey fan, his main issue was that he wouldn’t be able to get Hockey Night in Canada without cable.

In a decision published Tuesday morning, the CRTC decided to give the CBC another year to make the conversion in 22 markets that are large enough that the CRTC designated them for mandatory conversion but small enough that they do not have original programming and the CBC was prepared to pull the plug on them rather than spend millions on new transmitters.

These include transmitters in Quebec City, Sherbrooke, Trois-Rivières and Chicoutimi that rebroadcast CBC Montreal. They also include a large number of Radio-Canada’s transmitters outside Quebec. The Globe and Mail has a map here.

Breton wasn’t the only one trying to stop his city from falling through the cracks. The city of London, Ont., actually passed a resolution demanding the CBC save its transmitter there.

Since Radio-Canada transmitters in Quebec are shutting down, the CBC is going to use the old Radio-Canada analog transmitters in Trois Rivières and Quebec City for CBC programming, taking advantage of the better coverage of those transmitters. On the flip side, its transmitter in Chicoutimi (Saguenay) will see its power drop significantly because it’s on a channel that is supposed to be vacated.

Here’s what’s going on for each transmitter:

  • CBMT Montreal must still terminate analog transmission on Channel 6 by Aug. 31. Its transitional digital transmitter on Channel 20 will move to Channel 21.
  • CBJET Saguenay will drop in power significantly, going from 12,000 watts to just 496. Because it’s running on Channel 58, which is one the government is forcing all television stations to move off of (big cities or small), it drops to low-power unprotected status. This also means that Industry Canada (which regulates frequency allocations) can force it to move frequencies if it wants to give it to someone else.
  • CBMT-1 Trois-Rivières switches from Channel 28 to Radio-Canada’s old spot on Channel 13, and gets a power boost from 33,000 to 47,000 watts, in order to increase its coverage area.
  • CBVE-TV Quebec City switches from Channel 5 to Radio-Canada’s old spot on Channel 11, and gets a power boost from 13,850 to 33,000 watts, increasing its coverage.
  • CBMT-3 Sherbrooke remains operational, unchanged at 14,000 watts on Channel 50.
  • Other retransmitters in Quebec (there are about 40 of them from Kuujuaq to Îles de la Madeleine) are not in mandatory markets and will remain running as they were before.

The CRTC’s decision is understandable. It was backed into a corner by the CBC. Not allowing the extension would have meant forcing the CBC to shut down these transmitters – many of which are in minority-language markets – and would have meant, some have argued, failing in its mandate.

It’s also the latest compromise on the digital transition. Originally the CRTC wanted every TV transmitter in Canada to be converted to digital. Then in 2009 it said only “mandatory markets” – capital cities, those with multiple stations and those with populations above 300,000. Then in March it removed the territorial capitals from the list of mandatory markets. And now CBC and Radio-Canada retransmitters won’t have to make the transition.

In 2009, I argued that the digital TV transition is a counterproductive waste of money. Two years later, with the deadline only two weeks away, this seems even more clear. Broadcasters are waiting in some cases until literally the last minute (midnight from Aug. 31 to Sept. 1) to switch their analog transmitters with digital ones, because they know that the analog transmitters reach a larger audience. The fact that the CBC is pushing for a delay and that so few transmitters are being changed outside of mandatory markets is a clear indication that market forces aren’t pushing hard in the direction of digital TV.

And why should they? Having high definition is nice, but the vast majority of people rich enough to have purchased high-definition TVs also have cable or satellite service. Most of those on analog TV are either too poor to afford a subscription service or are too disinterested in TV to spend the money.

Digital television is being forced on us for reasons that still elude me. The government wants to auction off TV channels 52-69 for wireless services, but analog transmitters in those frequencies can be reassigned lower channels without converting them to digital (there certainly aren’t more than 50 television transmitters operating within range of Quebec City or Moncton).

Analog over-the-air television has existed using roughly the same technology for more than half a century. Forcing broadcasters to spend millions on hundreds of new transmitters and consumers to spend hundreds on millions of new televisions (or digital converters for their existing sets) without a clear need seems ridiculous.

UPDATE (Aug. 17): Actually, Breton isn’t happy. He’s calling the decision a “false compromise”, says the CRTC should have forced the CBC to install a digital transmitter in all mandatory markets, and points out that because most digital converter boxes don’t pick up analog signals, people won’t be able to easily switch between CBC and other channels in these markets.

The Team 940? Bell proposes frequency swap

Cogeco’s CRTC application to bring two Montreal AM radio stations back to life has prompted interventions from the owners of the other AM stations in the city – Astral (which owns CJAD) and Bell Media (which owns CKGM/The Team 990) – as well as Paul Tietolman, who has been trying for some time to start up his own AM station at 940 kHz.

The interventions (two are opposed to the application, while Astral is negative but not quite so categorical) are based on these main points, which have been responded to by Cogeco:

  1. Concentration of ownership: The interventions point to the fact that Cogeco asked for and received an exemption to a CRTC policy that forbids any owner from having more than two stations on the same band in the same language in the same market. This allowed them to purchase all of Corus Quebec’s radio assets in Montreal, adding CKOI and CHMP 98.5FM to CFGL Rythme FM, giving them three French-language FM stations. Now they want to add two more stations to their empire, giving them five French-language stations (they also own CKAC) and two English-language stations (with CFQR). Cogeco responds by saying that exception was, well, exceptional, and that owning two French-language AM stations would not be a further exception to CRTC policy. Cogeco also says it doesn’t believe an all-traffic station (even one that solicits advertising) would be a significant competitive threat to existing broadcasters.
  2. Use of clear channels: The interventions agree with me and other radio watchers that 50,000 watts and a signal pattern that stretches into the Maritimes and northeastern Ontario is overkill for a Montreal traffic station. They say that if the application is approved, it should be for two frequencies that are not clear channels. Cogeco responds that the frequencies have been vacant since June 2010 (when the CRTC announced it had revoked the licenses) and no one has applied for them.
  3. Unfair competitive advantage: The interventions question the entire point of a publicly-funded all-traffic station. And while there’s nothing the CRTC can do to change how the Quebec government spends its money, the incumbents object because the funding would give the traffic stations an unfair competitive advantage. The funding “will allow Metromedia (the Cogeco subsidiary that owns the stations) to aggressively sell advertising in the marketplace, potentially offering lower rates than what is offered by the incumbents. This potential strategy will only serve to further undermine an already weak market,” writes Bell Media VP Kevin Goldstein in his intervention. Cogeco responds by quoting news articles demanding better communication about road conditions from the government and says they only expect about a quarter of its advertising revenue ($600,000 for the first year) will come at the expense of their competition.
  4. Guarantee of format: The interventions say there’s no guarantee that their all-traffic format would be maintained once the contract with the Quebec government runs out. Cogeco responds that it would accept a condition of license making such a guarantee.
  5. No public bidding: The interventions feel this project should have been open to a public bidding process. Cogeco responds that any broadcaster could have responded to the notice from the transport ministry that it intended to award this contract to Cogeco, but none ever did. The lack of demand meant the government did not have to open bidding on the project.

Here’s where the intervention from Bell gets interesting: They state that they have been trying, since Corus shut down CINW (940 Hits) and CINF (Info 690) in January 2010, to purchase the transmitter and antenna from them, to no avail. Bell says that if the CRTC wants to approve this application, it would be prepared to perform a frequency swap, taking either 690 or 940 kHz and taking up a clear channel that allows them to broadcast 50,000 watts day and night.

Propagation patterns for CKGM (Team 990AM) in red (day) and black (night) vs. CINW (940AM) in purple and CINF (690AM) in blue, as provided in Bell's CRTC intervention

As Team 990 gains broadcast rights to Canadiens games in the fall, nighttime propagation becomes more important. As a Class B frequency, 990 requires the transmitter to modify its signal at night, reducing its coverage. Switching to 940 would give CKGM a much larger coverage area.

The idea makes a lot of sense. Montreal sports teams – and the Canadiens in particular – are going to have a lot more interest in the outlying regions than Montreal traffic information. It makes sense for that station to have a larger coverage area. And, of course, most people interested in traffic will listen to the radio in their cars, which should not have trouble picking up a giant transmitter just a few kilometres away.

But Cogeco responds by criticizing Bell’s suggestion that it would have been too expensive to retune its existing transmitter and antenna from 990 to 940 kHz. It quotes an engineering expert it hired that said in the worst case scenario of having to replace everything, it would cost less than $250,000.

