Tag Archives: fee-for-carriage

| Opinion, TV

Rogers et al pissed at CTV “Save Local Television” campaign

One-sided ad from CTV Atlantic

One-sided ad from CTV Atlantic

If you haven’t caught CTV’s “Save Local Television” ads recently, you haven’t been watching television. CTV has blanketed its stations, the A television network as well as specialty channels like the Comedy Network and Space with these advertisements that predict a doomsday scenario for local television and demonize the cable and satellite companies for “taking our programming” and “giving nothing in return” (as if this arrangement benefits solely the cable companies at the expense of local broadcasters, and as if the cable companies are selling DVDs of Corner Gas).

The cable and satellite companies have responded with a giant STFU, and issued a press release saying they’re complaining to the CRTC that CTV is breaching the public trust with this one-sided campaign that is a “blatant violation of journalistic principles.” (More coverage from CTV-owned Globe and Mail, Canwest/Global-owned Financial Post, CBC-owned CBC.ca and non-profit cooperative Canadian Press)

You see, not only is CTV running these ads all over the place, it’s enlisting the help of its journalists to spread its message. Ridiculously one-sided news reports from CTV Atlantic, CTV Winnipeg, CTV Toronto and A Barrie simply throw journalism out the window. In all but the one case, no attempt whatsoever is made to get comment from cable and satellite companies. The exception, in the CTV Atlantic report, includes a 10-second clip in a two-and-a-half-minute report whose bias is evident when the reporter talks about broadcasters wanting “equal treatment”.

CP24 (which is owned by CTV) has a fluff interview with CTV Executive Vice-President of Corporate Affairs Paul Sparkes in which he crosses the line from misleading to outright lie, saying cable and satellite companies are “taking our programs, repackaging them, selling them to the consumer, making a profit, and paying us nothing.” Local television feeds are not “repackaged”, but passed through directly to consumers. Sparkes also dismisses an actual question about fee for carriage lobbed at him from his reporter.

This report from Graham Richardson is a bit more balanced, in that he actually talked to a Rogers VP without systematically picking apart everything he says. It is the exception, unfortunately.

CTV Montreal enlisted the help of the premier, although Jean Charest doesn’t specifically state that he supports a mandatory fee for carriage. (He also talks of how important local television is to his home town of Sherbrooke, even though it has no local anglo television station.)

Right of response

In response to the complaint, CTV issued a press release blasting Rogers as “underhanded” (at the same time arguing that discussions shouldn’t happen via press release).

Its only comment about the attacks on its journalistic integrity came from this paragraph:

Indeed, consistent with CTV’s efforts to provide balanced coverage of the issues surrounding the crisis in local television, CTV once again invites representatives from Rogers, Bell, TELUS, Cogeco, Eastlink and the CCSA to participate in tomorrow’s nationwide events.

I can only assume this means CTV reporters will only talk to cable and satellite companies about this issue if they send a representative to CTV’s political rallies on a Saturday to be heckled by a public that has only been told one side of an issue. That doesn’t sound particularly “balanced” to me.

Despite this, Shaw once again called CTV’s bluff, and Ken Stein, the senior vice president of corporate and regulatory affairs at Shaw Cable, agreed to an interview with CTV NewsNet’s Jacqueline Milczarek. Milczarek argued with him (politely) for more than six minutes, a huge contrast from the softball questions given to CTV executives.

Stein also appeared opposite CTV’s David Goldstein to debate the issue on an Alberta program, which went on for a respectable 14 minutes. Sadly, the debaters weren’t as respectable, accusing the other of misleading people. In short, Shaw says it produces local programming through cable access channels, while CTV argues (correctly) that those channels are financed entirely out of a CRTC-mandated fund. CTV argues that Shaw et al are stealing their programming and pirating it to viewers, and incredulously accuses Shaw of using “scare tactics” in this campaign (you know, the one in which CTV is using a heart monitor metaphor to say local TV will “disappear forever” if fee for carriage isn’t enacted).

