In an editorial in the National Post today Hubert Lacroix explained his frustration with the CRTC’s decision to exclude the CBC from carriage fees that stand to benefit private broadcasters.

We hear the CRTC chair state to the media that “there was just too much on the table to deal with in one sitting, so we decided to deal with the private broadcast system before turning to the public one.” Unfortunately, words said in a scrum will not fix our broken business model. The CRTC’s decision makes no commitment. We can only deal with what we know to be true, and that’s that we’ve been shut out. We are left with an advertising market under severe pressure, a 30-year history of stagnant public funding punctuated by periodic major cuts and a cost base that is increasing at 6.7% per year.

Over the last decade, my predecessor at CBC/Radio-Canada implemented permanent cost-reduction initiatives to generate $78-million in ongoing annual savings. Last year, I was forced to make cuts of $171-million, cancel programs and lay off nearly 10% of our workforce. This year, we’ve had to sell $155-million worth of assets to balance our budget — selling the furniture to pay the mortgage.

I think we can be forgiven for being a little skeptical of fine words and a little overheated at the thought of more delays. CBC/Radio-Canada’s business model is not sustainable. It would be irresponsible to suggest otherwise. One thing that our history proves is that words won’t fix our financing model.

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	The CRTC	Posted at 11:14 pm (31 Mar 2010)

Now that the dust is settling on the CRTC’s non-decision-decision yesterday, I few choice analysis pieces are rising up to the surface. Here’s a few quotes.

Denis McGrath has an interesting take on it from a TV writer’s point of view:

One of the worst parts of it is that there’s now another one-year push as people figure out the rules. Hearings will happen next year. Which means that no changes will be concrete til 2012. Which means that by that time the Domestic TV industry will have endured about 5 years of complete violent uncertainty. I don’t know if there’s anybody who can hang on that long.

I guess Canadian TV will eventually drive you insane. There’s no way around it…
Not saying it’s the end of anything. But not saying it’s not. Welcome to the age of uncertainty. Try to look natural. Smoke’em if you got ‘em.

Meanwhile over at Medium Close Up, Howard Bernstein parses the decision with a grizzled eye of a retired news veteran.

I don’t know if the commission is still gunshy from its poor decisions to allow the cable companies to rape and pillage Canadians in the past. I am not sure whether the terrible rulings in the past that allowed Canadian broadcasters to undermine content rules and kill local television make the current CRTC fearful of their own decision making ability. Maybe they are afraid of a government that stomped on their last mobile telephone decision. Whatever the case, the current ruling that the networks can claim money from the cable and satellite companies for what are by license free over the air services will lead to no easy resolution of the ongoing battle.

Of course the happiest people of all with yesterday’s ruling were likely the lawyers. The CRTC decided to ask the Federal Courts to figure out their position, and the cable and satellite guys told the Globe they’d beat them to it..

“This isn’t over,” said Lawson Hunter, a former federal regulator and communications lawyer with Stikeman Elliott LLP.

So while the lawyers were licking their chops at the prospect of fighting over the revenue scraps of the broadcast industry, perhaps the biggest news of the day was coming out the polling firm Ipsos-Reid far from the CRTC lockup.

The average Canadian now spends more time on the Internet than watching television, according to a new survey from Ipsos Reid, a shift in digital habits that reflects the increasing prevalence of computers in our lives…

Canadians now spend more than 18 hours a week online, compared to just under 17 hours watching television.

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	The CRTC, The Media Landscape	Posted at 5:45 pm (23 Mar 2010)

The CRTC reached a decision today on the acrimonious fee-for-carriage fight.

And the CBC is the odd man out.

The decision released this afternoon allows private broadcasters to negotiate with cable and satellite companies for fees for this signals, just like the specialty channels higher up on the dial.

But the CBC has been denied the same right.

The CRTC said the CBC can’t participate in the negotiations the process could results in broadcasters pulling their signals off the air, and that doesn’t fit with the CBC’s mandate.