We’ll take them: Tietolman

Tietolman Tétrault, in its intervention (PDF), suggested the stations use frequencies of 600 and 850 kHz (formerly of CIQC and CKVL, respectively) and said the 690 and 940 frequencies should be open to applications. It said it would be willing to apply for both:

Tietolman Tétrault Média est déjà prêt, intéressé et apte à appliquer pour l’obtention de ces fréquences. Nous avons en main un plan d’action que nous estimons bénéfique pour la diversité radiophonique nécessitant ces deux fréquences-clés. Évidemment, ces deux fréquences seraient en ondes peu de temps après l’obtention des licences.

Tietolman, whose family once owned CKVL, had tried to offer a competing $81-million bid for Corus Quebec, including 690 and 940. They’ve indicated for a while now that they’d like to bring back 690 and 940, though they haven’t said what kind of format the stations would have.

Other interventions

A few other smaller groups and individuals also filed interventions in this application.

Jacques Blais of S.O.S. Québec Radio filed a handwritten note (PDF) – he wrote that he had computer problems – in which he called the project useless and a waste of public money, and appealed to common sense in rejecting it. He also repeated that 50,000 watts was too much for this station, and said the 690 and 940 frequencies should be reserved for French-language stations only, because the French language is threatened in Quebec.

That last part is kind of funny because his supporting documentation was my previous blog post and an article from The Suburban.

Marc St-Hilaire of the Syndicat général de la radio union said (PDF) endorsed the new station but said it was worried that Cogeco would deduct the number of people it hires for these stations from its commitment to hire journalists for its Cogeco Nouvelles news agency. Cogeco made the commitment as part of the deal that got it to own three francophone FM stations in Montreal.

Chantale Larouche of its parent union the FNC expressed similar thoughts in a separate intervention (PDF).

Cogeco says each station would have six full-time announcers, plus a full-time traffic journalist, and that these would be in addition to the commitments they already made for the creation of Cogeco Nouvelles and the hiring of journalists.

Finally, Miguel Therriault of Quebec City filed a very brief intervention (HTML), saying, in its totality: “Les coûts sont outrageusement exagérés. De plus ce service est complètement inutile. Les stations de radio actuelles répondre très bien à la demande. C’est une dépense inutile.”

You can read the interventions here:

The hearing to discuss Cogeco’s application was supposed to happen next Monday, but the CRTC announced last week that the items have been withdrawn from the agenda and will return as part of a later hearing. No explanation was given and no date has been set yet.

UPDATE: An open call has been issued for the two frequencies, with a deadline of Aug. 29. Cogeco maintains it still wants to setup all-traffic radio stations and will go through this process if necessary.

All-traffic radio: A $9-million waste

Coverage map for CINW 940AM at 50,000 watts, as submitted to CRTC

Last week, news came out that Cogeco and the Quebec government have reached a deal that will see the creation of two new all-traffic AM radio stations in Montreal set to open in the fall. The project will cost taxpayers $9 million over three years.

It’s the most ridiculous use of $9 million I’ve seen in a while.

The history of 690 and 940 AM

Montreal has had two giant holes in its radio spectrum since January 2010. Both frequencies – 690 and 940 kHz – started out as CBC stations. CBM (CBC Montreal) moved to 940 and CBF (Radio-Canada Montreal) moved to 690 in 1941. They were among Canada’s oldest AM radio stations and each had clear-channel status, meaning that they could operate at 50,000 watts and did not have to reduce power overnight to avoid interference.

Clear-channel status is highly sought – or at least it was. There are only about a dozen such stations in Canada (CKAC is the only active one in Montreal), and the clear-channel status means they can be heard from very far away with a good enough antenna.

Despite this seemingly huge advantage, CBC decided in the late 90s to move its AM stations in Montreal to FM – 88.5 and 95.1 MHz – where they remain today as CBC Radio One and Première Chaîne). The argument was that FM provided better quality audio and the signal would be easier to capture in the city. The tradeoff – that the signal would no longer be carried by skywave to neighbouring provinces and territories – didn’t seem to be such a big deal. It was a controversial move at the time, particularly for CBC Radio listeners who had better reception with AM than FM.

In 1999, the decades-old CBC transmitters were shut down and the frequencies vacated. Métromédia (later Corus Quebec), which owned CIQC 600 AM and CKVL 850 AM, wasted no time in snapping the clear channels up, and moved those two stations to the vacated frequencies. They were reborn as all-news stations CINW (940 News) and CINF (Info 690).

We all know how that turned out. The anglo all-news station didn’t work out financially, so they changed it up into a news-talk format in 2005. When that didn’t work either, they fired everyone and started played music in 2008. (Info 690, meanwhile, kept going with their news format). Then, in January 2010, Corus pulled the plug on both stations and gave up. They returned their licenses to the CRTC.

Since then, the frequencies have remained vacant. Clear AM channels that it seems anyone could have had just by asking. But no takers.

In 2010, Corus agreed to sell its Quebec assets to Cogeco. This included the transmitters for CINW and CINF, even though they were inoperative and had no broadcast license. The deal was approved in December, giving Cogeco the equipment (and a lease on the transmitter site in Kahnawake until 2021) but no idea how to use it in a way that could make it profitable.

And here’s where the Quebec government comes in.

Congrats, Cogeco lobbyists

According to documents they submitted to the CRTC (you can download them yourself from here), Cogeco found out about the Quebec transport ministry wanting to improve the way it communicates information about traffic disruptions to the public. With all the construction work expected to come (the Turcot Interchange, for example), they wanted to minimize the pain to drivers by keeping them as well informed as possible.

Cogeco went to them and proposed a … let’s call it a partnership. Cogeco would provide the transmitter, the programming, the staff. The government would provide access to traffic information and lots and lots of money.

The government thought it was a great idea, and on April 14 they published their intention to award a contract to Cogeco. The deal was finally announced last week by the government and Cogeco (PDF) and the CRTC announced it would hold a hearing on the proposal to give the licenses back to CINW and CINF. News coverage was brief, most just regurgitating the press release:

The station, which according to the deal must be operational by Oct. 31 (though the target date is Sept. 1 pending CRTC approval), would broadcast live from 4:30am to 1am weekdays and 6am to 1am weekends and holidays. This information includes:

  • Traffic status on highways and bridges
  • Road conditions
  • Information on road work sites (it’s unclear if this is just those run by the transport ministry or all municipal sites as well)
  • Highway safety tips
  • Weather conditions

In other words, the kind of stuff you’d expect from any traffic information radio station. Missing from this list is an item about providing information on public transit service. It’s unclear why both sides left this out of their press releases, but it’s contained in their CRTC submission and in the contract between the government and Cogeco, and I would imagine the intention is to include such information in their broadcasts.

The deal also includes promotion of the station by Cogeco and 25 minutes a day of airtime for the ministry.

Cogeco says it plans to use CHMJ in Vancouver (owned by Corus) as a template. That’s also an all-traffic radio station, but with one major difference: It’s not funded by the government.

You could also compare it to The Weather Network and MétéoMédia, which provide all-weather programming, funded mainly by subscriber fees that all cable subscribers must pay for the channels.

Why this is a bad idea

I appreciate that the ministry wants to improve communication about traffic and road work. But they’re doing this by getting into the broadcast business. The figure of $3 million a year might not be much, but it represents about three-quarters of the stations’ proposed budgets. Cogeco also predicts that figure will rise if the contract is renewed beyond three years (the CRTC asks for seven-year projections for a station’s finances) to $3.3 million a year for the next three years.

Put simply, this is a solution to a problem that does not exist. I mean, seriously, is the biggest complaint about commercial radio that there aren’t enough traffic reports? Just about every station does traffic reports every 10 minutes during rush hours. CJAD does it all day. All this without any specific funding by the government to do so. Even CBC Radio One does traffic reports, including public transit updates. (The CBC is funded by the federal government, but that funding doesn’t come with a requirement to do traffic updates. CBC Radio does traffic reports because it knows that’s what rush-hour listeners want to hear.)

This isn’t to say an all-traffic radio station wouldn’t make sense. CHMJ is trying that format. And it’s a good idea for AM radio, because most portable music devices these days can’t receive AM radio, but most cars can. But if there’s a demand for it, then it can be done without government funding. And if there isn’t a demand for it, why bother?

Cogeco’s own submission to the CRTC says there are about 1.3 million vehicles travelling in the Montreal area during the afternoon rush hour (less in the morning), which means more than $2 per vehicle per year spent on these stations. They expect their market share will be 1.5% for the anglo station and 1.6% for the francophone station. Based on their estimated total weekly hours of listening, the English station would expect about 1,000 listeners on average (more, obviously, during rush hour) and the French station about 3,000 listeners.

