The Canadian Radio-television and Telecommunications Commission (CRTC) today introduced a new framework that will give English-language private television broadcasters greater flexibility to offer high-quality programs that are of interest to
Canadians.
“The new approach to licensing on the basis of ownership groups reflects the trend of media convergence,” said Konrad von Finckenstein, Q.C., Chairman of the CRTC. “Our framework will enable the large groups to attract viewers to their different television services while encouraging the creation of original Canadian programs. In doing so, we are providing the industry with flexibility to adapt to the new reality of increased consumer choice in a digital world.”
Consolidation in the industry has resulted in large groups controlling both conventional television stations and specialty services. The CRTC’s approach will take into account a group’s total revenues when setting obligations related to the objectives of the Broadcasting Act.
Group-based policy
In 2011, the CRTC will hold licence-renewal hearings for the largest English-language private ownership groups. The largest groups are: CTVglobemedia Inc., Canwest Television Limited Partnership and Rogers Communications Inc.
This approach will permit the CRTC to introduce new requirements to encourage and support the creation of Canadian programs.
The CRTC will propose that the three largest ownership groups spend at least 30 per cent of their gross revenues on Canadian programming. However, they will be able to shift resources among their English-language conventional television stations and specialty services to meet this obligation.
Value of local television programming
As part of its framework, the Commission has set out a market-based solution to allow private local television stations to negotiate with cable and satellite companies. Each television station would have the option of entering into negotiations to establish a fair value for the distribution of their programs.
“The current dispute between conventional broadcasters and distributors threatens the overall integrity of the broadcasting system,” said Mr. von Finckenstein. “Broadcasters and distributors have a symbiotic relationship. The time has come for them to put their differences aside and work together to ensure the continuation of conventional television, which Canadians clearly value.”
During its proceeding, the CRTC received conflicting legal opinions as to whether it has the authority to implement a negotiation regime. Given that this issue is vital to the future of conventional television, the Commission has initiated a reference to the Federal Court of Appeal seeking clarification on its jurisdiction under the Broadcasting Act. The CRTC has asked the Court to consider its request on an expedited basis.
Transition to digital television
The Commission also launched a proceeding to ensure an orderly transition to digital television for consumers. Local television stations in major markets, as well as provincial and territorial capital cities, must complete the switchover by August 31, 2011.
In particular, the CRTC is seeking comments on:
- the number of Canadians that could potentially lose access to free local television as a result of the transition
- the size, type and manner of administering a subsidy program for over‑the‑air viewers, should such a program be authorized
- the provision of a free package of local and regional television stations measures to educate consumers, and
- the establishment of a trial market ahead of the transition date.
Additional sources of revenue
The Commission will allow video-on-demand services to insert commercial advertising in programs acquired from Canadian English- and French-language broadcasters. This will provide the broadcasting system, and conventional broadcasters in particular, with an important new source of revenues.
However, the CRTC will keep its current policy restricting the sale of advertising in the local availabilities of programs broadcast by foreign pay and specialty services. This time, usually two minutes per hour, will continue to be used primarily for the promotion of Canadian programs.
In addition, the Local Programming Improvement Fund will be maintained in its current form. As a result, cable and satellite companies will continue to contribute 1.5 per cent of their gross broadcasting revenues to support local television programming in markets with a population of less than one million. The CRTC will conduct a comprehensive review of the Fund during the 2011–2012 broadcast year.
French-language broadcasters
Next year, the Commission will consider appropriate measures for the French-language market when it reviews the licence obligations of TVA Group Inc. and V Interaction.
Canadian Broadcasting Corporation
The CBC’s unique mandate and needs within the Canadian broadcasting system will be discussed in the context of the next licence renewal for the public broadcaster’s English- and French-language television services.
Finally, the current licences of broadcasters will be extended until August 31, 2011, under their existing terms and conditions.
