CRTC leans towards hybrid solution for over-the-air digital broadcasting

The chair of the CRTC appears to be softening his demand that Canadian broadcasters convert all their over-the-air signals to digital by 2011. Konrad von Finckenstein told a Parliamentary committee yesterday that a hybrid solution – one that sees urban areas receiving digital OTA and smaller markets continuing to rely on cable and satellite – could be a cost-effective alternative to converting every analog transmitter to digital. “We must find an acceptable solution to the obstacles standing in the way of the transition from analog to digital television,” von Finckenstein told the Standing Committee on Canadian Heritage. “A hybrid solution which would entail over-the-air digital signals in standard definition in major centres and access by way of cable and satellite in non-metropolitan centres, appears to be the answer. However, certain details still need to be worked out, including access, cost and entitlement.” The CRTC chair stressed, however, that there has been no definitive solution at this point, adding that a public hearing will be held on the issue in October. Various broadcasters have pitched the same proposal to the CRTC and to the Heritage Committee at hearings during the past three months, but von Finckenstein’s comment on the viability of the proposal marks the first time the commission appeared open-minded to the hybrid proposal. Von Finckenstein sharply rebuked broadcasters last June for dragging their feet on converting their analog transmitters to digital. At the time, only 22 digital transmitters had been built compared to 740 high powered analog transmitters. Broadcasters have long complained that the cost of converting analog transmitters to digital is unwarranted given the small number of Canadians who receive their television signals on OTA. Only one in 10 Canadians get access to TV via OTA. A recent CRTC-commissioned report put the cost of digitizing analog transmitters at slightly more than $424 million. The CRTC chair also told MPs, who are studying the broadcasting industry’s current financial crisis, that steps would be taken to ensure that consumers have a choice when the hybrid solution is finalized. “Consumers will not necessarily have to subscribe to a cable or satellite company. They can get set top boxes if they want to receive digital signals,” he said, adding such boxes would cost about $50. A hybrid solution could create competition for Bell Canada’s proposal for a freesat service, which the company has offered as an alternative to full digital OTA conversion. Bell has been campaigning for regulatory and industry support for its freesat proposal, which it says could significantly reduce the cost of converting OTA signals to digital by offering Canadians a free digital tier of OTA channels via a satellite receiver. Under the proposal, Bell said it was ready to spend up to $5 million a year to convert analog transmitters to digital, in return for broadcasters to drop calls for a fee-for-carriage. In return, the CRTC would credit $5 million towards Bell’s contribution to the Local Programming Improvement Fund. In his testimony before the Heritage committee, von Finckenstein pitched the hybrid solution as among eight steps that he said were necessary for the structural reform of the broadcast industry. He also told MPs that he was open to allowing broadcasters and BDUs to negotiate the value of fee-for-carriage. If both stakeholders are not able to agree, the CRTC would then step in to arbitrate. The CRTC chair, responding to a question from Liberal MP Pablo Rodriquez on whether von Finckenstein had changed his position on fee-for-carriage in the last two months, also suggested it was incorrect to use the term "fee-for-carriage" because it “means different things to different stakeholders.” For example, he said, stakeholders have varied suggestions on how much BDUs should be charged for broadcasters’ signals. “So we are not exactly hammering a dead horse but transforming it to a camel or something, but it’s still going to run at the end of the day,” said NDP MP Charlie Angus who, after listening to von Finckenstein’s response, said the fee-for-carriage proposal hasn’t been shelved by the CRTC. The CRTC chair repeatedly said when fee-for-carriage was proposed, the CRTC was seeking commitments from broadcasters that the funds will be directed towards improving local programming. “We were not prepared to give a fee-for-carriage unless there was a firm commitment. There were no firm commitments on the table,” he said. “So there will be a fee. What’s the amount of the fee will depend on the market of the station in question, but it will be different for different markets.”

CRTC leans towards hybrid solution for over-the-air digital broadcasting

News | 05/26/2009 8:52 pm EDT

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