And CRTC submissions are usually pretty optimistic.

Why this is overkill

The other thing that bugs me about this is the choice of channel. Cogeco wants to put both these stations on clear channels, and have both running 50,000 watts day and night. The reach of these stations, as you can see from the map at the top of this post, is not just the greater Montreal area, but as far as Gaspé, Moncton, southern Maine, Kingston, northern Ontario and even Labrador. The vast majority of its listening area couldn’t care less what happens on the Champlain Bridge.

Then again, if nobody else wants the frequency, I guess it’s better to do that than nothing at all. But surely we can find a better use for such a powerful signal than traffic reports for one city.

There are also some strange proposals, like having a roving reporter patrol the city to report from the scenes of major traffic events. Compare this to the private sector that has helicopters flying overhead to report on traffic and other issues. It’s a government employee doing a job that the private sector is already doing better.

What the government should spend its money on

In the grand scheme of things, $9 million isn’t a lot of money. But rather than spend it on duplicating a service the private sector already does for free, how about the transport ministry use it more wisely. Spend it on adding more traffic cameras, providing better real-time information to traffic reporters, better ways of getting information to smartphones and other portable devices, improving the Quebec 511 service. Create a database of road work (both provincial and municipal) that can be integrated into Google Maps and used to suggest better routes to drivers.

Or, you know, they could use it to improve the province’s highways. At least repave the kilometre or two closest to the Ontario border, which will give the most psychological bang for the buck and end those silly anecdotal cross-border comparisons.

The CRTC will be hearing the two applications for all-traffic radio stations on July 18 in Gatineau. Comments and interventions are being accepted until June 20. The contract is contingent on CRTC approval and would be cancelled if CRTC approval doesn’t materialize before Oct. 31.

UPDATE (May 31): A Gazette piece says that there was a call for bids in this deal. That’s not entirely accurate. On April 14, the transport ministry published its intent to give a contract to Cogeco (a document that starts off by saying “this is not a call for bids”), and gave competitors 10 days to indicate that they could provide a competing offer for the deal – something that if accepted would have led to a formal call for bids. After the deadline passed, the ministry gave the deal to Cogeco.

CRTC caves in to Cogeco

The CRTC, which sets rules regarding concentration of ownership in broadcast media, decided it could simply ignore them in a ruling on Friday that gave Cogeco the right to buy almost all the assets of Corus Quebec.

Specifically, Cogeco would buy 11 stations for $80 million, including Montreal’s 92.5 the Q (formerly Q92), CFQR-FM.

In Montreal:

Elsewhere:

  • CJRC-FM Souvenirs Garantis 104.7 in Gatineau
  • CIME-FM 103.9 in St-Jerome
  • CHLT-FM Souvenirs Garantis 107.7 in Sherbrooke
  • CKOY-FM 104.5 in Sherbrooke
  • CHLN-FM Souvenirs Garantis 106.9 in Trois-Rivières
  • CFOM-FM Souvenirs Garantis 102.9 in Quebec City
  • CFEL-FM (“CKOI”) 102.1 in Quebec City

The biggest problem with the acquisition is that it would violate a CRTC rule that says one company can’t own more than two stations in each language on each band in each market. Cogeco was willing to get around this by selling stations in Quebec City and converting one in Sherbrooke into a retransmitter of Montreal’s CKAC sports station.

But it wanted an exception in Montreal. CHMP 98.5 is the flagship station of the Corus talk radio network, and Rythme FM (CFGL) and CKOI are the No. 1 and No. 2 music stations, making them a whole lot of money. Cogeco said that a requirement to sell one of those stations would torpedo the whole deal (CKOI alone represents half the cost of the acquisition), and promised that in exchange for this special consideration they would hire journalists throughout Quebec and create a talk-radio news agency.

And the CRTC caved. Well, mostly.

They didn’t buy the idea of turning Sherbrooke’s CKOY FM into a retransmitter of Montreal’s CKAC sports station, and gave Cogeco a year to find a buyer for it. They also made a strict condition that Cogeco’s plan for a news agency continue, so they can’t pull a bait and switch.

That part is good news. The idea of Cogeco Nouvelles sounds good. At least the part about them hiring 33 full-time journalists and spending $3 million a year on news sounds good. The part about sharing content sounds a lot like the regional stations will all take the majority of their content from Montreal and insert a bare minimum of local stories just to justify their license.

But still, considering how little actual journalism comes out of private radio in Quebec, on the whole this is good.

There are also a few additional incentives to sweeten the deal, like this: Cogeco will “provide its services free-of-charge to groups operating fewer than three French-language radio stations in Quebec’s small markets as long as they agree to supply COGECO Nouvelles with news from their markets. The service’s content will also be available free-of-charge to community radio stations.”

Oligopoly

But as nice as all that is, and I hope Cogeco Nouvelles succeeds, the problem of radio competition remains. Instead of three players in the Quebec francophone (popular) music scene in Montreal, there would be two, representing an astonishing 95% of advertising revenue in the biggest market in Quebec. And that’s true for both the French and English-language markets in Montreal. If you discount jazz, classical and CBC/Radio-Canada’s stations, the two will own all seven music stations (four francophone, three anglophone) in Montreal.

Much of the debate at the CRTC seemed to be about Astral Media, which owns the NRJ and Rock Détente networks and is seen as a major player in the regions. But rather than acknowledge that there’s a serious problem with Astral Media owning stations that should be competing with each other (this is particularly true in Montreal’s anglophone market, where Astral owns CHOM 97.7, CJFM 95.9 Virgin Radio and CJAD 800), the CRTC decided that the best response was to create an even bigger behemoth in Cogeco.

With the acquisition, Cogeco stations would have an astounding 46.6% market share in the Montreal francophone market and 22.4% in the anglophone market, or 41.3% total. Astral, meanwhile, has a 31.4% share in the francophone market and a 55.4% share in the anglophone market. Note that all these numbers don’t exclude CBC/Radio-Canada stations. When you consider just commercial stations, or as a share of ad revenues, those numbers are even higher.

The suggestion that this would somehow “restore a competitive balance” is silly.

The Montreal-less network

There’s also a problem that isn’t being considered very well here: While Cogeco argues that regional talk-radio stations need the resources and “expertise” of Montreal’s 98.5 FM, it also plans to sell stations in the regions to a third party that won’t be able to setup a Montreal station if they want to build a network.

For example, CKOI is a brand network in Montreal, Sherbrooke and Quebec City. As part of the acquisition, Cogeco will have to sell the Sherbrooke and Quebec City stations in this network, but not the Montreal one. And there isn’t exactly a lot of extra space on the dial for someone to setup a new francophone music station in Montreal. So not only would anyone who wants to buy these stations have to change their brands (along with the Rythme FM station in Quebec City), but they wouldn’t be able to take advantage of whatever efficiencies Astral and Corus/Cogeco think they have found with multi-region brands.

Personally, I think music radio stations can do fine without needing to belong to a Montreal-network (some names are already popping up as potential buyers). But it’s funny that Cogeco puts such a strong emphasis on the need for a Montreal flagship station for its talk radio network but has no problem with other people having radio stations in the regions without a Montreal-based moneymaker to keep them afloat.

In conclusion: Good for radio, bad for radio choice

I’m happy that the CRTC handled some of the issues I brought up in my criticism of Cogeco’s plan. And I’m happy that Cogeco is planning to setup a regional radio news network and hire journalists.

But this is a step backwards for radio diversity in Montreal, at a time when the city desperately needs more competition in commercial radio.

The CRTC should review its rules for media concentration, particularly because the public seems to be abandoning the AM band and because Montreal’s numbers suggest that commercial music stations aren’t strictly segregated on the basis of language.

Montreal has seven commercial radio stations that all play popular music that sounds a lot alike. It should have more than two companies running them.

More coverage in:

UPDATE (Jan. 12): Almost a month after the CRTC’s decision, and weeks before the transaction is set to close, Astral decides to appeal to the federal court to overturn it, saying it was “arbitrary and unreasonable” to change the rules at the last minute just for Cogeco. VP Claude Laflamme makes the point in the statement that “the sudden lack of predictability in the application of the CRTC policy penalizes all broadcasters which in the past decided not to pursue business opportunities in order to abide by the policy as formulated and as consistently applied.”

