Dalfen appears open to letting in more foreign channels, remains undisturbed by diginet failures

CRTC chair Charles Dalfen is open to approving the distribution of further U.S. and other foreign channels in Canada as enticement for turning TV subscribers to digital. "You want to promote the digital rollout, if you can, and cable operators say what will sell digital is having something different to offer and so you kind of balance that with the competitive aspect. I don’t know a better way of doing it particularly when you are in a transition that will presumably come to an end at some point." Dalfen’s comments came during a recent exclusive interview with Canadian Communications Reports. "The theory has always been the more that you allow cable to carry, the more attractive their service is and the more unlikely that people will bypass the system for foreign services. But at the same time, where there is a genre that is offered in Canada, we tend not to let the equivalent genre from the United States in," he elaborates. A proposal by the Canadian Cable Television Association (CCTA) to bring in 17 new U.S. channels has been harshly criticized by private broadcasters. Canadian Association of Broadcasters president and CEO Glenn O’Farrell called the move a "thinly disguised cash grab." The CCTA, however, stated that the additional channels would increase choice and diversity, maximize the benefits of competition and accelerate digital penetration (CCR, June 30/03). The CCTA has also requested regulatory permission to carry five third-language television channels (CCR, April 25/03). The last time the CRTC considered making more foreign channels eligible for carriage here, it approved 19 new services of 29 seeking digital carriage in Canada (CCR, Aug. 2/01, April 11/01). At that time, the CAB argued that given the large number of licensed Category 1 and Category 2 digital channels, there was no room for new foreign channels. The broadcasters fear that allowing more foreign channels into Canada on a digital basis could hurt the slew of existing Canadian digital channels, many of which have been struggling. So far, Corus Entertainment has killed its music channel EdgeTV and CTV has axed the women’s sports network WTSN. Dalfen, however, has no macro concerns about some of the Canadian diginets falling by the wayside. "The digital licensing environment was very clearly one that would be a market test. And a large number of the major players have tried proposals, and one or two have failed," he states. "I guess that’s the way the marketplace goes." He does express concerns, though, that the French-language Category 1s have not yet launched. "I understand the market realities, but it’s a matter of concern. Those should definitely launch," he states. The CRTC chair notes as well that the commission within the next month will issue a distribution notice on rules governing high definition signals of conventional television stations. The notice follows a process started last year (CCR, Feb. 28/03, Aug. 29/02). The issue pits broadcasters, who want the protection of the status quo in digital, against distributors, who are asking for more flexibility. While many companies have lined up to apply for licences for digital channels, others are also attempting to start new conventional over-the-air channels that depend exclusively on advertising revenue. The granting of a conventional licence to Craig Media for the Toronto market led to CHUM Ltd. eyeing a station in Craig’s home territory of Alberta. That CRTC process is currently under way (CCR, June 20/03), with Dalfen telling CCR only that each bid for a conventional licence will be considered on a case-by-case basis. "We have applications under consideration in Alberta, and we’ll take them seriously. Toronto got a new (conventional) TV station for the first time in 30 years (with Craig and Rogers’ OMNI2)," he says. While the cable industry argues that offering more choice in channels should help repatriate viewers who have been illegally receiving television signals through the black and grey markets, Dalfen notes that there is little that the CRTC can do in terms of enforcing anti-piracy rules. The CRTC has been holding meetings and won commitments from industry players on ways to combat piracy (CCR, Aug. 22/03), but Dalfen says under current legislation that is about as far as the CRTC can go. "The Radiocommunication Act has the enforcement powers. If we had the authority to police or enforce the acts regarding piracy, we would. But the Broadcasting Act and Telecommunications Act don’t contain sections for policing," he points out. "We’re trying to do more (to combat piracy), but we don’t have the primary responsibility (for enforcement) even though we regulate the system that is the primary victim." CRTC reform Dalfen sits on the fence when it comes to reform of the CRTC. There have been recent calls for changes to the commission, including by the House of Commons Standing Committee on Canadian Heritage. In its report released at the beginning of the summer, the committee called for a review of the mandate of the CRTC, stricter guidelines for the nomination of commissioners, and a reduction in their number from 13 to nine (CCR, June 20/03). "In this job you can never very easily talk about revamping yourself. I think the best you can do is listen to whatever the proposals are, and try to shed light on the debate," he says. "As an institution, we don’t really have views on the subject because it would be impossible not to sound defensive if we did." Unlike in the United States, where the Federal Communications Commission makes its votes public, Dalfen says the Canadian system is more focused on creating consistent policy. Therefore, he feels that there is no reason to make public how commissioners vote, while noting that the number of dissents has diminished over the last year and a half. "There’s no question that the more dissents you have, the harder it is to have consistent policy. We’ve had quite a reduction in the number of dissents in the last year and a half. …We have in many cases avoided dissents simply by examining the thing and trying to get compromise wording into the decisions," he notes. "That’s the process that I think we should be doing. But occasionally it goes beyond wording and (a commissioner) can’t live with a particular decision and that’s when they dissent." Comparing the Canadian regulatory system to the American, he points out, "The balance we’ve drawn is that we’re not judges in the sense that we don’t have two new litigants before us on an issue of law, and they go away and we never see them again. We do have an ongoing set of parties that we regulate, and we have more importantly objectives set out in the Broadcasting Act that we are meant to achieve. …So if you don’t get a dissent, while I don’t think you can take it that every commissioner fully agreed with the decision, on balance they felt that this was the appropriate message that they could live with in the name of consistency and achieving the objectives like our statutes. The Communications Act in the United States doesn’t have a set of objectives. It really doesn’t and they develop their tradition by coming together in silos and voting publicly. With our act, I don’t think (open votes) make sense. Our act talks about the commission, rather than commissioners and so on, and it really seeks to put the emphasis on consistency." Dalfen notes that the commission is attempting to make the decision-making process faster, but adds that speed cannot come at the expensive of a poor decision. "We’re trying to work on that (getting decisions out quicker). But to me, there is no merit in being fast but getting ill-considered decisions out. But there are ways and we’re embarking on those ways internally of trying to speed up procedures, and cut out stages in the process that aren’t necessary," he says. "But I don’t think that speed is the only objective here. We need well-reasoned decisions. If you don’t do that, you’re going to end up with 20 complaints that will multiply your work." From a personal perspective, the CRTC chair says it’s too early to judge where he’s had the most effect or made strides. "There is very little (achievements that have been made) that were begun on my watch. And what we’ve embarked on in the case of drama and removing obstacles to local competition in telecom are processes that are going to take time before we speak of achievement," he says. "I can say though that one area that I have focused on is the decision writing, and making sure that our messages are clear. And I’m pleased to see that there is clarity in those decisions. I’ve gotten messages from the outside world saying that our messages are getting across."

Dalfen appears open to letting in more foreign channels, remains undisturbed by diginet failures

News | 10/03/2003 4:00 am EDT

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