Digital Television transition in 2011 could cost consumers $73.5 million

By August 31, 2011, Canadian local television stations in most parts of Canada will have to broadcast digital over-the-air TV signals instead of analog signals.

This means that Canadians who watch television stations using over-the-air (OTA) antennas or “rabbit-ears” antenna may be required to make some changes in the way they receive television signals.

Last week, the Canadian Radio-television and Telecommunications Commission (CRTC) issued additional information concerning the digital transition in order to assist the broadcasting industry in its preparations for the switchover.

Contained within that that document http://crtc.gc.ca/eng/archive/2010/2010-485.htm were estimates on the number of Canadian households affected by the switch digital television and the estimated cost to consumers for the transition.

Number of Households affected

The federal regulator estimates that approximately 826,000 to 857,500 Canadian households in mandatory markets may require over-the-air digital converter boxes to maintain access to over-the-air services using older television sets. The converter boxes will be used to convert the digital television signals into analog signals that can be used by older analog televisions. Households with newer digital televisions will not require the convertor boxes.

In addition, approximately 31,500 household outside the mandatory markets may require digital receiving equipment, such as satellite receivers and dishes to make the transition to digital television. The satellite receivers would work with both existing analog televisions and newer digital television sets.

Mandatory markets account for 11.2 million households in Canada vs. 550,000 households in non-mandatory.

Consumer Cost of Transition

At a cost of $75 per converter box, the CRTC estimates the aggregated cost to consumers in mandatory markets for the purchase of over-the-air digital converter boxes could be as much as $64 million.

Outside the mandatory markets, a number of broadcasters operating transmitters on channels 52 to 69 may cease over-the-air transmission altogether or maintain analog or digital operation on channels 2 to 51. The CRTC says up to 31,500 households outside the mandatory markets may be affected and would require digital receiving equipment, such as satellite receiver and dish in order to receive stations that ceased to broadcast.

Based on one satellite dish and receiver per affected household at a total cost of approximately $300, excluding installation, the estimated aggregated cost to consumers affected by the transition towards the purchase of digital receiving equipment may be up to $9.5 million.

Add the costs of equipping consumers in both mandatory and non-mandatory markets with the necessary digital equipment and the estimated cost is $73.5 million.

Read the complete text of the document below and then discuss in Digital Home’s Canadian Television Industry forum.

Broadcasting Regulatory Policy CRTC 2010-485

Ottawa, 16 July 2010

Issues related to the digital television transition

The following document provides a consolidated view of stakeholders’ positions and sets out the Commission’s determinations on a number of issues related to the digital television (DTV) transition, including:

  • the number of Canadians who could potentially lose service as a result of the transition to over-the-air digital television;
  • the Commission’s proposal to authorize the provision by broadcasting distribution undertakings of a free package consisting of all local and regional conventional television signals currently available over-the-air in a given market;
  • possible measures to educate consumers regarding the DTV transition; and
  • the implementation of one or more trial market(s) for DTV conversion.

Introduction

1.      Canadian television is in the process of converting its over-the-air transmitters from analog to digital. The transition to digital television (DTV) will provide significant benefits to Canadians. In addition to providing television viewers with better picture and sound, including high definition programming, and allowing for more services through multiplexing,it will make spectrum available for public safety uses and greater wireless competition and innovation through the repurposing of channels 52 to 69.

2.      In its 2007 policy on conventional television, the commission at the request of the department of industry established 31 august 2011 as the date for the transition from analog to digital over-the-air television in canada. in its recent policy on the licensing of private television services, it confirmed that broadcasters will be expected to convert full-power transmitters to digital in mandatory markets by that date. the commission defined mandatory markets as all markets containing a provincial, territorial or national capital, all markets with populations over 300,000 and all markets with more than one local television station. additionally, channels 52 to 69 must be vacated both inside and outside mandatory markets by 31 august 2011. consequently, outside mandatory markets, broadcasters can, under certain circumstances, elect to continue operating transmitters on channels 2 to 51 either in analog or digital or cease over-the-air transmission and depend on broadcasting distribution undertakings (BDUs) for the distribution of their signals. However, broadcasters who cease over-the-air transmission will lose their privileges as over-the-air broadcasters, i.e. primarily mandatory carriage and simultaneous substitution.