La Presse quotes Cogeco as counter-arguing that Astral controls 75% of the anglophone market (they own CJAD, CHOM and CJFM, but that doesn’t violate the CRTC’s rules), and they shouldn’t be pointing fingers about media concentration.

Note that while Astral suggests that Cogeco should have been forced to sell one of the music stations, it doesn’t have its eyes on them because it already owns two francophone FM stations in Montreal (CITE Rock Détente 107.3 and CKMF NRJ 94.3)

UPDATE (Jan. 14): Corus says it will, of course, fight this appeal, and that the Cogeco deal is still set to close on Feb. 1.

Some truth about Sun TV News

Sun TV News, the new specialty channel being proposed by Quebecor, is in the news again because their second attempt at CRTC approval has been released to the public.

After the previous application for a Category 1 specialty channel was outright rejected by the CRTC, Quebecor has decided to put forward an application for a Category 2 channel, just like almost every new specialty channel in the past few years.

Both categories are digital channels, meaning they won’t be on analog cable and aren’t part of the basic package. The difference is that Category 1 channels must have a minimum of 50% Canadian content, and in return all digital cable and satellite providers must make the channel available on a discretionary basis. For Category 2 channels, the dealings with television providers are mostly unregulated. They negotiate carriage fees with each other, and the providers can choose whether or not to make the channel available.

But while the Sun TV News application is technically a Category 2 channel, Quebecor is asking for an exception that grants it the biggest advantage of Category 1: mandatory availability, at least for the first three years.

In both the previous and current applications, media coverage and left-wing reaction has confused the nature of what Quebecor is asking for. That’s partially understandable. CRTC’s regulations can be overly complicated sometimes, particularly when it comes to what channels providers have to carry.

This Canadian Press article, for example, states three times that the new channel would be “funded with money from cable TV fees”, even though that’s not what the application is requesting. The statements are attributed to activists, but aren’t challenged in the article, leaving readers to assume they are true. This report uses the term “must-carry”, which has a special meaning at the CRTC that doesn’t apply in this case. Quebecor isn’t asking for must-carry status. This Globe and Mail story also uses the term “must carry”, as does this National Post report.

“Must carry” vs. “must offer”

In an effort to reduce the confusion, let me explain a bit how this works.

There is a list of channels that all cable and satellite providers must provide as part of their basic packages. In addition to the local television channels, this also includes things like CPAC and APTN. Other channels like CBC News Network and the Weather Network are also included in basic packages. Fees, set by the CRTC, are charged to all subscribers to pay for these channels.

Beyond that, there are levels of discretionary tiers that have different statuses at the CRTC. Some are allowed on analog cable on a discretionary basis or can be part of the basic package. Some, like Category 1 channels, are offered only on a digital basis unless an exception is warranted.

Category 2 channels are the least regulated type, and the one preferred by both the CRTC and new channel applicants because of how easy it is and how low the minimum requirements are.

Though it might seem like your cable or satellite company has every channel in existence, it doesn’t. Bell TV, for example, doesn’t carry MuchMoreRetro. Videotron doesn’t carry Fox News Channel (somewhat ironically, if you think Quebecor is an evil right-wing empire). Shaw Direct doesn’t carry Court TV (now Investigation Discovery) or TFO. There is no regulation requiring these companies to make these channels available. They decide what their users might be interested in, based on what the channels offer and what they want to charge the TV provider. The channels, meanwhile, ask people to “call your cable or satellite provider” to pressure them into adding the channel to their lineup.

What Quebecor wants with Sun TV News is to bypass this process, and require that all digital TV providers have the channel in their lineups. The wholesale price would still be negotiated between the provider and the network, and the provider could package the channel and charge for it however it feels.

Kory Teneycke, the former Harper aide who is behind this application, calls it “must offer” to distinguish it from “must carry”. I’ll use that expression for lack of a better one.

In short, Quebecor is asking that this channel be available on all digital cable and satellite providers, but the choice to take it would be entirely up to the consumer. Nobody would be forced to pay for the channel if they didn’t want it.

The package exception

One scenario that might see people paying for Sun TV News without wanting to would be if they got it as part of a package. It would make sense for a news channel theme pack to include Sun TV News with CTV News Channel, CNN, MSNBC, Fox News Channel, BNN, CNBC, Al Jazeera English and BBC World News. Someone might select that wanting all the news channels but having moral objections to Sun TV (and, presumably, Fox News).

But this packaging is entirely up to the TV provider. It’s not regulated by the CRTC and isn’t negotiated with the channels.

The CRTC only regulates packaging to ensure that porn channels and single-view religious channels aren’t forced on consumers as part of packages. Theoretically, the CRTC could require the same thing for Sun TV News that it requires for Playboy TV, but that seems a bit excessive.

Of course, if cable and satellite providers did away with such packages, or offered people à la carte options, this wouldn’t be an issue. But so far, only one major TV provider offers that kind of à la carte service: Quebecor-owned Videotron.

Ignorance breeds fear

What gets me most about the reaction to this application is how much people are willing to oppose it without knowing what it is. There has been no proposed program grid, not even any confirmed hosts. All we know about Sun TV News is that it wants to be a mix of news and opinion, that its creators consider the other news channels “boring”, and that those creators are Conservatives who want to create a channel based partially on Fox News.

A group of activists has already started a petition that has 68,000 signatures on it (we’re not sure how many of those are real people). It repeats the non-truth about forcing people to pay for the channel, and throws in some drama that makes it seem as if Stephen Harper is trying to force his ideological agenda into our brains through the CRTC.

Sun Media had a field day with this, saying that the petition is based out of New York and that author Margaret Atwood and her cronies are trying to suppress free speech. Even Teneycke himself weighed in.

Fox News Cheap

It’s hard to judge something like this until you’ve seen it. Sun TV News could become a quality all-news network that bring much-needed competition to the industry. It could become a Fox News North, as critics have called it, providing news coverage to make people think it’s objective, but loading primetime hours with fearmongering blowhards who care more about expressing their opinions than seeking the truth.

The arguments from Quebecor that this isn’t Fox News North are contradicted by statements in the CRTC appliction, particularly this one:

The most comparable channel to STN is located in the USA, Fox News. Both channels’ strategy is to focus hard news and commentary that raise public debates and reactions on different topics. Fox News has been USA’s most watched All News channel for years and still is. In 2008-2009, Fox News’s audience was as high as CNN’s and MSNBC’s combined. Fox News does not have extensive distribution in Canada. Therefore, this represents a true opportunity for STN.

But while their goal is to replicate Fox News, I think the more likely scenario is that Sun TV News will be an experiment in cheap newsgathering that will quickly become a laughing stock because of its horribly small budget. According to the CRTC application, the channel plans to have a budget of about $25 million, of which $15 million would go to programming and technical costs. Though it’s hard to directly compare this to CBC and CTV, since they take advantage of their local stations and national newscasts (I’m trying hard not to use the word “synergies” here), it’s still very little money. We’re looking at a staff of maybe 100 people, including journalists, anchors, producers and technicians, advertising salespeople, marketers, etc. Anyone who thinks he can run a national news network on that kind of budget is probably kidding himself.

The feared scenario, that they’ll spend little money on news budget and focus all their efforts on opinion, makes more sense considering how little they have to spend. But even then, the big-name blowhards come at a high price, and a $25 million total budget isn’t enough to get a Canadian Glenn Beck on the air if you want anything more than a webcam and laptop in front of him.

How Sun TV News describes itself

Though it’s obviously self-serving, we really can’t judge Sun TV News based on anything other than the statements of the people behind it.

Here, verbatim from the CRTC application, is how Sun TV News describes its “hard news” and “straight talk”:

“Hard News” will almost exclusively rely on live reporting and real-time conversations with journalists covering breaking news – as opposed to the more traditional news wheel format that features a revolving set of news stories. But these headlines will be analysed, commented upon and discussed at length. The host will question the reporter and will have an intelligent exchange that will often open to further debate.

News will not be read like in a news bulletin. Daytime “hard news” will be covering a broad range of political, economic and lifestyle stories that matter to Canadians both rural and urban. So even its “hard news” portion will not be “all news” like it has traditionally been done in Canada. Short traditional news bulletin may be programmed but not more than once an hour.

“Straight Talk” will be programs featuring hosts and guests that deliver strong opinions and analysis of stories that are important to Canadians that day. “Straight talk” opinion journalism at night will be clear, intelligent and engaging – featuring a broader array of television personalities and signature hosts who will challenge viewers to think – and decide – for themselves. The challenging of ideas in itself may feed the news but at least will attempt to have Canadians make their own mind on the events occurring every day in Canada.

