Canadian Broadcasters Hail New CRTC Ruling

OTTAWA: Canada’s conventional broadcasters are praising a new ruling by the CRTC that ups the contribution that cable and satellite platforms must make towards local programming.

The Canadian Radio-television and Telecommunications Commission (CRTC) says the Local Programming Improvement Fund will have more than C$100 million to distribute during the 2009–2010 broadcast year, up from C$68 million. The additional financing for the fund—created in October 2008 to support local television programming in markets with a population of less than 1 million—will come from the increased contribution from pay-TV platforms. Cable and satellite companies will now contribute 1.5 per cent of their gross broadcasting revenues to the fund, an increase of 0.5 percent. Television stations in smaller markets will be able to draw on these funds to maintain their spending on local news and other types of local programming. This is a temporary measure and the CRTC is set to hold a public hearing this fall to come up with a long-term solution.

"Canadians have made it abundantly clear that they value local programming," said Konrad von Finckenstein, the chairman of the CRTC. "We have taken steps to ensure that broadcasters, and particularly those in smaller markets, continue to provide Canadians with programming that reflects their needs and interests."

The CRTC’s public hearings, beginning this September, will seek to develop a new regulatory framework for conventional television broadcasters. “The rapid evolution of the communications industry is forcing everyone to rethink the model for conventional television broadcasters,” said von Finckenstein. “This fall, we will develop a new framework that will give broadcasting ownership groups the flexibility to adapt to this changing environment. However, in exchange for greater flexibility, we expect broadcasters to make meaningful commitments regarding the production, acquisition and broadcast of high-quality Canadian programming."

The hearings will tackle the issue of license renewals, the terms of the local programming fund, carriage fees to conventional broadcasters from pay-TV platforms, the transition to digital TV and Canadian programming commitments by English-language broadcasters.

Canada’s conventional broadcasters have welcomed CRTC’s decision. Peter Viner, the president of Canwest Broadcasting, called the move a "good first step. We’re pleased that the Commission recognizes the local broadcasting industry is under pressure and is moving quickly to address the issue of fair compensation for signals in a comprehensive policy review that will begin on September 29, 2009. We look forward to playing an active role in that process.’’

The pay-TV platforms, however, signaled their discontent. Phil Lind, vice-chairman of Rogers Communications, said Canadian consumers could wind up shelling out an additional C$50 to C$100 per year for their pay-TV packages.

"CRTC announcement says that, not withstanding earlier rulings by the CRTC and notwithstanding the lack of support by the Canadian Heritage Committee, the CRTC is seeking to impose another new tax on consumers," Lind said. "The only question outstanding is how much more consumers will have to pay to watch the same television signals they watch today. Consumers already pay a CRTC-ordered 5% tax on cable and satellite service to fund Canadian programming. In the fall, they will now be hit with another monthly CRTC-ordered contribution of 1.5% of cable broadcast revenues to subsidize local news and information broadcast programming. Today, the CRTC has announced a third tax which, if broadcasters get their way, will add another $3 to $6 a month to cable bills, depending on where people live. We are profoundly concerned about how these new taxes will affect our customers and the Canadian broadcasting system and we intend to fight them on behalf of Canadian consumers."