3.      Accordingly, in Broadcasting Notice of Consultation 2010-169, the Commission called for comments and sought further information on:

  • the number of Canadians that could potentially lose service as a result of the transition to over-the-air digital television;
  • its proposal to authorize the provision by BDUs of a free package consisting of all local and regional conventional television signals currently available
    over-the-air in a given market;
  • possible regulatory measures to educate consumers regarding the DTV transition; and
  • the implementation of one or more trial market(s) for DTV conversion.

4.      The following, while containing a number of Commission determinations on matters within its purview, is also meant to provide a consolidated view of stakeholders’ positions on the above-noted issues.

Potential loss of service to Canadians

5.      In Broadcasting Notice of Consultation 2010-169, with a view to providing the Government with a revised estimate of the impact of the digital transition, the Commission sought comment on a number of issues, including broadcasters’ plans outside mandatory markets. Some broadcasters, particularly those operating on channels 52 to 69 outside mandatory markets, did not provide details on their transition plans as they were still evaluating their options.

6.      Based on the record of this proceeding and more recent estimates of the number of Canadian households that rely solely on over-the-air reception, the Commission has revised its estimates of the number of households that may require digital receiving equipment to maintain access to local over-the-air signals.

7.      As noted by parties, there is uncertainty with regard to changes in the number of Canadian households relying solely on over-the-air reception as the transition date nears. In addition, as raised by parties, estimating the impact of the transition is difficult as it is hard to accurately determine the reliance on over-the-air reception for secondary television sets used by BDU subscribers, the number of households with digital television sets relying on over-the-air reception and the number of analog television sets still being used for over-the-air reception. All of the above-noted factors may affect the number of television sets needing equipment to continue to receive over-the-air television services.

Over-the-air digital converter boxes

8.      According to 2006 Census data, approximately 11.2 million Canadian households currently have access to analog over-the-air television in mandatory markets. As well, there are approximately 550,000 Canadian households in non-mandatory markets that are served by transmitters operating on channels 52 to 69. Of these households, 118,000 are served by a transmitter which is slated for conversion.

9.      Given that in 2009 approximately 7.3% of Canadian households relied solely on
over-the-air reception, approximately 826,000 to 857,500 households may require over-the-air digital converter boxes to ensure that viewers in these households maintain access to over-the-air services using older television sets.

10.      As a result, based on one digital converter box per affected household retailing for up to $75, the aggregated cost to consumers affected by the transition for the purchase of over-the-air digital converter boxes may be up to $64 million.

Satellite receiving equipment

11.  Outside the mandatory markets, a number of broadcasters operating transmitters on channels 52 to 69 may cease over-the-air transmission altogether or maintain analog or digital operation on channels 2 to 51. Most broadcasters indicated that they were still formulating their transition plans or still evaluating their options. Based on 2006 Census data, 432,000 Canadian households currently rely on transmitters operating on channels 52 to 69 outside mandatory markets for which broadcasters are currently evaluating their options.

12.  Given that in 2009 approximately 7.3% of Canadian households relied solely on
over-the-air reception and assuming the broadcasters noted in the previous paragraph were to cease over-the-air transmission altogether, up to 31,500 households outside the mandatory markets may require digital receiving equipment, such as satellite receivers and dishes.

13.  Based on one satellite dish and receiver per affected household at a total cost of approximately $300, excluding installation, the estimated aggregated cost to consumers affected by the transition towards the purchase of digital receiving equipment may be up to $9.5 million.