This latest development will be a bitter pill for CBC executives to swallow. And they seem angry.

“The CRTC’s decision defies logic,” CBC President, Hubert Lacroix, said. “The Commission wants to save Canadian programming. CBC/Radio-Canada invests more in Canadian programming than all of the other broadcasters combined.”

The decision is especially difficult because, despite some reservations, the CBC joined forces with the private broadcasters last September under the Local TV Matters campaign. And while that campaign probably helped sway public opinion and encourage the CRTC into making this decision, the CBC gained nothing.

“This will solve the economic problems of private sector players but will not bring the system back into balance. It leaves the player who delivers more than anyone else in the system without a viable business model.”

Lacroix added that the decision will impact CBC finances and operations.

“One thing is clear: this will force us to cut programs and services, and our ability to fulfill our mandate has been compromised. The independent production sector, the cultural community, and the public will all suffer as a consequence. But we need to study the decision in more detail and present a plan of action to our Board before I can share more,” Lacroix said.

For quotes from people on every side of the issue, check this page from the Winnipeg Free Press.

For more on the today’s CRTC decision, see this page on cbc.ca.

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	The CRTC	Posted at 8:54 pm (22 Mar 2010)

As part of the ongoing deliberations around the fee-for-carriage hearings, the CRTC is asking for comments from Canadians on the affordability of local TV, access to local programming and other issues.

To this end the CRTC has set up a web site where you can submit your views. The comments will form part of the public record on the issue and some of them will be included in a special report for the government.

The issue seems to be of great interest to Canadians, to date the CRTC and other third party site have received nearly 200,000 comments. The majority of these came via the antagonistic campaigns Stop the TV Tax and Local TV Matters.

As the web site says “we are studying whether local television stations should be able to charge cable and satellite companies for distributing their programs.”

They even put together a YouTube video

The site will be open for comments until December 20th.

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	The CRTC	Posted at 7:16 pm (04 Dec 2009)

CBC executives appeared before the CRTC hearings in Gatineau Quebec this morning.

As yesterday, the fee-for-carriage issue dominated the hearings. The CBC asked for the right to negotiate a price with cable and satellite carriers for its conventional television signals.

“The conventional television financial model in Canada is collapsing,” Hubert Lacroix said in a press release this morning. “The CRTC needs to recognize what conventional broadcasters bring to the services that cable and satellite companies offer their customers,” the CBC president added.

During the hearing Executive Vice President of English Services Richard Stursberg said “those services that are drawing the smallest audiences are the one’s making the most money, there’s something odd about that.” He said the conventional broadcasters are the heavy lifters in the industry. They attract the largest audiences, yet broadcasters are not paid for those signals.

Unlike previous hearings, CRTC chair Konrad von Finckenstein was much more conciliatory during the CBC presentation, which he said he was well organized. He said “We’re all striving for a solution in which Canadians don’t have a higher bill, or if they have a higher bill they get a better product.”

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	The CRTC, The Media Landscape	Posted at 11:02 am (17 Nov 2009)

The fee-for-carriage battle that has pitted conventional broadcasters and their Local TV Matters campaign against cable carriers and their Stop the TV Tax campaign has finally ended up in the hands of the television regulator, who is hearing arguments on the issue this week.

At the packed hearings CRTC chair Konrad von Finckenstein often seemed exasperated with the approach from both sides. He pressed officials repeatedly on why the carriers and broadcasters couldn’t solve this issue themselves. “Why is it so difficult for you to sit down and negotiate?” he asked a Rogers official.

Von Finckenstein said he was very frustrated by the messy, public battle between the conventional broadcasters and the cable and satellite carriers, the likes of he had never seen before. “I have trouble realizing why we are in this mess.” He said broadcasters and carriers are in a “symbiotic relationship. There should be a symbiotic solution.”