That could easily describe either Fox News Channel or MSNBC. Or a bunch of other networks. But it gives a bit of an idea what they’re going for.

What the CRTC should do

The CRTC doesn’t have the luxury of watching this network and judging whether it’s good for Canadian TV watchers. It has to go on the application itself.

Based on that application, I would argue the CRTC should accept the network, maybe even with the exception they’re requesting (particularly since it’s only temporary).

The reason is simple: The channel proposes to create all its content. It says it will have zero foreign content. That alone should put it on a level higher than those Category 2 channels that air little but Family Guy reruns, 80s music videos, Star Trek movie marathons and ancient sitcoms.

The fact that Sun TV News wants to add to both news coverage and political debate in this country should certainly count for something as well, even though we may not agree with it.

The potential for abuse is there, but the CRTC already requires broadcasters to adhere to a code of ethics through the Canadian Broadcast Standards Council. Sun TV News has already accepted that it would be subject to those rules. The CRTC can’t prohibit someone from starting up a channel because fearmongers disagree with the political leanings of its creator.

Sun TV News made sure to suggest in its application that without mandatory availability for at least the first three years on air, its business case would fall apart:

If mandatory access for a maximum period of three years is not granted to Sun TV News, one or more major cable or satellite providers might decide to not offer this service. This would be fatal to our business case as shown in Appendix 1, and would likely result in the cancellation of the Sun TV News project.

The CRTC shouldn’t let itself get bullied. But it should set policy encouraging new channels to include as much original, Canadian content as possible. Sun TV News, which seems to put this figure at 100%, should be rewarded for that, just like any other channel should.

Sun TV News’s suggestion that it get a break from closed-captioning requirements, though, should be ignored. Broadcasters routinely request exemptions from obligations to CC programming, like a high school student who wants an extension on a term paper.

Though it doesn’t specifically request relief from CC requirements, it gives this quote: “However commendable this obligation is, the sums that need to be invested in such an amount of closed captioning means a lower amount is left for Canadian programs.”

I’m pretty sure everyone else could make a similar argument.

By the numbers

Looking through Sun TV News’s CRTC application, I found some interesting financial projections I thought would be worth sharing.

  • Though the wholesale fee would be negotiated between the broadcaster and TV provider, Sun TV News uses a base fee of $0.25 per subscriber per month in its analysis, and seems to suggest that they would aim for this. (That doesn’t mean the channel would cost $0.25 to consumers though – providers charge consumers far above the wholesale rate.)
  • If the mandatory availability or “must offer” requirement is given, Sun TV News expects 17% penetration in the first year and up to 50% penetration by the end of the seven-year license at $0.25 per month. (“Penetration” defined as the number of cable/satellite subscribers who pay for the channel.)
  • Based on this analysis, the channel would get $15 million a year in subscriber revenue, which would be combined with $10 million a year in advertising to reach the $25 million budget.

Quebecor survey shows Sun TV News wouldn’t be popular

The CRTC application includes some survey data from polling they conducted. Though they do a good job of spinning it, the survey shows only 41% of Canadian TV watchers would be somewhat (36%) or very (5%) likely to subscribe to the channel. This makes its 50% penetration rate seem a bit far-fetched.

Similarly, a survey showed “Canadians do not find reporters to have an inherent bias in the news they report” (52% vs 7%), contradicting claims by Quebecor that Canadians are tired of the “lamestream” media’s biases.

When asked about their satisfaction with current news choices, 67% in Quebecor’s survey rate it six or higher on a scale of 1-10. Quebecor spins this as saying Canadians are “not extremely satisfied”, but when almost half are rating seven or eight on a scale of 1-10, I would argue that’s pretty satisfied. Postmedia’s Andrew Mayeda agrees.

Finally, even though Teneycke and company are pushing this as a competitor to CBC and CTV news channels, the application softens the stance and even argues that those networks won’t be seriously affected by the appearance of Sun TV News. Instead, it argues that it will bring Canadians back from CNN (which it simultaneously argues is winning Canadian viewers from CBC and CTV because it has more opinionative programming in primetime, and is losing American viewers to Fox News because its primetime programming isn’t opinionative enough).

“In the long run, we believe the impact on the existing Canadian all-news services will be negligible,” it says.

I’m sure that comes as a relief to them.

TV gets shut down for maintenance

CBC antenna atop Mount Royal, and the giant crane working on it

A lot of people who rely on old-fashioned antennas to get their television service have noticed this summer that all the TV stations in Montreal disappear after midnight.

The reason is simple: The transmitters are being shut off for maintenance work.

For the past couple of months, workers have been busy replacing antennas and doing other work on the 50-year-old CBC transmission tower atop Mount Royal (just northwest of the Belvedere, at the mountain summit, in case you’ve never seen it before).

Old antennas laying on the path of Olmstead Rd.

One of the main purposes of the maintenance is to replace antennas as television broadcasters make the switch to digital. An antenna that CFCF-12 has been using since it launched in 1961 has been replaced with a new one that will be used for digital transmission. The station even did a news piece on it (skip to the 8:40 mark). Though the station got approval today to operate a 10,600-Watt digital transmitter, it looks like it won’t be put into service until after the transition deadline of Aug. 31, 2011.

For safety reasons (we’re talking about transmission power in the hundreds of thousands of watts), all the transmitters have to be shut down while the maintenance takes place. To minimize disruption, this work is taking place overnight, when Mount Royal Park is closed and when TV viewing is at its lowest.

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CFQR gets license renewal – and a slap on the wrist

This week, the CRTC gave approval for a license renewal to CFQR-FM, commonly known as Q92 (but who prefer to refer to themselves now as “92.5 the Q”). They can keep broadcasting until Aug. 31, 2014.

The approval is considered “short-term” because CFQR was in violation of one of its conditions of license, a minor one that requires that 20% of music from the jazz and blues category be Canadian. (The station exceeded its requirements for Canadian content overall.)

The station blamed this on improper labelling involving a new program:

Our non-compliance related solely to the introduction of a new three-hour program on Sunday evenings called Chill. This program is a showcase for Canadian smooth jazz. We experienced a problem with the labelling of songs in this three hour program block. The result was that we could not correctly identify individual selections as to whether they did or did not qualify as Canadian content. This in turn led directly to the compliance question raised by the Commission.

We deeply regret our failure to comply with the category 34 requirement. We take our responsibilities seriously and understand the importance of meeting our regulatory obligations. The non-compliance was not intentional and it was for a short duration.  It only related to this program feature.   We want to assure the Commission that it will not happen again.

This isn’t the first time CFQR has gotten a slap from the national regulator. The last time their license was up for renewal, the commission noted that the station was not in compliance with a condition of license requiring no more than 49.9% of music broadcast be hits. (You know, so it doesn’t sound too much like CJFM AM radio.</sarcasm>)

The CRTC has also renewed the license of CKLX-FM, Planète Jazz 91.9, even though the station was in non-compliance on its financial obligations.

Cogeco’s self-serving plan for Quebec radio

Three months after announcing a deal to buy Corus Quebec’s radio stations (with the exception of CKRS in Saguenay, which has been sold to an independent group including Guy Carbonneau), Cogeco and the CRTC yesterday both released Cogeco’s proposal for how it will run those stations.

Among the highlights:

Cogeco News

In addition to the above, Cogeco is talking big about creating a “news agency” that would serve all its stations (I guess they mean something bigger than Corus Nouvelles). Here’s what they say in their press release:

The news agency that COGECO proposes to set up will play a key role in enriching local information and will provide a complement to the other information sources available in Quebec. All of the stations of the COGECO group as well as independent stations in the regions and community stations will be asked to contribute to the content available through the agency. In return, they will be able to select the most relevant news for their respective listening audiences and produce their own news bulletins locally.

Pooling resources through the news agency, which will be coordinated by FM 98.5, will create a full information source available 24/7 – because news happens nights and weekends, too.

Furthermore, sharing information resources will allow regional stations CHLN-FM Trois-Rivieres, CHLT-FM Sherbrooke and CJRC-FM Gatineau, which will remain predominantly spoken-word radio services but will now primarily target men between the ages of 25 and 54, to devote their resources to producing local shows. Most significantly, this means the return of local public affairs programming in the morning and at noon, as well as locally produced news bulletins.

Finally, a night-time show and a weekend morning public affairs show will be produced and offered to all stations of the group. Community stations and independent stations in the regions will also have the benefit of these new resources and information content.

