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CRTC Release on Fee For Carriage Issue (March 22, 2010)

35K views 235 replies 81 participants last post by  ScaryBob 
#1 · (Edited)
As has been speculated in the press and in other threads, the CRTC will be releasing a report on the state of the Canadian TV Broadcasting Industry today on what is being referred to as the "Regulatory Policy framework on group-based licencing of ownership groups".

From the CRTC web site:
Please be advised that Monday’s release (March 22nd) will be at 4 p.m. [Ottawa time]
Discuss the March 22, 2010 CRTC release here.
 
#28 ·
Except windows7, you won't be able to watch any ABC/NBC/CBS/Fox programing for which CTV owns the Canadian rights. CTV will be allowed to require the BDU's to delete that programming unless the BDU and CTV reach a specific agreement on that program. Think Super Bowl as an example. No CTV Vancouver on Shaw, CTV can insist that Shaw delete the US network feeds of the game. Shaw and CTV can reach an agreement to allow Shaw to still provide the US feeds ... that agreement may be monetary (in which case Shaw could presumably sell its own advertising) or Shaw could agree to simsub.

The one bit of leverage is that I can't imagine either the BDU's or the networks risking complete consumer alienation by allowing things to reach the stage of program deletion.
 
#29 ·
@Johnny Canuck. I think your point 3 should read:
3) If a local station opts for VFS they lose some regulatory programming protection (mandatory distribution and priority channel placement).

If in fact the actual legal words from the crtc ALLOW for simsubs to be negotiated away I'd bet a lot that the broadcasters will immediately state to the BDUs that simsubs must stay. After all, no simsubs no money.


I think that all we need is for the crtc to FORBID Canadian stations to buy EXCLUSIVE RIGHTS for Canada. Then no blackouts, no simsubs. Easy...and hopefully we'd see CTV and Global out of business as TV stations quite soon.
 
#31 ·
I think that all we need is for the crtc to FORBID Canadian stations to buy EXCLUSIVE RIGHTS for Canada. Then no blackouts, no simsubs. Easy...and hopefully we'd see CTV and Global out of business as TV stations quite soon.
Well, part of the option to buy exclusive rights rests with the production studios. Not all the hit shows are produced by the American networks, they buy some of them from the studios as well. American networks may not want to buy the rights for Canadian distribution, and the production studios may not want to sell them to American networks (they want their show seen after all).

But, there might be pressure put on CTV/Global by the production studios to negotiate with the BDU's for this very same reason!!!
 
#30 ·
JohnnyCanuck said:
It's now a minimum 30% of gross revenue. Far better regime.
Agreed. And it will have the secondary effect that a lot of members are looking for: Reducing the total number of simsubs because the CTV/Global's just won't have the monetary means to buy the rights to all of the Amercian Prime Time hits, as they currently do.
 
#32 ·
OK, so correct me if I'm wrong, but from what I can tell of these statements. A Canadian station can opt out of regulation, then try to negotiate a fee for carrying their signal, and if they can't come to an agreement, then request blackout of any broadcasts they own rights to.

If this is correct, then is it safe to say, that the BDU would only have to blackout the originating US network feed in the areas that they would be able to reach OTA?

This should then be similar to the simsib rules. The Canadian networks shouldn't be allowed to force my BDU to blackout any shows in area's where they can't broadcast these shows OTA.
 
#43 ·
OK, so correct me if I'm wrong, but from what I can tell of these statements. A Canadian station can opt out of regulation, then try to negotiate a fee for carrying their signal, and if they can't come to an agreement, then request blackout of any broadcasts they own rights to.
Just about correct. What the stations choose is negotiated carriage, and an effect of that is removal of existing regualtory protections.
However, an new regulation gets added regardless, and that is the right for the station to request blackout of their or other channels that carry programming they have the exclusive right to in their market.

If this is correct, then is it safe to say, that the BDU would only have to blackout the originating US network feed in the areas that they would be able to reach OTA?
That is my loose interpretation.
This should then be similar to the simsib rules. The Canadian networks shouldn't be allowed to force my BDU to blackout any shows in area's where they can't broadcast these shows OTA.
Correct (to my interpretation), if a station not in your market asks for blackouts, the BDU you subscribe cannot black you out from signals not belonging to them, except their own, if your BDU carries them as a distant local.
 