Support program eligibility

14.  In order to facilitate the possible establishment and administration of a support program for consumers for the purchase of digital receiving equipment, the Commission also sought comment on the size, type and manner of administering such a program for
over-the-air viewers. The Commission is not making a determination on this issue, but rather providing a consolidated view of stakeholders’ positions.

15.  Parties were generally in favor of a consumer support program for the purchase of technology-neutral digital receiving equipment (e.g. over-the-air digital converter box, satellite receiving equipment or terrestrial BDU receiving equipment). They noted that funding should come from future spectrum auction proceeds. Further, they submitted that all affected Canadian households both in and outside mandatory markets should be eligible and that eligibility should be based on self-identification as a viewer who relies solely on over-the-air reception, given the challenges associated with having BDUs verify this information.

16.  Some parties suggested that support take the form of tax rebates for the purchase of digital receiving equipment, including television sets, that monthly BDU subscription fees should be eligible and that eligibility should be limited to low-income households.

General authorization to distribute a local package

17.  In Broadcasting Notice of Consultation 2010-169, the Commission stated its preliminary view that BDUs should be authorized to provide a free package consisting of all local and regional conventional television signals currently available over-the-air in a given market (local package) on condition that:

  • it is provided at no charge,
  • no other television services are provided in conjunction with the local package and
  • access to the local package is not conditional on the purchase of any other services.

18.  Accordingly, the Commission sought comment on this proposal and on the terms and conditions under which a local package would be offered. The Commission also sought comment on BDUs’ intentions to offer such a package on these or other terms.

19.  Both FreeHD Canada and MTSAllstream agreed with the Commission’s preliminary view that BDUs should be authorized to provide a free local package and stated their intention to offer such a package. Most BDUs supported the proposal on condition that offering a local package would be optional, not a requirement. BDUs also argued that they should be permitted to charge a monthly fee for the local package to recover the costs incurred, as well as a fee for the sale or rental of customer equipment necessary to receive the package. BDUs also argued that in the event that the proposed compensation regime for the fair value of private local conventional television signals referred to the Federal Court of Appeal in Broadcasting Order 2010-168 were adopted, television stations that are offered as part of the local package should not receive compensation under this regime.

20.  A number of specialty broadcasters expressed concern that a local package offering might provide incentives for current BDU subscribers to downgrade the broadcasting services they currently receive. They submitted that significant reductions in the number of subscribers receiving basic or discretionary services could impact the revenues of their services.

21.  The Commission considers that authorizing BDUs to offer a local package subject to the conditions described below would provide Canadians who rely solely on over-the-air television with a means to maintain access to services they currently enjoy after the digital transition. Moreover, the Commission is of the view that the availability of such a package would benefit over-the-air stations by providing Canadians with another option for accessing these stations, while also benefitting BDUs by allowing them to reach new customers.

22.  The Commission considers that any local package offered by a BDU should be implemented as a customer-friendly option to replace over-the-air television, not as a substitute for BDU basic or discretionary services. In this regard, prohibiting BDUs from offering other broadcasting services in conjunction with a local package would minimize the potential impact on other basic and discretionary broadcasting services.

23.  Given that the local package would serve as a replacement for over-the-air television service, the Commission continues to be of the view that it would be inappropriate for BDUs to charge a monthly fee for such a package. Since BDUs would not be permitted to charge a fee for the local package, it would also be inappropriate for television stations to seek compensation from BDUs under the proposed local television signal compensation regime for the distribution of their signals as part of the local package. However, given that such a local package would be distributed by BDUs on a digital basis, which requires a set-top box and possibly other customer equipment, local package users would be required to purchase or rent any such equipment from BDUs in order to receive the local package, as well as pay the costs of any service calls necessary to install or maintain customer equipment or facilities.