“We want to put information radio in Quebec back on top,” commented Mr. Lachance. “Since COGECO is a business that is close to its people, it is a natural fit for us to make local information and local interest content the heart of our strategy. The decision to include independent stations in the regions and community stations in the agency aligns with that, and we think this is great news for radio in Quebec.”

Unless I’ve misunderstood, this sounds a lot like what the TV networks have done to local television stations. They still produce local newscasts locally (well, except Global), but many of the stories they produce are prepackaged by the national network. Without the resources and staff to put together a full newscast, the local stations are forced to use these prepackaged reports, even if they’re local stories from local newscast hundreds of kilometres away that have little interest to their communities.

And Cogeco is trying to sell this as a good thing for local radio.

Of course, if the alternative is no news at all, or a straight rebroadcast of a Montreal signal, I guess it is good news.

Let us cheat, but only where we get rich

Cogeco doesn’t try to hide the fact that its request to keep its stations in Montreal is all about money. Rythme FM is the No. 1 station in Montreal, 98.5 has the most popular morning show, and CKOI also does very well here.

Their excuse for wanting to keep all these money-generating stations? They’re throwing out a bunch:

98.5 is special: “The proposed exception affects only FM 98.5 in Montreal’s French-language radio market and would allow COGECO to operate three French-language FM radio stations, each in its own niche.”

Are Rythme FM and CKOI so different that they qualify as their “own niches”? And the exception applies equally to them. Nothing stops Cogeco from keeping 98.5 and selling Rythme FM or CKOI. It’s selling both stations from those networks in Quebec City and shutting down CKOI’s sister station in Sherbrooke.

It saves the French language: “The distinctiveness of the bilingual Montreal market and the importance of keeping talk radio like FM 98.5 strong in order to ensure the sustainability of French-language spoken-word radio in Quebec justify our request for an exception”

I have no idea what bilingualism has to do with this, nor how “the distinctiveness of the bilingual Montreal market” somehow means it makes sense to concentrate ownership. I don’t know whether 98.5 is profitable. If it is, they can sell it to someone who will keep the talk radio format. If it isn’t, there’s no guarantee Cogeco won’t change the format and make it a music station or something else that’s cheaper to produce.

It helps the regions financially: “Without that exception, it will be next to impossible for COGECO to indefinitely support regional spoken-word radio stations that have been running heavy deficits for many years.”

That’s an argument for converting CKOY in Sherbrooke from a station to a retransmitter, but what does it have to do with Montreal? Does Cogeco expect us to believe that if we give them an exception to media concentration rules that they’ll subsidize money-losing regional stations indefinitely?

It helps the regions with programming: “The limited exception sought by COGECO would breathe new life into stations in the regions by providing them links to strong programming sources – to FM 98.5 primarily, for information and public affairs, and to CKAC-AM for sports and CKOI-FM for its expertise and music content.”

Again with the distraction. CKAC has nothing to do with the exception, since it’s an AM station. And as for CKOI, you just said you’re selling its sister station in Quebec City and shutting down its sister station in Sherbrooke. If Montreal-based programming would save these stations, why do you insist on getting rid of them?

We should include anglo stations too: “… a very high number of francophone listeners tune in to English-language music stations.”

Sure. CHOM and CJFM get a lot of francophones listening to them. But so does CFQR, which you’ll recall is one of the stations you’re buying. Add in the anglo stations, and Cogeco wants to own five of the 13 commercial radio stations in the city, and four of the eight commercial FM (mainstream) music stations. This doesn’t support their argument very well.

Straight-up bullshit: “Our plan is without a doubt the best opportunity to increase diversity of voices across Quebec that the broadcasting system has seen in many years.”

You’re buying a former competitor. Don’t pretend it’s the opposite of what it is.

Ooh, money!

Oh, and that last part they mentioned about “an exceptional contribution of 9% of the total transaction value, an amount of $7.2 million, to various organizations and initiatives to support the radio system”? Sounds kind of generous, doesn’t it?

It’s CRTC policy that when a broadcaster is sold, the buyer proposes a “tangible benefits” package of 10% of the purchase price to contribute positively to the development of the broadcasting system. The money doesn’t go to the CRTC, but to organizations that support independent productions and other good things.

You math majors might notice that their 9% proposal is less than the 10% CRTC policy. In other words, it’s another exception they’re asking for, one that they’re selling to the public as a generous donation on their part.

What the CRTC should do

Cogeco hasn’t made anywhere near a solid case for keeping three FM stations in the Montreal market. It’s selling or shutting down Rythme FM and CKOI-branded stations elsewhere in Quebec, and freely admits its only motivation for wanting to keep these stations here is money. The CRTC should order Cogeco to sell one of the FM stations in Montreal, and let someone who isn’t Cogeco or Astral Media take a shot at making money from commercial francophone radio in Montreal.

Cogeco’s point about the unprofitability of regional stations is a good one, but giving the company what it wants in Montreal won’t suddenly make those stations profitable (even with all the big talk about a news agency they promise). It will at best simply delay their eventual decision to either sell or shut down those regional stations.

In Quebec City, Cogeco’s plan to sell two stations would put it in compliance with CRTC guidelines. No problem there.

In Sherbrooke, Cogeco is presenting its plan as a “win-win-win”, proving it doesn’t give a crap about local radio. The CRTC should order Cogeco to find a buyer for CKOY. Corus found a buyer for CKRS in Saguenay, and those Quebec City stations are going to someone. I’m willing to bet there’s interest in CKOY if it’s on the block for cheap. If Cogeco is interested in having a CKAC retransmitter in Sherbrooke, it can apply for a new license on a vacant frequency.

The CRTC will hold a hearing on Sept. 28 at 9am at Le Nouvel Hotel (1740 René-Lévesque W., corner Saint-Mathieu) to consider the application.

UPDATE (Aug. 6): Cogeco VP Richard Lachance does interviews with Infopresse and Paul Arcand explaining the plan, saying the new news service will create about a dozen jobs (including reporters in the federal and provincial legislatures), and there’s no Plan B if the CRTC decides it doesn’t like Cogeco’s plan.

Trente, meanwhile, takes another look at the plan, referencing this blog post.

Community lacking in community TV

The CRTC will be holding a hearing this month about community television, and at least one group is hoping they will close loopholes (or even just curb abuses that aren’t even loopholes) that allow cable companies to use these channels as promotional arms.

The CRTC requires cable companies to devote 5% of their gross revenues to Canadian programming. Of that, 2% must go to a community channel, kind of like those “cable access channels” we hear about in the U.S.

Even though it’s a very small fraction of their money, the cable companies decided they would put it to good use. Instead of just giving it over to an independent community broadcaster, they’d run their own community networks. Rogers uses the moniker RogersTV. With Videotron, it’s VOX. Shaw TV, TVCogeco, you get the idea.

The problem with having the cable companies in control is that this can lead to abuses. Rogers is being accused of having too much advertising. Others of not keeping proper records (which, admittedly, is a chronic problem for many low-budget broadcasters).

But the biggest problem seems to be that the programming itself isn’t fulfilling its mandate:

The CRTC audits found that Cogeco, Rogers, Shaw, and Persona all classified staff-produced news and other programming-even MTV promos in one instance-as “access programming”. Some Eastlink systems reported no access programming at all.

“The CRTC’s data show that Canada’s ‘community’ channels have become promotional tools for cable companies,” said Catherine Edwards, spokesperson for CACTUS.

A look at VOX, Videotron’s community channel, and you can see what they mean. A show devoted to TVA’s Star Académie. A show put together by a (former) Quebecor-owned weekly newspaper. Quebecor personalities are all over the schedule.

Sure, there’s the “Mise à jour [city name here]”, and the half hour where they show traffic cameras. But I don’t see much access here, nor do they make obvious how someone could get involved.

Perhaps the era of community television is over. We no longer need cable access when we have Internet access. People can just put their videos on YouTube. (Ratings certainly suggest that, with market shares of 0.1 and 0.2%.)

But until the CRTC makes that determination, cable companies should start playing by the rules – the spirit as well as the letter.

UPDATE (May 15): La Presse’s Marc Cassivi also thinks Vox isn’t doing what it should as far as community programming.

CRTC has decided: It’s time to pay for free TV

So, it’s over. The Local TV Matters folks won. And we, the television consumers, will be the ones who end up paying for it.

OK, it’s not so simple. First, the CRTC’s decision on fee for carriage (I’m sorry, “negotiation for value”, which will mean a fee that we don’t call a fee for some reason) is being referred to a federal court to see if the commission even has the authority to impose it.