Nevertheless Von Finckenstein realized that the fee-for-carriage argument is contentious and long-running. He noted it was first discussed at the CRTC in 1971. Still Von Finkenstein is looking for a resolution of the issue, saying the debate is not “about enshrining old business models…” but “establishing a framework for group approach.”

Von Finckenstein said he didn’t want the CRTC to impose a solution, he said he wanted the two sides to come together and figure out a way to split the pie. “I don’t understand why you don’t realize it’s in your long-term interest to come to an agreement.”

“I think [the carriers] and the broadcasters are destroying each other and chasing viewers off the medium.”

CTV President, Ivan Fecan said the current problems affecting broadcasters are long-term and not caused by the recession. Adding that without a new system some conventional television broadcasters would not survive. Fecan proposed that CTV would black out popular programming if they can’t come to terms with the cable and satellite carriers.

After lunch, Canada’s largest cable company, Rogers, presented to the commission and took aim at the CTV proposal. Nadir Mohamed, CEO of Rogers, “Canada’s conventional television broadcasters are not in a state of crisis,” he said conventional broadcasters have been overspending on American programming and said broadcasters get about a billion dollars a year in subsidies, “they do not need a bailout.” Other members of the Rogers team said the CTV proposal was “simply fee-for-carriage under another name.”

Various reporters are covering the hearing on Twitter, you can follow along here, the hearings are also live on CPAC, you can watch online here.

The hearings in Gatineau, Quebec are expected to last 10 days. Transcripts will be posted online daily.

Other coverage:

CBC: Carriage fees dominate CRTC hearing
The Globe: CTV proposes TV shakeup and CRTC blasts both sides in TV dispute
The Star: Local programming dying, CTV tells CRTC hearing

And if you’re having trouble making sense of the whole issue, here’s a link to a YouTube video that explains it all.

Where do you stand on the issue? Do you agree with the broadcasters, the carriers, or neither?

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	The CRTC, The Media Landscape	Posted at 2:34 pm (16 Nov 2009)

In a ruling yesterday the CRTC reversed its opposition to fee for carriage for conventional broadcasters.

Conventional broadcasters have been lobbying the CRTC for a charge from the cable companies for carrying their channels, known as carriage fees, for a few years.

“We’re pleased that the Commission has committed itself to rethinking the model for conventional television broadcasters,” Hubert Lacroix, the president of the CBC, said.

Yesterday’s ruling may give the CBC a bit more money to work with in next year’s budget, but it depends how the fees are negotiated. The CRTC ruling did not set the fees outright, instead it said that broadcasters and cable companies should negotiate the size of the fee.

Yesterday’s ruling also increased the funding for local programming. The ruling increased the amount handed over to a local broadcasting fund, the Local Programming Improvement Fund, from 1 per cent of gross broadcasting revenues to 1.5 per cent. That will make the fund worth about $100 million a year.

“The Commission’s commitment to supporting local programming is very important at this time given the state of the economy, and is a critical first step to resolving the broader economic issues facing conventional broadcasters in Canada,” Lacroix said in a press release.

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	The CRTC, The Media Landscape	Posted at 11:39 am (07 Jul 2009)

All weekend CTV’s news channel and their ‘A’ channel affiliates put on their cheerleading outfits and grabbed the pompoms to rally around their self-serving ‘Save Local TV’ campaign.

The campaign is an orchestrated effort by CTV and Global to sway public opinion in favour of a CRTC amendment that would force cable companies to pay for signals from conventional broadcasters such as CTV, Global and the CBC.

The cable providers have not been amused. On Friday, Rogers, Telus, Cogeco and others have filed a complaint with the CRTC that CTV has violated the Broadcasting Act by airing one-sided and unbalanced coverage of its own advocacy campaign. Phil Lind, the Vice Chairman of Rogers called it “one-sided reporting masquerading as ‘real news’.”

The whole thing makes a mockery of CTV’s journalistic independence, Lind called a  “blatant violation of respected journalistic principles.”

