Tag Archives: CRTC

| Radio

CRTC approves Cogeco acquisition of 10 RNC Media stations

The CRTC has approved the $18.5-million acquisition of 10 RNC Media radio stations by Cogeco, representing two thirds of RNC’s network of stations.

Affected stations are:

  • Planète 104.5 in Alma
  • Planète 93.5 in Chibougamau
  • Planète 99.5 in Roberval
  • Planète 100.3 in Dolbeau-Mistassini
  • Radio X 95.7 in Saguenay (repeater at 96.3 Alma)
  • Capitale Rock 104.3 in Val-d’Or
  • Capitale Rock 102.1 in La Sarre (repeater at 95.7 Rouyn-Noranda)
  • WOW 96.5 in Rouyn-Noranda (repeaters at 103.5 Val d’Or and 103.9 La Sarre)
  • Pop 104.9 in Lachute
  • Pop 102.1 in Hawkesbury

Of the remaining stations, two are being sold to Leclerc Communication:

  • CKLX-FM (91,9 Sports) in Montreal
  • CHOI-FM (Radio X) in Quebec City

The remaining three are presumably on the market with no sale announced yet (but I’m told there are talks with at least one potential buyer):

  • CHXX-FM (Pop 100.9) in Donnacona (serving Quebec City, repeater at 105.5 Lotbinière)
  • CFTX-FM (Pop 96.5) In Gatineau (repeater at 107.5 Buckingham)
  • CHLX-FM (Wow 97.1) in Gatineau

The acquisitions bring Cogeco’s radio network from 13 to 23 stations, and means Cogeco’s first expansion into the Saguenay and Abitibi regions. Of population centres over 15,000, the only ones that wouldn’t be within 100 kilometres of a Cogeco transmitter will be Rimouski and Sept-Îles.

A map of Quebec’s major commercial radio networks: Cogeco Media (purple), RNC Media (red, with approved sales in reddish purple), Bell Media (blue), Attraction Radio (black) and Groupe Radio Simard (gold). Retransmitters are in a lighter colour.

Notable aspects of this transaction:

  • Cogeco plans no immediate change to the “vocation” of the radio stations, which will remain local.
  • Cogeco plans to introduce local newscasts to the Lachute station. For other stations, the benefits come mainly through access to the infrastructure of Cogeco Nouvelles.
  • The commission has accepted Cogeco’s proposed tangible benefits of $1,184,217, based on a total transaction value of $19,736,958. The breakdown uses the standard formula for radio, with:
    • $592,109 (3%) to Radio Starmaker Fund or Fonds Radiostar
    • $296,054 (1.5%) to FACTOR or Musicaction
    • $98,684 (0.5%) to the Community Radio Fund of Canada
    • $197,370 (1%) to discretionary initiatives
  • The nature of the discretionary initiatives isn’t specified, but Cogeco said it would include six-week paid internships at its radio stations. The commission pushed back on this (tangible benefits are not allowed to be self-serving), and Cogeco responded by saying it would use $10,000 a year for bursaries instead. The rest of the discretionary money would go to local initiatives, broken down as follows:
    • $10,000 a year in the Saguenay region
    • $5,000 a year in the Abitibi region
    • $3,196 a year in the Lachute-Hawkesbury region
  • The contract includes a 36-month service contract for RNC Media to continue providing local news, office space, outdoor advertising, transmitters and technical support for the stations in the Abitibi region after the deal closes. Following that, Cogeco will rent space for three transmitters at two sites from RNC for $5,000 a year each for 10 years (indexed to the consumer price index), and two transmitters at a third site for five-year renewable leases for a price to be negotiated.
  • The radio stations (bought by Cogeco) and TV stations (retained by RNC Media) in the Abitibi region will continue to cross-promote for a period of 24 months after the acquisition. The exact value of these ads is confidential, but will be the same for both sides. A similar ad exchange deal is in place for Cogeco’s CKOF-FM (104,7) and RNC Media’s TV stations in Gatineau, even though those stations aren’t part of this transaction.
  • Cogeco acquires the WOW brand (used by CHOA-FM in Val-d’Or) and gives RNC Media a licence to continue to use the brand for its Gatineau station. Cogeco also acquires the Planète and Capitale Rock trademarks.
  • RNC Media holds on to the POP brand (used by CFTX-FM in Gatineau and CHXX-FM in Donnacona) but gives Cogeco licence to use it for the Rouyn-Noranda station.
  • RNC also keeps the Radio X brand, which is used by CKYK-FM in Saguenay. Cogeco can use the KYK logo, but without any mention of Radio X. There does not appear to be transition allowance here, which means it would have to change the branding as soon as the deal closes.
  • Cogeco says of the 220 on-air employees it will have if the transaction is approved, 92 (42%) are women, 4 (2%) people with disabilities, 2 (1%) visible minorities and 1 (0.5%) Indigenous person. (In the application, Cogeco gets the math wrong by two decimal places on the last three percentages there, making it look even worse.)
  • About 55 employees will move with the stations — 10 in Abitibi, 44 in Saguenay and one in Lachute. Three of those employees are currently on leave.
  • The deal will close on the first of the month after CRTC approval. This is listed as the only remaining condition for closing.
  • The deal includes a non-compete agreement for Val d’Or, La Sarre, Rouyn-Noranda, Lachute, Hawkesbury, Amos, Dolbeau, Roberval, Alma, Chibougamau and Saguenay, for a confidential period.
| TV

No more U.S. Super Bowl ads, but access to U.S. stations remains under USMCA trade deal

I was a bit busy yesterday in the middle of a Quebec newsplosion, but fortunately people in the rest of Canada (Globe and Mail, Financial Post, CBC, BNN, Michael Geist, Cartt.ca) had time to read the new U.S.-Mexico-Canada Agreement and notice an annex that directly impacts the CRTC and Canadian TV viewers.

