CBC ‘fiercely opposes’ Bell’s all-news channel proposal

The CRTC should throw out BCE Inc.’s “unprecedented” proposal to use tangible benefits money to launch a new, French-language television news service in Montreal, CBC/Radio-Canada said in an intervention filed with the commission Friday. On Monday, Bell told commissioners during the first day of hearings into its proposed $3.38-billion acquisition of Astral Media Inc. that the company would add $41.3 million in tangible benefits pledges to the $200 million package it proposed in May. At the time, George Cope, Bell’s president and CEO said $20 million of that money would go towards launching the new, all-news station. In an intervention filed with the commission Friday, the CBC said it is “fiercely opposed” to Bell’s request to use tangible benefits money to support the proposed new station, which would compete with the CBC’s RDI French-language news service as a competitive “Category C” licence. “BCE’s proposal to use tangible benefits monies to subsidize the launch of a new Category C news service is extraordinarily self-serving and unprecedented,” the public broadcaster wrote. “No party has ever before suggested that benefits monies should be used to subsidize the launch of a totally new broadcasting service—let alone a service in a category that the Commission has classified as competitive and made subject to open entry with uniform conditions of licence.” The CRTC requires companies purchasing broadcast assets to spend about 10 per cent of the value of the transaction on projects and programming that benefit the Canadian broadcasting system. In a 1993 decision on the application of tangible benefits, the commission said those benefits should fall into one of three “broad” category descriptions: “operating expenditures, such as in the areas of additional staff or programming improvements; capital expenditures for technical improvements; and grants and contributions to Canadian talent or program development funds.” In its intervention on Friday the CBC compared tangible benefits funds to its own parliamentary appropriations, which it said the commission has “expressly precluded” the Crown corporation from using to finance its television news services. It said it would be “grossly inappropriate” for the commission to “tilt the playing field” in favour of a new Bell-owned news service by allowing it to draw benefits monies. “Every other broadcaster who wishes to operate a Category C news service must meet the economics of the market,” the Bev Kirshenblatt, the CBC’s senior director of regulatory affairs, wrote. “There is absolutely no basis for permitting a distortion of the market as suggested by BCE.” Cope said on Monday that the new French-language news service would benefit Quebec’s French-speaking majority, but would not be financially viable without the tangible benefits fund. In documents submitted to the commission Friday, Bell said it estimated the proposed service would lose $12.4 million in its first year of operation, $6.8 million in its second year, and between $2.5 and $4.8 million in each of the next three years, based on a comparison of projected revenues versus programming and operating expenses. In its intervention, the CBC questioned why Bell would propose to operate a service that could not make a profit. It argued that such a service would not be in the public’s benefit. “f the service were to be subsidized as requested by BCE and if the economic case for this service were truly as grim as BCE suggests then either the new service would require ongoing subsidization—on what basis is unclear—or the service would be eventually taken down,” Kirshenblatt wrote. In the case of the latter, she added, the station would cause “serious financial harm to existing French language news services,” which include RDI and Quebecor Media Inc.’s LCN channel, before it would be taken down. It is not yet clear whether the commission will accept the CBC’s submission as a part of the public record on the Bell-Astral acquisition file. In July, the commission imposed an Aug. 9 deadline for all interventions on the file. The CBC argued that it was responding to new information Bell presented at the hearing Monday, and that it “might have intervened” if Bell had included the all-news station proposal in its initial tangible benefits package request earlier this year. It said the last-minute nature of Bell’s proposal was “an affront to the Commission, an abuse of the Commission’s procedures and a breach of natural justice which prejudices the rights of intervenors.” The CRTC said Friday it was considering the CBC’s request and will make a decision as to whether or not it can be added to the public file. Bell did not respond to a request for comment on this story. news@thewirereport.ca

CBC ‘fiercely opposes’ Bell’s all-news channel proposal

Broadcast | September 14, 2012

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CBC ‘fiercely opposes’ Bell’s all-news channel proposal

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