TV industry at odds on future of over-the-air

BCE Inc. wants to see over-the-air (OTA) transmitters shut down and local stations move to a model it called “local specialty,” under which they would negotiate wholesale fees with cable, IPTV and satellite-TV providers. The company said in an intervention, submitted as part of the CRTC’s review of the future of the television, that local stations “would retain carriage rights and have the same local programming obligations they do today.” Local TV stations — also known as conventional TV stations or over-the-air TV stations — “must have access to subscription revenues,” Bell said. The company, which owns the CTV network, argued that even “with their significant scale advantage, local television stations in the US now depend on a dual revenue stream for survival,” Bell said, adding that a “similar approach is needed in Canada.” Because under Canadian law, over-the-air stations can’t charge TV providers subscription fees, Bell recommended that the CRTC create a new licensing category that would allow these channels to stop broadcasting over-the-air and become “local specialty services.” Under this plan, they would have the same local programming requirements and be subject to the same regulations, including continuing to be carried on basic, Bell said. As specialty channels, they could charge wholesale subscriber fees, but only in the markets where they are offering local programming, Bell said. The company said this would “provide a sustainable model for Canadian local television for the medium to long term.” “The current model is failing, and urgent action is needed,” Bell wrote in its submission. “The local television sector is seen as critical, by Canadian consumers, local communities, and Commission policy, and these new resources are needed to continue the programming, information and community service contributions these stations make.” The CRTC had asked for comment on whether regulatory intervention is needed to maintain access to local television stations, and whether over-the-air transmission should continue to be maintained. In its intervention, Shaw Communications Inc. said over-the-air transmitters shouldn’t be shut down yet. “While the shutdown of transmitters could save broadcasters ongoing operational costs, consideration of such a measure is premature given the potential impacts on Canadian television viewers and public policy issues, including copyright concerns and US broadcaster calls for retransmission consent,” the company said. Shaw, which owns the Global TV network, said ending over-the-air transmissions would “disrupt the existing copyright model that permits the retransmission of US 4+1 services without consent.” Rogers Communications Inc. said in its submission that it was “acutely aware of the struggles experienced by local OTA television stations,” noting that its City and OMNI conventional stations are experiencing declining revenue. It proposed that the CRTC put in place three measures to lower the stations’ costs: reduce Canadian content requirements, remove prime-time programming restrictions, and get rid of requirements around programs of national interest. “Adopting these proposals will provide an immediate boost to the financial well-being of OTA stations and will give each of them the tools to develop its own strategy and address the challenges it is facing,” Rogers said. Gregory Taylor, principal investigator at Canadian Spectrum Policy Research, urged the CRTC not to end over-the-air-transmissions. He said that because over-the-air television can be accessed through a digital antenna, “to discontinue the OTA service places the entire system in the hands of private BDU providers.” Taylor noted that while over-the-air viewership varies, viewership in some places, such as Windsor, Ont., can be as high as 20 per cent. “Cleary the majority of Canadians prefer the services offered by BDUs, but there is still a sufficient viewership of OTA to merit continuing the service,” he said. Taylor added that while Canadians are increasingly watching television online, over-the-top (OTT) is not yet a replacement for over-the-air transmission, given current “audience data and network architecture,” such as the data caps limiting many Internet plans. “Internet architecture has not yet matured to the point where it can replace OTA, which has no data cap,” he said. Among other reasons to continue broadcasting over the air, Taylor said ending OTA broadcasts would affect the lowest income segment of the population. “It would disenfranchise the poor, who are switching to a more vibrant OTA sector in the U.S.,” he said. The Wire Report reported last year that private conventional broadcasters still hadn’t fully recovered from the 2008 global financial crisis, which caused a 10 per cent decline in Canada's TV advertising revenues. CRTC figures released earlier this year show that in the 12 months ended Aug. 31, 2013, private, conventional broadcasters saw a loss of $2.3 million before interest and taxes, compared to a surplus of $22.9 million the previous year. That was the first negative balance for this group of broadcasters since they lost $116.9 million 2008-09. The interventions, which were due last Friday, were submitted as part of the CRTC’s ongoing review of the future of television. It is the third phase of the Let’s Talk TV consultation, following a public consultation launched in October 2013, and a questionnaire released in February 2014. The responses dealt with a number of questions regarding the television system, such a pick-and-pay television system and simultaneous substitution, The Wire Report reported Friday. A public hearing will be held as part of the process beginning Sept. 8. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

TV industry at odds on future of over-the-air

Broadcast | June 30, 2014

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TV industry at odds on future of over-the-air

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