Annex 15-D of the agreement is very specific: “Canada shall rescind Broadcasting Regulatory Policy CRTC 2016-334 and Broadcasting Order CRTC 2016-335.”

It doesn’t use the words, but that policy is about ad substitution during the Super Bowl. It’s the policy (originally announced in 2015) that said Bell could not require TV providers in Canada substitute its signal over those of U.S. border stations during the game because of Canadians’ strong demand for those high-profile U.S. commercials.

Bell has been trying hard since 2015 to get that decision overturned, going all the way up to the Supreme Court of Canada. The NFL has been on their side, because without simsub, the value of the Super Bowl rights in Canada plummets.

Now, thanks to the NFL’s lobbying of U.S. trade negotiators, the Canadian government will step in and solve the problem for them. The annex doesn’t specify a timeframe, but presumably it would happen when the treaty is ratified, which may or may not come before the next Super Bowl in February.

Putting this in the trade deal gives the Canadian government and the CRTC some cover. The Canadian government can say they were forced into this by the U.S. government, and the CRTC can blame the Canadian government when people go back to complaining to it that U.S. ads are blocked.

This also could have ended much worse for Canadian TV viewers. This trade deal could have ended the entire practice of allowing U.S. over-the-air stations to be rebroadcast in Canada without their consent. There was lobbying from a coalition of U.S. border stations in favour of requiring retransmission consent. Instead, the existing simsub regime will be maintained, and rebroadcasting through TV distributors allowed (but only when the signal is unaltered and simultaneous).

Assuming this deal is ratified, it could be decades before the simsub regime changes. And by then it could be completely irrelevant.

UPDATE (Oct. 6): Donald Trump amazingly brought up this clause in a campaign rally on Thursday night, saying a “big big problem” with Super Bowl ads was fixed when he told his negotiators to fix it. He said he got a phone call thanking him from NFL commissioner Roger Goodell.

And let QVC in, too

The annex also includes a provision related specifically to QVC: “Canada shall ensure that U.S. programming services specializing in home shopping, including modified versions of these U.S. programming services for the Canadian market, are authorized for distribution in Canada and may negotiate affiliation agreements with Canadian cable, satellite, and IPTV distributors.”

In 2016, the CRTC denied an application by TV provider VMedia to allow it to distribute the American shopping channel in Canada. It argued that since QVC would be doing business with Canadians, and that’s the very basis for that channel, “QVC would be carrying on a broadcasting undertaking in whole or in part in Canada” and for that it needed a licence (which it couldn’t get because it’s not Canadian-owned).

VMedia filed a request in court to overturn that decision, and the federal court sent it back to the CRTC. The commission opened a proceeding about its reconsideration, but has not published a decision.

| TV

CRTC renews all mandatory TV subscription orders

If the CRTC is trying to wean the broadcasting system off of free money, it hasn’t been showing it in the past couple of weeks as it has renewed mandatory distribution orders for most services that have that special status requiring all cable, satellite and IPTV subscribers to subscribe to those services.

Every service whose status was up for renewal on Aug. 31 was renewed, with three getting an increase in their per-subscriber fee and one getting a decrease. Overall, the total goes up by seven cents a month per subscriber.

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| TV

Major cable TV companies’ licences renewed: What the CRTC decided

On Aug. 2, the CRTC renewed the broadcasting licences of most of Canada’s major cable TV companies, including Videotron, Cogeco, Rogers, Shaw, SaskTel, Eastlink, Telus, VMedia and Bell MTS.

Though it wasn’t technically a policy proceeding, the omnibus licence renewals allowed the commission to impose a bunch of de facto policies, or clarify existing ones, on everyone at the same time. (Licenses for Bell’s Fibe TV operations, Bell satellite TV, Shaw Direct and some other distributors weren’t part of this proceeding, and smaller distributors who are exempt from licensing aren’t affected.)

Here’s what was decided:

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| Radio

Atikamekw communities have no use for CBC North’s Cree programming

CBC and Radio-Canada have radio transmitters across the country, but most of them don’t have original programming. So often the question has to be asked: which local station should they retransmit? In some cases it’s easy — just pick the closest one — but in others it’s more complicated.

In the Atikamekw communities of central Quebec — roughly halfway between Lac Saint-Jean and Val-d’Or — there isn’t a Radio-Canada Première originating station anywhere close. Between Saguenay, Rouyn-Noranda, Trois-Rivières and Quebec City, the distance is about the same.

But these stations aren’t serving francophone Québécois audiences, they’re serving First Nations communities. So it made sense that the station it would retransmit would be none of these. Instead, Wemotaci (Weymontachie), Manouane (Manawan) and Obedjiwan retransmit CBFG-FM in Chisasibi, a community along James Bay that is the base for stations in northern Quebec. That station mainly rebroadcasts CBF-FM Montreal, but broadcasts three one-hour shows a day in the Cree language, produced by CBC North.

A recent consultation with the Atikamekw communities showed that there’s little interest from their members in that programming. In an application to the CRTC, Radio-Canada says it’s because there is a negligible number of Cree-language speakers in those communities. Atikamekw (which is well spoken in the region) is considered a Cree language, but is a different dialect from the James Bay Cree spoken in Chisasibi.

A letter from Constant Awashish, Grand Chief of the Atikamekw council, says only that the communities felt that the Mauricie station would be a more appropriate source of programming, without explaining why.

So the CRTC has approved the application (without a public comment period) and transferred the retransmitters to the Mauricie station CBF-FM-8 Trois-Rivières — between 200 and 315km away. The change reduces the network of CBFG-FM from ten stations to seven, the furthest south being Waswanipi, 135 kilometres northwest of Obedjiwan.

UPDATE: The three transmitters switched their source on Oct. 17.

| Radio

Should the CRTC allow an English-language commercial radio station in Quebec City?

For at least the third time, the CRTC is about to make a call on whether Quebec City should be allowed to have an English-language commercial radio station.