#33 ·
And then I watch ABC/CBS/NBC/Fox simsub-free.
Not quite. You will see the same title card on every channel attempting to show any program for which CTV has exclusive distribution rights.

Rogers: Can we at least have American Idol?
CTV: Sure, we have a great deal on last year's syndication rights. 60 cents.
Rogers: But we need this year's show.
CTV: No problem. It comes bundled with The Littlest Hobo and The Starlost. $1.10
 
#37 ·
If they’re going to charge us now for these local channels then it should be a pay for what you want model. This way you can keep your Cable or Satellite for the speciality channels but can put up an antenna on your home for the FREE local channels.

I’ve been using a rooftop antenna for years now to compliment my satellite TV system primarily because the free HD signals ‘over the air’ are the best quality you can get… but now if I have to pay anything for these free local signals, that come to me over cable or satellite, then I’ll for sure cancel them and just use the antenna for the FREE HD signals. As a bonus I get the USA channels too out of Buffalo and can see US programming… I always use the antenna for the US channels… I just love my antenna!!!
 
#38 ·
I, for one, am happy with this ruling. It is fairly close to the US model where stations can either request mandatory carriage for no money or negotiate for compensation for carriage. There were a number of cable systems in the US that had local stations missing due to negotiation failures between stations and BDUs. The worst case scenario of mandatory carriage plus FFC has been avoided. Since stations that choose negotiation lose all protection rights, they can be put into optional bundles on a second tier. We could see CTV, Global, et al put into an optional networks bundle with US nets. That would be great for people with digital OTA but not so good for people farther from the US border.

The only concern I have is that companies like Rogers could enter into sweetheart deals with CTV and Global that are good for each company concerned but bad for consumers and other stations and BDUs. I can also see small, independent stations suffering further due to their lack of clout with BDUs.
 
#52 ·
Won't work. You'd end up with massive broadcast rights violations that could result in Canada being cut off from the broadcast of nearly ALL foreign productions. Canadian laws would no longer honor and protect legal business agreements, and the entire nation would be branded as a piracy haven fully backed by the federal government.

As unpleasant as sim-subs and blackouts may be, they serve their intended purpose, which is to protect the rights holders.

On another note, I still have to read through the decision to extract all of its details. But from what I understood by the numerous posts here, we're in for a very messy year, and an even messier new fall season. How many popular shows will be blacked out? How much will cable bills increase? How many subscribers will cancel their services and use alternate means to get their TV fix? And how many local channels will have the rug pulled from under their feet?

That last one is especially important for me. If cable companies start pulling the plug on local channels, does that mean there will be room for my free cable television channel? But even if my channel does get carriage, will there be anyone left out there to watch it?

I'm starting to wonder if my CRTC license still has any value.
 
#42 ·
If it turns out that the CRTC doesn't have any jurisdiction over the negotiated value for signal (VFS) then I imagine that these negotiations will quickly lead to price fixing and an un-regulated oligopoly.
 
#45 ·
If it turns out that the CRTC doesn't have any jurisdiction over the negotiated value for signal (VFS) then I imagine that these negotiations will quickly lead to price fixing and an un-regulated oligopoly.
If the courts rule that the CRTC doesn't have the power to implement a value for signal system then there will be no negotiations because this system will not be implemented. Basically we are in another waiting game yet again, this time waiting to see what the courts rule. If they say NO, the CRTC doesn't have the power to do this then you are back to square 1. The ball would then be tossed into the governments court and they would have to decide whether to make changes to the Broadcasting Act and since no party wants to touch this issue with a 10 foot pole, I think things would just stay as they are now.

It was stated that it could take up to 6 months for the courts to finally rule on this issue so its status quo until then.
 
#46 ·
This should then be similar to the simsib rules. The Canadian networks shouldn't be allowed to force my BDU to blackout any shows in area's where they can't broadcast these shows OTA.
I hope so, otherwise there would be no incentive for them to maintain their existing towers, further less to convert to digital. Imagine the arguments arund subscribers in "fringe" coverage areas.

