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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.
 
#127 ·
True, but the broadcasters don't like this since they don't get any ad revenue for out of market viewers.
When a national advertiser buys time on a network, do they care which station that ad is actually viewed on? Unless I'm very seriously mistaken, most of the advertisers on network shows tend to have a nation wide market. Local advertisers tend to focus on local coverage shows. Again, many of the national advertisers also buy ads on the cable channels, many of which are owned by the broadcasters.

So yeah, the broadcasters are often competing with themselves.
 
#128 ·
When a national advertiser buys time on a network, do they care which station that ad is actually viewed on?
The advertisers would actually prefer you watch it on a distant station as they then don't have to pay for that viewer. :) Advertising rates are basted on TV ratings and I gather only the local market is used to do the calculation.
 
#129 ·
So, the CRTC thinks most Canadians can afford an increase to their BDU-supplied services:

They might not want to pay more for TV services, but most Canadians could afford the modest price increase they'd be subject to if TV networks get approval to charge cable and satellite companies for their over-the-air signals, says the CRTC.
http://www.cbc.ca/arts/tv/story/2010/03/23/crtc-report-tv-signals.html

Interesting that they mention the a-la-carte option (which does have some restrictions for Canadian Content - I believe it's 50% of your bill or 50% of the channels - can't remember)

"These packaging limitations will be largely eliminated as part of changes to [CRTC] regulations that are scheduled to come into effect on Aug. 31, 2011," the commission said, referring to the deadline for the switch from analog to a fully digital broadcast system.

"These changes will enable BDUs to respond better to consumer demand for pick-and-pay and other packaging options."
Bell and Videotron a-la-carte options are mentioned, however, that's after you have at least basic. What this will allow is full a-la-carte in late 2011, which is discussed in another thread on this forum.
 
#130 ·
Someone needs to remind the CRTC that they don't have taxing authority, like Parliament does. It's not up to them to decide what Canadians can or cannot afford.

We need to replace the CRTC with a board made up from members of the public, rather then insider media shills. Right now, the CRTC doesn't give a damn about the consumer at all except as something to milk more money from.
 
#132 ·
Advertising rates are basted on TV ratings and I gather only the local market is used to do the calculation.
When a national advertiser places ads with a national network, are they still looking at individual markets and paying for them separately or simply doing the entire country in one shot? It seems to me the latter makes more sense, but then I'm not in advertising.
 
#133 ·
Ah... I see the posts defending broadcasters, and I can't help but laugh.

They want to have all the advantages of free market, without any of the complications.

I say if their ad revenue dropped because they've lost viewers, then they got what they deserved. If they had pay too much for american programming, it's their problem. If they have opened too much specialty channels, it's their own damn fault.

They should just closed their generalists stations and be done with it.

Or everybody should pay for their signal. Why create two classes of citizen?
We already had too pay for special funds. How many will they create?

We pay already way too much for the poor service we get. OCDE tell this, this is not just my opinion. We in Canada pay way more for our telecoms when compared, and received far less then others for the bigger amount paid.

Cell phone, BDUs, are more often then not the same pockets, msut I remind you. Theses guys are given basically license to steal by the CRTC, it's been like that for a while, and we just continue to take it, shut up and pay up.

In the end, we get what we deserve. Next election, this should be a topic, political parties should once and for all take a stand and we should vote on this.
 
#136 ·
What I want is uncompressed OTA HD and the ability to drop local networks on my cable bill. The shows I can't get instantly, I will torrent. I don't particularly care who is broadcasting the show I want to see, as long as I can see it in the highest possible quality.

What we are seeing here is a repeat of what happened to newspapers: the inability to adapt to changing markets. I was witness to Global dropping the ball when it bought the papers (leading to two of the WORST TV Christmas parties I've ever seen). I watched as they bought specialty networks instead of investing in HD infrastructure.

What they should have been doing was demanding BDU's integrate ATSC tuners into their boxes for seamless transmission and TRANSITION. They could have put some of their specialty channels on one of the available subchannels, but no. Value added means nothing to them.

Instead, they didn't and still don't, have any interest in improving the viewing experience for any local customers. When they say "this will mean MORE LOCAL TV" be sure to ask them "how that is possible? seeing as how you have laid off so many local production people."

For as long as I worked in TV, the networks fought tooth and nail to get local requirements and CanCon reduced. To top it off, and this is the kicker for me, the slack has been picked up the BDU's who actually produce local programming.

I did more local as a freelancer in a month than in a year in conventional TV.
 
#180 ·
Instead, they didn't and still don't, have any interest in improving the viewing experience for any local customers. When they say "this will mean MORE LOCAL TV" be sure to ask them "how that is possible? seeing as how you have laid off so many local production people."

