Broadcasters question need for digital OTA transmission

Among the other pressing matters to consider at last week’s review of over-the-air (OTA) television (see chart) – most notably the contentious issue of fee-for-carriage making national media headlines – the CRTC weighed the public policy ramifications of shutting down over-the-air transmission altogether. The day will certainly come when the last remaining analog TV transmission tower signs off for good, but there was some difference of opinion as to how that event should be handled, or even what the date for it should be. CRTC vice-chair of broadcasting Michel Arpin asked interveners from the Canadian Broadcasting Corp. about their spending on new HD capacity. "Part of what we are trying to avoid…is to make investments into analog equipment which would not be used after a particular date," said CBC president and CEO Robert Rabinovitch. "Having a relatively fixed conversion date would be a good guidance to us in terms of how we move ahead." Later that day, CanWest Global Communications CEO Leonard Asper asked that his firm be allowed to present its timeline for moving to all-digital and all-HD over-the-air transmission next year, during its licence renewal hearings. "We have…asked that broadcasters not be forced to collectively spend hundreds of millions of dollars to build HD/high definition transmitters that would serve less than 10% of the population," he informed the commission. Meanwhile, Ivan Fecan, president and CEO of Bell Globemedia and CEO of CTV Inc., pegged CTV’s timeline for a full move away from OTA at seven to nine years. "I don’t think anybody here is saying that…anytime soon we’re going to be shutting a transmitter down," Fecan said. "The issue really comes up when one is ready to fall down." When asked by Atlantic Region commissioner Elizabeth Duncan whether 2011 might be possible, Fecan replied: "I suspect it’s a bit beyond that." Fecan also pegged the cost for converting CTV’s national transmitter network completely to HD at $160 million. "We have a lot of transmitters, we have a lot of rebroadcasters," he said. The argument against OTASome broadcasters – notably – questioned the wisdom of investing millions of dollars in digital and HD OTA capacity at all, noting that nearly nine out of every 10 Canadians pay a BDU to deliver their television service. But while he acknowledged that the cost associated with rolling out a digital OTA system is admittedly prohibitive, Gary Maavara, VP and general counsel at Corus Entertainment Inc. – which owns three Ontario CBC affiliate stations in Kingston, Peterborough and Oshawa – said, "The Canadian system should not abandon digital broadcasting until we have explored its potential." With US OTA broadcasters working toward a Feb. 17, 2009 cut-off date for their analog services, Maavara noted Canadians living in border regions will soon be flooded with digital OTA signals originating from south of the border – signals that might tempt them away from tuning in to Canadian broadcasters. The commission foresees a period when both analog and digital signals are broadcast over the air as well as carried by BDUs. Not surprisingly, most BDUs said that would prove too onerous, but that assertion found support from broadcasters as well. Richard Stursberg, executive VP for CBC Television, noted that with the number of high definition channels carried by BDUs growing exponentially, there isn’t much headroom left in their respective systems to replicate the full channel universe in analog. "They are already going to be under capacity pressures as a result of the requirement to carry high definition signals because they simply chew up more bandwidth," he said. "And if you were then to layer on to that a requirement…to continue to carry the analog signals, I think they are going to find themselves in a challenging circumstance." That capacity crunch would be even more pronounced if a request, advanced by some broadcasters – and admittedly of benefit to the CBC – to carry all 126 local network feeds on BDUs was granted, Stursberg later added. But while CanWest’s Asper seemed to recognize the difficulties for cable BDUs in carrying all 126 local network signals, he told the commission that DTH BDUs should have to, "as this would be consistent with the Broadcasting Act itself." CRTC vice-chair Arpin also asked the CBC representatives whether BDUs should be required to downconvert broadcasters’ digital signals to analog in order to offer both over their systems in the absence of analog OTA feeds. "It is a conundrum, particularly as it relates to foreign signals which will by definition only be available as digital signals," said VP and CTO Ray Carnovale. But Rogers Communications Inc. president and CEO Ted Rogers said his cablesystems would be willing to downconvert signals that are HD at the source, if and when analog OTA shuts down. "That means we would take a local station and they would get three carriages on Rogers: analog, standard definition and high definition programming," he said, seemingly countering assertions that bandwidth – at least for cable BDUs – is scarce. But it is DTH providers who find themselves most hampered in their ability to quickly ramp up their capacity to meet such requests. When asked by commissioner Ronald Williams whether DTH providers would have to launch more satellites in order to carry all 124 local network channels, Canwest director of engineering for eastern operations Eric Heidendahl responded, "Absolutely, yes." Shaw Communications Inc. CEO Jim Shaw argued against the need to carry those local stations nationally on Shaw’s Star Choice DTH service. "From a…customer perspective, they add little value outside of their local communities," he said. "Mandated carriage of even more of these services is unnecessary – for Star Choice, it is untenable." To distribute all 124 small-market stations in standard definition alone, Shaw would have to add another seven or eight transponders, said Shaw senior VP of planning Michael D’Avella. Gary Smith, president of Bell Video Group, also challenged the notion that all local and small-market stations need to be carried on Bell ExpressVu, saying that it didn’t recognize the "physics" of the system. "From our business perspective…it would be an unreasonable demand on our business to carry all 124," he said. "There is huge duplication in these signals and they don’t bring any additional value to the majority of the subscribers." To carry all 124 additional signals, Bell ExpressVu would likely have to add the same number of new transponders as Shaw would, Smith said. However, CTV president Rick Brace refuted the notion that BDUs would be hard-pressed to carry all local stations. "If distributors can find capacity to add more and more Canadian services, they can find room for local services," he said in opening remarks. However, he qualified that statement by saying only the ones that created original local content should be carried. Rogers also challenged some broadcasters’ contention that upgrading their transmitters to HD would be too costly, and that OTA should be abandoned altogether. He claimed the transmission piece of the puzzle is already in place for many OTA broadcasters, but investing in studio and production equipment is a different matter: many broadcasters are opting to simply import their HD programming hours from the US rather than make original content in HD here, he said. "So if you have a high def set, you see this glorious picture for all the American programming, and then when Canadian programming comes up it is just not as good," Rogers said. "So it builds up a feeling of Canadian being inferior to American, which I think is detestable." But another intervener from the BDU camp – the Canadian Cable Systems Alliance, which represents approximately 85 small cablesystems nationally – said there was no need to push OTA broadcasters to upgrade to digital and HD. "The existing over the air transmission infrastructure, together with existing BDU networks, will support universal access to television programming for some time to come," said CCSA president and CEO Alyson Townsend. "There is no immediate need to build digital over the air transmission facilities to support universal access to high definition television programming." BROADCASTERS AND BDUs: WHERE THEY STAND ON SOME OF THE MAJOR ISSUESBROADCASTERFEE FOR CARRIAGECTV Inc.In favour, asking for 10 cents per local station per month, with money going to Canadian production and HD rolloutCanWest MediaWorks Inc.In favour, asking for 50 cents per BDU subscriber each month; estimates fee for carriage would increase BDU bills by $1.50-$2.50 a month in totalQuebecor Media Inc.In favourTQS/Cogeco Inc.In favour, but only for private broadcasters – asking for $1.00 per BDU subscriber per monthCBCIn favour, but no rate suggested Rogers Communications Inc.Opposed, citing existing payments to CAB and CTF; worried that American broadcasters would also demand fee-for-carriage on Canadian BDUsBell ExpressVuOpposedShaw Communications Inc.Opposed BROADCASTEROTHER CARRIAGE ISSUESCTV Inc.Wants all 124 local stations carried by DTH, but reserves right to withhold distant signals; wants priority carriage and simultaneous substitution framework to remain intactCanWest MediaWorks Inc.Wants all 124 local stations carried by DTH, otherwise will have to revisit local programming expenditures; wants priority carriage and simultaneous substitution framework to remain intactQuebecor Media Inc.Wants deregulation of priority carriage and simultaneous substitution; wants conventional broadcasters to be able to negotiate access fees directly with BDUsTQS/Cogeco Inc.Wants DTH providers to carry all small-market signals; wants current priority carriage and simultaneous substitution framework to remain intactCBCWants current priority carriage and simultaneous substitution framework to remain intactRogers Communications Inc.Wary of BDU-broadcaster negotiations for carriage – says they’ve favoured DTH providers in the pastBell ExpressVuDoesn’t want to carry all 124 small-market signals; favours omnibus channels to avoid duplication; wants removal of the priority carriage and simultaneous substitutionShaw Communications Inc.Doesn’t want to carry all 124 small-market signals; favours omnibus channels to avoid duplication; says broadcasters can monetize time-shifting BROADCASTEROVER-THE-AIR TRANSMITTERSCTV Inc.Wants to avoid building an HD OTA transmission system; favours subsidies to OTA viewers in rural areas if OTA is cut off, but opposes the CBC/CanWest hybrid modelCanWest MediaWorks Inc.Proposes hybrid approach with digital/HD OTA transmitters in 17 marketsQuebecor Media Inc.Believes market forces should drive upgrades to digital/ HD transmitters as well as a cut-off date for analogTQS/Cogeco Inc.Believes cost of upgrading OTA transmitters to digital far exceeds return due to low number of OTA viewersCBCRecommends CRTC set an analog cut-off date – suggested Aug. 31, 2011; proposed hybrid model with OTA digital transmitters serving metro areas, rest of Canada served by BDUsRogers Communications Inc.Says hybrid approach advanced by others won’t affect its business; indeed, shutting down OTA would drive more subscribers to BDUsBell ExpressVuBacks hybrid approach advanced by CBC/CanWest; favours a fixed date for analog shut-down but didn’t propose oneShaw Communications Inc.Says decision whether to offer digital/HD OTA should be up to broadcasters

Broadcasters question need for digital OTA transmission

Broadcast | December 6, 2006

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