Roberts looking for way to get wholesale rate increase following CRTC denial

The viability of Canada’s not-for-profit multifaith specialty TV channel is at stake following the CRTC’s denial of a basic wholesale rate increase, according to the channel’s president and CEO. Vision TV’s Bill Roberts says he’s left with no choice but to contest the decision, which was part of the specialty service’s licence renewal issued on Nov. 2 – Decision 2001-669. His preferred course of action would be to redress the pass-through rate denial by going back to the commission and getting a licence amendment. "Failing that I’m looking at the appeal procedures in terms of federal court and Cabinet. I’m thinking this through with legal counsel," Roberts tells CCR. In its licence renewal application, Vision TV had asked for a basic rate increase of seven cents, which would bring its basic rate to 15 cents. Vision predicts that without the rate increase, it will lose nearly $24.4 million between now and 2008. With the increase, it anticipates a $3.17 million surplus. The projections are based on a .09 per cent annual increase in analog subscribers and 4.78 per cent net growth in digital subscribers (minus those subscribers who migrate from analog). In rejecting the rate increase, the CRTC concluded that "during that period in which Vision TV asserts that its audience levels have decreased, its revenues have been increasing. In particular, those revenue streams most closely associated with audience size – advertising, airtime sales and fundraising activities – have shown stable growth over the period." Roberts insists the CRTC didn’t get the numbers right in the decision. "One of the things, if I were to go the federal court route, is that there are errors of fact in the decision… There are references to a loss of $14 million – that is indeed the entire budget of Vision TV as a not-for-profit organization. That is simply a misstatement by a dimension of ten or more." In the decision, the CRTC states that Vision projects further audience erosion because it has had to increase the amount of repeat broadcasts of Canadian programming. "According to the licensee’s projections, this audience erosion could translate into a decline of almost $14 million per year in the revenues it earns from advertising, the sale of airtime, and from donations and grants," states the decision. Roberts says that Vision TV proved economic need for a rate increase by "any rationale" in its application (CCR Update, Nov. 14/01). "The commission can look back to its Musique-Plus and MuchMusic decisions (where the) talk about any rate increase subsequently authorized would be based on the commission’s determination of the financial resources required by the licensees…that seems somehow to have been skated offside in this consideration," he says. In its ruling, the CRTC notes: "As a rule, however, it is not the commission’s policy to grant a rate increase based solely on a projected or potential decrease in revenues. Based on the available evidence, the commission is not convinced of the appropriateness of an increase in Vision TV’s wholesale rate at this time…" Roberts contends otherwise and notes that even now Vision staff from the top down are paid below industry standards and that they work in a centre with equipment "with the best technology of the 1970s." "I have invited members of the commission and (CRTC) staff to come and look at the premises and what these folks work with… It’s certainly not luxurious by any stretch of the imagination," he says. "So if we want these charities and not-for profits (broadcasters) to exist in the same universe as the telephone companies, the CanWest Globals and the Alliance Atlantis’ exist in, then what public policy and initiative is going to sustain that?" Canadian content shortfall Vision was given only a short-term licence, ending in August 2004, rather than the traditional seven years due to its non-compliance with conditions of licence requiring it to air 60 per cent Canadian content. Roberts says Vision is not taking issue with the non-compliance and has initiated measures to ensure compliance in future. Initially, CRTC records showed that in 1999-2000 Vision had broadcast only 40.61 per cent Canadian content between 6 a.m. and midnight, and 46.89 per cent between 7 p.m. and midnight. However, Vision spent much time chasing down producers for numbers certifying productions qualified as Canadian content. In the end, the CRTC and Vision ended up agreeing that the station had aired 57.02 per cent Canadian content throughout the day, and 61.13 per cent at night. As a result of the kerfuffle over the numbers, Vision TV director of programming operations Joan Jenkinson says that the station now "has firmly written into contracts (with independent producers) that the program will not be accepted without a certification number." As well, she says Vision has invested a significant amount in its database system and infrastructure to monitor and carefully plan Canadian programming. "All around, we’re having to beef up our infrastructure, which is costing us money, but we are also being limited by the conditions of licence imposed that are stricter than they were before. For example, having to report every six months (instead of a year) on our Canadian content and being within the 60 per cent range. It gives us less flexibility in how we will design our program on an annual basis," she notes. Former Vision president and CEO Fil Fraser, under whose rein the Canadian content shortfall occurred, tells CCR: "We’re talking about 57 per cent versus 60 per cent… There were counting errors and errors in the counting system." He adds, "When I was there, I thought we were over performing – at least most of the time. It makes me wonder a bit why that became such a huge issue when at the same time the commission recognizes that Vision alone amongst the specialties provides multifaith and multicultural programming." Fraser, however, says that a rate increase is not "a matter of life and death" for Vision, although it’s important in terms of creating good Canadian programming within the channel’s mandate. He notes that programming costs are going up as more and more specialty channels enter the market and create competition. Recent CRTC denials of basic rate increases(For English Canada Market)Specialty ChannelIncrease RequestedProposed RateCRTC DecisionVision TV7 cents15 cents2001-669Pelmorex (Weather Network)2 cents25 cents2001-668Corus (CMT)6 cents6 cents2001-154Corus (YTV)3 cents (years 1 – 3)38 cents2000-1405 cents (from year 4)40 cents Chum (MuchMusic)5 cents**14 cents2000-138** A 1-cent increase each year over five years, or a one-time 5-cent increase

Roberts looking for way to get wholesale rate increase following CRTC denial

Broadcast | November 22, 2001

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