TV columnist Bill Brioux wrote a list of 25 worthier causes than the Save Local TV campaign, number 23 is hiring more middle managers at the CBC, and number 24 is bringing back Steven and Chris.

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	The CRTC, The Media Landscape	Posted at 2:22 pm (25 May 2009)

The CRTC published the transcripts of their license renewal hearings on their website recently. Don’t get too excited. There’s not much to read in there, almost every page is blacked out.

The hearings were held in camera to grant license renewals to Canada’s private broadcasters. Blogger Jim Henshaw dug through the 251-page document and found this little nugget of irony from Commisioner Poirier:

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	The CRTC	Posted at 12:18 pm (20 May 2009)

In response to Heritage Minister James Moore comments on advertising on CBC Radio, Michel Tremblay, senior VP of corporate strategy said today that advertising on CBC Radio “is not currently being considered.”

But others say that Moore’s comments amount to an invitation for CBC management to look at advertising on CBC Radio as a way to make up the looming budget shortfall.

Charlie Angus, the NDP heritage critic, who raised the issue with on Monday told the Globe that he was surprised by Moore’s comments. “He revealed his government’s inclination to support the introduction of commercials on CBC Radio.”

A CBC press release said Moore’s comments come on the heels of a series of meetings between the CBC and the Feds “to obtain some flexible financial measures” that will help the corp “to alleviate the burden of the recession.”

The CBC has long pressed for more flexible mechanisms to raise revenue, including last year’s failed bid to introduce subsriber fees. A submission to the CRTC in 2007 said “In the Corporation’s view, no service should be subject to regulatory constraints which would preclude it from generating sufficient revenues from the service it provides.”

Advertising on CBC Radio would require CRTC approval, and there’s some speculation that Moore’s comments may have been intended to encourage the CBC to submit a request.

Both the Globe and the Star have more on the subject.

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	CBC Radio 1, CBC Radio 2, Parliament, The CRTC	Posted at 12:05 am (11 Feb 2009)

Heritage Minister James Moore hinted yesterday that advertising on CBC Radio “is an option.” The Minister made the comments during an exchange with NDP heritage critic Charlie Angus, but then seemed to back away from them. Below is a transcript of the exchange:

Charlie Angus: Would you consider opening CBC Radio One and Radio Two up for commercial advertising?

James Moore: Yeah I mean, CBC has a lot of pressure… Look we’re working with Hubert Lacroix and people at CBC in order to get a full sense of the scale of the problems that they have. Commercial advertising is an option  that has been talked about for some time. I would frankly consider anything so long as the end result is to have a strong national public broadcaster that serves Canadians as best as possible.

Charlie Angus: So you would consider opening advertising onto Radio One and Radio Two? That has been discussed?

James Moore: It has not been discussed with CBC – Radio Canada. It’s not something that I’m looking at doing. But we are very conscious of the needs of the CBC – the pressures that they’re facing. I would work with them on any option that they think would work to best serve their mandate in serving Canadians.

The Minister made the comments during a heritage committee hearing that’s online here, scroll along to the 1:12:11 mark to watch it.

Advertising revenue currently accounts for about 20 per cent of total CBC funding. Although some advertising already exists on CBC Radio, such as podcast sponsorships and ads on radio web sites, CBC Radio earns very little money from these deals. CBC Radio’s total budget for 2009 is around $140 million, of which less than $1 million is from self-generated revenue.

Ian Morrison, spokesperson for the watchdog group Friends of Canadian Broadcasting, told the Citizen Radio One and Two ads could generate up to $95 million a year.

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	CBC Radio 1, CBC Radio 2, Parliament, The CRTC	Posted at 12:44 pm (10 Feb 2009)

UPDATE: CBC responds. See below.

Contrary to most leading opinion in the space, traditional media is not, in fact, being threatened by technologies like Internet television and iPods. Further, it would be a waste of time to create Internet-only content if the goal is to generate advertising revenue.

