Distributors argue against renewal of mandatory carriage for Pelmorex

Canada’s major broadcasting distributors are lining up against Pelmorex Communications Inc.’s request to renew its mandatory carriage order for The Weather Network for a seven-year licence term. The CRTC is now considering Pelmorex’s application to renew its broadcasting licence for The Weather Network and its French counterpart, Météomedia. The commission is looking at the company’s plans for its next licence term and its request to extend its status as a mandatory basic service beyond Aug. 31, 2015. At a public hearing on Tuesday, Pelmorex said it wants to renew its licence so that its mandatory distribution order, which the CRTC has granted the company under 9(1)(h) of the Broadcasting Act, is continued for a full seven-year licence term. But in a joint presentation to the commission Tuesday, Rogers Communications Inc., BCE Inc., Bell Aliant, Cogeco Cable Inc., Quebecor Media Inc., and Shaw Communications Inc. said any extension of its mandatory carriage order at this time would be premature. “We regard any extension of the current mandatory distribution order as unnecessary and inappropriate,” Ken Engelhart, senior vice-president of regulatory affairs at Rogers, told the commission. Yves Mayrand, vice-president of corporate affairs at Cogeco, told the CRTC that Pelmorex’s 9(1)(h) order should not be extended because the issue was studied during a public hearing in 2009, which resulted in a time-limited order that expires in 2015. “None of the circumstances have changed relative to the merits of giving Pelmorex this time-limited order,” Yves said. He said Pelmorex can apply for another mandatory carriage order when its existing one expires. “Pelmorex will not suffer any harm as a result of having to respect the Commission’s decision to wait until 2015 to possibly apply for an extension. Its broadcasting interests are profitable and will remain profitable for the foreseeable future. Genre protection and four more years of 9(1)(h)-generated cash flow make that abundantly clear,” Mayrand said. The companies added that they support Pelmorex’s request for a seven-year licence renewal, although they oppose the company’s request to renew its mandatory carriage. Receiving a mandatory carriage order under section 9(1)(h) of the act guarantees a channel a position on distributors' digital basic packages. But Pelmorex officials told the commission Tuesday its mandatory carriage status is essential to its business model. Pelmorex runs a national alerts system that broadcasts real-time, local alerts about emergencies such as floods, forest fires, chemical fires, or Amber Alerts on The Weather Network and MétéoMédia. The company runs bilingual alerting operating centres in Oakville, Ont. and Montreal, Que., which receive emergency messages from government authorities, authenticate them, and make them available to last-mile broadcasters through Internet and satellite feeds, Pelmorex said Tuesday. Paul Temple, senior vice-president of regulatory and strategic affairs at Pelmorex, told the commission that without 9(1)(h) carriage the company would not have the necessary revenues to operate its national alerting system. “If even one large distributor moved us to a tier, the results would be devastating and would require dramatic adjustments to our small market pricing and operations,” Temple said. He added that Pelmorex’s wholesale subscriber fee for the channel would not change. It would continue to be 23 cents per subscriber per month for the English and French services, the same price it has been since 1993, he said. The company argued that it also meets the requirements for a 9(1)(h) order because it broadcasts local weather and road safety information in English and French. It said its programming is 100 per cent Canadian and meets the objectives of the Broadcasting Act. Pelmorex said that, since its last licence renewal, it has introduced new programming features, including a local, 14-day weather trend, a local precipitation forecast, a local hourly forecast, and a local Driving Hazard Index. “We've made major advances in the quality of our service through improved localization. That's our ability to customize and broadcast local information for more than 1,000 communities simultaneously—something no other broadcaster does,” Pierre Morrissette, chairman and CEO of Pelmorex, said. “We pioneered this technology in Canada, and it also underpins our alerting services.” Pelmorex has user agreements for its alerting system with the governments of P.E.I., Nova Scotia, New Brunswick, Ontario, Manitoba, and the Yukon, and is trying to finalize agreements with the remaining provinces and territories, it said. Discussion Tuesday also turned to an expanded national alert system involving the broadcasting distributors and radio stations. Pelmorex told the commission it is conducting tests with radio and television broadcasters so they can manage the necessary technology and broadcast their own emergency alerts. “The next step in the roll-out is to complete access agreements with remaining federal and provincial alerting partners. Then, with the commission's encouragement, BDUs and broadcasters must come on board,” Temple said. “Alerting stakeholders have made it clear in their letters of intervention that they need certainty before they can invest in equipment and public education.” The major broadcasting distributors said Tuesday they are committed to implementing a national emergency alert system and that most distributors will be capable of delivering alerts by the end of the year. Rogers said it is working with Pelmorex and others on a committee to develop a common system and that, by the end of the year, it will have installed all necessary equipment to implement its alerting system across its cable systems. Bell Canada said it is developing alert systems for its Internet protocol TV (IPTV) and satellite operations, and that its system will be available “soon.” Bell Aliant’s will be available in 2012. Cogeco also said its system will be available this year, and Videotron said it will need several months to implement one. But the major broadcasting distributors cautioned that they expect compensation for participating in a national alerting system. Jean Brazeau, senior vice-president of regulatory affairs at Shaw, said the distributors’ participation in such a system would be voluntary and that compensation should be provided through legislation or contracts. Brazeau said the Criminal Code now deems carriers harmless when they assist law enforcement agencies by lawfully intercepting telecommunications. He noted that under Bill C-51, one of the so-called lawful access bills in Parliament, Internet service providers (ISPs) would receive compensation for their voluntary participation in the provision of data to law enforcement agencies. He said compensation was also provided in Alberta under the 2010 Alberta Emergency Management Amendment Act. sdoyle@thewirereport.ca

Distributors argue against renewal of mandatory carriage for Pelmorex

Broadcast | February 8, 2011

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