The network also finally got some smart analysts on. Eamon Hoey looked at the larger picture, taking a dim view of fee for carriage, and got hounded by Milczarek. Carleton University’s Christopher Waddell also pointed out how CTV isn’t telling all sides of this story, and also got treated with skepticism.

Don’t get me wrong, these interviews with Milczarek are what journalists are supposed to be doing: getting people to answer tough questions. But compared to the fluff interviews about open houses with CTV executives, it seems clear that CTV is using its journalists to advocate for a cause, being soft on their bosses and tough on their competition.

Breach of trust

CTV is grossly abusing its public trust by forcing its journalists to participate in what is essentially a political campaign. Television viewers have the right to be fully informed about all sides to this issue and CTV is systematically denying them that right.

Of course, the fact that local CTV stations are owned by a giant conglomerate that puts profit above everything else and is pretending to care about local television to manipulate the public is the problem in the first place, isn’t it?

What’s even sadder is that it takes another group of giant corporate conglomerates protecting their own bottom lines to bring this problem to light. If a solution was proposed that benefitted both private broadcasters and cable and satellite companies at the expense of television viewers, who would be there to look out for us?

I’m going to CTV Montreal’s open house today. I’m pessimistic about their chances of convincing me to accept their corporate manifesto, but it’s a good chance to explore the station.

| TV

Bell solves TV crisis (not)

OK, someone’s going to need to explain this one to me, because it doesn’t make any sense.

Conventional television broadcasters (CTV, Global, TVA, TQS and CBC/Radio-Canada) are pleading with MPs and the CRTC for the ability to charge cable and satellite distributors for fees to carry their channels. Their argument is that the advertising model has failed them, and they require a second revenue source to pay for all those local news stations and transmitters. They also say it’s unfair that specialty cable channels get subscriber fees. (Why am I paying money to networks that air non-stop Seinfeld reruns packed with ads anyway?)

Since the distributors would undoubtedly pass these fees onto their customers (despite their billions of dollars in profits), this would effectively mean that Canadians would be forced to pay for television channels that are broadcast for free over the air.

On Wednesday, Bell, whose Bell TV is one of two direct-to-home satellite services legally operating in Canada, announced it had come up with an “innovative” solution to this problem, that wouldn’t cost consumers extra, would help broadcasters and more importantly not hurt its own bottom line.

That solution is “freesat”, a system where some over-the-air television channels would be beamed to homes via satellite for free. Bell would be happy to provide this service if it meant they didn’t have to do this fee-for-carriage stuff. (It’s also easier to convince people to sign up for paid satellite service when they already have the equipment.)

So there you go, a win-win-win solution. Right?

Oh wait, not right, because this doesn’t solve anything.

Bell seems to believe that the financial problem of television stations is their upcoming transition to digital transmission. While the purchase of digital transmitters is a nontrivial problem – the CRTC’s estimate is that it would cost hundreds of millions of dollars – and it has led to the decision to shut down many retransmitters, that’s not what the broadcasters are complaining about. Their argument is that the cost of local newsrooms and local programming is too high to be paid for with advertising alone. Bell’s idea would not solve this problem.

Its financial uselessness isn’t the only flaw in Bell’s Freesat plan, as Digital Home also points out. Among the others:

  • Freesat would require users to purchase satellite dishes and decoders from Bell, at a cost much higher than a simple over-the-air digital-to-analog converter. One of the main reasons people don’t have cable or satellite is cost, so the people who would need this are also the people least likely to afford it.
  • Not everyone has a home that can accommodate a satellite installation.
  • Bell’s satellite service doesn’t carry all local conventional television channels (like, for instance, Global Quebec). This wouldn’t change under Freesat. So viewers would actually lose channels. Not to mention that the decision of what channels we’d have free access to would be Bell’s alone.
  • This proposal ignores the fact that there’s a second satellite provider in Canada. How would StarChoice fit into this? Would it also have to provide free channels?

