Tag Archives: CRTC

| 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:

Continue reading →

| 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.

| Technology

CRTC: Videotron’s Unlimited Music program is illegal

In a big step toward the principle of net neutrality, the CRTC today established policies about differential pricing of Internet data (both wireless and wired) and ruled that a Videotron promotion that offers free streaming of music from selected music streaming services is against the rules.

The Videotron promotion in question is called Unlimited Music, which it debuted in August 2015. And the way it worked was it reached agreements with several music providers like Spotify and Google Play and Apple Music and exempted that data from its data caps for premium data plans. People with those higher-end plans could stream as much music as they wanted and never worry about busting their data caps.

But even though just about anyone was invited to join the program, it wasn’t automatic. And radio stations were not invited to join in.

It took minutes for net neutrality advocates to say this was wrong. I literally came out of the press conference announcing it and was on the phone with the head of the Public Interest Advocacy Centre who immediately said it was against the rules. But it took a year and a half for the CRTC process to unfold to declare it so.

Videotron said at the time it believed that because it wasn’t giving undue preference to its own music service, that the program was legal. It was mistaken.

The CRTC’s decision not only makes Unlimited Music illegal, but any plan from any provider that treats data differently depending on where it’s going or what kind of data it is. So a plan that offered no data but free access to Facebook, or a plan that didn’t count email downloads toward the data cap, those are now illegal.

There are some exceptions. One is for administrative functions. If you’re checking with your provider how much data you’ve used up on your plan, that could be exempted from data charges. Another is for “content-agnostic” stuff, like charging different rates depending on different times of day. So long as everything on the Internet gets treated the same, it’s OK.

The commission also leaves the door open to other exceptions opening up, and providers applying for pre-approval of new ideas. CRTC staff tell me such applications would go through the usual application process.

Otherwise, the commission will use guidelines established in its policy to evaluate (after the fact, following complaints) whether a service or program is compliant. These include whether the pricing is offered only on certain data plans, whether any money exchanges hands with third parties, how exclusive the offer is for certain services or subscribers, and “impact on Internet openness and innovation.”

Under the CRTC’s analysis, Unlimited Music did not meet the criteria of agnostic treatment of data, lack of exclusivity, and lack of negative impact on Internet openness and innovation. And there were no exceptional circumstances to warrant an exception to the rules.

So Videotron has until July 19 to bring Unlimited Music into compliance with the rules. But there’s likely no way to do so, so expect it to be withdrawn.

To be clear, this decision relates to data pricing only. Promotions like Rogers offering free Spotify subscriptions to certain users are still legal. But Rogers must treat the data from Spotify like any other Internet data. It can’t exempt that data from its data caps. (And it doesn’t.)

UPDATE: Videotron says it’s disappointed in the decision, and will analyze it in the coming days to figure out how to respond. In the meantime, the Unlimited Music offer remains in effect until further notice, and it promises to keep subscribers up to date.

| Radio

CRTC radio licence renewal applications: Radio Ville-Marie has several compliance issues

There was a dump of licence renewal applications posted online March 1, March 6 and March 30 for radio stations. Most were found to be compliant with their licence conditions, while some had issues. Here are stations up for renewal in Montreal and surrounding markets. For those still open for comment, you can find their applications here.

CIRA-FM 91.3 Montreal (Radio Ville-Marie) plus retransmitters in Trois-Rivières, Victoriaville and Rimouski: Several compliance issues — Financial statements using the calendar year instead of the broadcast year, financial statements reported late, annual report missing (blamed on a move and the absence of their director of finance), noisy recordings (which the station blamed on a power failure and faulty equipment), failure to properly categorize songs (which they say they actually did), failure to respond to requests for information (lost in the shuffle of other demands, they say),

One other thing they’re accused of is being “alarmist” in fundraising requests. According to CRTC policy, it is considered unethical for solicitation announcements to be unduly coercive or to suggest that a show or station would disappear from the air if enough money wasn’t received. Radio Ville-Marie (like just about every non-profit on the planet) did exactly that, saying on air that “without your financial support, we can’t continue our mission”, which sounds accurate but is apparently against the rules.

For most of the compliance issues, the station gave identical answers on how they would be solved: the creation of a committee to ensure compliance. Asked about the possibility of a short-term licence renewal or other sanctions, the station downplayed the problems as “administrative” and not affecting programming or their mission. This is the kind of statement that will likely irk people at the commission.

