Cable industry pitches Heritage committee on need for legislative reform, and less regs

The cable industry is asking for significant legislative changes that would require the CRTC to deregulate competitive industries, give consumers more choice over what television channels they receive, and reduce or eliminate foreign ownership restrictions. In a 12-page brief to the House of Commons Standing Committee on Canadian Heritage, the Canadian Cable Television Association (CCTA) recommends that the Broadcasting Act be amended to recognize that broadcasting has evolved into a highly competitive industry – one in which consumers are demanding more control over what they buy. "The commission does not currently have the legislative direction or the practical tools it requires to adequately address the business and technological realities of the evolving communications environment," the Sept. 10 brief states. Such tools could be used to dismantle many protectionist policies, by putting competition and consumer on an equal level with diversity and Canadian content. Reforming Canada’s broadcast industry: the debate isn’t newOn Canadian content and foreign ownership: "Canadian content requirements have been the source of irritation at high public levels in the United States for some time, while foreign investment restrictions in the cultural industries run counter to the international trend toward the free flow of capital. Both are a source of concern to our trading partners." – Former Trade minister Art Eggleton, January 27, 1997 Source: CCR, Feb. 5/97 On tiering and linkage:"We have to question whether this is a policy that is appropriate for the ‘90s. Some argue that packaging should be left to the distributors to decide, so they can differentiate their products more from their competitors." – Lorne Abugov, lawyer and partner, Osler Hoskin & Harcourt Source: CCR, Feb. 5/97 On subsidies and promoting Canadian content:"You can’t just cut one without doing the other. You would have consequences that are pretty foreseeable… I think it’s clear that the ability to protect is diminishing in the face of technological change and therefore the emphasis needs to be increasingly on promotion." Source: CCR, July 30/97 Former Industry minister John ManleyJanet Yale, president and CEO of the CCTA, acknowledges that the association’s recommendations will face opposition, particularly from analog specialty services. "The kind of things we might be looking for are things they’d never agree to, so we may end up agreeing to disagree." What analog channels fear, and what the CCTA is proposing among other things, is the end of the tiering and linkage rules. Under the current regime, DTH satellite TV companies can let customers choose what channels they want in a package (as long as most are Canadian); cablecos face more stringent packaging rules on their analog tiers. "The way that you have to compete in a marketplace is to differentiate yourself from your competitors and to do that you need carriage flexibility, in terms of the kinds of rules that govern how you can package and offer services to consumers," explains Yale. Diverting money from television production to Internet content production is another idea that will no doubt be contentious. Specifically, the CCTA wants new media projects to receive a larger slice of the $200-million Canadian Television Fund (CTF). The association has also suggested in the past that broadcast distributors be allowed to divert part of their mandated content payment to equity in new media companies. Yale, who is also the CTF’s vice chair, says such ideas will be discussed when the CTF board meets next week at a strategic retreat. "Many of the board members are starting to recognize that we have to think differently about this and we have to have our guidelines updated to reflect the desire of many broadcasters to have integrated, two-screened content, and for producers to be in the vanguard of that two-screen approach," she told CCR. "There’s growing recognition that we have to think creatively about the production and funding of Canadian cultural products to make sure that we remain relevant for our audiences who either go onscreen or online." The CCTA’s brief to the Heritage committee was intended to touch on general themes. Yale says more specific recommendations will be tabled when the association appears later this fall before the committee, as part of its 18-month review of Canadian broadcasting (CCR, May 24/01). The first deadline for written briefs was Sept. 10. Much of the cable industry’s wish list isn’t expected to be new. Last year, the CCTA released a position paper outlining its vision for regulatory reform. Specifically, it called for changes that allow for more integration between cable and broadcasting, a higher threshold for foreign ownership, and more regulatory exemptions. The pitch to the Heritage committee is part of that ongoing strategy. Yale says the association is taking a two-pronged approach to its campaign – one that targets CRTC regulations, and one that requires changes to legislation, particularly the Broadcasting Act. "What we’re going to be unveiling over the fall is detailed recommendations both for legislative change as well as detailed proposals with respect to regulatory flexibility that we think makes sense," Yale says. The Broadcasting Act was enacted in 1968, and later amended in 1991 when the cable industry was still a monopoly. Since then, dozens of Canadian and foreign channels have been authorized for distribution in Canada, and cablecos face stiff competition from satellite TV, namely Bell ExpressVu LP and Star Choice Communications Inc. Today, DTH accounts for more than 1.4 million of the 2.2 million total digital TV homes, according to subscriber figures compiled by Decima Publishing (CCR, Aug. 30/01). "If we have large integrated players competing with each other, both from a content and distribution perspective, then we have to stop thinking of cable as the dominant player in distribution and DTH as the small little player," says Yale. "Our main competitor right now is Bell." The CCTA argues that one of the main deficiencies in the Broadcasting Act is its failure to include competition and consumer choice among its lengthy list of what is considered to be in the public interest. "The commission is supposed to act in the public interest. If you look at the objectives of the Broadcasting Act, nowhere is competition and reliance on market forces mentioned as a public policy objective. Then how is the commission supposed to make that a priority in its decision making?"

Cable industry pitches Heritage committee on need for legislative reform, and less regs

Broadcast | September 13, 2001

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