Independent broadcasters call for more flexibility under new group-licensing model

Independent broadcasters are calling on the CRTC for greater regulatory flexibility as the commission prepares to apply its group-based licensing policy to Canada's large broadcasting groups. “Independent programming services compete with the large broadcast groups for viewers, programming, access to distribution platforms, advertising, and in other areas,” the Independent Broadcast Group (IBG) wrote in a submission to the commission for its proceeding on the licence renewals for large broadcasting groups. “Accordingly, it is critical that independent broadcasters be able to take advantage of comparable or greater regulatory flexibility ... The need for regulatory flexibility is no less urgent for independent broadcasters.” The CRTC is currently holding a proceeding on applications from the large English-language broadcasting groups, which include CTVglobemedia Inc., Rogers Communications Inc., Shaw Media Inc. and Corus Entertainment Inc., to renew their television licences. In March 2010, the commission established a new group-based licensing process in which all of a company’s broadcasting properties are considered for licence renewals at the same time. Under this policy, broadcasting groups will have increased flexibility to allocate funds to their Canadian programming and programs of national interest expenditure obligations. The IBG, which is made up of independent broadcasters the Aboriginal Peoples' Television Network, Channel Zero Inc., Ethnic Channels Group Ltd., Fairchild Television Ltd., TV5 Québec Canada, Stornoway Communications and ZoomerMedia Ltd., told the commission it supports the renewal of the group licences, acknowledging that the new policy will ultimately strengthen the English-language television sector. “Areas in which the group policy will create additional flexibility include the allocation of Canadian programming expenditures between different services and changes to the formula used to calculate Canadian programming expenditures, and other matters contemplated in individual applications,” the IBG wrote. But the coalition said the new model may also create competitive disadvantages for independent programmers if the CRTC doesn't undertake “appropriate regulatory rebalancing.” Monique Lafontaine, vice-president of regulatory affairs at ZoomerMedia's television division, said by phone that the group is concerned the new framework will give large broadcasters an advantage in the amount of time between the commission's approval of the broadcasting group licences and those of the independents. “Another one of our concerns is that there is this framework in place that the commission spent an extensive amount of time on and got an extensive amount of comments on for these larger players that is meant to adjust the regulatory regime for them in the current environment. But this regulatory framework does not establish for the smaller players, so there's a bit of an unfairness there,” she said. “We don't want to be disadvantaged.” For this reason, the group has requested that the commission consider on an expedited basis applications from independent broadcasters to obtain comparable or greater regulatory flexibility. “This will assist to maintain a degree of parity and to offset at least some of the disadvantages independent broadcasters would otherwise experience,” the IBG wrote. Lafontaine said IBG members will clarify their position further after reviewing what the commission allows for larger players. “We're going to analyze that and see how it impacts on us and see whether it would be satisfactory for us to compete to the extent that we can with the larger players, or whether greater flexibility will be needed,” she said. “It's all a moving target at this point, because we don't know what the results are.” The group said a comparable regulatory framework for independent broadcasters shouldn't be precisely the same as the one for large broadcasters, but that they should both apply to the services covered in the group licensing framework. The group is asking the commission to consider altering some conditions of licence and expectations that they say place independents at a disadvantage. The IBG said, for example, that giving independent broadcasters more flexibility to allocate Canadian programming expenditures between their different services wouldn't translate to the same advantage that is given to large broadcasters. Lafontaine added that some of the licence conditions that could be reviewed relate to expenditure requirements or licence fees. The IBG also told the commission that it should encourage large broadcasting groups to deal openly and fairly with independent broadcasters. The group said large broadcasters are increasingly trying to acquire all rights to programming—across multiple platforms—from independent producers. “Since these broadcasters own multiple broadcast windows, and since they will now be permitted greater flexibility in allocating their CPE between various services, they will have less incentive to seek or accept financial participation by independent broadcasters,” the IBG wrote. “Consequently, smaller independent broadcasters are likely to find it increasingly difficult to participate in joint productions, or to acquire rights to publicly-subsidized Canadian productions even on a second- or third-window basis.” The group said the commission should use the hearing to explore the intentions of large broadcasting groups to work with other broadcasters, noting that collaborations often lead to better quality productions. Lafontaine said large and independent broadcasters are benefiting from collaboration with one another, and that the IBG is hoping the commission will put licence conditions in place that express an expectation for this to continue. In advance of the group-based licensing hearings in April, the commission is encouraging producers and large broadcasters to reach terms of trade that cover the exploitation of multi-platform rights. CRTC chair Konrad von Finckenstein said at the Prime Time in Ottawa conference last week, hosted by the Canadian Media Production Association, that the commission is willing to impose a compromise if the two sides can’t reach new terms of trade by the hearing. “If you don’t get it done at the hearing, I want to see your latest best offer and we will impose something on that basis. It’s all in an attempt to get it done. But let’s get this off the table. It is so vital to ensure the diversity that we want,” von Finckenstein said. Jim Pattison Broadcast Group Limited Partnership and Astral Media Radio Inc., which operate local television stations in British Columbia, also commented on the commission proceeding. The companies told the CRTC that their services depend on local, regional and national advertising revenues, and asked the commission to confirm Shaw Communications Inc. and CTVglobemedia Inc.'s existing conditions of licence to ensure there are measures to protect local broadcasters. “The commission is aware that advertising revenues of secondary market television stations have been in decline in recent years,” the companies wrote. “The removal or amendment of these conditions of licences would have significant further negative impact on local and national advertising revenue.” Right now, large broadcasters operating in the same region as the Jim Pattison and Astral stations in B.C. are mandated to replace regional ads with local commercials sold by small players. Parties involved in the proceeding will participate in a public hearing starting April 4. kfournier@thewirereport.ca

Independent broadcasters call for more flexibility under new group-licensing model

Broadcast | February 22, 2011

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