Bell offers free satellite tier if broadcasters drop carriage fee demands

Bell Canada says it’s prepared to spend $5 million annually to convert analog broadcast signals to digital, but it wants concessions in return from both broadcasters and the CRTC, the Commons Heritage Committee heard yesterday. “Broadcasters would avoid the massive cost of upgrading their analog transmitters in markets where they don’t feel it is cost-effective,” said Mirko Bibic, senior VP, regulatory and government affairs. Bell is pushing hard to garner industry and regulatory support for its freesat proposal, which would save smaller broadcasters the cost of converting their over-the-air signal to digital by offering those services for free on Bell TV. Consumers would have to pay a one-time fee of $450 for a satellite dish and a receiver, but would receive at least five digital TV channels without having to subscribe to Bell TV. A similar service has been offered in the UK since May 2008. In an interview, Bibic suggested that broadcasters could pay this fee for low income Canadians through savings accrued by being relieved of obligations to convert analog transmitters. “Another model would be through a government subsidy but I am not sure what that would be,” he said. The Bell offer does come with strings attached, however. Broadcasters would have to drop their demand for fee-for-carriage and the CRTC would apply the annual $5 million cost towards Bell TV’s mandated contributions to the Local Programming Improvement Fund. This would reduce its annual payment from an estimated $15 million a year to $10 million, Bibic said in an interview with Tech Media Reports. Bell first floated the freesat idea in April 2008 at a CRTC hearing on BDUs and specialty services, touting it as an inexpensive alternative to converting analog broadcast signals to digital. Bell executives pitched the proposal again last week to CRTC commissioners at the broadcast licence renewal hearings. Under freesat, Bell commits to distribute broadcasters’ local signals in small market areas reached through analog over-the-air transmitters. The signal would be digitally distributed via satellite, saving broadcasters the cost and resources of converting their analog transmitters to digital. Broadcasters have long complained about the high price associated with converting their analog transmitters to digital to meet the Aug. 31, 2011 CRTC deadline. Only one in 10 Canadians receive their TV via OTA and broadcasters have argued that the small number doesn’t warrant the high cost of digital conversion, instead preferring a hybrid solution through cable and satellite. An independently commissioned CRTC report on converting analog to digital transmitters put the price tag at $424 million. Bibic told the Heritage Committee, which is currently conducting a study on the financial woes facing the broadcast industry, that freesat would save the industry “hundreds of millions of dollars”. In response to a question from Liberal MP Scott Simms, Bibic said no community will be left out. “We will guarantee that every community continues to have access to every single one of their local stations.” In addition to high cost of digital conversion, broadcasters also worry they may not be able to meet the 2011 deadline. To date, only 28 digital transmitters have been converted out of a total of 1291, according to the CRTC-commissioned report. With freesat, Bibic said these same signals would be available in digital a year before the deadline. “We have told the CRTC last week that we can be up and running with freesat in the third quarter of 2010, one full year ahead of the required deadline,” he said. Bibic refuted suggestions that freesat is a way for Bell to avoid its obligations for distant signals. “At the end of the day, it is not our regulatory obligation to build digital infrastructure, it is the broadcasters’. So we are willing to help them. They will save hundreds of millions of dollars and what we are asking for in return is that the LPIF not be increased and we continue to pay for distant signals in the manner in which we pay,” he said. The toughest opposition to freesat is likely to come from the cable companies, who would view the proposal as an avenue to bypass their system.

Bell offers free satellite tier if broadcasters drop carriage fee demands

Broadcast | May 7, 2009

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