That’s the CBC’s official position, as articulated in a submission last week to the CRTC titled Reject Old Assumptions About New Media.

The document is a short 13-page PDF document. Here is my summary of its main points.

(CBC management: Like all carbon-based life forms, I make mistakes. I’ve made several here before. If I’ve misinterpreted something, please join the discussion in the comments. And hey, just for fun, shall we assume silence means I’ve got it right? <grin>)

1. Traditional TV and radio usage is not being displaced by the Internet.
2. Amateur video will never be a substitute for traditional media, particularly entertainment programming.
3. It would be a waste time for traditional media companies to create Internet-only content if the goal is to generate advertising revenue.
4. Most Canadians use the Internet primarily as a communications and research tool (Ed: Implying that most Canadians do not use the Internet for entertainment.)
5. The trend is towards personalizing and controlling media, not developing new ways to consume it.

The points argued by the CBC in its submission appear diametrically opposed to the opinions of most thought-leaders who work in new media and broadcasting. The Corporation, downplaying the amount of opinion to the contrary, admits it stands largely alone in its assessment of the current landscape:

“There appears to be an assumption in some [Ed: Emphasis added] industry literature that broadcasting content found on new media is reducing the consumption of traditional radio and television…. This broad assumption is false, and empirical data refute this hypothesis.”

My opinion: One can’t dispute the hard numbers — they’re sourced from reputable organizations like BBM Neilson Media Research. (Although I’m afraid I just can not accept the stat quoted that fewer than 1% of Canadians watch broadcast television over the Internet.)

More than that, I’m concerned that the submission illustrates only the current reality — there’s no articulation of any vision for the future here.

• We have producers who are winning prestigious international awards as they develop new forms of entertainment media. Did we ask them where they think we should be going? I’d rather put my money on the “gut feel” of those folks than statistical forecasts generated from surveys and focus groups conducted months ago — remember “months” is an eternity in today’s new media world.
• We have an industry-leading media research team in Toronto. Were they tasked to chart out likely scenarious using widely available results from other public broadcasters around the world? Did we meet with the BBC or ABC or NPR to get a sense where we’ll be in ten years? If so, what do they think?

The conclusions in this submission seem way off base to me, and it lack of vision scares me.

Then again, I also have a mortgage to pay. So I’ll shut up now and turn it over to you.

What do you think?
Note: If you’re a CBC insider, consider posting your thoughts from your home computer. I’m just sayin’. Besides, shouldn’t you be working right now and not reading the semi-coherent ramblings of a freelance radio producer?

CBC’s Response

Hey Tod,

I am worried that some of your contributors may be taking your synopsis of our submission, which highlights only a couple of its points, as the sum total of our position.

To be clear, CBC/Radio-Canada believes that the new media world is a large and important part of its future. It is a central pillar of the strategic themes identified in the Challenge Us! process. Providing space for Canadian expression on the maximum number of platforms that Canadians want to use to consume media is, we believe and multiple Parliamentary committees have confirmed, now part of our mandate. As you know, we are expending a lot of energy and creativity on developing new ways of providing that space either using current resources or by finding new ways of generating funds.

Last week’s submission was not our last word on the subject. The Commission will initiate a broad review in the fall and we intend, as usual, to submit a fully developed, forward-looking position that describes our role and how it fits into the larger system.

Last week’s filing was a preliminary one, in response to the CRTC’s initial question of whether it was framing the issues properly. We did not want the public debate to move forward and public policy decisions to be contemplated based on what we perceived to be two faulty assumptions in the Commission’s framing of the issues. And those are:

1. That the consumption of broadcasting content found on new media is replacing the consumption of traditional broadcast media, particularly television; and

2. That new media represents a major business opportunity for Canadian broadcasters.

Today and, to the extent that we can foresee, into the future, the vast majority of high quality broadcast content found on any platform is going to be produced by traditional broadcasters. Public policy decisions based on the assumption that that supply of quality Canadian content will be financed by a one-for-one shift of revenue from traditional to new media would lead to a severe weakening of the country’s main creators of Canadian broadcasting content.

