Only ‘public service’ channels will receive mandatory carriage, experts say

Broadcasters will face a tough task convincing the CRTC that their channels offer a distinct and unique public service in order to gain guaranteed access to Canadian homes, industry experts say. “It’s a long-shot for everybody and rightfully so,” Pierre-Louis Smith, principal and owner of Stratego Media Consulting and a former chief regulatory officer for the Canadian Association of Broadcasters, said in an interview Tuesday, a day after the CRTC said it will consider applications for mandatory carriage orders at an April hearing. “Getting priority access and mandatory carriage on basic nowadays is nothing to sneeze at,” he said. The CRTC said on Monday that it had received 22 applications from broadcasters seeking mandatory distribution orders for their channels under section 9(1)(h) of the Broadcasting Act, which allows the commission to require broadcast distributors to carry a specific channel “on such terms and conditions as the Commission deems appropriate.” Channels that receive a mandatory distribution order benefit from a CRTC requirement that all broadcast distributors offer those channels—often on their basic service package—increasing their subscription and viewership numbers, and driving up advertising revenues as a result. The commission also typically requires broadcast distributors to pay a monthly, per subscriber “wholesale fee” to broadcasters who operate mandatory distribution channels, which can provide a broadcaster with millions of dollars in annual revenues. Former CRTC vice-chair of broadcasting Michel Arpin said in a telephone interview that the commission will ask broadcasters to prove their channel constitutes a distinct public service in order to gain a mandatory distribution order. He said the commission will also want evidence that those channels would not be economically viable without mandatory carriage, and that the service they provide is not duplicated by any other channel or service. “There are a number of applicants for services that are of interest,” Arpin said. “But do they qualify as a public service? That’s what the commission will have to in order to ascertain if those services are really feeding a need.” Channels that currently have mandatory distributions orders, he added, can each be classified as a unique public service that helps to serve the objectives of the Broadcasting Act, such as by promoting Canadian expression, or serving minority or disadvantaged communities. Arpin pointed to Aboriginal Peoples Television Network Inc.’s (APTN) service for First Nations communities and to Quebecor Media Inc.’s TVA network— which serves francophones outside of Quebec—as two such examples. APTN is among a group of six channels that are applying to renew mandatory distribution orders before their current licences expire. The others include crime-prevention channel Avis de recherché, CPAC, and a trio of channels for the visually impaired: Accessible Media Inc.’s AMI-tv and AMI-audio and Vues & Voix’ Canal M. Four other channels also currently benefit from mandatory distribution orders but do not need to reapply for those orders at this time, the commission added. Those channels include TVA; CBC/Radio-Canada’s CBC News Network, which has mandatory distribution in all French-language markets; Radio-Canada’s Réseau de l’information (RDI) French news channel, which has mandatory distribution in all English-language markets; and Pelmorex Communications Inc.’s The Weather Network/MétéoMédia, which provides emergency services during extreme weather conditions. “If you look at the list, you notice that they are all somehow public services,” Arpin said. Broadcasters of another 16 channels are also applying for new mandatory distribution orders, including for eight channels that currently have broadcasting licences, and for eight that do not. Smith said existing channels would have little or no advantage over those seeking their first licence in their efforts to gain a mandatory distribution order. He said that even those channels that have previously secured mandatory distribution orders will be subject to close scrutiny as they reapply for those orders under the commission’s new criteria for assessing requests for mandatory carriage. That criteria, established in CRTC decision 2010-629, says the commission will only grant mandatory distribution orders “on an exceptional basis,” and only for channels that are of “exceptional importance … to the achievement of the objectives of the Broadcasting Act.” It adds that applicants must prove that their channel makes an “exceptional contribution to Canadian expression,” demonstrates an “exceptional commitment” to original Canadian programming, and that Canadians have an “extraordinary need” for its service. Smith said the commission will also likely focus on new requirements that broadcasters provide a business case demonstrating why their service needs a mandatory distribution order to continue operating, and how such an order would impact TV subscribers, who are forced to pay monthly fees to receive those channels even if they don’t watch them. He noted that several of the services that are currently benefit from mandatory distribution orders are run by non-profit organizations, and said other non-profit groups would have an advantage over other, private broadcasters requesting an order. “Those who would qualify would have to clearly demonstrate that their service meets the broadcasting act in such a way that it is reasonable and legitimate to fork out money for the service whether they’re watching it or not,” he said. Smith pointed to APTN’s request that the commission increase its monthly per subscriber fee from 25 cents to 40 cents as one that would come under close scrutiny, particularly given CRTC Chair Jean-Pierre Blais’ focus on consumer interests. APTN said in its application that it needs the increased subscriber fees to produce more original programming in its efforts to reach Aboriginal youths in a “highly competitive” broadcasting environment. “The challenge for APTN is that there’s a new sheriff in town that is very concerned about the impact of distribution of services on the consumers, and very focused on providing choices to the subscribers,” Smith said. “This is something that, in a way, goes against those principles.” Michael Hennessy, president and CEO of the Canadian Media Production Association (CMPA), said the commission must strike a “fundamental balance” between ensuring consumers have access to important services and imposing costly services on them. He said broadcasters and other interveners will need to keep both considerations in mind when they argue their cases before the commission during the hearing in April. “I think all of us need to address both sides if the commission is going to take us seriously,” he said. “If you come in and you’re just pushing your particular agenda, it’s not helpful to the CRTC. You’ve got to balance all these things. As Jean-Pierre Blais likes to say: what is the public interest in all of this?” —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Danika Grenier at dgrenier@thewirereport.ca

Only ‘public service’ channels will receive mandatory carriage, experts say

News | 01/22/2013 10:56 pm EST

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