CKIN-FM 106.3 Montreal: Despite the station’s troubled compliance history, and controversy about its very Arabic-centric programming schedule, the commission found only one issue in reviewing compliance for its first renewal under new owner Neeti P. Ray: A programming log failed to list the start times of each song broadcast. But even then, Ray notes that the regulations don’t require listing start times, but merely listing the songs played in order. Nevertheless, Ray responded with a revised list that included exact start times for each song played on air. The commission appears satisfied with this response and believes the station is in compliance with its licence conditions.

CKLX-FM 91.9 Montreal: No apparent compliance issues. RNC Media notes it appears to have found a winning formula with an all-sports format.

CJRS 1650 AM Montreal: Radio Shalom failed to install an alerting system by the March 31, 2015 deadline, but instead only installed it in September 2016. The station’s owner blamed a lack of funds. Similarly, there was an issue with payments to Musicaction in 2014, which the owner said were solved.

CJSO-FM 101.7 Sorel-Tracy: After two straight short-term licence renewals because of failure to meet licence conditions, the station is once again in apparent non-compliance at renewal time. The CRTC’s main issues are the lack of a public alerting system and incomplete records of music broadcast, which means classification issues that put them in non-compliance with Canadian and French-language music quotas. The station’s replies were brief, noting that the new owner took control 12 days before the deadline to install the public alerting system (“I had other priorities”) and there was confusion on how some songs should be classified in terms of popular versus specialty.

CFOU-FM 89.1 Trois-Rivières: The UQTR campus station failed to provide financial reports for the years 2012-2013, 2013-2014 and 2014-2015, because the financial reports they filed correspond to their fiscal year instead of the CRTC-mandated broadcast year of Sept. 1 to Aug. 31.

CITE-FM-1 102.7 Sherbrooke plus retransmitter CITE-FM-2 94.5: No apparent compliance issues.

CFAK-FM 88.3 Sherbrooke: No apparent compliance issues for the Sherbrooke campus station.

CHXX-FM 100.9 Donnacona (Quebec City) and retransmitter CHXX-FM-1 105.5 Ste-Croix-De-Lotbinière: Radio X2 failed to comply with its 65% francophone music quota, reaching only 63.5% during a sampled week in February. It blames this on certain songs it believed were French but were actually more than 50% English. This would be its second straight non-compliance finding. The commission suggested it may impose additional contributions to Canadian content development funds (a de facto fine) as a result of non-compliance. The station also says it wants to once again rid itself of conditions of licence requiring it to maintain a presence in Donnacona, but it looks like that request will be treated separately.

CITF-FM 107.5 Quebec City: No apparent compliance issues. But ADISQ wrote in to demand access to reports Bell Media promised to file when it acquired Astral Media on its program to promote independent artists.

CJLL-FM 97.9 Ottawa: No apparent compliance issues for this ethnic station.

| Opinion, TV

20 bogus arguments about the CRTC and Super Bowl ads

With less than three weeks to go until Super Bowl LI, the rhetoric is heating up about a decision made by the CRTC two years ago to end simultaneous substitution during the Super Bowl, now that it’s about to finally come into effect.

There’s good reason for this. Simultaneous substitution is worth $250 million to the Canadian television industry, according to one estimate, and substitution for the Super Bowl alone — the most watched program on Canadian TV every year with an average around 7 million (plus another 1 million on RDS) — is worth $18 million a year to Bell Media, which owns the Canadian rights through 2019. There’s a huge financial interest for Bell to keep fighting this.

And so the decision is facing an appeal by Bell Media, though the court declined to stay the decision in the meantime, so it remains in force pending a decision.

Ever more desperate, Bell Media, the NFL and other allies in the fight appealed to the government directly, lobbying them to engage in creative manoeuvres to overrule the CRTC. The government appears disinterested in stepping in to overturn a populist decision by a supposedly arm’s-length regulator.

In the arguments for and against the decision, from interest groups, newspaper columnists and others, there have been a lot of good points and a lot of poor ones made. Those who want to oversimplify this issue have taken plenty of logical short cuts that can lead casual observers to incorrect conclusions.

Here are some of the arguments used by both sides that I’ve heard over the past few weeks (in some cases I’ve included links to those who have used them or implied them), and why I think those arguments are invalid.