24.  For the reasons set out above, the Commission will establish a general authorization, pursuant to Broadcasting Regulatory Policy 2009-546, that will grant BDUs an exception to section 5 of the Broadcasting Distribution Regulations so as to permit them to distribute a local package both in and outside mandatory markets without having to provide users of the local package with the full basic service. This authorization will be subject to the following conditions:

  • Only local and regional television stations licensed to broadcast within the BDU’s licensed area shall be included in the package. Stations without
    over-the-air transmitters must provide a direct feed to BDU head-ends or up-link centres.
  • Local package users cannot receive video-on-demand or any other broadcasting services in conjunction with the local package.
  • BDUs may offer telephony or Internet services to local package users, but may not offer a local package as part of a bundle or otherwise make receiving this package contingent on purchasing other services.
  • No monthly fee shall be charged for the local package service, but users may be required to purchase or rent equipment or pay for service/support calls. In addition, users may choose to pay for the use of an electronic programming guide.
  • Any future compensation related to the proposed local television signal compensation regime will not apply to the local package.

Consumer education and awareness

25.  In Broadcasting Notice of Consultation 2010-169, the Commission set out its preliminary view that the broadcast of public service announcements (PSAs) is the most effective and efficient means of ensuring that over-the-air television viewers are adequately prepared for the digital transition. In addition to seeking comment on this and other measures that could be undertaken by broadcasters, it sought comment on the role BDUs and other licensees could play in creating greater awareness among Canadians regarding the transition.

26.  Broadcasters indicated their intentions to air PSAs, noting that such efforts will ensure maximum audience retention following the transition and are thus in their best interest.  BDUs also indicated their intentions to participate in a consumer education campaign based on the need to respond to consumer demand for information regarding the transition.

27.  Many parties, including Canwest, the Canadian Cable System Alliance, MTS Allstream and the Public Interest Advocacy Centre, emphasized the urgency of launching a consumer education campaign. Most indicated that PSAs should begin at least one year ahead of a given market’s conversion and that they should increase in frequency. Parties generally recommended that the information contained in the PSAs include:

  • what is happening, where, when and why;
  • who will be affected and what to do; and
  • references to a toll-free number and/or website with more detailed information.

28.  Finally, parties generally called on the Government to lead and fund a coordinated consumer education campaign consisting of PSAs for multiple media (e.g., TV, radio, print), websites, call centres and volunteer programs. In this regard, some parties suggested that the Government produce standardized PSAs or fund their delivery (e.g. through the purchase of airtime). Canwest, the Canadian Media Guild and Channel Zero suggested the creation of a special task force or committee comprising major stakeholders to design and execute a consumer education campaign.

29.  Rather than the imposition of reporting and monitoring obligations on licensees, parties recommended the use of public research surveys, funded by Government or the Commission, to ensure the effectiveness of the education efforts.

30.  The Commission notes that parties’ comments with respect to the Government’s role in establishing a consumer education campaign are consistent with a recommendation contained in its 23 March 2010 report to the Government on the implications and advisability of implementing a compensation regime for the value of local television signals. Specifically, the Commission recommended that the Government fund and lead a coordinated national consumer education and awareness program to ensure that Canadians are well-informed with regard to their access to local television services and any required consumer action. The Commission added that the Government should establish a working group tasked with implementing a comprehensive, coordinated national DTV consumer education program with involvement from all stakeholders, including broadcasters, cable and satellite companies and consumer groups.

31.  The Commission notes broadcasters’ intentions to undertake efforts to inform Canadians of the transition in order to maximize audience retention. It further notes that BDUs and other licensees can and intend to respond to consumer demand for information regarding the transition using a variety of means. However, the Commission expects broadcasters, BDUs and other licensees to actively participate in the creation and implementation of a coordinated national consumer education program. As part of this program, the Commission further expects broadcasters to publish and maintain a comprehensive account of their transition plans on their websites. The Commission considers that this program should begin no later than 1 March 2011. The Commission may adopt regulatory measures, as part of a coordinated national consumer education program or otherwise, in order to ensure that Canadians are informed concerning the transition.

