CRTC okays ‘caster negotiations, defers final nod to courts

The regulator lays out a framework for future negotiations between BDUs and broadcasters and okays paid spots in VOD services. Media execs weigh in on the outcome.

The CRTC has okayed and drawn up a plan for fee-for-carriage, but stopped short of making it official on Monday without court approval.

Noting that it received ‘conflicting legal opinions’ on whether it has the authority impose fees between broadcasters and cable companies, the federal watchdog has asked the Federal Court of Appeal to clarify its jurisdiction under the Broadcasting Act.

‘The current dispute between conventional broadcasters and distributors threatens the overall integrity of the broadcasting system,’ said CRTC chief Konrad von Finckenstein in a statement. ‘Broadcasters and distributors have a symbiotic relationship. The time has come for them to put their differences aside and work together to ensure the continuation of conventional television.’

If given the green light, the federal regulator has a plan at the ready – revealed as part of its new group-based television policy – that would see broadcasters and cable/satellite companies negotiate among themselves on the value of over-the-air signals. Private broadcasters would have the option once every three years to haggle with distributors over the value of their signals.

The decision also included a section giving permission to video-on-demand services to insert commercial advertising in programs acquired from Canadian English- and French-language broadcasters. ‘This will provide the broadcasting system, and conventional broadcasters in particular, with an important new source of revenues,’ the report stated.

Although Mediaedge:cia president Bruce Neve says that the CRTC’s move to defer the final decision to the courts is a ‘typically Canadian compromise’ that will likely result in the consumer paying more, he told MiC he was pleased that the regulator okayed the insertion of paid commercials in video-on-demand programming, ‘a relatively small, but growing subset of the viewing universe.’

Sylvia Criger, chief investment officer at MediaCom, said that the ability of broadcasters to negotiate with BDUs will likely mean a more favourable negotiating environment for media buyers.

‘I think for us it’s a good thing,’ she tells MiC. ‘This isn’t exactly what [the broadcasters] wanted, but it is better than where they are now. They have the ability to negotiate. If they didn’t get it, from our perspective, they would have been a lot more aggressive on rates because they need the revenue. They’ve all had a bad year, they all think the economy is going to come back a bit better this year, so they would have been more aggressive in terms of renegotiations and that would impact the rates that we’re going to be charging our clients and we sure as heck don’t want those to be increasing after a really bad year.’

Under the framework provided by the CRTC, if the broadcasters choose to negotiate with the BDUs, they would then give up the regulatory protection that keeps them on the more favorable, low-end of the dial. If they are unable to strike a deal, they will be allowed to pull their signal off the BDUs in question and, further, to block other channels from airing shows to which they hold the Canadian rights.

It is not yet known when the decision will be reviewed in the Federal Court of Appeal, but the CRTC said in its report that it has requested an expedited review of the decision.

Networks that led the pro-fee campaign last year, CTV and Global in particular, were silent late Monday while distributors howled over the prospect of paying for over-the-air signals.

‘The commission has decided to penalize our customers and impose fees for services that are available free over-the-air for anyone with an antenna or on the internet,’ commented Rogers vice-chair Phil Lind in a release.

While the private networks are in line for more revenue, the same cannot be said of CBC which, under the CRTC’s plan, is not allowed to negotiate with cable companies – reason being that any possible blackouts of the Ceeb signal would go against the Broadcasting Act’s stipulation that the network must be available across Canada by the ‘most appropriate and efficient means.’

The framework for the new group-based television regulatory policy also included a mandate by the CRTC to ‘introduce measures to encourage the creation of high-quality Canadian television programs,’ indicating that it plans to reintroduce minimum spending levels on Canadian programming.

It proposes that CTVgm, Canwest and Rogers should be required to spend at least 30% of their gross revenues on Canuck shows, with added emphasis on ‘programs of national interest’ including dramas, documentaries and award shows.

From Playback Daily, with files from Media in Canada