An application by Evanov Radio subsidiary Dufferin Communications, which also owns stations running the Jewel format (including 106.7 in Hudson), plus CFMB 1280 and CHRF 980 in Montreal, prompted a request for comment by the commission in 2016 about whether a general call for applications should be issued. So far two applications (the other one for a French station) have been filed for the use of 105.7 MHz, considered one of the last available usable frequencies in the city.

On Wednesday, the CRTC issued another notice of consultation, effectively reopening the file. It never came to a decision in the case, ironically because of a lack of francophone commissioners. With recent appointments that problem has been solved.

This is Evanov’s second attempt to do this. In 2010, the CRTC denied a previous application by the company, ruling by majority vote that because the English-speaking population of Quebec is so small (1.1% speak it most often at home), “for all practical purposes there is virtually no advertising market in Québec for an English-language station” and “its service is almost entirely dependent on Québec’s French-language audience.”

In 2006, the CRTC similarly denied an application by Standard Radio (which at the time owned Mix 96, CHOM and CJAD, before it was bought by Astral Media the next year).

Why does it matter that an English station would attract a francophone audience? (After all, Montreal’s English-language music stations have larger francophone audiences than anglophone ones.)

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| Radio

TTP Media’s CFNV 940 plans to change format as it seeks licence renewal

CFNV 940 logo

The process to launch TTP Media’s talk radio stations in Montreal has taken so long that they’re now in the process of getting their licences renewed after the end of their initial seven-year term. And the publication of the application for the first of those stations suggests that the company may be moving away from its proposed news-talk format and toward health and wellness, which sounds like the kind of thing that has been tried on other AM stations in the market.

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| TV

Télé Inter-Rives proposes bringing over-the-air TV back to Îles-de-la-Madeleine

There’s not much clearer evidence of the declining industry of over-the-air television than the lack of demand for new TV stations in the country. With some exceptions (ICI in Montreal, for example), there haven’t been applications for new over-the-air stations in about 20 years. Instead, major networks like CBC, TVO and CTV have been shutting down transmitters en masse to save money.

So it’s a bit surprising that someone has submitted an application for a new transmitter, in one of the most remote places in the country: the Magdalen Islands (Îles-de-la-Madeleine), the archipelago in the Gulf of St. Lawrence that belongs to Quebec but is actually closer to all four Atlantic provinces than it is to the Quebec mainland.

The application comes from CHAU, the TVA affiliate in Carleton on the Gaspé peninsula. It’s owned by Télé Inter-Rives, which also operates affiliates of the three major French-language networks (Radio-Canada, TVA and V) in Rivière-du-Loup. In addition to its main transmitter in Carleton, CHAU operates 11 digital retransmitters in the Gaspé peninsula and northern New Brunswick. This would be the 12th transmitter, CHAU-DT-12.

(CHAU, like other independent broadcasters, made the investment to convert their over-the-air transmitters to digital even though they were not required to do so by the government’s digital transition plan because they served small communities.)

Proposed transmission pattern of CHAU-DT-12 in Îles-de-la-Madeleine

CHAU-DT-12 would be a 100-watt station, with a transmitter on Channel 12 in Cap-aux-Meules on the local transmission tower operated by GAD E?lectronique. CHAU puts the cost of the new transmission facility at $37,572. That’s about $3 for each of the region’s 12,000 or so residents.

Because it’s a retransmitter, CHAU-DT-12 wouldn’t be a local station for the islands, but CHAU says it wants to provide local programming, working with independent producers on the islands and doing reporting using technologies like Skype and FaceTime. CHAU says in its application that the residents of the islands have a lot in common with those of the Gaspé peninsula and Acadian communities in New Brunswick, including an interest in fishing.

It promises to devote at least 20 minutes a week to local news relevant to the islands.

The islands haven’t had an over-the-air television transmitter since CBC/Radio-Canada shut down its extensive network of analog TV rebroadcasters in 2012. Before they were shut down, they had two retransmitters of the Radio-Canada station in Montreal (CBIMT and CBIMT-1) and one retransmitter of CBC Montreal (CBMYT).

“In today’s difficult environment for over-the-air television in Canada, the project to extend CHAU’s signal to the Îles-de-la-Madeleine represents an investment that is unexpected but achievable thanks to technical possibilities that reduce installation and operational costs,” the application reads.

The CRTC is accepting comments about CHAU’s application until July 5. Comments can be filed here. Note that all information submitted, including contact information, becomes part of the public record.

| Opinion, Radio, TV

CRTC report has fundamental but very vague suggestions to change our broadcasting system

One day before the deadline set by Heritage Minister Mélanie Joly, the CRTC on Thursday released a report into the broadcasting system that proposes major, fundamental changes to how broadcasting is regulated in this country. (The condensed backgrounder is here.)

Unfortunately, that report is also quite vague, even on the parts that should be specific.

It’s not the CRTC’s fault, really, because that’s not really its purpose. The original order issued back in September by Joly is just as vague, seeking a report on “the distribution model or models of programming that are likely to exist in the future; how and through whom Canadians will access that programming; the extent to which these models will ensure a vibrant domestic market that is capable of supporting the continued creation, production and distribution of Canadian programming, in both official languages, including original entertainment and information programming.”

In terms of assessing programming distribution models, the report is pretty clear, but is also repeating a lot of stuff we already know: conventional television and radio are mature industries and have no way to go but down, online audio and video streaming services are catching on with the population, and Internet delivery of content means more Canadians are getting that content directly from foreign sources who don’t have to contribute to Canadian content or answer to the CRTC.

What’s new is what the commission proposes to do about it, but that’s where the data and charts go out the window and we’re left with vague, obvious suggestions and what often sounds like one unnamed person’s opinion.