On the other hand, I assume that exclusive broadcast rights mean exactly that. That they can prevent any unauthorized broadcast.
 
#48 ·
Tridus,

You are correct in the literal sense in that, yes, these stations will be protected as far as programming content that they have paid the distribution right's for is concerned.

But I think you are missing my point. These stations actually want (really, really, really want) to be carried on the BDU's and the BDU's know it. That is where they are not protected. Reread my post again in that context please:

If Rogers refuses to pay Global, Global can yank it's signal.
...
If they can't come to a negotiated settlement how would they possibly force a BDU to pay for the signal?
I really think the BDU's will still be in the driver's seat for any negotiated signals. I'm not convinced that all stations will opt for negotiated value.
 
#57 ·
Tridus,

You are correct in the literal sense in that, yes, these stations will be protected as far as programming content that they have paid the distribution right's for is concerned.

But I think you are missing my point. These stations actually want (really, really, really want) to be carried on the BDU's and the BDU's know it. That is where they are not protected. Reread my post again in that context please:



I really think the BDU's will still be in the driver's seat for any negotiated signals. I'm not convinced that all stations will opt for negotiated value.
Really, CTV admits that they get 80% of their audience from BDUs, so they are hardly in the driver's seat in this. You can't really threaten the other guy when he knows you are dead without him.

The other side of this, if the BDU has to PAY for the signal, is it too much of a stretch that they should be allowed to insert their OWN commercials. The broadcaster is being paid for the programming, it could be argued it is no longer their bandwidth to sell to advertisers. Maybe this is the next step in this ridiculous fight.
 
#49 ·
*edit* Holy smokes, in the time it took me to write this post, there were about 5 more before me.. maybe my Q's have been substantially answered, but I'll leave my orig. post below ... *end edit*

So, just for my own clarity here. Lets say I want to watch 24, Fox and Global carry it. So, if my sat provider did not negotiate terms with Global, Global could force the blackout of Fox while they are broadcasting 24?

Another example, Fox and Global carry "House", I assume the answer to my question above would be the same, however what about Showcase who shows older episodes, other seasons, as well as new episodes of House? Global could force the blackout of that too?

When I first saw this on the news today, I was very upset because there was no mention of the "must carry" and its waiver. Then again why would that come up on a CTV news report - they wouldn't want the public to know that they have had a "must carry" and priority placement all this time.

How's this for an extra twist - who is going to pay for the blackouts of all these shows - that is going to be at least a job or two, maybe some new equipment - if Global is going to enter negotiations, fail in them, then ask for shows to be blacked out -- shouldn't they have to compensate the cable co for this extra work?
 
#84 ·
So, just for my own clarity here. Lets say I want to watch 24, Fox and Global carry it. So, if my sat provider did not negotiate terms with Global, Global could force the blackout of Fox while they are broadcasting 24?
Yes exactly.
Another example, Fox and Global carry "House", I assume the answer to my question above would be the same, however what about Showcase who shows older episodes, other seasons, as well as new episodes of House? Global could force the blackout of that too?
Showcase has a different rights arrangement. Old episodes should not be affected. Since CWG owns Showcase anyways, I don't see them asking it be blacked out.
How's this for an extra twist - who is going to pay for the blackouts of all these shows - that is going to be at least a job or two, maybe some new equipment - if Global is going to enter negotiations, fail in them, then ask for shows to be blacked out -- shouldn't they have to compensate the cable co for this extra work?
The BDUs already have sim-sub equipment in place, so it would be as simple as going to black or a slate instead of the US station feed.
 
#51 ·
Looks like the CRTC found the 'out' they were looking for- the courts! They really didn't want to deal with this issue (they denied FFC twice before) so this time around they decided to throw the ball to the courts by saying they are not sure if they have the authority to go ahead with something (VFS) like this.

