Blue Ant calls on CRTC to review framework for small broadcasters

Blue Ant Media Inc. is calling on the CRTC to revise its regulatory framework for independent broadcasters and to give them more flexibility to compete against vertically integrated players on a more “fair and equitable” basis. In a regulatory filing with the CRTC last month, Blue Ant proposed a 12-point plan for regulatory changes to help independent broadcasters compete in a consolidated media environment, including extending the Cancon spending rules of the commission’s licensing regime for large broadcasting groups, imposing new linkage rules for TV carriage that would push more independent channels onto “basic” packages, and eliminating broadcasting benefits requirements for small companies acquiring broadcasting assets. “The basic logic behind that is that we’re already disadvantaged by our lack of leverage and our size in the market, and the fact that our customers are also our competitors,” Raja Khanna, Blue Ant's chief executive, said in a phone interview, referring to companies like BCE Inc., which compete with specialty channels but serve as “customers” by carrying Blue Ant's channels on their broadcast distribution networks. “ to make sure that independents like Blue Ant at least have the similar flexibility in programming and so on that the big guys have,” he said. Blue Ant, headquartered in Toronto, owns magazines and seven specialty channels, including Aux, Bite, and Travel + Escape, and filed its proposal as part of the CRTC's consultation on mandatory distribution. The company called on the CRTC to extend the rules of its 2011 group-based licensing regime to independent broadcasters. That framework allows large broadcast companies with groups of stations and channels to pool spending and spread Canadian programming requirements across their broadcast services, airing less Canadian content on some channels and more on others. The company made the same proposals in its licence renewal applications to the CRTC last year, which the commission rejected, though Khanna said the company wants to be treated as a broadcast group. “It lets Canadian broadcasters focus their expenditures on the most compelling programming projects that will appeal most to consumers,” Blue Ant said in the filing, and asked the commission to “et independent services have similar flexibility.” Khanna added Blue Ant’s goal with the comments to the CRTC is to start a dialogue that works towards a review of the framework for independent broadcasters. He said the fact that every applicant for mandatory distribution in the CRTC's 9(1)(h) consultation is an independent shows there is a problem with the system. “These independent broadcasters have gotten to the point where they think that this heavy handed regulatory solution is the only way for them to survive,” Khanna said. “That is a sad state of affairs and I think that we need to talk about it.” Blue Ant proposed that the CRTC impose a new “linkage” obligation on vertically integrated broadcast companies—which are those that own both broadcast assets and broadcast distribution platforms—that requires them to carry at least one independent channel on their basic TV packages for each of their own channels on basic. Under the CRTC's vertical integration regulatory rules, the commission implemented a 3:1 linkage rule, which requires vertically integrated broadcasters to carry at least three unaffiliated specialty channels for each channel carried that is affiliated with the company. Blue Ant also asked the commission to “clear the way” for independent broadcasters to compete in an increasingly popular online distribution market by reducing regulatory barriers that can prevent them from being carried on online, on-demand platforms. Canadian broadcast companies are emerging with online, on-demand and mobile TV platforms, such as BCE's Bell Mobile TV, Shaw Communications Inc.'s Shaw Go, or Quebecor Media Inc.'s new illico Club Unlimited service, as Canadians increasingly sign up for unregulated services such as that of Netflix Inc. The U.S.-based streaming site added 1.16 million American subscribers and 700,000 international users in the third quarter of 2012. Blue Ant said the commission should “safeguard” independents’ ability to have their channels and programs carried by online distributors and require vertically integrated broadcasters to make their content available to competing online platforms. “reater competition in broadcast distribution has the potential to foster innovation in the distribution of Canadian programming services to consumers,” the company said. As a way to reduce small broadcasters’ operating costs, Blue Ant also recommended that the CRTC allow independent companies to file consolidated revenue reports for all of their television stations instead of individual reports for each station, and that the regulator forego tangible benefits requirements for small broadcasters acquiring broadcasting assets. Under current CRTC rules, companies that acquire TV broadcasting assets are typically required to dedicate funds of about 10 per cent of the value of the transaction to projects benefitting the Canadian broadcasting system. Blue Ant said the commission should waive that obligation if the transaction does not lead to companies acquiring a “significant” share of the content or broadcast distribution markets. In response to the proposals in Blue Ant's licence renewal application last year, the CRTC, in a letter dated Nov. 21, 2012, told the company that its request was outside the scope of the licence renewal process and would not be considered. “These broader policy issues will not be addressed as part of Blue Ant’s licence renewal,” the CRTC said. Rogers Communications Inc. spokeswoman Jennifer Kett said in an emailed statement to The Wire Report that Blue Ant’s regulatory filing is out of place because they are beyond the scope of the CRTC's consultation on mandatory distribution. “In addition, the CRTC has already put into place new protections for independent broadcasters in its regulatory framework relating to vertical integration (21 September 2011) and has incorporated those new protections into the Broadcasting Distribution Regulations,” Kett said. Khanna agreed that the CRTC's 9(1)(h) consultation is not the place to analyse, accept or reject the company’s proposals. “What we’re saying is, clearly, give us a place to talk about this,” he said. “Let’s schedule a hearing into this question of independence in the context of media concentration.” —With reporting by Danika Grenier at dgrenier@thewirereport.ca and editing by Nicholas Kyonka at nkyonka@thewirereport.ca

Blue Ant calls on CRTC to review framework for small broadcasters

Broadcast | March 13, 2013

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