But let’s go through them and look at the issues in a bit more detail:

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| Radio

CPAM, CJMS given one more (last?) lifeline with two-year CRTC licence renewal

Montreal’s Haitian radio station, and the AM country station it bought after its previous owner had extensive licence compliance issues, are trying the patience of the CRTC. But the commission is giving each of them another chance to get their administration in order.

On Friday, the commission renewed each of their licences for two years, with requirements that they broadcast messages on air acknowledging their non-compliance, and with three mandatory court orders each requiring them to be in compliance with their licence conditions.

“The Commission is concerned with the licensee’s ability and commitment to operate the station in a compliant manner,” it wrote in each of the decisions.

CJWI 1410 (CPAM Radio Union) was found in non-compliance with licence conditions related to:

  • Timely filing of annual financial reports
  • Timely response to CRTC requests for audio recordings and information
  • Keeping and producing proper records of music played on air (one request for information was never answered)
  • Timely filing of proof of financial contributions to Canadian content development
  • On-air announcements about previous non-compliance (the broadcasts did not use the exact wording laid out by the CRTC)

This is the third consecutive licence term in which CJWI has been in non-compliance. In other words, the station has never fully complied with its licence conditions since it launched in 2002. In 2008, the commission found the 2007 annual return was filed late and gave a four-year licence renewal. In 2015, the commission found once again annual returns were filed late (four years’ worth were filed simultaneously, and the fifth three months later), as well as proof of Canadian content contributions. It imposed a $2,500 de facto fine and broadcast of shame messages noting their non-compliance.

The excuses given by CPAM for the failure to comply are also getting repetitive, usually blaming some nameless employee or accountant for not knowing the rules. (Though the excuse that records were destroyed in a firebombing is a pretty good one.) Its promise that someone will take charge of ensuring paperwork is filed rings hollow in light of its repeated failures.

CJMS 1040 was found in non-compliance with conditions of licence related to:

  • Timely filing of annual reports (one year’s was never filed)
  • Responses to requests for information (a request was never answered despite several reminders)
  • Production of audio recordings on demand (a request was not fulfilled)

The latter to contradict mandatory orders issued by the CRTC in 2014. Failure to comply with such an order could result in a contempt of court proceeding. But here the commission seems content to simply issue new mandatory orders that may or may not be followed.

This is the fifth consecutive licence term that CJMS has been found in non-compliance, but the first under this owner. Like CJWI, CJMS has never fully complied with its licence. CJMS’s licence had already seen short-term renewals since its launch in 1999:

Both licence renewal decisions make clear that the commission is losing patience, and that a further failure to meet licence conditions could result in the stations losing their licences entirely.

In the meantime, mandatory orders have been issued requiring each station provide:

  • Program logs and audio recordings on request of the CRTC
  • Reponses to requests for information from the CRTC
  • Full annual returns by the deadline

I’m pessimistic that either station will be fully in compliance two years from now. But hopefully they’ll be close enough that the commission decides to give them yet another chance.

| TV

Eight proposals to replace OMNI

Updated April 20 with a clarification from Rogers, and Nov. 4 with clarifications based on feedback from Ethnic Channels Group.

The Canadian Radio-television and Telecommunications Commission has released eight applications for national ethnic television services, and set a hearing for Oct. 15 Nov. 26 to discuss which of them would be the best candidate to replace OMNI.

Last year, the commission caved to OMNI’s demand that it be given mandatory subscription fees from all television subscribers, under the threat of surrendering the licence and leaving the country without a multilingual TV service offering newscasts. But in giving in, the CRTC also set a limit of three years (until Aug. 31, 2020) and said that it would ask other broadcasters if they had better proposals for such a mandatory ethnic service, and consider them at a future hearing.

On Tuesday, the CRTC released eight applications, seven for TV services (including OMNI’s proposal for renewing its status) and one for an ethnic described video guide. Each makes proposals for multilingual programming including national newscasts and proposes a mandatory monthly fee.

I analyzed the nearly 200 documents submitted for the eight applications and below present an analysis of the applicants, proposals and programming:

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| TV

How a simple change to NAFTA could dramatically change how Canadians view television

One of the consequences of Donald Trump becoming president of the United States is that now Canada, the U.S. and Mexico are meeting to discuss amendments to the North American Free Trade Agreement, which Trump has threatened to pull out of entirely if he doesn’t get his way.

Canada has made clear that it plans to keep cultural exceptions to the free trade agreement, allowing it to continue to protect its cultural institutions from its much larger neighbour. So it might be tempting to think there won’t be any change here.

But there is one change being proposed that could make a huge difference to the Canadian television industry, and its one that proponents on both sides of the border would argue strengthens rather than weakens cultural protection.

It’s called retransmission consent.

CUSFTA, NAFTA and copyright law

When it comes to broadcasting law, NAFTA defers to the earlier Canada-U.S. Free Trade Agreement, whose text is posted online in a PDF. Article 2006 of the CUSFTA lays out requirements and exceptions to copyright law when it comes to retransmission of distant television signals. Under its rules, each country must prohibit non-simultaneous retransmission, or altered retransmission, of signals that aren’t meant for over-the-air broadcast, without the consent of the copyright owner.

But the rules intentionally leave a big hole for simultaneous transmission of over-the-air stations without that consent. As a result, Canadian television distributors can distribute U.S. over-the-air stations (CBS, ABC, NBC, Fox and PBS) without those stations’ consent or compensation to them, following only the rules set by the CRTC.

This exception to copyright law dates back to the early days of cable TV, when providers picked up the cross-border stations over the air and distributed them to their customers. The rules have been codified since then (generally, providers can distribute two sets of what are called 4+1 stations — PBS is the +1 — and choose to take a group of Eastern time zone stations and a group in the Western time zone) but the essence remains in place to this day, enshrined as section 31 of the Copyright Act.

Some people want to change that, on both sides of the border.