And it only applies to the English networks (CTV, Canwest and Rogers), though it will probably be imposed in a similar way for TVA and V.

And the CBC totally got the shaft, which they’re really angry about because they were counting on the CRTC deciding that Canadians should pay for something they’ve already paid for – and includes advertising on top of that.

And if the government isn’t happy with the ruling, it can just override it and impose its own will.

Rogers, like the other cable and satellite companies not named Videotron, is also mad, saying “Canadians lose” in this decision. Cogeco has similar arguments against the decision.

Other, more independent opinions include Don Martin, Andrew Coyne and John Doyle in the “agree” column, and L. Ian Macdonald in the “don’t agree” column.

You can read the full decision here.

How it works

Though not a complete victory for conventional television broadcasters, they have a lot to like from this decision. There are some minor changes to Canadian content requirements, more flexibility to transfer funding between conventional and specialty television assets, and the ability to add commercials to video on demand. But the big power the TV networks will have is the power to pull their signals and the programs they have rights to from cable and satellite networks that don’t offer them enough money.

In a system that somewhat mirrors what happens in the U.S., Canadian broadcasters (so far just the big anglo ones, though it’s expected the francophone ones will have a similar system) will have the choice between two options, which they’ll have to stick with for three years at a time:

  1. The status quo: No charge for carrying signals, and they keep all the benefits, including simultaneous signal substitution, guaranteed carriage, and preferred spots on the dial
  2. Negotiation. If they choose this route, no matter what is negotiated, they lose the benefits, including simultaneous substitution, which alone might be a big reason for stations to choose Option 1.

The key bargaining chip the CRTC throws in to give the broadcasters an edge in the negotiation process is the ability to force cable and satellite companies to block out U.S. programming they own exclusive rights to.

So, for example, if Global Montreal (CKMI) decides that Videotron isn’t paying enough, it can demand not only that Videotron not allow its subscribers to watch Global, but it can demand that Videotron black out House, Heroes, 24, Family Guy and a bunch of other shows on U.S. stations. Ditto CFCF for Grey’s Anatomy or CSI.

Ever try to watch a hockey game on Rogers Sportsnet and get a black screen? Expect to see a lot of that if there’s a fee dispute.

This kind of thing happens in the U.S., though usually it doesn’t last that long as consumers raise bloody hell once their stations go black. Expect no difference here.

As for how much it will cost, that’s up to the broadcasters and cable companies. Some have said $1 a month per station. But it could be anything. It might not even be a fee, but some other form of non-monetary compensation. In the end, assuming the TV networks decide to go the fee route, it will be whatever the market decides.

One thing to note is that another right the broadcasters lose if they decide to demand a fee is the right to mandatory carriage. Ideally, that could mean that individual consumers would be given the right to choose whether or not they want to pay for a certain station. But the requirement to block out U.S. programming probably means that won’t be an option – or at least would make it impractical.

So, instead of being a truly market-based solution (and one which would favour original programming over the import and resale of U.S. shows), the price for local TV will be whatever your cable or satellite company think you’d be willing to pay for hit U.S. shows. And you’ll probably be forced to pay every penny of it, tacked on to your television service bill in big red letters.

What about free TV?

If the broadcasters decide to go the blockout-and-blackout method, the question will inevitably come up: Won’t people just go to their website and stream the videos online, or hook up a pair of rabbit ears and watch their station for free over the airwaves?

Here, my mistrust of the big broadcasters leads to some speculative theories. For one thing, since most people with both cable TV and Internet get the two from the same company, the broadcasters could choose to restrict online access. If Videotron won’t pay the fee for CFCF, then CTV.ca could refuse to stream shows to Videotron Internet customers. Or, they could do what Rogers is doing with its on-demand website, and force people to authenticate subscriptions before they have access to online programming.

The CRTC has been hands-off on the Internet (and for good reason), so there’s nothing preventing the broadcasters from doing this.

As for getting programming over the air, a fee dispute would provide ample incentive for broadcasters to cripple or disable their transmitters. CFCF could find itself having sudden “technical difficulties” at its transmitter in the event of a dispute. Global’s CKMI is already putting out so little power as to be difficult to receive even in the Montreal area.

What this could do, though, is boost over-the-air reception for U.S. border stations. If enough Canadians get fed up of their broadcasters trying to bleed them dry, they could install an antenna big (or high) enough to capture U.S. stations.

But, of course, it’s unlikely to get that far. Because, as we all know, television providers and television broadcasters work together for the common good.

More awards shows, by decree

Another aspect of the CRTC decision concerns what’s called “priority programming”. This was a provision that required the big broadcasters to devote eight hours a week to expensive dramas, comedies and other scripted programs instead of wasting it on celebrity gossip shows and cheap news.

The CRTC has replaced that with a provision for “programs of national interest”, which include dramas and scripted comedies, but also documentaries and Canadian awards shows.

Yes, awards shows. The CRTC apparently believes that this is a type of programming so in danger that it requires a special status.

The other important part of this change is that instead of being time-based, it’s now revenue-based. They’ll be required to spend 30% of revenues on Canadian programming, and 5% on “programs of national interest”. Because this will be a percentage of revenues instead of a percentage of airtime (though Canadian content in general still has time-based minimums), hopefully this will mean more effort producing better-quality Canadian programming instead of just putting together the cheapest hour of television they can.

On the other hand, it might mean pooling all their money into whatever Toronto-based cop drama they can most easily sell to CBS.

Digital TV continues, mostly

Finally, the CRTC has decreed (with one notable dissenting opinion) that the digital TV transition should continue as scheduled, at least in all major markets. So analog television transmitters in markets of over 300,000 people and provincial and territorial capitals and any market with more than one television station will all have to transition to digital by Aug. 31, 2011.

In its call for comments, the CRTC acknowledged that many Canadians would be adversely affected by this and would need to buy digital converter boxes. But they don’t seem to really care.

I’ve already argued that this is an unnecessary move and will be unnecessarily expensive for both broadcasters and consumers. The reason is simple: The reason for doing this is to liberate TV channels above 52, and conversion to digital is unnecessary to accomplish this goal, because no Canadian market has more than two dozen television stations (including U.S. border stations), which could be reassigned to a lower channel if they’re currently above 52.

But instead of acknowledging that there’s nothing wrong with the way we’ve been broadcasting television since the 1950s, we’re willing to ditch a half-century-old technology and make a lot of people buy a lot of expensive equipment because some regulators think it looks cool.

Two French specialty channels coming

Announcements came this week about two new specialty channels that will be launched over the next month.

One is Yoopa, a kids’ channel (ages 2-6) that was approved by the CRTC as “TVA Junior”. Quebecor plans to launch it April 1, and it will have some advertising, though not of the traditional kind, says Richard Therrien.

The other is Zeste, a food channel set to launch March 22 by the company behind Évasion.

Both are digital channels and will launch in both standard and high definition.

UPDATE (Feb. 26): The CRTC has also approved TVA Sports, though it refused to step in and force RDS to give up is exclusivity contract with the Canadiens.

Shaw to buy Canwest

The big change for one half of the Canwest empire now has a roadmap: Canwest announced this morning that Shaw Communications would buy a 20% equity interest and 80% controlling interest in Canwest Global once the company emerges from creditor protection.

Coverage at The Globe and Mail (of course, with analysis and more analysis), CBCReuters, Canadian Press, Wall Street Journal and Financial Post. Though financial terms won’t be disclosed until after regulatory approval, Shaw is spending at least $65 million on this acquisition.

Canwest Limited Partnership, which owns the National Post, Montreal Gazette, Canada.com and other publishing assets, is unaffected by this. They will still be auctioned off as part of their restructuring.

Corus Cable Empire?

Assuming the deal goes through (and there’s no big reason to believe it won’t), the Shaw family will have control over a worryingly large number of specialty channels in Canada. They have a controlling interest in Corus Entertainment, a company spun off from Shaw to get around a CRTC rule about cable companies owning specialty services – a rule that no longer exists.

Corus owns or has a majority interest in (copy-pasted from Wikipedia):

It also has a 50% share with Astral of the Teletoon channels.

Canwest owns – and Shaw would get:

And the former Alliance Atlantis channels through a deal with Goldman Sachs:

Add to all this minority stakes in mentv, One, Historia and Séries +, and you’ve got a pretty huge specialty empire here, 31 channels. That would put it ahead of CTVglobemedia’s 29 channels, and way ahead of other specialty players Astral Media (9 plus The Movie Network and Super Écran), Quebecor Media (8) and Rogers (6).