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| Radio

CRTC gives TTP Media until June 30 to launch English radio station at 600 AM

For the fourth time in as many years, a group owned by a trio of Montreal businessmen has appealed to the CRTC for an extension on their deadline to launch a new AM radio station, claiming that unforeseen circumstances have caused delays but assuring the commission that they’ve been resolved and the station is months away from launch.

TTP Media’s request for an extension for 600 AM

On Wednesday, the CRTC announced that it will grant an extension, until June 30, 2017, to 7954689 Canada Inc. (TTP Media) to launch its English talk radio station at 600 AM, first authorized in 2012.

As it did with the 940 AM station a year ago, the extension was granted despite the previous extension being declared “final” by the commission. Though the previous extensions, despite being requested for only a few months, were given for a full year, this one is limited to June 30, after the group said it should have the station on air by June.

This is the first official communication from the otherwise very quiet group for a year now, so we have some information on what is causing the delays, and what their short-term plans are.

As in previous requests, Managing Partner Nicolas Tétrault blames “the consolidation in the commercial broadcasting business in Montreal,” a reference to the Bell acquisition of Astral Media that was finalized in 2013 (and did not result in any major programming changes to existing stations in the market). But here he indicates that the banks that are loaning them tens of millions of dollars needed some reassuring on the group’s business plan. (This may be, at least in part, why they abandoned plans for a third station at 850 AM, though that station is not mentioned at all in the application.)

The bigger issue has related to the transmitter itself. The group finally came to an agreement with Cogeco Media to buy all the assets of the former CINW 940 and CINF 690 transmitter site in Kahnawake, and signed a new lease with the land owner, Frances Montour. The details of the lease are redacted, but it appears to go until 2022, with clauses for renewal beyond that.

It didn’t take long after the agreements were signed in late September and early October for the 940 transmitter to be brought back to life, at first to do on-site testing, antenna tuning and impedance matching, and later full on-air testing.

The station, CFNV 940 AM, has legally launched, but a de facto launch is expected early in 2017, according to its Twitter account. In the meantime, it’s running music — currently all-Christmas music — interspersed with recorded messages every 15 minutes:

You’ll notice the station refers to itself as “La superstation”. Time will tell if it lives up to that tagline.

More work needed for 600

For the English station at 600, there’s more work needed than turning the switch back on and transmitting again. The towers that were set to work at 690 have to be re-tuned for 600, and the transmitter itself needs to be sent to the factory to be reset to the new frequency. On top of it all, parts for AM transmitters aren’t as easy to find as they used to be, and nowadays must be custom made, which causes more delays.

From Patrice Lemée, engineer at Commspec:

Concernant la station AM 600KHz, l’envergure des travaux techniques est beaucoup plus complexe. Celle-ci sise e?galement dans les anciennes infrastructures de Cogeco Me?dia Inc. ope?rant a? la fre?quence 690KHz. Par contre, un changement de fre?quence est requis afin de diffuser a? la fre?quence 600KHz. Ces changements touchent l’essence me?me du site de diffusion. L’e?metteur doit e?tre partiellement re?-expe?die? a? l’usine afin d’e?tre re-synthonise? a? la nouvelle fre?quence. Le syste?me de phasage doit comple?tement e?tre redessine? afin de diffuser a? la nouvelle fre?quence d’ope?ration. De plus, ces deux stations (600 & 940) coexistent sur le me?me site de diffusion. Ce qui entraine des complexite?s supple?mentaires quant a? la conception du syste?me.

Afin de proce?der aux diffe?rentes modifications du syste?me de diffusion de la station AM 600Khz, nous avons contacte? diffe?rents manufacturiers. Base? sur les re?ponses des soumissions obtenues, il semblerait que certains manufacturiers ont de la difficulte? a? obtenir les pie?ces requises pour effectuer la conversion dans les de?lais prescrits.

Je vous confirme cependant que les travaux sont de?ja? entame?s et que la conception est pratiquement termine?e. Par contre, la rarete? des pie?ces d’e?quipement AM est une re?alite? de nos jours. Les pie?ces sont maintenant faites sur demande et les de?lais de livraison sont beaucoup plus longs que par le passe?. Il est assez fre?quent de rencontrer des de?lais de livraison de 12 a? 16 semaines.

Suite aux informations cite?es pre?ce?demment, nous estimons qu’il sera possible d’effectuer les modifications du syste?me de diffusion du 600KHz seulement au printemps 2017. Nous demandons donc une extension de la date de mise en service jusqu’au 30 juin 2017.