Cross-border unity

On the Canadian side is Bell, which owns CTV stations. Appearing before a parliamentary committee hearing on Sept. 20, Rob Malcolmson, Senior Vice-President, Regulatory Affairs, suggested eliminating section 31 of the Copyright Act entirely, which would mean television providers would need to negotiate carriage of distant signals both Canadian and American. CTV and CTV Two stations being carried outside their markets would get some compensation as a result. (Current copyright law requires TV providers distributing distant stations to compensate rights holders, both Canadian and American, through a fund that taxes them at about $1 per subscriber per month, but that compensates the creators of the programming, not the stations broadcasting them, and it’s not optional.)

Requiring retransmission consent would change a lot for U.S. border stations. Giving them negotiation power would mean they too could get compensated, and just as important, they could set conditions on carriage, which could include things like blackouts for programs they don’t have the Canadian rights to. A content provider (like, say, the NFL) could make this a condition for being broadcast on border stations, and those border stations could make it a requirement for being rebroadcast in Canada.

Or the U.S. stations could simply decide not to be carried in Canada. And that’s exactly what some of them want.

Some U.S. border stations carried in Canada have formed the U.S. TV Coalition, a group that has been actively lobbying the Canadian government to change its laws so those stations have bargaining power or can take themselves out of Canada entirely. Its members include WXYZ-TV and WDIV-TV in Detroit, WIVB-TV and WNLO-TV in Buffalo, and KSTP-TV in Minneapolis.

KSTP in 2015 tried to ask the CRTC to remove its station from the list of those authorized for rebroadcast in Canada. The CRTC refused, saying their consent isn’t needed.

Making simsub moot

So what would happen if this simple but substantial change went through? It’s hard to say exactly, because the Canadian television system has been so reliant on the current scheme. But here are some things that could happen.

First, some U.S. stations could refuse to be carried in Canada, either because they don’t want to deal with getting Canadian rights to programming or because they don’t think they’re being compensated enough. Canadian TV providers would probably find others that would be game for replacing them, since for many U.S. markets (like Burlington/Plattsburgh or Buffalo), the Canadian market is a big source of their audience.

Then, U.S. rights-holders, probably starting with major sports leagues, could start demanding that signals be blacked out in Canada during their programming to protect the rights of their Canadian broadcast partners. The U.S. stations, which now have bargaining power, could impose this requirement on cable companies carrying their stations.

As new carriage agreements are signed with U.S. stations, they could demand direct fees for carriage (which would undoubtedly depend on whether their programming is subject to blackouts). Those fees would be passed on to the consumer, and the days of TV providers including U.S. stations for free in basic cable packages would be gone.

This doesn’t get much attention in Canada, but as Cartt.ca points out, there are also U.S. border communities where Canadian stations are carried on cable TV. Canadian stations could start making similar demands of U.S. cable providers.

If blackouts take hold during primetime series and sporting events, Canada’s simultaneous substitution system becomes moot. (Though an alternative would be to expand simsub so Canadian ads are seen on U.S. stations regardless of when the program airs or where.) If simsub is no longer a major factor in Canadian TV stations’ revenue, they suddenly get a lot more programming flexibility. Rather than CTV, CTV Two, Global and City building their schedules around having as many simultaneously broadcast U.S. network shows as possible, they could schedule their shows whenever they want.

Original Canadian series would no longer get bounced around the schedule. Programs that follow live sports (like NFL games) would no longer have to be delayed so they sync up with the U.S. network’s delay. Sports programming carried on U.S. network stations (particularly NFL games) could be moved to TSN or Sportsnet so local stations could continue to carry local news. Conversely, Canadian sports like the CFL’s Grey Cup could be moved to local stations because the Canadian over-the-air networks would no longer be reserved for simsubbable programming.

It could be a seismic shift in how English Canadians watch television, giving a lot more power and flexibility to Canadian TV networks.

Don’t hold your breath

Or maybe it won’t. Neither government has indicated it wants to press this as an issue, and though the U.S. TV coalition is pushing it, there isn’t much public support.

The reality is that Canadians like being able to watch ABC, CBS, NBC, Fox and PBS, and any move that would risk taking those channels away (or subjecting them to blackouts) would be deeply unpopular, no matter how much it might benefit the Canadian system. And it’s not like Canadians are desperate to make the lives and bottom lines of Bell, Corus and Rogers any better.

So this is more of an academic exercise than anything else. Realistically, the system will mostly stay the same until the point where Internet-based video consumption takes over from regulated TV distribution as the main source for popular video content. And the Internet has a separate scheme for ensuring that video doesn’t cross the border when a producer or broadcaster wants to protect their rights.

UPDATE (Sept. 4, 2018): A report by the Globe and Mail suggests that U.S. NAFTA negotiators are indeed pushing for changes to simultaneous substitution. It’s not clear if they’re seeking to mandate consent or just allow the U.S. ads into Canada.

| TV

Corus agrees to sell Séries+ and Historia to Bell Media for $200 million

Bell Media, Canada’s largest television broadcaster, is getting even bigger by acquiring two French-language services from its closest English-language competitor.

Bell and Corus Entertainment announced Tuesday that they have a deal whereby Bell acquires Séries+ and Historia for a price Corus values at about $200 million, subject to closing costs.

The deal requires approval by the Competition Bureau and the Canadian Radio-television and Telecommunications Commission.

That could be difficult, because of the history of the two services. The two were launched in 2000 as a joint venture between Astral Media and Alliance Atlantis. Alliance was then bought by Canwest, then Canwest’s television assets were bought by Shaw. Astral held on to its half of the ownership stake until it was bought by Bell in 2013. As part of its (second) proposal for the acquisition, Bell and Shaw each agreed to sell their half of Séries+ and Historia to Corus.

Now Bell wants to buy it all back. And at a discount, too. When Corus bought them in 2013, each half was valued at about $140 million, for a total price of $280 million. This transaction would be a savings of 29%. PBIT earnings for Historia and Séries+ were $29,881,221 in 2013 and $21,427,553, or a 28% decrease. The change was due mainly to a sudden surge in Séries+’s programming expenses in 2015-16 and a slow decline in ad revenue for both channels.