DTV trial market(s)

32.  In Broadcasting Notice of Consultation 2010-169, the Commission indicated that the conversion of one or more markets prior to the conversion deadline of 31 August 2011 may enable stakeholders to assess whether measures established to educate Canadians in these markets were sufficient and to implement any necessary changes prior to the conversion of the remaining markets. The Commission indicated that market selection could be based upon, among other factors:

  • distance from other mandatory markets;
  • size; and
  • broadcasters’ intentions to convert in the market.

33.  Broadcasters and other stakeholders generally supported the establishment of one or more trial market(s) for mandatory conversion to digital prior to 31 August 2011. However, there was no agreement among broadcasters regarding which market(s) would be the most appropriate for the trial, and some BDUs questioned the merits of the proposed approach.

34.  Having reviewed the submission of parties and broadcasters’ plans, the Commission is of the view that the conversion of one or more trial market(s) several months before the conversion of the remaining markets would be beneficial. It also considers that Winnipeg would constitute an appropriate trial market given its size, its distance from other mandatory markets and the presence of all major English-language broadcasters in the market. The Commission is also of the view that the city of Québec would constitute an appropriate trial market given its size and the presence of all major French-language broadcasters. The Commission notes that most broadcasters in these markets have stated their intentions to implement digital transmitters by 2011 and that some broadcasters in the Québec market are already operating DTV transmitters on their post-transitional channels.

35.  The Commission would also be prepared to adopt regulatory measures to facilitate such a trial in a given market selected jointly by broadcasters. However, the Commission considers it inappropriate to establish trial market(s) in the absence of clarity concerning the timing and scope of a national coordinated consumer education campaign, since this will have a significant impact on the success of any trial market.

Secretary General

Related documents

  • The implications and advisability of implementing a compensation regime for the value of local television signals: A report prepared pursuant to section 15 of the Broadcasting Act, 23 March 2010
  • Call for comments on issues related to the digital television transition, Broadcasting Notice of Consultation CRTC 2010-169, 22 March 2010
  • Reference to the Federal Court of Appeal – Commission’s jurisdiction under theBroadcasting Act to implement a negotiated solution for the compensation for the fair value of private local conventional television signals, Broadcasting Order CRTC 2010-168, 22 March 2010
  • A group-based approach to the licensing of private television services, Broadcasting Regulatory Policy CRTC 2010-167, 22 March 2010
  • General authorizations for broadcasting distribution undertakings, Broadcasting Regulatory Policy CRTC 2009-546, 31 August 2009
  • Policy proceeding on a group-based approach to the licensing of television services and on certain issues relating to conventional television, Broadcasting Notice of Consultation CRTC 2009-411, 6 July 2009
  • Policy determinations resulting from the 27 April 2009 public hearing, Broadcasting Regulatory Policy CRTC 2009-406, 6 July 2009
  • Determinations regarding certain aspects of the regulatory framework for over-the-air television, Broadcasting Public Notice CRTC 2007-53, 17 May 2007
  • Comments

    11 Responses to “Digital Television transition in 2011 could cost consumers $73.5 million”
    1. herry69 says:

      why is the consumer always getting screwed ? why can’t the greedy corporations pick up the tab once in a while. and what’s more pathetic is that the federal government does absolutely nothing about it. sometimes i feel like a sucker to be a canadian because the tories are gutless fools.

      • 57Moose says:

        A minor sidetrack, but the only reason the tories are gutless is they have to work within the confines of a sometime fragile minority.
        Kudos to Stephen Harper for being conciliatory enough to hold this government together for so long when the forecast was 6 months at inception.
        How it relates to TV is that if Canadians could only embrace him more broadly, it’s much more likely we will see a return to an industry less regulated and with more options than we do now.
        As it stands, there is no way he could toss out the CRTC. With some clout, then yes, possibly.
        Maybe even quite cow towing to big business like Copps and the liberals did when BTV cried foul and open the skies as it were, as they have overruled the CRTC policy and let Wind Mobile operate, we might one day see Dish or Directv or their much sought after content here.
        Maybe even a return to the pre pirate days when if you couldn’t legally buy it, it wasn’t stealing.
        That seem more than fair. The whole idea was to protect Canadian startups. BTV has a few millions subs, but is ridden with massive debt. SD has a measly million and flounders to do much right with technology.
        I’d say they had their chance and it’s time to let someone else have a go at it, but you know what you have to do, right?