The application makes no mention of administrative or on-air aspects of either stations, including launch dates, on-air talent or studio location. So we’ll just have to continue to wait.

| Radio

CRTC rules CKIN-FM is not breaking its licence conditions with Arabic-language focus

The Canadian Radio-television and Telecommunications Commission has dismissed a complaint against CKIN-FM 106.3 by Radio Moyen Orient (CHOU 1450 AM) that it is not respecting its licence conditions by drastically increasing the amount of Arabic programming it broadcasts.

The complaint, filed in the spring by the city’s incumbent Arabic radio station, said that when Neeti P. Ray purchased CKIN-FM from Groupe CHCR (owner of CKDG-FM 105.1), it promised to maintain the station’s ethnic focus and serve the same languages. But after the acquisition closed, the station essentially turned itself into an Arabic station, broadcasting Arabic programming daily from midnight to 7pm, Spanish music until midnight on weekdays, and relegating the six other languages to an hour each on Saturday and Sunday nights.

For CHOU, this meant direct competition, which it judged was unfair. (CKIN-FM’s media kit boasts that FM is better than AM, without naming CHOU directly.)

But as I noted, and as Ray noted, and as the CRTC noted, nothing in the conditions of licence prevents them from doing this. The ethnic broadcasting policy incorporated into the licence conditions says that a certain number of languages and ethnic groups have to be served, but does not place a minimum or maximum number of hours.

The only place where CKIN-FM broke its licence conditions was (coincidentally?) during the week sampled by CHOU when it came two languages short of its required eight. The station explained this by saying that there was a schedule change, and two programs that aired on Saturday one weekend and Sunday the next were just outside the sample week (weeks are defined as Sunday to Saturday). This is a very reasonable explanation (though broadcasters should exceed their requirements to give themselves more flexibility and avoid situations like this), and the CRTC agreed.

CKIN-FM’s licence is up next August, and issues of licence compliance can come up again when the CRTC considers licence renewal.

| Opinion, Technology

The entirely predictable result of Quebec’s gambling-website-blocking law is coming

Only minutes after it was spotted at the very end of Quebec’s 2015 budget document, the proposal to force Internet service providers to block illegal gambling websites was criticized as being unconstitutional.

In the months that followed, the bill to implement the measure was criticized, by opposition parties, by Internet providers, by public interest groups, by Michael Geist, and by anyone with even a basic understanding of constitutional law in Canada. (Though, strangely, not by some actual independent gambling sites.)

And yet, the government kept pushing the legislation along. During parliamentary committee hearings, Finance Minister Carlos Leitão assured everyone that they had their lawyers look into it and it would pass a challenge. This isn’t a telecommunications bill, he argued, it’s about gambling, consumer protection and health, which are provincial jurisdictions.

When Bill 74 was finally adopted at the National Assembly in May 2016, it was with both opposition parties noting the potential issues (which also included worries about the impact this would have on small ISPs).

The Public Interest Advocacy Centre wasted little time, applying to the CRTC to ask it to declare the bill’s website blocking elements unconstitutional. Meanwhile, the Canadian Wireless Telecommunications Association launched a challenge in Quebec Superior Court.

On Thursday, the CRTC responded to PIAC’s application, arguing that on the one hand the court case should settle the matter of whether the bill is constitutional, while on the other hand saying that blocking websites is against the federal Telecommunications Act and complying with a provincial law is not justification for doing so.

The CRTC has given parties 15 days to respond to its preliminary findings, and if it doesn’t change its mind, it will suspend the PIAC application until the court case is settled.

The law won’t be implemented until probably 2018 at the earliest because it will take a while for Loto-Québec to set up its end of the system. That should be enough time for the court to decide on this issue, assuming it doesn’t end up being appealed.

In the meantime, we can sit here and shake our heads at all the energy, time and money being wasted by the Quebec government, the CRTC, the court system, Internet providers, PIAC, Loto-Québec and others over provisions of a law that is obviously unconstitutional and probably wouldn’t work even if it wasn’t.

| TV

Global, City TV withdraw demands to reduce local programming minimums in Montreal

Corus Entertainment, which owns Global TV, and Rogers Media, which owns City TV, have each decided that in light of recent changes in local television policy, they are willing to accept the requirement that their stations in Montreal produce the standard 14 hours per week of local programming, and have withdrawn requests that their quota be reduced to 10 or seven hours a week.

