Broadcasters push case for more compensation for out-of-market carriage

When a camera crew from Midwest Broadcasting showed up in Cold Lake AB to cover an air show, people there asked why they even bothered coming since the program wouldn’t reach many viewers because the channel wasn’t on satellite. That was a story Midwest VP of finance Glenda Spenrath recounted during a session at the Canadian Association of Broadcasters (CAB) conference to illustrate the drastic effect out-of-market signals are having on a small market broadcasters. "The biggest thing is not being on satellite when 61% of our market has satellite. We need to be on satellite to reach our own people," she said. Bell ExpressVu senior director of regulatory and government affairs Chris Frank, however, responded that the problem had been solved through negotiation on distribution. A deal inked between the CAB and ExpressVu that was modified by the CRTC ensured that Midwest’s signals were added to satellite TV lineups (CCR, July 31/03; Oct. 10/02). ExpressVu added CITL-TV and CKSA-TV Lloydminster, both owned by Midwest, to its offering in the Lloydminster broadcast area as part of that deal (CCR Update, Oct. 2/02). Spenrath though said that Midwest’s stations still end up competing "against our own affiliates" because signals with the same programming are being beamed in from other parts of the country. CTV Specialty Television Inc. executive VP Bart Yabsley agreed that time-shifting made available by digital technology has had a "devastating impact on local stations." "There are still many stations not on the bird. The distributors welcome foreign channels, but won’t give us much space," complained Michel Carter, president and CEO of Cogeco Radio-Télévision Inc. and TQS Inc. But Frank pointed out that distributors also had to worry about high-definition (HD) channels, which consume a lot of bandwidth. Broadcasters are unhappy with the compensation they are receiving from the direct-to-home (DTH) satellite distributors for the carriage of out-of-market signals in exchange for not performing simultaneous substitution. There is little that the CAB can do until the agreement between it and ExpressVu and Star Choice terminates. But it is currently in protracted negotiations with Rogers Cable Inc., which is demanding similar terms as those of its satellite TV rivals (CCR, Nov. 22/04). CAB senior VP of television, specialty and pay services and new technologies Wayne Charman begs to differ. "The DTH agreement is different. Satellite has most of its customers in rural areas. But Rogers is in some big urban markets," he notes. He says, therefore, that compensation should be based on the level of damage incurred by the local broadcasters in the Rogers service area. He also dispels Rogers allegations that a study by Strategic Inc. that attempted to assess the damage was faulty. A study conducted by Canadian Media Research Inc. (CMRI) for Rogers contends that the Strategic study fails to consider distant viewing to DTH homes in Rogers’ market area. Charman insists it does, and he also says that the Strategic research reduced the impact to take into account that not all viewing loss would be due to out-of-market signal carriage, but could be due to other factors such as market fragmentation. Rogers criticized Strategic for blaming all of the viewing loss on out-of-market signal carriage. He also notes that it is not fair that advertisers can buy commercials at Halifax rates on that city’s stations, and end up getting national coverage through out-of-market carriage. Charman also says that Rogers contention that the CAB is using the Rogers case as a template for future negotiations with other cablecos is not correct. Rogers told CCR last month that the CAB had put negotiations with other cable companies on hold until the Rogers deal was ironed out. He notes that the CAB already has inked deals with Vidéotron ltée, MTS and TELUS, which has yet to launch its TV service.

Broadcasters push case for more compensation for out-of-market carriage

Broadcast | December 6, 2004

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