For as long as I worked in TV, the networks fought tooth and nail to get local requirements and CanCon reduced. To top it off, and this is the kicker for me, the slack has been picked up the BDU's who actually produce local programming.

I did more local as a freelancer in a month than in a year in conventional TV.
I just got back from the Law Society of Upper Canada conference in Ottawa. CTV's Regulatory Vice-President, Kevin Goldstein, participated on the "Value for Signal" (or what used to be called Fee For Carriage) discussion panel. Guess what he said? This:

"Actually, Value For Signal has never been about local television."

So there you have it. I can tell you that my jaw dropped: I didn't expect to hear that -- the thing we always knew but, like "Voldemort", never spoke -- actually uttered out loud and in public.

Let the war rage on. Should get even more desparate (i.e. funnier if it wasn't so cynical) if the FCC starts to tear down Retransmission Consent in response to recent abuses stateside.

My two pennies say that VFS will never become fact. This will be overtaken by technology.
 
#137 ·
I remind you that they've submitted a reference to the Federal Court of Canada to determine whether what they propose to do is within their authority.
They don't have the authority to do what they are proposing, at least from what I have gathered. Under the Broadcasting Act, which governs broadcasting in this country BUT also sets out the rules and regulations that the Commission must adhere to, I see no mention about them having the ability to implement a taxation system (or 'compensation' system if you will) such as Value for signal. Here is a link to the Act itself, I cannot find anything direct or non-direct that says they have the authority to do this, perhaps someone with more legal expertise can find something but I doubt it. if they can't hand out fines how can they impose taxation?!

Broadcasting Act
 
#138 ·
From the regulatory perspective, it's not a tax. We call it a tax because the BDU's have vowed to pass it on to the consumer. That's different than the CRTC imposing a regulatory requirement that the cost be passed onto the consumer.

The CRTC's reference to the Court makes a lot of sense. The issue respecting their authority is murky. They have the right to set carriage rates in certain circumstances. They have the right to set certain consumer costs. Yet, they are proposing something that was not contemplated in the actual crafting of their legislative framework. It is settled law that where legislation (or contracts) are ambiguous on their plain read that the interpretation is to be governed by the intent of Parliament (or the parties in the case of contract). Ultimately as this issue would wind up before the Federal Court one way or another, isn't it better to let the Court sort out the extrinsic evidence beforehand ... not after?
 
#139 ·
Divided They Fall

I maybe reading more thoughtful insight into the CRTC ruling then was really there. But when they talk of the symbiotic relationship between broadcasters and cable/sat operators, I think this refers to the ongoing exodus to Internet services. An Ipsos-Reid study already shows that more Canadians are watching the Internet than TV. If they don't resolve this spat, they may both be left behind the rising tide of Internet services. With the exception of live sports, there is very little we can't stream, buy or download off the Internet. And as someone pointed out in an earlier post, consumer electronics manufacturers are exploring all sorts of ways to integrate Web clients into their products.
 
#140 · (Edited)
Yes I can afford a slight increase in cable for the local. But the principle of paying money so I don't get to see the US commercials with the SuperBowl for example just defies common sense. Therefore I will cancel cable if this VFS nonsense goes through. The irony is CTV might get 25 cents a subscriber for their broadcast signal, but they'll lose revenue from people like me who no longer subscribe and subsidize specialty channels like TSN and Discovery.

Another concern I have is the cost may be initially low. But the locals will say that they are still hurting (maybe businesses won't want to advertise as consumers are threatening boycotts), and will ask for hikes every year, or whenever carriage is renegotiated
 
#142 ·
If a station opts out of regulation and chooses to negotiate a FFC ( I refuse to call it VFS) then as far as I can tell, they don't have to simsub regs. either. So here's what I see happening eventually. Stations will opt out of regulation and negotiate a modest fee, on top of this fee, will be the agreement that the BDU will simsub it's commercials over it's entire service area instead of larger increases in it's FFC prices. The stations revenue will now increase, the costs get passed on to us and the BDU's increase their fees because now their operating costs have gone up. Everyone gets a bigger piece of the pie and we the consumer get screwed.
 
#147 ·
One other point that seems to be missed. The current situations require the BDUs to simsub, for the benefit of the broadcasters. Yet the BDUs (read customers) have to pay to provide this. So we are paying extra to not get the American channels.
 
#148 ·
The dissenting CRTC opinion (from www.michaelgeist.ca): "The Commission defends the interests of the industry to the detriment of consumers who, for their part, remain powerless. These consumers are the same 11 million Canadian subscribers who have been hit since September 2009 with the first bill for the $100 million resulting from the establishment of the Local Programming Improvement Fund (LPIF) (1.5% of the BDU's bill to the subscriber) with no guarantee as to any increase in content. How much will the bill be this time? $100 million? $200 million? $300 million?"

