Latest – but likely not the last – local avails application denied by CRTC

Although the CRTC decided not to stretch the limits of local availabilities any further last week when it denied Only Imagine Inc. (OII)'s application to sell commercial advertising in the coveted timeslots, the commission didn't completely close the door on the possibility of advertising for profit during local avails. "We watched hearing and we know they were given a pretty thorough grilling, so to that extent the decision didn't surprise us that much," says Bob Reaume, VP of policy and research at the Association of Canadian Advertisers. "We're disappointed because we really did feel that this was a legitimate opportunity to at least begin the process of repatriating some of the audience that is lost every day." Specifically, OII - a creation of former Craig Media Inc. CEO Drew Craig and Jeff Thiessen, ex-senior VP at Winnipeg-based religious programmer Trinity Television Inc. - proposed making 70% of the two minutes per hour of local availabilities that exist during certain American satellite programming accessible to advertisers, while 30% would be reserved for BDUs and priority 9(1)(h) services. In what some viewed as an unnecessarily arduous and disruptive procedure, OII would have had to setup a master control centre and install equipment in each cablesystems' headend that would locally substitute commercials during local avail time (CCR, Jan. 31/2007). The CRTC thought OII's application was disruptive from a regulatory standpoint as well. "The commission finds that approval of OII's proposal would require the commission to impose unduly intrusive regulatory measures, and that OI's proposal would not provide sufficient benefits to the Canadian broadcasting system to justify such a fundamental change in the current policy on local availabilities," read the CRTC's decision. However, OII's application is almost certainly not the last attempt to insert paid ads into avail times, and there's reason to believe the CRTC would be receptive to such future applications. "I think there's a suggestion that the door isn't entirely closed and there might be some room in the future to revisit this issue," says Reaume. Indeed, both the fact that the CRTC has shown a recent willingness to relax restrictions on local avails - like when it altered that policy to allow BDUs to also promote non-programming services during avails last June (CCR, June 20/2006) - and that this denial focused specifically on the intrusive nature of OII's proposal, as opposed to the merits of advertising during avails, lend credence to the notion that the issue is still open. To reach its decision on OII's application the CRTC considered the following two primary issues: whether OII's service would benefit the Canadian broadcasting system enough to justify a change in policy; and whether OII's proposed method for implementing the service was feasible. In addressing the first matter the commission acknowledged that substantial revenues could be generated to use in the production of Canadian programming (OII committed to contribute 50% of its revenues to a new fund to support Canadian drama production, estimating a total of $170 over seven years), but disagreed with some of the applicant's logic. Specifically, the CRTC found fault with OI's contention that Canadian programming services currently do not use all of the promotional time that is available to them, and also found that many affiliation agreements between BDUs and American programming services preclude reassigning the rights of local avails to other parties. As for the feasibility issue, the commission concluded that since the BDUs strongly opposed OII's application, amending their conditions of license as part of implementing OII's service would be a lengthy process. Wrote the CRTC: "Absent willing involvement on the part of BDUs, the commission finds that OII's proposed method for implementing the service may not be feasible without the commission's supervision on an ongoing basis."The very fact that the commission broke down OII's application into two criteria further hints at a willingness to address inserting Canadian ads into US satellite programming. In short, if an application came forward that would benefit the Canadian broadcasting system and displayed feasible implementation it would therefore stand up to the commission's requirements. And there is widespread support for advertising during avails; 20 of the 36 interventions the commission received supported OII's application. In addition, the group of 16 opposing interveners included the BDUs, who showed a desire to advertise during avails when they unsuccessfully applied to do so in 2005. Given that the commission also cited a lack of BDU support as a main reason for rejecting OII's application, a new application from a united group of BDUs may be in order. Reaume believes there's a better way to do it. "I think the commission should put this out to bid and give some parameters," he says. "Conduct some kind of study and assessment on what the market can bear in this regard...and then have a hearing on which configuration and which bid best suits the parameters. I think that would be a smart way to proceed, but of course that's the commission's purview."

Latest – but likely not the last – local avails application denied by CRTC

News | 06/13/2007 7:45 pm EDT

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