This appears to be the start of a long drawn out battle, if the courts rule that the CRTC does not have the authority then their plan outlined today becomes null and void and the broadcasters will probably start lobbying the government to change the regulations to implement VFS. On the other hand, if the courts rule that the CRTC does have the authority to do this then I can see the BDU's launching an appeal which would then drag this out even further and who knows what the end result will be there?!

Looks like some fun time ahead! :)
 
#53 ·
This should then be similar to the simsib rules. The Canadian networks shouldn't be allowed to force my BDU to blackout any shows in area's where they can't broadcast these shows OTA.
i'm in an area where we don't have OTA broadcast no regional CTV here no GLOBAL (and i like it that way) but if my provider blackout american channels because of the CTV or GLOBAL request because they own the canadian rights
i'll write to my MP
 
#58 ·
The CRTC already ruled that there will be no change on using the local ad avails on the US channels, so they won't move at all on the selling of commercial time.

As an employee of a very small BDU, this ruling is terrible. We had hoped there would be an exemption for small systems like there was with the LPIF, but I couldn't see any language that suggested so. A company like CTV will steamroll right over us, using blackouts as the anvil and their specialty services as the hammer. I have no idea how we'll afford to hire someone to black out programming if it comes to that.
 
#61 ·
So, relax for a bit. The CRTC chose to do nothing about Fee for Carriage (ooops! Value For Service!).

A "reference" from the Federal Court goes something like this:
"Yo, Judge! Suppose I plan to murder some guy, will I get off if there are the following circumstances?"

It's like peeking under the hood. The court, in a "reference", is giving an opinion of how it might rule, in a hypothetical case, with the facts as presented -- without an opposing counsel. The answer will be couched in "could be" and "inclined to rule this way" language. A "reference", in short, is not a ruling.

The best "reference" question is one that is bald and blunt; the CRTC's is rambling by comparison. At its heart, the CRTC just wants to know if it has the jurisdiction to set such regulation. The court could say "seems so!" and that would NOT stop a subsequent court challenge by a BDU or broadcaster.

Neither is the court obligated to respond, ever, or in a timely or expedited manner. There are a lot of variables here!

FFC/VFS is not likely to be a drain your pocket or mine in the near future.
 
#62 ·
Lots of good points in this thread, but I have a problem with the notion that a Canadian entity cannot purchase exclusive distribution rights and control how that content is distributed. As everyone who has read any of my FFC posts know, I am vehemently in the corner of the BDU's on the issue, so I very reluctantly step in to defend the likes of CTVgm and Canwest Global.

Caveat out of the way, content is a product. Only a BMW dealer can sell a new BMW (yes he or she can choose to sell that car to another dealer who may not be a BMW dealer) but no Mazda dealership can acquire a BMW from BMW itself. Likewise, you can't see Alice in Wonderland on an Empire Theatre screen but you certainly can at a Cineplex Odeon. Half the physical products you buy have exclusive distributors that are the only authorized Canadian (and yes ... if can be more regional) wholesalers. Why should TV shows be any different? If I'm the production house, my content is worth more in an exclusive distributorship ... why should actual owner of the creative content be forced to pursue a less profitable avenue to distribute their content?

As far as whether the BDU's have all the leverage ... I don't think so. They may have a little more leverage, but if you recall the whole TSN2 thing, CTVgm took almost no heat for their outrageous carriage rate demands of Shaw and Rogers and the BDU's got blasted. Rogers dug in for quite a while, but there's no question that they took the brunt of consumer anger. While the networks need BDU distribution more than the BDU's need the stations, with the ability to insist on signal deletion ... if 24 goes dark because Global and Shaw or Rogers can't reach a deal, it will be Shaw and Rogers that the public directs their anger at. That levels the playing field.

As far as whether the CRTC is hiding behind the Courts. The question of legislative authority was raised by some of the BDU's before the Commission. If the legal argument is credible and has a reasonable possibility of success, the CRTC would be foolish to proceed with VFS implementation. Guaranteed one or more BDU would pursue this before the Federal Court. Could you imagine the mess if we had a half-implement massive change like VFS suddenly found to be outside the authority of the CRTC to implement? Much better the Federal Court does this on an advance referral. That's why that process to our highest courts exists ... and this is a good use of it.
 
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