Corus is selling primarily to cut down its debt, as it says in its statement, but also because the channels are “not core to advancing Corus’s strategic priorities at this time.” The main reason for that is language. Other than these channels, Corus’s only French-language assets are the bilingual channels Teletoon and Disney.

“In the 18 months since Corus acquired Shaw Media, we have demonstrated a resolute commitment to de-lever our balance sheet to 3.5 times net debt to segment profit by the end of fiscal 2017 and 3.0 times by the end of fiscal 2018,” said Doug Murphy, President and Chief Executive Officer. “We have successfully accomplished the first step in our journey through the disciplined execution of our integration plan and ongoing advancement of our strategic priorities in fiscal 2017.  As we reviewed our portfolio of assets this year, we determined that while Historia and Séries+ are excellent channels, they are not core to advancing Corus’ strategic priorities at this time. Furthermore, the increased financial flexibility this transaction provides will enable Corus to accelerate our transformation into an industry-leading integrated media and content company.

Corus was embroiled in controversy recently after news came out that Séries+ and Historia would no longer be commissioning original series. It’s unclear if that decision was made in anticipation of this announcement (La Presse first reported on Corus negotiating this deal back in May 2016). Corus remains in control of the channels until the deal is closed, which Bell predicts will happen in mid-2018.

From Bell’s statement:

“The addition of Séries+ and Historia perfectly complements our broad slate of French-language channels, further enhancing our competitiveness in the vibrant Québec media landscape,” said Randy Lennox, President, Bell Media. “We look forward to taking Séries+ and Historia further than ever before, reinforcing our commitment to invest and grow in Québec, and deliver even more opportunities for francophone viewers, producers, and advertisers.”

“Bell Media has had a proven track record of investing in original French-language production, commissioning over 530 original productions from more than 70 francophone producers, and representing nearly 2,700 hours of new programming,” said Gerry Frappier, Bell Media’s President, French-language TV and RDS. “Now with the addition of Séries+ and Historia, we look forward to bolstering our commitment to both francophone viewers and the Québec television production community even more.”

The CRTC’s common ownership policy says generally that deals where a company gets control of more than 35% of the viewing share will be reviewed to determine if it’s in the public interest, and anything higher than 45% would generally be denied. According to the CRTC’s latest Communications Monitoring Report, Bell’s English-language services represent about 37% of viewing hours outside Quebec’s francophone market, and 21% in the Quebec francophone market. Corus’s French-language services (which also include Teletoon) represent only 0.4% of Quebec francophone viewing share. So mathematically, the deal would seem to meet the CRTC’s criteria for approval.

But expect those who came out against the Bell-Astral deal, particularly Quebecor, Cogeco and Telus, to argue that this deal calls into question the integrity of the CRTC’s 2013 decision and that it should be denied as being against the public interest.

Since this is a change in ownership, the deal would also be subject to the CRTC’s tangible benefits policy, which requires 10% of the value of television ownership transactions be spent on funds and projects that benefit the broadcasting system. Under this policy, Bell would be expected to spend $20 million on new projects over the next seven years. No tangible benefits proposal has been released yet, but will become public when the CRTC publishes the application for change in ownership.

| My articles, TV

How the CRTC screwed over community television to save local news

It’s a new dawn in local television. CTV Montreal has a new 5pm weekday newscast, City Montreal is preparing to launch evening news at 6pm and 11pm, and ICI is getting an infusion of cash thanks to OMNI’s successful bid for mandatory distribution at 12 cents per month per subscriber.

It’s a big enough change that I was asked to write about it for the Montreal Gazette. That story leads Saturday’s Culture section.

But while the new investments are great news for people who like local television (and, indirectly, people like me who like writing about it), there’s a big loser in this that isn’t getting discussed much: community television. The additional money going into local news is coming straight out of their pockets.

Let’s not talk TV

When the CRTC announced it was undertaking a long consultation process it called Let’s Talk TV, proponents of non-profit community television were excited about the prospect of finally bringing their issues to the forefront. A complaint from the independent group ICTV against Videotron’s community channel was in progress (the commission would later find that MAtv had failed to respect its licence conditions in terms of giving enough access to people from the community). And there was a growing opinion that community channels were not fulfilling their mandate.

The Canadian Association of Community Television Users and Stations and other groups filed complaints about other television providers that they felt were doing the same things to their community channels, ignoring their commitments to community access and using their funds to produce professional broadcasts and give side jobs to people affiliated with the company.

But the Let’s Talk TV process didn’t talk much about community television, and when it led to its first decisions in January 2015, the commission decided to kick the can down the road on community television, announcing it would begin a separate process to consider that. And that process would also include discussions of local news.

As expected, a review of the community television process was hijacked by discussions of local commercial television. People were more concerned about whether their local station would stay on the air or how long their local newscast would be than how their local Rogers TV or Shaw TV would be funded.

And the complaints about community channels still haven’t been properly evaluated, years later. That will happen at a hearing on the renewals of their licences, scheduled for October.

Provider TV

Let’s step back a bit and look at what community television is and has become in Canada.

Since 1971, the CRTC has required cable television providers to support community channels. Back then, television equipment was very expensive, very large and hard to obtain and operate. Community access was the only way many people could see themselves on television and communicate with the public through video. Cable companies would set up studios at their head ends and let people from the community broadcast on a special channel they set up.

Since the turn of the millennium, the situation has changed. Getting access to equipment isn’t the biggest problem — as the CRTC says, “many Canadians now carry an HD camera in their pocket in the form of their smartphone” — editing can be done on a home computer, and distribution is much easier thanks to YouTube and other free online services.

Instead, over the past decade, the issue has been more about money.

