CRTC to examine impact of satellite TV distribution on local markets

The CRTC has initiated a process to examine the impact of satellite TV distributors carrying one local TV signal but not others in the same market, and the effect on a small market when direct-to-home (DTH) distributors beam in out-of-market signals – PN 2001-103. Among the questions the CRTC is posing are: What effect are out-of-market stations having on the audiences, local programs, and revenues of the local stations? and what would the effect be on DTH distribution capacity and cost if they were required to carry all local stations even if they decided to carry one? "I think that the questions the CRTC is asking are quite fair...and will give a fair survey of the issue," says Paul Armstrong, director of regulatory and government affairs at Bell ExpressVu LP. "It also talks about broadcasting, including how much public interest would be served by DTH undertakings distributing multiple services where the programming is largely the same." The process stems from a complaint filed by Cogeco Radio-Television Inc against Star Choice Communications Inc. Cogeco alleged that by distributing the local TVA signals in Chicoutimi/Jonquière and Sherbrooke, but not the local signals of TQS, in which Cogeco has an interest, or Radio-Canada, Star Choice was "giving undue preference to TVA." It alleged that not getting DTH distribution was affecting its advertising revenues. In its defence, Star Choice argued that it cannot be guilty of undue preference under the Broadcasting Distribution Regulations since it has no interest in the TVA stations. It also argued that limited channel capacity did not permit it to carry all the local signals in those markets, nor could it afford the cost of carrying every signal. Its decision to carry TVA signals was a business one, based on "the popularity of the signals, signals offered by competing BDUs, uplink sites, backhaul costs, etc.," said Star Choice in response to Cogeco’s complaint. Cogeco fired back, saying ownership was not at issue, and that Star Choice was giving TVA an "unjust advantage" in the market by broadcasting its signals exclusively. It also pointed to a Pricewaterhouse Coopers LLP that it commissioned that unconditionally revealed that Star Choice has the capacity to carry Cogeco’s signals. It is becoming increasingly important for local stations to get carried on satellite TV, according to a March 2001 report on the impact of satellite delivery obtained by CCR. The report, completed by Strategic Inc for the Canadian Association of Broadcasters, reveals that tuning to satellite TV has grown substantially since 1997, and that the markets most impacted tend to be smaller, with populations of less than 300,000. An industry insider told CCR that one of the reasons why satellite distributors are reluctant to carry the signals of one network from a number of different communities is that, other than the local news content, the programming is virtually identical – particularly in the French market. Viewers, therefore, need not tune into their local station to see specific programming. The growth of satellite, according to the Strategic report, has shown a loss of ratings outside major markets and that buyers have begun to shift funds away from locally bought advertising. The report, which is broken down by city, shows that the number of hours tuned to satellite grew 523.6 per cent in Sherbrooke from the fall of 1997 to the fall of 2000, and increased 329.4 per cent in Chicoutimi/Jonquière. The report also shows that the growth in viewing to satellite is coming at the expense of over-the-air and cable viewing, and has resulted in a decline in overall market share of the originating station. Ruling on the Cogeco complaint, the CRTC found that Star Choice was not guilty of undue preference and did not breach section 9. Nonetheless, the commission initiated the process because it had received a number of other similar complaints. Interested parties have until Nov. 30 to file comments.

CRTC to examine impact of satellite TV distribution on local markets

Broadcast | October 11, 2001

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