Industry quarrel continues over BCE’s use of benefits for satellite TV upgrade

GATINEAU—Cultural groups and competitors continued to weigh in Thursday on how to spend the tangible benefits derived from Bell Canada Enterprises Inc.’s acquisition of CTVglobemedia Inc. Thursday was the third day of the CRTC’s hearing on the transaction. At issue is the size and contents of BCE’s proposed benefits package as well as concerns about vertical integration. At the hearing lobby groups and companies took aim at the validity of Bell’s plan to spend tangible benefits funds on a satellite upgrade to MPEG-4 compression technology. Companies leading a broadcasting acquisition traditionally contribute 10 per cent of the value of the transaction in “tangible benefits” to support the Canadian broadcasting system. On Tuesday BCE presented the commission with a revised plan worth $220.8 million that would go to independently produced programs of national interest, local news, satellite carriage of all local stations (those supported by the Local Programming Improvement Fund, or LPIF), the production of local news in high-definition on CTV stations, support for the A Channel stations, and radio benefits. Carrying all local stations on its satellite service would require Bell to make a conversion to a new compression technology called MPEG-4. Bell has told the commission it could not afford the conversion upgrade unless it uses benefits money to do it. On Thursday, Rogers Communications Inc. said it supports Bell’s proposal for the conversion because it would allow Bell to carry more Rogers stations, including its Citytv and OMNI stations. The Independent Broadcast Group, comprised of the Aboriginal Peoples Television Network, Channel Zero, Ethnic Channels Group, Fairchild Television, Stornoway Communications, TV5 Québec Canada and ZoomerMedia, told the commission Thursday that it is not against Bell’s proposal for the satellite conversion, but added that, if it is approved, BCE should be required to carry all local stations, not only those supported by the LPIF. Quebecor Media Inc. told the CRTC it is against the proposal to use benefits funds for the MPEG-4 conversion because Bell must move to the new technology anyway to remain competitive. Quebecor also said it is against allocating a portion of the benefits to allow Bell to fund high-definition broadcasting for CTV’s news stations. The Writers Guild of Canada, the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) and the Directors Guild of Canada took issue with the $68.2 million BCE allocated to programming in its proposed benefits package. The Writers Guild argued that BCE should devote 80 to 90 per cent of its benefits to on-screen programming rather than the 31.4 per cent currently offered. “We need funding to create and produce high quality Canadian programming that will compete with U.S. shows for Canadian audiences,” Maureen Parker, executive director of the guild, said. The Writers Guild suggested redirecting a portion of the benefits from the MPEG-4 conversion to programming. ACTRA also said that 85 per cent of the benefits should go to content creation. Gregory Taylor, an expert on the transition from analog to digital broadcasting, told the commission that it should reserve $10 million from the benefits package to establish a body to oversee a national awareness campaign for the transition. By the digital transition deadline of Aug. 31, 2011, conventional television stations in large and competitive markets must upgrade their transmitters from analog to digital. Consumers must also switch from analog to digital tuners if they wish to continue receiving over-the-air television signals. Taylor said the awareness campaign should at least include a website and a call centre to answer questions from the public. On Thursday CRTC chairman Konrad von Finckenstein also directed Bell, in its closing arguments Friday, to provide additional information about its proposal to spend benefits on an MPEG-4 conversion. kfournier@thewirereport.ca

Industry quarrel continues over BCE’s use of benefits for satellite TV upgrade

Broadcast | February 3, 2011

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