The requests came as part of a proceeding to renew licences for Canada’s major television broadcasters. The large groups all have their licences expiring in 2017, and the CRTC is holding a public hearing in November to discuss what conditions should be in their renewed licences for over-the-air television and specialty channels.

Bell Media proposed no such changes for CFCF-DT, which is the market leader in the city and whose local newscasts often have a market share above 50%. But even the #1 broadcaster warned about the failing business model of local television, and said that for its network “at this time, we can only commit to the current local programming requirements and even these regulatory minima may need to be revisited once the Commission’s decision on local programming is released.”

Normally, television stations in “metropolitan” markets of more than 1 million people are required to broadcast 14 hours of local programming every week, while stations in smaller markets are required to broadcast seven.

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| My articles, Radio

TTP Media abandons 850 AM, shows no progress on other unlaunched stations

For the past five years, one of the most common questions I’ve been asked by people in the local broadcasting industry is what’s going on with TTP Media, a group of local businessmen who won CRTC licences to launch three AM talk radio stations in the city and had promised to revolutionize the market with big investments in quality programming.

Unfortunately, for years now the answer has been “nothing that I know of.” And unfortunately that continues today.

Since getting the licence for 850 AM in 2013, the group’s only on-the-record activity has been asking for extensions and technical changes from the CRTC, each time indicating that the stations were mere months from launch.

But now there’s finally some news, even though it’s not clear what it means. In June, the authorization from the CRTC to launch a French sports-talk station at 850 AM expired. Because the decision approving the station was published in 2013, and the first extension given last year, a second request for a final one-year extension should have been a matter of formality.

But that request was never issued. So on June 19, when the deadline was reached, the authority to launch the station expired.

According to the CRTC, the frequency is now available for anyone else to apply for.

I chronicle my attempts to seek comments from the partners in Tietolman-Tétrault-Pancholy Media in this story published by Cartt.ca. Paul Tietolman, whose father Jack founded the station that used to be on 850 AM in Montreal, was the only one who would talk to me, but he wouldn’t answer questions about the group’s plans, wanting to defer to his partners and not act as a company spokesperson.

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| TV

CRTC settles Videotron/RDS dispute, opening door to subscribers getting RDS GO

It’s not official yet, but a decision released by the CRTC this week will likely lead to Videotron subscribers soon finally getting access to RDS GO and being able to stream Canadiens games on smartphones, tablets and online.

The decision, released Tuesday, is what’s called a final offer arbitration between Videotron and Bell Media over the distribution of RDS and RDS2. The companies couldn’t come to an agreement over renewing the distribution contract, which expired last August, and so Videotron asked the commission to intervene.

In final offer arbitration, both parties present complete contracts to the commission, and it chooses one in its entirety (or, exceptionally, can refuse both).  This method of conflict resolution has the advantage of rewarding whichever side presents the most reasonable-seeming offer, and so encouraging both sides to be more reasonable in those offers.

In this case, the CRTC sided with Videotron, judging that its offer was better. The supporting documents in the case are heavily redacted to protect commercially sensitive information, so we don’t know any of the details of the contract, including what wholesale per-subscriber price Videotron will pay for RDS, what kind of volume discount it will get on that price, how long the term is or even how many RDS subscribers Videotron has.

But the documents do give plenty of insight into the relationship between Bell and Quebecor, and the tone of the many letters to the CRTC suggests there’s no love lost between these two organizations.

Videotron wants streaming

According to the documents submitted, Bell and Videotron managed to work out most of their differences on the new contract, including multiplatform rights, which Videotron has been trying to get a deal on since at least 2014. And it made it clear it sees these rights as essential:

Il est très important de souligner l’urgence de la situation puisque tant et aussi longtemps que le tarif multiplateforme n’est pas réglé, les abonnés de Vidéotron n’ont pas accès à ce contenu et sont désavantagés vis-à-vis les abonnés de Bell Télé. De plus, en retardant l’accès à ce contenu, Bell Télé continue de jouir d’un avantage concurrentiel important tout en désavantageant Vidéotron.

Though Videotron initially wanted to put multiplatform rights to arbitration as well, after failing to get the issue resolved in mediation in 2014, the companies solved that issue on their own, leaving only the wholesale price for the channels up to the commission.

With the CRTC’s decision, there’s now a new contract with RDS, one that includes multiplatform rights and will allow Videotron to meet new packaging requirements set by the CRTC to come into effect by Dec. 1.