    2. DigitalDude says:

      This is absolutely fabulous news.
      All the spending on NEW TV’s and converter boxes will stimulate the economy big time.

      Sensible folks will be able to finally dump the dish and cut the cable and put up inexpensive outdoor antennas and get TV for FREE, the way it used to be.

      All the specialty content is available from the internet anyways and with Netflix coming into Canada, who need cable or satellite?
      All these wars about TV taxes and local TV will be a thing of the past.
      All the greedy corporations will get their just deserts.

      Now we just need to get some decent broadband packages going.
      You now that is where we’ll get screwed if we try and subvert our TV dollars.

      It’s about time some thing really drastic happened, this will open peoples eyes to some of the amazing options out there and just how antiquated the old broadcast model for TV actually is, even if it did just go Digital and HiDef.

      Connect that antenna coax to a media centre with a tuner for a best of breed PVR.
      Recycle that HD FTA box that doesn’t work anymore like it did when you bought it for…(many have ATSC tuners in them and make great PVR’s.)

    3. Bob says:

      So why is it then if all broadcasts are mandated to go HD… why are they charging extra for HD programming?

    4. BJB says:

      I’m in Toronto and made the switch 3-4 months ago and turned off my Rogers account. No regrets signal quality is great even with a $30 antenna up in the attic.

    5. Opti says:

      This is ridiculous 75 dollars for the transmitter just buy a newer TV it would be cheaper and then you get a new TV! I don’t know any TV’s that were built within the last 5-10 years that are not digitally capable so its not like there isn’t already a flood of pre-owned tv sets that will do the trick. As usual journalism doesn’t check all their facts and leads the reader on like a monkey for entertainment.

    6. Anonymous says:

      Does anyone know what mandatory and non mandatory markets mean?
      We live in a rural area where cable has yet to reach.
      After reading the above article, I’m thinking that our million dollar a minute Harper came up with a new way to double screw us.
      Not that I have come to expect anything less from any of our poli-po$ers.

      -Joe B

    7. Don says:

      Free OTA exists now. Anyone in a metropolitan area can get HD for free. Unless you are hooked on some of the specialty channels it’s the way to go. Antennas are cheap and pay for themselves in no time. Cable and Sattelite companies are over charging for their services with their crazy bundles and charging extra for HD.

    8. gee says:

      Hey, CRTC. When are we going to get that high quality Canadian programming that you’ve been promising? On my television, it’s nowhere to be seen. I know I’m paying for it, but where is it? I’m missing world-class shows like, CSI:Miami:Canada, Dancing in Canada with Mukluks On, and America’s Got Canadian Talent. Canadian culture, CRTC style.

    9. Mythorn says:

      Everyone is pointing fingers at the Tories. While I am not a fan of many of their policies, this was not caused by any Tory government. The plan to transfer OTA Broadcasts to Digital was approved by the Liberal government in 2005 – and this was after the US Congress (and many European countries) decided the same thing.

      People, before you complain about someone or something, please get your facts straight.

    10. Steve says:

      We have an analog TV set with rabbit ears; We’re affected and I know LOTS of people like us. It’s going to cost us and maybe stimulate Asia’s economy.

      But since they are converting to digital now, I wish the CRTC had adopted a more efficient digital broadcast method, like MPEG-4 instead of going with the old, less-efficient, MPEG-2. I mean, if you are going to force a major conversion now, why adopt an old digital technology when MPEG-4 IS the new standard for digital video. ATSC doesn’t even work with mobile devices on the move for crying out loud.