It should go without saying that the specialty assets – and not the Global Television Network – are why Shaw is interested in this acquisition.

The release says that Shaw would operate Canwest as a standalone company (instead of, say, just taking its assets and giving them to Corus), but you have to think that some sort of consolidation is going to happen if they can get it past the CRTC.

Another (albeit minor) question is what happens to the few conventional TV stations that Shaw and Corus own. Shaw owns CJBN in Kenora, Ont. (a station with the distinction of being Canada’s lowest-powered non-repeater, at 178 Watts), which is currently a CTV affiliate. Corus, meanwhile, owns CKWS Kingston and CHEX Peterborough in eastern Ontario, both of which carry CBC programming. None of the three stations are in cities with Global stations, so it’s conceivable they could all become Global affiliates or even sold to Canwest and become Global owned and operated stations.

Shaw’s second chance to prove its point

My favourite part of this story comes out of a quote from Canwest chairman Derek Burney (emphasis mine): “We look forward to benefitting from Shaw’s participation in a reinvigorated Canwest, as it is a strong business partner with a proven commitment to the Canadian television broadcasting industry. This significant investment in conventional television should be seen as a big vote of confidence in the industry and its future.”

Of course, Shaw and Canwest have been on the opposite side of the ugly fee-for-carriage debate, with each side spouting half-truths at each other in a bid to scumsuck public support.

Remember those “cable company cash cows”? Funny how useful one of them has suddenly become now that the TV company needs a bailout.

But as much as this is ironic for the Local TV Matters people, it also forces Shaw to prove its point about how conventional television isn’t in need of financial support from cable and satellite companies.

Last year, after Shaw sarcastically offered to buy three stations from CTV for $1, and CTV sarcastically accepted, it later pulled away from the deal, claiming that due dilligence showed the stations were hollowed out shells and work had been outsourced to other stations.

Shaw can’t make that excuse this time. While many Global stations are little more than a newsroom, a couple of editing suites and a green screen, Shaw gets the broadcast centres that control them, and can do with them as they wish.

So will Shaw back down from its tough talk about fee for carriage? Will Canwest pull out of the Local TV Matters group, stuck in the same awkward position as CityTV and TVA where the parent company cares more about protecting cable profits than local television?

We’ll find out within the next few months. (Though by the time Shaw’s acquisition is final, the fee for carriage debate might be over.)

UPDATE: The Financial Post explores a big thorn in the side of this deal: Goldman Sachs, which is still fighting with Canwest over the company that owns the former Alliance Atlantis channels.

Five ways for Montrealers to watch U.S. Super Bowl ads

Note: This post has been updated for the 2011 Super Bowl. For the latest on Super Bowl ads on Canadian cable and satellite, click here.

For 364 days a year, Canadians don’t care about what the CRTC calls “simultaneous substitution” – the policy whereby cable and satellite providers replace a U.S. channel with a Canadian one when both are running the same program. (The logic behind this is so the Canadian station gets all the Canadian viewers and can charge higher advertising rates.)

For Montrealers especially, the U.S. ads are pretty forgettable. Local ads for Burlington businesses or ads for products and services that Canadians don’t get. Besides, commercials in general are meant to be ignored. Nobody really cares whether the Ford ad lists prices in Canadian or U.S. dollars.

But then there’s Super Bowl Sunday. And while two teams fight for the National Football League’s championship trophy, many television viewers will be looking at the full experience, which includes a halftime show and insanely-expensive commercials. Advertisers turn Super Bowl commercials into events, building up hype and spending through the nose on celebrities and special effects to justify the through-the-nose spending they’re doing just to get the airtime.

So if you’re a Montrealer watching the Super Bowl and want the U.S. commercials, what can you do?

Here are your options:

  1. Watch the U.S. network over the air. As much as the CRTC would like, it can’t stop U.S. stations from transmitting across the border. So you can hook up an antenna and watch it that way. The U.S. network affiliates in Vermont and New York have good coverage in Montreal if you have a good antenna. The catch is that since 2009 they broadcast only in digital, which means you need a television with a digital tuner (most recent HDTVs have this) or a converter box (like this one or this one). Elias Makos has more details for Montrealers wanting to watch U.S. stations over the air.
  2. Watch west-coast feeds. This method has mixed success. The cable and satellite companies are supposed to replace all feeds they’re asked to, but some forget (or aren’t asked?) to do this for west coast feeds, which carry the Super Bowl live at the same time as the east-coast stations do. There’s no guarantee of success with this.
  3. Watch the ads online. These advertisers aren’t about to sue people who put their ads online, and they’re more than welcome to you watching them as many times as you want after the game. YouTube and Spike TV have special sites setup with Super Bowl commercials. The latter includes an archive of past Super Bowl ads. Adweek has a section on Super Bowl ads too
  4. Get the feed illegally. If you subscribe to DirecTV or other U.S.-based satellite services, this whole post is moot and you’ll get the U.S. feeds. You can also try hunting for website streaming the Super Bowl from a U.S. location, but the NFL works diligently to shut those down, and if the entire point is to watch the ads, then you might as well just go to YouTube and see them there legally.
  5. Go to a friend’s house or bar that has done one of the above. Of course, the harder it is for you to get the feed, the harder it is for them too.

Ways that no longer work:

  1. Watch the U.S. network in HD on Videotron Illico digital TV. Videotron made a point of announcing in the past that they would have the U.S. feed untouched in HD. They can no longer do this for customers in the Montreal area with the setup of CFCF-DT in 2011.
  2. Watch the game on Bell TV. The CRTC closed a loophole in 2009 that would have allowed Bell to give most of its subscribers access to the U.S. Super Bowl feed. If you use Bell TV satellite service, you’re out of luck.

RadCan pulls plug on online RDI streaming

It happened on Oct. 29, but it seems few people either noticed or cared. The first news story came out two weeks later that Radio-Canada has stopped livestreaming of its RDI all-news network online.

The reason? “Faciliter les discussions avec les câblodistributeurs”.

Some reaction online (including the video above) was negative, suggesting that Radio-Canada doesn’t get it, that we own the corporation and that the cable companies have nothing to fear from online streaming.

Here’s what gets me though: RDI is a must-carry network for cable and satellite. There’s no choice in the matter. The CBC even forced StarChoice to include it as part of its “English essentials” basic package last year. Because of this, the wholesale rate is set by the CRTC: $1 for RDI in francophone markets and $0.10 in anglophone markets.

So, what kind of discussions are we talking about here? There’s nothing to negotiate.

Besides, RDI isn’t the only one doing this. CPAC, the political affairs channel funded by the cable and satellite companies, also streams for free online. In fact, it annoyingly starts playing automatically when you go to the CPAC website.

I understand the worry from cable and satellite companies: if broadcasters stream all their stuff for free, then consumers might realize they’re being gouged and start cancelling their television services.

But for the public broadcaster to pull its feed, to intentionally deny access to its services from Canadians, solely to please the cable and satellite industry, that’s outrageous.

I sent an email to Alain Saulnier, who was quoted in the Cyberpresse piece, asking for clarification, but there was no response.

Grab the popcorn, the real local TV debate is about to begin

On Monday, the Canadian Radio-television and Telecommunications Commission will finally get down to meeting about the future of conventional broadcast television, and through a series of hearings lasting at least a week, will hear arguments from broadcasters, cable and satellite companies, unions, producers, and maybe even a few television watchers, about whether those who freely transmit television signals over the airwaves should be paid a fee by cable and satellite companies currently mandated to distribute that signal. If it does, it will then have to decide who pays for it, how much it will be (or how it’s negotiated) and where the money will go.

To prepare for it, TVO’s The Agenda with Steve Paikin has a long panel discussion with four experts: the uncomfortably smiley Ian Morrison of Friends of Canadian Broadcasting (who supports fee for carriage), the knowledgeable but detached Grant Robertson of the Globe and Mail, the nerdy Michael Geist (who, like Andrew Coyne, supports deregulation and increased consumer choice), and Norm Bolen, who represents producers (and supports fee for carriage) as president of the Canadian Film and Television Production Association.

In the Globe and Mail, the story is told through the eyes of two former Canwest E! network stations: CHCH Hamilton, which was bought by Channel Zero and is trying to build a business model around being an all-news station during the day (70 hours a week of local news), and CHCA Red Deer, which it seems hasn’t been missed much since it was shut down on Aug. 31.

Meanwhile, even though the deadline for public comments has passed, both the Local TV Matters people and the Stop the TV Tax people are still running ads. The former has created a new one, which as usual vastly oversimplifies the issue.