Bell supports U.K.-style broadcast system, blocking U.S. networks

BCE Inc., Canada's largest broadcaster, would support the establishment of broadcasting rules similar to those of the United Kingdom, where American channels cannot be aired and broadcasters can license and air shows exclusively, the company said. "Canada is the only country in the world where American channels are freely carried by cable and satellite distributors, dramatically impacting the value of the exclusive programming rights Canadian broadcasters purchase. Allowing U.S. networks freely into Canada causes massive market disruption. We would be supportive of such a system as seen in the U.K.," Scott Henderson, a spokesman for BCE division Bell Media, said in an emailed response to questions. In Canada, regulations called "simultaneous substitution" require broadcast distributors to substitute Canadian signals, including Canadian advertising, for American signals where the programming is the same. That ensures a Canadian broadcaster like CTV, if it has the rights to the Super Bowl or American Idol, doesn't have to compete with an American network's signal running American advertising. Bell Media, which owns 27 local TV stations in the CTV and CTV Two networks, suggested that if the CRTC plans to phase out simultaneous substitution, the regulator should also bar American channels from the Canadian broadcast distribution system. In an interview with CBC Radio last week, CRTC Chairman Jean-Pierre Blais said simultaneous substitution will be on the table in the regulator's upcoming review of TV services, which includes a consultation with Canadians this fall followed by one with industry next year. The chairman questioned whether more homegrown Canadian programming could replace the need to licence American programs and a reliance on simultaneous substitution to protect the sale of Canadian advertising running on them. Henderson said that simultaneous substitution "remains essential" to protecting the exclusive program rights purchased by conventional broadcasters and supporting Canadian programming and related regulatory obligations. "In an environment where conventional TV doesn't have access to a secondary revenue stream, and remains completely dependent on advertising revenue, the elimination of simultaneous substitution could put the entire conventional model at risk," Henderson said. Hendersen said Bell Media would also support a system of "non-simultaneous substitution," which would expand the existing regime so that the signal is replaced even when the shows are played at different times. No matter when it airs, distributors would be required to substitute the U.S. broadcast signal with the Canadian broadcaster’s signal, including its advertising, where the Canadian broadcaster has the Canadian rights to the program. "Non-simultaneous substitution would allow Canadian broadcasters to maintain market integrity and protect programming rights while providing the flexibility to schedule according to what is best for Canadian audiences and Canadian productions," he said in the email. Last week, when CBC Radio host Anna Maria Tremonti asked Blais whether it still makes sense for Canadian broadcast distributors to carry the signals of American networks ike ABC and NBC, the chairman said the popularity of American shows in Canada has "cross-subsidized" the creation of Canadian English programming. "But the fact is that we've got really good Canadian production companies that have gone down to the States and sold great products, because we have great creators, great crews. We also are very successful in kids' and childrens' programming, to sell it to PBS. I'm actually very optimistic about the future of programming," Blais said. "Will that completley replace the model of simultaneous substitution that's been at the base of a lot of our programming? I don't know. That's one of the questions we'll be asking in this process. I think it will probably occur over time, because I don't think it's sustainable that Canadian broadcasters continue to rent their content, rather than own it, in an era where it's a nonlinear future," Blais said. When asked in a follow-up question whether he is open to "getting rid" of simultaneous substitution, he said: "We're a regulatory agency. We always have to have an open mind. We have to ask the right questions. We must not be afraid of asking the right questions." Rogers Communications Inc., whose media division owns the Citytv and OMNI Television stations, said the upcoming TV review will be an opportunity to hear "directly from Canadians" about the future of the TV broadcast system. "The current system is changing rapidly and we know consumers are looking for more choice and flexibility. We look forward to participating in the CRTC process and making our views known at that time," spokeswoman Jennifer Kett said by email when asked for comments on simultaneous substitution. Telus Corp., a broadcast distributor offering fibre-based, Internet-protocol TV services, said eliminating simultaneous substition and barring American signals is unlikely. "This doesn't seem realistic given that the US is Canada's neighbour and the signals of border stations inevitably leak into Canada," Ann Mainville-Neeson, director of regulatory affairs at Telus, said in an email response to questions. She said the company welcomes the TV services review, and that technology and consumer expectations have changed since the Broadcasting Act was last updated in 1991. "While the Commission can't change the Broadcasting Act as part of this consultation, it can and should look at each and every one of its regulations and policies to test whether they are still relevant and beneficial in today's consumer-centric environment," Mainville-Neeson said. "The sim sub regime is no exception, but it should be recognized that sim sub has traditionally been very important from a revenue perspective for Canadian broadcasters and changes to this regime should not result in an increase in costs for consumers. This would not be a step in the right direction for the Canadian broadcasting system," she said. BCE has been critical of the broadcasting regime's falling support for conventional television, particularly after the CRTC decided in 2012 to phase out the $105-million local TV programming fund, and the Supreme Court, the same year, denied the commission's proposed "value for signal regime" that would have compensated local stations for the carriage of their signals. As part of BCE's deal this year to acquire Astral Media Inc. for $3.38 billion, Bell Media told CRTC commissioners in May it would keep all of its over-the-air TV stations open with current levels of funding. CRTC data released Thursday in its annual Communications Monitoring Report showed that private, conventional TV stations collectively had revenues of $2.04 billion in 2012, down from $2.14 billion in both 2011 and 2010, and up from $1.97 billion in the recession year of 2009. At $1.35 billion, advertising revenues in 2012 were similar to 2009, The Wire Report reported in June. —With reporting by Simon Doyle at sdoyle@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Bell supports U.K.-style broadcast system, blocking U.S. networks

News | September 26, 2013

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Bell supports U.K.-style broadcast system, blocking U.S. networks

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