So when do we get RDS GO?

Not quite yet, it seems. While the company told me in a statement that it’s happy with the decision and that there’s “agreement in principle” on multiplatform distribution, some aspects of the deal are still in discussion. “It’s impossible for us to make an announcement on this subject today,” the company said.

Hopefully this will be resolved by the time the Canadiens season begins again this fall.

Multiplatform distribution, and in particular “TV anywhere” apps, still have plenty of holes, particularly where they involve large vertically integrated companies. Few Bell services are available to Videotron customers this way, and few TVA services are available to Bell customers.

 

These issues will eventually be resolved as new distribution contracts are signed (in many cases probably involving a quid pro quo to avoid giving one distributor a competitive advantage), but they’re taking forever.

Because this deal concerns only RDS, it doesn’t affect distribution of other Bell Media services on Videotron (not even TSN). But hopefully this will help speed up discussions about getting those services on board as well.

The arguments

Since the CRTC arbitration in the end concerned mainly just the wholesale fee for RDS, the arguments presented by Bell and Videotron mainly concerned trying to set a higher or lower value on the channels. Though both offers increased the wholesale fee for RDS, Bell’s increased it more than Videotron’s did.

Much of those arguments centred on comparing RDS to TVA Sports, which of course is owned by Videotron’s parent company Quebecor.

Bell’s arguments for a higher fee included:

  • RDS maintains higher overall ratings than TVA Sports, even after losing national NHL rights.
  • RDS is more respected by viewers than TVA Sports.
  • RDS’s production and acquisition costs have increased dramatically.
  • Outside of hockey, RDS is by far more popular than TVA Sports, with many more marquee events.
  • Though Saturday night Canadiens games are popular, many more Quebec francophones are choosing to watch the games in English on CBC or Sportsnet than watch TVA Sports (they don’t say why, but this probably has to do as much with the fact that some people just don’t feel the need to subscribe to the channel as it may with people not liking its broadcasts).
  • Videotron is changing its packaging rules to come into compliance with the CRTC’s new rules. A higher per-subscriber wholesale fee should be expected when there are fewer subscribers.
  • RDS needs to compete not only with TVA Sports but with online sources of sports programming.
  • Bell’s offer is more in line with what other distributors in Quebec pay for RDS.
  • Videotron has done nothing in its packaging of RDS to warrant a “special discount”.
  • Videotron is treating RDS more harshly than TSN, because its goal is not fair market value but to punish RDS in order to support TVA Sports
  • Quebecor started TVA Sports and is aggressively bidding for sports rights, which is why RDS’s acquisition costs have increased so much in the first place

Videotron’s arguments for a lower fee (one closer to that for TVA Sports) included:

  • TVA Sports has higher peaks in ratings thanks to NHL playoffs and Canadiens Saturday night games
  • RDS has lost other important sporting events to TVA Sports, including some MLB, NFL, QMJHL and tennis rights
  • Bell offers RDS and TVA Sports at the same retail price, suggesting equivalent value to consumers
  • RDS lost a third of its ratings due to the loss of Saturday night NHL games, NHL playoffs, NHL special events and non-local NHL games
  • RDS’s subscriber revenues have already gone up considerably faster than its expenses, particularly jumping from 2011 to 2012, when it went from 44% of revenue to 62%. (This is mainly because until 2011, RDS’s wholesale rate was regulated by the CRTC.)
  • RDS’s profits continue to increase (though they were cut in half in 2014-15 after losing NHL rights).
  • There’s also RDS Info, which isn’t part of this contract but also collects subscriber fees while adding little original content
  • Television subscribers are already beginning to unsubscribe from some services or eliminate pay TV all together, citing cost as a major factor.
  • Comparing Videotron to other distributors in Quebec isn’t appropriate both because of Videotron’s high market power as a distributor and Bell’s high market power as a broadcaster. (Plus, of course, Bell TV is one of Videotron’s main competitors in Quebec.)

Comparing ratings is tricky, especially for this past season, since no Canadian teams made the NHL playoffs. TVA Sports’s overall numbers would have been much higher had that happened. There were a lot of other issues with arguments on both sides, and of course plenty of other arguments were presented that were redacted in the public documents.

The decision

The CRTC found Bell’s offer reasonable on several points, like packaging, volume discounts, and how it compares to other rates. But it found RDS could not justify the rate increase it wanted when you look at historical rates, which it found more relevant to this case.