All cable television providers are required to spend 5% of their gross revenues on Canadian programming, but most are allowed to redirect some of that money to a community channel rather than simply hand it over to a fund like the Canada Media Fund. Most large terrestrial television providers do this because it allows them to keep control of that money, create a service that’s seen to do a public good, and provide added value for subscribers.

Critics might point out some other benefits, such as billing yourself for Internet access and providing side jobs for your employees. (The CRTC limits such overhead costs, but there isn’t a bright line that says you can’t be a supplier to your own community channel.)

Since 1991, the amount of money allowed to be redirected to community channels has been capped at 2% of gross revenues. Though there were many exceptions (small cable companies could devote the full 5% to a community channel, and companies that offered community channels in each official language could devote 2% to each one).

It might not seem like much, but when you have more than a million subscribers paying more than $50 a month, that’s a million dollars a month right there going to community TV.

As budgets for community TV grew, and technology advanced, they started to get more ambitious in terms of programming. Some even started broadcasting professional sports until the CRTC put a stop to that. (The ban doesn’t affect junior sports, and many junior hockey league matches are still broadcast on community channels.)

Community television is in an odd place because on the one hand it’s supposed to be volunteer-driven but on the other hand it’s required to spend money on programming. The pressure has always been there to keep the cable-access stuff to a minimum so more popular professional-looking programming can entice people to buy or keep their cable subscriptions.

And there was the added benefit of using community channel money to benefit related productions and personalities. Bell’s TV1 had shows linked to The Amazing Race Canada, the Much Music Video Awards, the Montreal Canadiens, The Social and eTalk. Videotron’s MAtv had side projects for such Quebecor personalities as Sophie Durocher, Louise Deschâtelets and Dominic Arpin.

This is a big part of the reason why CACTUS and others wanted community television taken out of the hands of big cable providers and put into the hands of non-profit community groups. But the CRTC has repeatedly resisted that effort, believing that the cable companies have the best resources available to provide high-quality community programming on a sustainable basis.

“Flexibility”

In 2010, the commission decided to freeze contributions to community channels. It found that the amount of money going to community television had almost doubled in a decade, and “although the Commission acknowledges that various metrics can be used to evaluate the success of community channels, it nonetheless considers that overall viewing to community channels remains modest relative to the growth in contributions to this sector.” Rather than cut the funding down, though, it decided to freeze it. Existing television providers would be capped at their 2010 levels until those dropped to 1.5% of revenues, and then they would stay at 1.5%.

In June 2016, the CRTC released its new policy on local and community television. There, it cut the contribution from 2% to 1.5%.

But the bigger blow was their decision to allow distributors the “flexibility” to redirect funds from community channels to their affiliated local stations to spend on local programming. For Canada’s five largest cities (Toronto, Montreal, Vancouver, Calgary and Edmonton), that redirection could be 100%, since the CRTC believed that people in those areas “have access to many media sources on television and radio, as well as online and in print, that provide community reflection.” For smaller areas, at least 50% of that money would still need to be spent on community television.

By the CRTC’s estimate, $65 million a year could be redirected from community channels to local stations owned by the major vertically integrated companies.

But what about independent stations? Where do they get additional money?

To help out most of them, there was already a fund called the Small Market Local Production Fund, funded by Canada’s satellite TV providers. The CRTC transformed that into the Independent Local News Fund, adjusted its admission criteria to include larger-market stations like CHCH in Hamilton and the V stations in Quebec and Montreal (while excluding small-market stations owned by the media giants), and required cable companies to contribute into the fund. Everyone kicks in 0.3% of revenues to support independent stations.

So in the end, all independent stations get extra money from this fund, and non-independent stations get funded through TV providers who share the same owner.

News pro quo

In exchange for the extra money, there were new requirements for local stations:

  • In addition to the amount of local programming they have to air each week (still set at 14 hours for major-market stations and 7 hours for smaller ones, with some exceptions), they must air a certain amount of locally reflective news programming as well — six hours in large markets, three in smaller ones.
  • There’s also a financial requirement for investment in local news: 11% of gross revenues for local television stations must be devoted to locally reflective news. (This number, proposed by the three English networks, is based on previous spending on local news.)

For community stations, even though they got less money, there were stricter regulations imposed to ensure that the money they did get was spent correctly:

  • Starting this year, cable companies must spend 60% of their community channel allocations on direct programming expenses. That rises in increments and reaches 75% after 2020.
  • Diverse citizen advisory committees are required in Canada’s five largest markets.
  • Rules on what qualifies as access programming have been tightened to stress that the community member that initiates a project must have creative control, and “is neither employed by a (TV provider) nor a media professional who is known to the public or who already has access to the broadcasting system.” They also can’t profit from the show (by turning it into a de facto infomercial for their business, for example).

The changes took effect on Sept. 1 after being formally approved as amendments to the regulations and enshrined in TV stations’ conditions of licence.

But most companies didn’t wait that long to make major changes:

  • Rogers closed some Rogers TV community stations and cut back at others in the greater Toronto area.
  • Shaw closed Shaw TV in Vancouver, Calgary and Edmonton, eliminating 70 positions and sending $10 million to Global TV stations.
  • Videotron cut the budget of MAtv by 25%, reflecting the drop of the maximum deduction from 2% to 1.5%. (There hasn’t been an announcement of any redirection of funds to TVA stations.) The cuts meant the cancellation of Montreal Billboard, a weekly series featuring interviews with local community groups. MAtv director Steve Desgagné told me the decision to cut that program was strictly budgetary.
  • Bell made serious cuts at its TV1 community channels, which operate in Toronto, Ottawa, Montreal and Quebec City. It declined to provide specifics when I asked.

The result

It’s hard to evaluate the impact on community television by looking at programming, because much of that programming is short-term projects. But you can expect less programming, and especially less of the non-access local programming produced directly by the cable companies, particularly in the larger markets, as a result of these changes.