My thoughts: the broadcasters are looking for money from BDUs (FFC), from consumers (LPIF), but there is one place they haven't looked, themselves. If a corporations owns both a broadcast network and specialty channels, then the profitable specialty channels should subsidize the money losing network. After all, they are just artifical barriers, in the end it is one company.

Therefore profits from TSN can be used to subsidize CTV. Look to yourself for money instead of dipping into my pocket.
 
#150 ·
If a corporations owns both a broadcast network and specialty channels, then the profitable specialty channels should subsidize the money losing network. After all, they are just artifical barriers, in the end it is one company.
Why limit it to specialty channels they own? One of the largest issues facing broadcast channels is unfair competition from specialty channels. Not only do broadcast channels have higher expenses from having to support a transmission system, but they don't get FFC like the specialty channels do. Granted the broadcasters get certain benefits like priority carriage and simultaneous substitution, but the latter only encourages the broadcast stations to become a repository for American programming.

Instead of applying another band-aid, we need to diagnose the real problems and fix them. Some ideas of solutions include:

  • Remove all specialty channels from basic service
  • Remove American Networks from Basic service and make them available without simultaneous substitution (with the fee going to the local stations as compensation).
  • Charge a fee for distant signals with at least some of the fee going to the local stations as compensation for dilution of advertising (especially important when there are independent locals).
  • Require digital programming guides provided by BDUs filter out (by default) stations not subscribed to. This will highlight the programming available on local stations.
  • Local stations must be unencrypted on cable since they are available to all customers.

I know many people won't like these ideas, but I think they will do a better job of solving the real problems than adding a new fee.
 
#149 ·
I don't necessarily agree that TV stations and networks have a right to be profitable on their without being propped up by specialty content. Where my issue rests is that there is no reason for them not to be profitable. If CTVgm lost money on the CTV network in the past year, it did so because it overspent for content. It bid outrageous amounts for the Olympics based on no business criteria other than making sure the CBC didn't get Vancouver (the portion of the bid for Vancouver was only marginally high ... but since it was packaged for London they paid more than double what those rights are actually worth). If they're losing money it's because they overbid for US content. Those are bad business decisions and neither the BDU's or the consumers should be asked to bail them out.

I've said it all along ... if they can't be profitable on the kinds of revenues they generate, then we're better served by CTV and Global going black and someone else picking up those licenses. That's the reality that the CRTC won't face (or more correctly is not allowed to face ... Mssrs. Fecan and Asper contribute way too much money to the ruling political party (and that's non-partisan ... if the Liberals were the ruling party, they'd be making those contributions there)).

Instead of the brave decision, we're faced with the CRTC doing the best they can to muddle through vague political direction, unclear legality, and a deceitful PR campaign that has been successful in lining up public sympathy with the broadcasters. Under those circumstances, I actually don't think the CRTC did such a bad job.
 
#155 ·
Why? Is Acura required to subsidize Honda? Why is it wrong for CTVgm to take the position that the CTV network itself needs to be profitable? As long as the books are clean and there's no silly bugger going on, then it is an entirely reasonable proposition. I don't mean to defend CTVgm or Canwest here ... I see them as purely evil in this fight, but some of the positions being put forward just seem to go too far.
 
#156 ·
Is Acura required to subsidize Honda?
That would only be accurate if Honda's were required to have features that Acura didn't (even though Acura's cost more) and they had to produce different models of Honda for each city but Acura was allowed to sell the same models nation wide.
 
#159 ·
Yes, but if CTVgm is legitimately losing money on a component of their operations, they have a right to rectify that. I am not saying I accept that they are losing money on CTV, nor am I suggesting that they are above playing a shell game.

What I object to is the suggestion that CTVgm should be compelled to eat a legitimate loss on CTV because they make money on TSN. That's not a defensible notion and it's not reasonable.
 
#161 ·
Different issue ... there are posts that explicitly suggest that CTVgm should be obligated to absorb losses on CTV because they make money on TSN. That's a ludicrous notion. I am not defending their bad management ... I've posted that I think they are directly responsible for such losses. I am simply saying the profitability of TSN (or for that matter the Globe and Mail) is completely irrelevant to the issue of whether they have a compelling case for VFS.
 
#165 ·
Different issue ... there are posts that explicitly suggest that CTVgm should be obligated to absorb losses on CTV because they make money on TSN. That's a ludicrous notion.
Right, instead lets charge the BDU's (which will just pass it to the customers). To go back to the car analogy, since Honda is losing money on one brand, while making a fortune on the others, they can just ask the government to tax Ford to make up for their loss...
 
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