Rogers letter to producers prompts call for retraction, and intervention by CRTC

The CRTC should order Rogers Communications Inc to retract a letter it sent to producers asking them to support cable ownership of analog channels, say the Friends of Canadian Broadcasting. The lobby group also wants the commission to force Rogers to reveal to whom it sent the Feb. 28 letter, and to demonstrate that future funding decisions by it and its $20-million Rogers Telefund "are in no way influenced by any action, or lack of action, on the part of recipients of this letter." "Friends believes recipients could reasonably construe this letter as either a threat, or an inducement to intervene in the PN CRTC 165-2000 process," the group states in a followup submission Monday to the CRTC. The proceeding is examining regulations that limit and/or prohibit cablecos from holding equity interests in analog pay and specialty services. Friends further argues that new investments by cablecos in analog channels could delay the onset of digital distribution by diverting capital and by creating an incentive to delay digital investments to protect the longevity of new capital in analog services. Cablecos are allowed to own digital specialty channels. Friends also contends that "relaxing the prohibition on cable ownership of analog specialty licensees will likely result in the elimination of mid-size players, among them Chum, Astral and Alliance/Atlantis within two years." But the Canadian Cable Television Association maintains the restrictions should be eased to permit cablecos to compete on an even footing with BCE Inc (CCR, Feb. 14/01), and it has found a powerful ally in its cause. In comments filed with the commission, the Competition Bureau says it favors changes to the regulations if steps are taken to safeguard against the potential for undue preference. The CCTA’s adversaries in this battle are equally as powerful, with both the Canadian Association of Broadcasters and the Canadian Film and Television Production Association opposing cable’s grab for more analog channel equity. It was the CFTPA’s opposition that prompted Rogers to send off its letter. CCTA president and CEO Janet Yale says people shouldn’t read anything more into the letter than Rogers’ disappointment in not getting the support it expected from independent producers. "Have you read the letter? Do you see anything that looks like strong arming?" she questions. "I mean I’ve read the letter. All I see is frustration and disappointment. …The production community was supportive of the BCE transaction, and BCE does not have the track record that the cable industry has in terms of financial support of production in this country." Signed by Rogers vice chair Philip Lind and Rogers Telefund executive director Robin Mirsky, the letter questions how producers can justify their opposition to cable ownership of analog channels. "We have poured literally hundred of millions of dollars of support into Canadian programming," the letter states. "At Rogers, we have been there for producers for more than 20 years with interim financing, grants and loans." CFTPA chair Stephen Ellis says the letter caught his members by surprise. He acknowledges that his group is concerned about changing the status quo, but he adds, "I think we indicated a fair bit of flexibility here as long as we are assured our members’ programs are going to find audiences." In second round comments filed Monday, the CFTPA backtracks on its original position, suggesting that the CRTC allow cable ownership of analog channels if there are "strong, clear and enforceable" safeguards. In its submission, Bell ExpressVu suggested that all contracts between large cablecos and program suppliers contain ‘most favored nation’ provisions that would ensure all suppliers are treated equitably. Those agreements would also be subject to third-party audits. ExpressVu also recommended that competitively sensitive information obtained by a programmer from a non-affiliated BDU not be shared with an affiliated BDU, and that marketing initiatives by programmers for the benefit of an affiliated cable undertaking be extended under similar terms to non-affiliated distribution undertakings. The Competition Bureau suggests capping the number of services cablecos or their affiliates could own. Ellis says that the CFTPA is concerned about what happens to the channels because they provide the greatest platform to its members. According to a February economic report prepared by Pricewater-houseCoopers on behalf of the CFTPA and l’Association des producteurs de films et de television du Quebec, the specialty and pay sector spent $171 million on new and acquired Canadian programming in 1999-2000, while the private conventional television sector ingested $97 million. Division among broadcasters Rogers also withdrew its CAB membership in protest of its opposition to the cable industry’s position. Yale says cablecos had anticipated that the broadcasters’ association, which supported the BCE-CTV deal, would offer a similar level of support to their industry, possibility with some safeguards attached. "And I think there are some tensions — internal tensions — (within the CAB) around what kind of position it should take on these issues. It’s increasingly difficult for the CAB to achieve consensus," she adds. "So I think Rogers made a decision that it was in its best interests to no longer be party to the positions that the CAB was taking that were directly in conflict with Rogers’ overall plans." Since the absorption of the Specialty Pay and Premium Television Association with the CAB’s specialty board, opinions within the association have become more diverse. Corus Entertainment was the only CAB member to specifically raise concerns about the association’s position in its submission. Other broadcasters, such as CBC, CTV and Global, did not oppose a relaxed policy but did indicate that the commission’s approach required more precision.

Rogers letter to producers prompts call for retraction, and intervention by CRTC

Broadcast | March 14, 2001

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