That is not the CRTC’s intention and we want to ensure that the debate from the outset reflects not only the future potential but the current reality of the new media universe.

Thanks,

Steven Guiton
Regulatory Affairs

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	Technology, The CRTC	Posted at 2:31 pm (17 Jul 2008)

The CRTC today reported that profits for Canada’s cable providers (like Shaw, Rogers, etc.) continue to earn very strong margins — and earned a BILLION dollars more last year than it did in 2006.

Total revenues for all cable companies combined jumped by more than 16% over the previous year (2006). That added an additional BILLION dollars into their hands as the total rose from $6.1 billion to $7.1 billion. The number of basic-cable subscribers increased by a little — about 2.3% increase in customers.

But as for their profit margins (a much more illustrative metric) Canada’s cable companies continue to bank a lot of cash. Their profit margins last year were at 21.7%  in 2006. With those kind of returns, I should drop my conservative (12%) RRSP investments!

In 2007, cable companies employed 17,900 people and paid a total of $1.07 billion in salaries. In comparison, in 2006 these companies employed 15,271 people and paid out $933.1 million in salaries.

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	The CRTC, The Media Landscape	Posted at 3:08 pm (18 Jun 2008)

The CRTC has just issued its report on the Canadian Television Fund’s mandate and governance structure.

In its report, the CRTC recommends that:

• The CTF’s funding be split into private- and public-sector streams. The private-sector stream would support the production of commercially successful programming and be accessed by private commercial broadcasters. The public-sector stream would be set aside for the Canadian Broadcasting Corporation, educational broadcasters and other not-for-profit broadcasters.
• Two separate Boards of Directors be established, with one having oversight of the private-sector funding stream and the other being responsible for the public-sector funding stream. However, both streams should share the day-to-day administrative services of the CTF to reduce operating costs.
• Increased emphasis be placed on audience success as a criterion for access to the new private-sector funding stream.
• The CTF maintain its current practice of funding productions that score 10 out of 10 points on the scale developed by the Canadian Audio-Visual Certification Office (the CAVCO scale).
• The proposals by two companies that distribute broadcasting services to opt out of their contributions to the CTF, as required by the Broadcasting Distribution Regulations, be rejected.
• The CTF establish a new funding stream to support the production of Canadian programs for broadcast on new media platforms.

More detail for CBC employees are on iO!

In February 2008, the Minister of Canadian Heritage announced that the government had asked the CRTC to prepare a report and make recommendations on the Canadian Television Fund.

This request followed a public hearing on the CTF held by the Commission from February 4 to 8, 2008, at which interested parties expressed their views. The Commission had previously created a Task Force to provide a detailed analysis of the issues concerning the funding of Canadian programming and the CTF’s governance.

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	The CRTC	Posted at 1:49 pm (05 Jun 2008)

Star Choice has responded to the CBC’s complaint that it took the CBC Saskatchewan channel out of its compulsory package for subscribers.

The company, owned by Shaw Communications, claims that CBC News is still on the air — broadcast by the SCN, the Saskatchewan Storyteller channel. SCN itself is not a CBC property.

In a news release headlined “CBC Misleading Public About Star Choice Carriage,” Shaw president Jim Shaw said that if CBC wants its entire channel of CBC Saskatchewan broadcast, it should get its own transponders.

Shaw doesn’t stop there. He blames the move to drop CBC Saskatchewan on the CRTC, saying since the regulator insisted they carry Super Channel, which takes up 10 channels of their bandwidth through 4 standard and 2 HD channels, they had no choice but to bump the local-programming.

The yanking of Radio-Canada’s French language service doesn’t even merit a sentence in the Shaw/Star choice release.

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	Saskatchewan, The CRTC, The Media Landscape	Posted at 9:16 am (20 May 2008)