Foreign services should be considered at same time as new Category 2s, CAB says

The CRTC's proposal to consider licence applications for new Category 2 digital specialty television channels at regular intervals could put potential new domestic entrants at a disadvantage to directly competing foreign services, warns the Canadian Association of Broadcasters (CAB). The CRTC has proposed reviewing all new Category 2 licence applications at specific time periods, regardless of when they were submitted, as a means of lessening its workload. Responding to the CRTC process on possible amendments for dealing with the processing of Category 2 applications (Broadcasting Public Notice 2003-14), the CAB isn't opposed to holding Category 2 diginet licensing hearings at six-month intervals (CCR Update, March 19/03). But it cautions that the proposed new procedure could place new Canadian services at a disadvantage to new non-Canadian services, which currently can be sponsored for inclusion on the lists of eligible satellite services at any time. "For example, the processing of a Category 2 application could be effectively frozen until the next licensing window, while a non-Canadian service in a format directly competitive with the proposed Category 2 service was added to the lists of eligible satellite services," the CAB states in its June 16 submission to the CRTC. "This would clearly harm the new Canadian service's ability to secure carriage on BDUs (broadcast distribution undertakings) that, by that point, might already be carrying the competitive non-Canadian service." But China Essence Television Network Inc. questions how considering all new Category 2 applications at one time will lessen the commission's workload. China Essence, which has a Category 2 application currently before the CRTC, points out that the commission "would still need to process the same number of applications…it would not really be lightening its workload. It would just be managing it a little differently." Burdened by the potentially time consuming analysis of Category 2 applications, the CRTC last year began asking new applicants to "prove clear evidence of reasonable likelihood" of carriage before it would proceed with its review of their applications (CCR, Oct. 10/02). The commission asked new entrants to submit a letter from a distributor stating that their services were being considered for carriage. The change led to cries of unfairness by new entrants who said that distributors were being given a gatekeeper role in determining which Category 2s got approved. As a result of the outcry, the CRTC initiated this process to determine if there are other ways of lessening the administrative burden of dealing with the influx of Category 2 applications it receives. In his June 16 submission to the CRTC, China Essence president Howard Ling notes that this "may well be a problem that takes care of itself, or at least becomes less acute, over time." He points out that there will likely be fewer Category 2 applications submitted to the CRTC because securing carriage is difficult and because the trials and tribulations of the September 2001 launch are now evident. He suggests a more appropriate route might be to exempt Category 2 digital channels from licensing, if they adhere to a set of criteria. Mississauga ON-based Golden Tunes Productions, which has two Category 2 applications before the commission, makes a similar recommendation. Golden Tunes Productions wants the CRTC to give provisional licences without a lengthy procedure but require licensees to launch their channels under a strict time frame or they lose the licence. The Canadian Cable Television Association (CCTA), which also opposes the CRTC's commitment of carriage requirement, suggests the onus for proving whether a channel is competitive could be shifted from the CRTC to the existing channels. In its submission to the CRTC, the cable association notes that the "most appropriate way to reduce the administrative burden would be to take a less restrictive approach to genre competition." Under the current process, one of the elements that the CRTC must consider in evaluating a Category 2 application is whether it is competitive with existing analog or Category 1 digital specialty channels. The CCTA suggests that the onus should rest with existing services to demonstrate how a proposed service would be "significantly more competitive with it than other services already licensed." The CCTA adds, "In this regard, CCTA submits that such interventions must pass a high threshold in order to discourage routine interventions opposing applications for new services that would have minimal or no impact on existing licensed pay and specialty services." The CCTA is against the commitment of carriage obligation imposed by the CRTC because if such a commitment is made, "based only on limited information, (it) could be interpreted by the service as consent to carry and, accordingly, could obstruct carriage negotiations."

Foreign services should be considered at same time as new Category 2s, CAB says

News | 06/30/2003 4:00 am EDT

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