CRTC denies 13 mandatory carriage applications, approves three

Citing the affordability of television services, the CRTC denied 13 applications for mandatory carriage on basic TV, granting just three new must carry licences to nonprofit channels. Among the 13 denials were two high-profile applications for mandatory carriage: Sun News Network and for an all-Canadian film service called Starlight: The Canadian Movie Channel. CRTC Chairman Jean-Pierre Blais said in a statement that the regulator is making sure “that television services remain affordable for Canadians by imposing reasonable rates for services offered on the basic service.” A panel of five CRTC commissioners held a two-week hearing in late April and early May on 22 applications, including six renewals and 16 new applications, for mandatory carriage orders under section 9(1)(h) of the Broadcasting Act. Mandatory carriage on basic TV typically comes with a guaranteed, per-subscriber wholesale carriage fee from broadcast and cable TV providers, ensuring significant revenues for the channels. According to the CRTC's most recent data, Canada had a total of 11.5 million television subscribers at the end of the 2011-2012 broadcast year. Blais warned applicants at the start of the hearing that the CRTC was setting the bar “very high” for mandatory carriage licences on basic service, and that the regulator is concerned about consumer choice and affordability in the TV provider market. Broadcast distributors—including Rogers Communications Inc., BCE Inc., Bragg Communications Inc., Cogeco Cable Inc., Shaw Communications Inc., and Telus Corp.—said throughout the consultation on the issue that mandatory carriage fees resulting from new 9(1)(h) orders would lead to higher monthly bills for television customers and cause them to downsize their subscriptions or cancel service altogether. Starlight, backed by a group of Canadian filmmakers and producers, had applied for mandatory carriage on basic TV, arguing that there is “market failure” in the availability of Canadian film on television. Sun News, owned by telecom and cable provider Quebecor Media Inc., had argued that it needed mandatory carriage on basic cable to get a leg up as a “new entrant” in Canada’s broadcasting market and help deal with competing broadcast distributors that place the channel in the dial’s “stratosphere” or offer Sun News excessively low wholesale carriage fees. The CRTC denied those applications in its decision Thursday, as well as applications for 11 other channels: Accents, All Points Bulletin, Canadian Punjabi Network, Described Video Guide, Dolobox TV, EqualiTV, Fusion, Maximum Television Canada, La télévision des ressources naturelles, Vision TV, and Avis de recherche (whose mandatory carriage licence will expire in two years). “The CRTC considered the need of consumers to have access to affordable television services. Each application was examined in order to ensure reasonable rates that will allow services to fulfill their mandate, without unduly increasing television subscribers’ bills,” the CRTC said in a release. In its decision denying the bulk of the 9(1)(h) applications, the regulator said Starlight did not demonstrate “an extraordinary need for mandatory distribution” of the channel, and that the high level of interest around it may indicate Starlight could operate successfully as a regular specialty channel with negotiated carriage deals. The CRTC also pointed to funds that provide assistance for the making of Canadian films, such as Telefilm Canada and the Harold Greenberg Fund. The Canadian Media Production Association (CMPA) said in a release Thursday that there is not enough support for Canadian film and that, following the CRTC's decision, it will be calling on Heritage Minister Shelly Glover for a review of Canada's film policies. “In a number of recent CRTC submissions the CMPA has repeatedly highlighted that the English-language feature film industry is facing a crisis because broadcasters, in general, no longer support and promote Canadian feature films as they once did,” Michael Hennessy, president and CEO of the CMPA, said in a statement. He said the Starlight service, which had requested a regulated wholesale fee of 45 cents per subscriber per month, "would have been exceptional," and if Starlight failed the regulator's test, "then most channels which cable companies choose to put on basic today would equally fail the test." In its decision on Sun News, the CRTC similarly said the company did not demonstrate an “exceptional contribution” to Broadcasting Act objectives and “did not make significant or exceptional commitments to Canadian programming expenditures that would exceed commitments normally made by Canadian news services.” The three services newly approved for new mandatory carriage on basic television were Francophonie channel Nouveau TV5 (with a wholesale fee of 28 cents per subscriber per month), described video channel AMI TV (28 cents in French and no fee in English), and a channel broadcasting the legislative assemblies of Nunavut and the Northwest Territories (no wholesale fee). The legislative channel received mandatory carriage on basic service only for satellite broadcast distributors serving Nunavut and the Northwest Territories. The regulator also granted a third “must offer” licence to CBC/Radio-Canada arts and culture channel ARTV, which means broadcast distributors must make the channel available to customers who may choose to subscribe to it. The must offer licence does not carry a wholesale fee. The CRTC said it renewed or approved some channels for mandatory carriage on basic TV with lower wholesale carriage fees than requested. Those were AMI TV in French (2 cents lower than its proposed 30 cents), Canal M (2 cents lower than its proposed 4 cents), APTN (increasing its rate from 25 to 31 cents, though 9 cents lower than its requested 40 cents) and Nouveau TV5 (2 cents lower than its requested 30 cents). All of the successful applications, the CRTC said, were “for services operated by not-for-profit organizations.” The Cable Public Affairs Channel (CPAC), which broadcasts parliamentary proceedings, received its request for a mandatory carriage licence renewal with an increase in its wholesale fee from 11 to 12 cents per subscriber per month. Commissioner Candice Molnar disagreed with the panel's decision to grant the Nouveau TV5 service national mandatory distribution on basic with a wholesale fee of 28 cents in francophone markets and 24 cents in anglophone markets. She wrote in a dissenting opinion that “the services do not meet the criteria for mandatory distribution.” —With reporting by Simon Doyle at sdoyle@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

CRTC denies 13 mandatory carriage applications, approves three

Broadcast | August 8, 2013

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CRTC denies 13 mandatory carriage applications, approves three

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