On the TV side, Bell’s CTV and Rogers’s City have both announced new expansions of local news, both to make use of these new funds and to meet the new locally reflective news requirements. Global has been non-specific about how it’s using the additional money.

What definitely won’t change is the strongly held belief among supporters of community television that cable access needs to be less cable and more access.

| Radio

CRTC says it doubts CPAM’s commitment to licence compliance for CJWI 1410 and CJMS 1040

The CRTC isn’t happy with Jean-Ernest Pierre and the two Montreal-area AM radio stations he owns, both of which have gone through a third straight licence term where they have failed to comply with their regulatory obligations.

The commission is considering further options, up to and including revoking or refusing to renew their licences.

On Thursday, the commission issued a notice of hearing for Sept. 7, during which it will consider the licence renewals of CJWI 1410 AM (Haitian station CPAM Radio Union) and CJMS 1040 AM (the country music station based in St-Constant). Both were set to expire Aug. 31, but have been extended a year to give the commission time to consider the compliance issues.

The notice lists a series of regulations and licence conditions the station has apparently failed to meet.

For CJWI 1410:

  • Failing to file annual returns on time (CPAM blamed this on the accountant)
  • Failing to file a form relating to the National Public Alerting System (blamed on the provider of the NPAS system and lack of familiarity with the form)
  • Failing to provide audio recordings and information on licence compliance following a CRTC request (blamed on lack of clarity on the form they were asked to fill out)
  • Failing to provide a detailed music list (CPAM said it sent one when asked)
  • Failing to provide proof of payment of Canadian content development contributions (CPAM said it was paid on time, gave no explanation for failure to provide proof by deadline)
  • Failing to broadcast word-for-word a notice of non-compliance as ordered under the previous licence renewal (CPAM said it believed it was acceptable to follow the spirit of the demand rather than the letter)

For CJMS 1040:

  • Failing to file annual returns on time (CPAM blamed this on the accountant)
  • Failing to file a form relating to the National Public Alerting System (blamed on the provider of the NPAS system)
  • Failing to provide audio recordings upon request (CPAM said host Pascal Pourdier sent them in November — eight months after the CRTC’s request — but apparently the commission never received them)
  • Failing to provide proof of payment of Canadian content development contributions (CPAM said contributions prior to 2014 were the responsibility of the previous owner, but it has paid the amount owed; for contributions after the acquisition, they were paid on time, but no explanation was given for failure to provide proof by deadline)

CJMS has requested a licence amendment to relieve it of the obligation to pay $500 a year to Canadian content development. That request might have been granted (the commission has since made it a policy that stations with small incomes shouldn’t be forced to make CCD expenditures, and the $500 a year was a commitment the group chose to make when it acquired the station in 2014) except that the CRTC also has a policy not to relieve stations of licence conditions when those licence conditions have not been met. (In other words, the commission prefers you ask for permission instead of forgiveness.)

For both stations, the owner passes the buck on responsibility, blaming the accountant, the alerting system provider, an on-air host and even the commission itself for its failure to comply with its licence conditions. The CRTC won’t like that.

But it especially won’t like the fact that these stations had already been called to order on these issues. CJMS’s last licence renewal came with two mandatory orders (which can be enforced by federal court) requiring the station comply with licence conditions. That order came after a bizarre in-person hearing during which the previous owner blamed his father’s dementia for the station’s failure to comply. Though CJMS has a new owner, this is the fourth straight licence term that the station has been in non-compliance, and the third straight time that a short-term renewal has failed to bring the station into line.

For CJWI, there was no mandatory order or tense public hearing, but there were also repeated short-term renewals because of licence non-compliance — in 2008 for four years because of a failure to provide an annual return on time, 2015 for two years because of failures related to annual returns and CCD contributions. Like CJMS, CJWI doesn’t have a single licence term where it has complied with all its licence conditions.

What will the CRTC do?

The commission has a policy on how to deal with non-compliant radio stations, based on how severe the non-compliance is, whether the non-compliance has been a chronic problem, and how the owner has responded to being informed of the apparent non-compliance.

The commission could do nothing, if it determines that the non-compliance was minor or just a communication issue. The next step is usually a short-term licence renewal, which it has already done repeatedly for both stations. It could impose additional CCD contributions (a de facto fine), it could require the station broadcast a notice of its non-compliance (which it did for CJWI), issue mandatory orders (which it did for CJMS), and in the most extreme cases, it could suspend, revoke or refuse to renew the licenses.

Normally, for that extreme measure, the commission would call the licensees to an in-person hearing to give them a chance to explain themselves. That’s what it did with CJMS’s previous owner, and for Aboriginal Voices Radio before revoking its licences. But this notice says the CRTC does not expect to require the licensees’ presence in person. This makes licence revocation unlikely.

Nevertheless, for both stations, it said: “Given the recurrence of the station’s non-compliance over the past several licence terms, the Commission has concerns regarding the licensee’s ability and commitment to operate the station in a compliant manner.”

That should be worrying to any radio station owner, and a strong sign that the commission’s patience is wearing thin.

Other stations in non-compliance

The hearing is also looking at three other stations that have compliance issues:

  • CICR-FM Parrsboro, N.S. The community radio station got its first licence in 2008, and was renewed for a short term in 2015. Its compliance issues relate to annual returns, program logs and requests for information from the commission.
  • CFOR-FM Maniwaki, Que. The commercial station has gone through a third licence term failing to comply with licence conditions, including a condition imposed in 2015 about broadcasting its failure to comply. The application does not include explanations for these latest failures.
  • CKFG-FM Toronto (G98.7). This commercial station owned by Intercity Broadcasting Network Inc. has so many compliance issues that the commission says it “could conclude that the licensee has demonstrated that it does not understand its regulatory obligations.”

Comments on these applications and others in the public notice are due by July 31 and can be submitted here. Note that all information provided, including contact information, becomes part of the public record. The commission could choose to invite people to the public hearing if it decides based on public comments that such an invitation is warranted.