The other factor that swayed the commission was the variability of the rate. Instead of a fixed per-subscriber rate, both offers proposed a scale where the larger the number of subscribers overall, the lower the per-subscriber rate. But the CRTC found that Bell’s offer was too flat, and “would have the effect of insulating the programming service from the impact of subscriber choice at an unreasonable level.” In other words, if people dropped RDS from their packages, Bell would see only a small drop in their subscriber revenue and Videotron would be forced to pick up an unreasonable amount of that loss.

As a result, the CRTC picked Videotron’s offer. This may be good news for Videotron subscribers wanting to get RDS, particularly as a standalone service, but more importantly good news for Videotron’s bottom line.

| Radio

CKOI is moving its transmitter

The CBC's Mount Royal antenna tower hosts most major FM and TV transmitters in the city.

The CBC’s Mount Royal antenna tower hosts most major FM and TV transmitters in the city.

All major commercial FM radio stations in Montreal except one broadcast from antennas on a single giant transmission tower at the top of Mount Royal.

Soon, the sole holdout will be joining them.

CKOI's current antenna atop the CIBC building

CKOI’s current antenna atop the CIBC building

Last week, the CRTC approved (without any public process) an application to move CKOI-FM 96.9 from its current location atop the CIBC tower at Peel St. and René-Lévesque Blvd. to the Mount Royal tower.

Cogeco’s application explains that, with the move of television stations to digital, and the channel change of Radio-Canada and CBC TV transmitters from 2 to 19 and 6 to 21, respectively, the old VHF TV antenna used by them has become obsolete and is being removed. That will open up a space for a new antenna, and Cogeco wants to install it.

There are a few benefits to this. One, Cogeco’s other FM stations (CFGL-FM 105.7 and CHMP-FM 98.5) already broadcast from the Mount Royal tower, and moving CKOI would allow all three to be managed from one site, the company says. Also, because the antenna would be higher (277.6m instead of 220.8m above average terrain), its transmitter can reduce power but still cover the same area.

Finally, Cogeco says the new antenna will be compatible with HD Radio. It’s unclear if Cogeco has immediate plans for HD Radio or if it’s more of a long-term option, but other broadcasters are starting to use it now and CKOI would be ideal both because of its high coverage and because there are no stations close to it in frequency.

 

What makes CKOI unique in Montreal isn’t just its location, but also its power. According to the Canadian Communications Foundation, the station was authorized to use 307 kilowatts of power in 1962, when commercial FM broadcasting was just beginning in the country (at the time, the station was CKVL-FM, and was transitioning from being a mere repeater of CKVL to having its own programming). Because of grandfathered rights, it got to keep that power level even though FM stations are now limited to a maximum of 100kW. CKOI is one of only five stations in Canada allowed to go beyond 100kW, and it’s the second-most powerful transmitter in the country after Winnipeg’s CJKR-FM (310kW).

The grandfathered rights, however, don’t mean CKOI can move to the Mount Royal tower and blast out 307kW. When asked to approve the change, Industry Canada (or whatever it’s called now) said CKOI could continue exceeding the 100kW maximum provided its coverage area did not increase, that there was no increase in interference to existing stations or aircraft navigation, that the new installation respects safety regulations relating to transmission power, and that there is no objection from the U.S. Federal Communications Commission.

As a result, CKOI has proposed an effective radiated power of 147kW, which is as high as it can go without exceeding its previous coverage to the west. (This will drop it to fourth-highest power in Canada, after London’s CFPL-FM, 300kW, and Winnipeg’s CBW-FM, 160kW.)

Current (blue) and proposed (green) contours of CKOI-FM

Current (blue) and proposed (green) contours of CKOI-FM

The new pattern slightly reduces how far the signal goes toward the east and south, but probably won’t be too noticeable. (Cogeco estimates that 99.6% of the population in the previous coverage area will still be in the new one.) The higher antenna height will also mean the signal will face less disruption from the mountain and tall buildings.

(147kW might sound a lot higher than 100kW, but because of the way propagation works, the coverage area isn’t that much larger. Compare CKOI’s current pattern to CKBE-FM’s 100kW signal for an idea of how different it is.)

As a bonus, people going through central downtown won’t have their FM radios so overloaded by a 307kW transmission just above their heads that they hear CKOI all over the FM band.