I have my issues with the transition to digital. I’ve already argued against it, and still believe that there’s plenty of room to move existing stations out of the higher channels (say, 50-69) and auction off those frequencies. Digital television would make a technology that’s been used for more than half a century obsolete unnecessarily.

Freesat is worse. The equipment is bulkier and more expensive, and it doesn’t give all local channels. It’s the worst of two worlds.

Oh by the way, if “Freesat” sounds familiar, it could be because it’s the name of a real free-to-air satellite TV service in the U.K., or because Bell is recycling this exact same idea from a year ago.

Nice try, Bell.

| TV

CRTC roundup: Deciding the future of TV

The CRTC continues to dominate be a footnote in the headlines as conventional television operators appear in two hearings – one for the CRTC itself in Gatineau to discuss license renewals, and another for a House committee in Ottawa to discuss the future of local television. And those discussions are heating up.

Last week, CTV and Global pressed their fee-for-carriage idea, where cable and satellite providers would be required to pay broadcasters to carry stations that already transmit their signals over the air for free. This would give broadcasters a $350-million lifeline, which is why they’re continuing to press for it even after having gotten rejected twice. They say local news simply can’t pay for itself, and it needs to be subsidized.

Even TQS jumped on board, despite the fact that it doesn’t produce local news.

Rogers, which owns CityTV and OMNI but gets much more of its revenue from its cable distributor, argued in front of MPs that CTV and Global were exaggerating their financial troubles to get a handout.

This week, Rogers repeated the accusation to the CRTC, saying the networks want money for local stations but also want to shut down small stations that don’t rake in money. It tempered that by saying that if the CRTC approves such an idea, it should be temporary until the recession goes away and a revenue goes back up. It also said fee-for-carriage means they shouldn’t be required to distribute conventional TV channels if broadcasters demand fees that are too high.

(This brings up an issue: Isn’t Rogers in a conflict of interest here? On one hand, OMNI and Citytv would benefit from additional fees, but Rogers is silencing those voices because the corporate parent has decided it would have more to lose from these fees through its cable provider than it would gain through its television stations. The same applies to Quebecor, which owns the TVA network and Videotron. In all, distributors showed revenues of $10 billion in 2008, with over $2 billion in profit.)

Pierre-Karl Péladeau, who speaks on behalf of TVA and Videotron, gave a more nuanced, have-your-cake-and-subsidize-it-too answer to MPs, saying fee-for-carriage should be allowed, but that the rates should be subject to negotiation between broadcaster and provider (no doubt the negotiations between TVA and Videotron would go amicably).

Leonard Asper of Canwest argued the problem is a regulatory system that allows distributors to flourish while broadcasters falter. He said debt and the recession are problems too, but they’re not the whole answer.

Ivan Fecan of CTVglobemedia said the Local Programming Improvement Fund, a special fund setup by the CRTC to subsidize local television stations in small markets, would need to be tripled, and that even then this would only protect the status quo and would not result in any increase in local programming. That angered Rogers and CRTC members.

CTV and Canwest also pointed out that cable and satellite providers are constantly increasing their rates without the “revolt” that the providers say would happen with a fee-for-carriage.

The Globe and Mail’s Grant Robertson, who has been covering this issue better than anyone, has a list of some of the issues that may come up in discussions about the future of television in Canada.

Why not just shut them down?

An interesting point was made in discussions of license renewals: If CTV and Global are so jealous of specialty television channels, why don’t they just become specialty channels?

It’s not quite so simple, but with 90% of Canadian television viewers having cable or satellite service, the added expense of setting up transmitters and local news stations isn’t worth the added viewership and ad revenue that comes with it. (Not to mention the cost of transitioning to digital television, which has caused broadcasters to decide to shut down dozens of retransmitters across the country.)

CRTC chairman Konrad von Finkenstein asked if CTV would prefer the specialty channel model to the conventional TV model. Conventional stations require a certain amount of local programming, while specialty channels are required to spend a certain percentage of their revenues on creating original programming. CTV suggested it would prefer the latter, though it wanted some recognition that having local stations is much more expensive than rerunning old Seinfeld episodes.

