CRTC slows down Category 2 applications by requiring commitment of carriage

Anyone now applying for a Category 2 digital specialty television licence must "prove clear evidence of a reasonable likelihood" of carriage before the CRTC will proceed with processing the application. The move is meant to use commission staff resources more efficiently, but it is leaving some newcomers to the field in a Catch 22 situation because distributors aren’t willing to provide them with letters indicating that they will be carried until they actually have a broadcast licence. One distributor has even adopted a policy of not writing such letters due to the high volume of requests from potential Category 2 licensees. "Pretty much every Category 2 licence has asked (for a letter saying the proposed diginet was being considered for carriage)…We just can’t do this for hundreds of licensees, and can’t justify doing it for a few but not all," a distributor tells a Category 2 applicant looking to satisfy the CRTC requirement in an email that was obtained by Canadian Communications Reports. Robert Ramsay, acting director of broadcasting analysis at the CRTC, tells CCR that it’s a matter of properly allocating resources. "Of the 262 Category 2s (that were licensed in December 2000), very few have launched. Before the commission begins processing further any application, we want to have an indication of the likelihood of them being distributed," he says. "They don’t need to have a carriage agreement, but they need to have a letter from a distributor indicating their clear intent of distributing the service if approved." Since late April, the commission has been asking for such letters before it proceeds with the potentially time consuming analysis of Category 2 applications, which includes whether the new channel provides diversity, whether it is competitive with existing analog specialty or Category 1 digital services, and whether any commitments should be confirmed in conditions of licence. "Even if the likelihood of applicants getting approved (for a Category 2 licence) is good, we want to know what’s the likelihood of them being distributed," Ramsay notes. "The commission has other priorities to address, so before we concentrate our resources on Category 2s, we want to know there’s some chance that they will be carried…So if we received 500 Category 2 applications and none of them have the likelihood of getting distributed, then we are wasting our time on these applications." The first round of Category 2 digital channels hadn’t even launched when more applications for licences were being submitted to the CRTC. Just two months after the initial round of 262 Category 2s were approved in December 2000, the CRTC received 16 applications for new digital services, with CHUM Ltd. leading the pack with 13. At that time, some Category 2 licensees approved in the first round had argued that it was not appropriate to license more until the existing ones had gone on air (CCR, Feb. 28/01). But when the CRTC proceeded to grant licences to these additional Category 2s in June 2001 (CCR, June 7/01) and subsequently to others, many in the industry believed that anyone who applied for a Category 2 licence could automatically expect to receive it, as long as their proposed service didn’t compete with analog specialty or Category 1 channels. The change in the process has angered Sue McGarvie, who applied in February 2002 for a Category 2 licence for a love and romance channel, but didn’t hear back from the CRTC until April when it requested that she submit a letter from a distributor indicating intent to carry her channel. After further correspondence with the commission, she now has until October 23 to provide the required information. "The process was supposed to be about new voices, but this is shutting us out," McGarvie tells CCR. Through Passion Media Inc., McGarvie was awarded two Category 2 licences in December 2000 – for Passion Television and The Singles Network (CCR, Feb. 1/01).

CRTC slows down Category 2 applications by requiring commitment of carriage

News | October 10, 2002

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