CRTC wants more transparency from big guns

The CRTC is seeking comment on new rules that would require large broadcasters and distributors to disclose more information about their finances than they currently do.

Currently, the CRTC collects lots of information but only releases “aggregate information” to the public. So we know how much all broadcasters spend on U.S. programming, but we don’t know how that breaks down per broadcaster or broadcasting unit.

Since broadcasters are arguing that they need more money because their business model is broken (and the distributors are arguing that the can’t spare fee-for-carriage payments without raising prices), it makes sense that they should let us see their books.

The CEP labour union certainly agrees with that reasoning.

Broadcasters want changes on the air too

In addition to fee-for-carriage, television broadcasters are asking for a relaxing of regulations about how much Canadian content they have to air and what kind of programming they must create. One of the proposed changes is to include reality programming in the list of “priority programming” (scripted comedies and drama shows) that the CRTC gives special attention to because it costs more to produce. This would go against the entire point of distinguishing expensive from cheap programming, and encourage private broadcasters to cancel expensive dramas in favour of cheaper reality shows.

Meanwhile, Bill Brioux wonders if CTV and Global will be reducing their big-budget U.S. programming purchases in light of their apparent financial woes.

StarChoice really dislikes CBC Regina

Last year, the CBC got all up in StarChoice’s face because of a decision by the satellite distributor to remove CBC Regina (CBKT) from its channel lineup. The CBC complained to the CRTC, saying that the removal meant StarChoice had more CTV channels than CBC channels, and this represented a violation of one of its conditions of license.

In November, the CRTC ruled that CTV’s main network and its A Channel network should be considered separately for the purposes of this rule, and that StarChoice was still in compliance. It dismissed the complaint.

But the CBC pressed on with its case, arguing that the CRTC got the numbers wrong and that even excluding the A Channel network, StarChoice has more CTV-owned stations than CBC-owned stations. These include CTV-branded stations as well as CJCH in Halifax (formerly ATV, rebranded as CTV Atlantic) and MCTV’s CICI (rebranded as CTV Northern Ontario).

What followed was a war of words betwen CBC and StarChoice, with the latter accusing the former of using incendiary language.

Now, StarChoice is asking for an exception to be made to its license to allow it to continue not distributing CBC Regina but still distribute all its CTV stations (including CTV Regina). I’m going to go out on a limb here and suggest the CBC will oppose this request.

In other news

| Media, Montreal, Radio, TV

CRTC Roundup: The American retransmission consent model

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

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

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

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

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

Michael Geist also weighs in on this issue.

Conventional television pros and cons

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

Pros

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

Cons

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

A plea for local TV

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

Journalistic Independence is here (kinda)

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

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

Minority-language communities are well-served

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

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

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

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

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

Fox Business coming to Canada

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

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

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

Specialty channels raking in the dough

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

Community TV station in Laval?

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

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

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

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

Al-Jazeera trying again

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

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

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

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

General changes to broadcasting laws

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

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

In other news

And on the telecom side

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

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

| TV

Rogers missing the point

Rogers, which appeared in front of the CRTC today to tell them it’s a bad idea to make crazy-profitable cable companies give money to on-the-brink TV broadcasters, says the whole CanCon problem is moot because it’s developing a Canadian version of Hulu which will feature CanCon.

There’s only one hitch: You have to be a Rogers cable subscriber to use it.

Perhaps CBC got it wrong, or Rogers executives are using a stretched analogy, but they seem to be talking about video on demand over digital cable, not online video.

UPDATE: This post makes it clearer: Rogers wants to setup online video in a walled garden format where you’d have password-protected access to programming based on what you’ve subscribed to on their cable system.

People in Quebec who have Videotron Illico digital TV get lots of video on demand. Plenty of TV shows can be viewed for free on the service, provided those TV shows are owned by Quebecor. Quebecor owns Videotron and TVA, so you only see TVA shows on the service.

That doesn’t sound to me like it’s solving the new media problem.