Canadian Networks Consider End to Broadcast TV

The CBC proposal, introduced first before the CRTC as the two-week session of hearings began yesterday, proposes a more rigorous transition to DTV broadcasting than Canada has considered thus far. It's proposing that the government adopt an August 20, 2011 shutoff date for conventional analog transmission. In the intervening time, all broadcasters would receive higher fees from cable providers such as Rogers Communications, Canada's largest CATV concern.

"We're proposing an approach that would allow conventional broadcasters to operate on the same financial footing as specialty services," CBC News quotes today from a statement from CBC President Robert Rubinovitch to the CRTC. Broadcasters may need the four-year window instead of a two-year one, to enable them to earn enough from raised cable fees to fund the construction of as many as 32 new DTV transmitters nationwide, joining the eight the CBC has already constructed.

The CBC is also proposing that the CRTC allow it to start charging a subscription fee, which could possibly resemble the license fee British TV viewers currently pay.

Representatives of CanWest Global, CTV, and the French-language network TQS which operates mostly in Quebec, have voiced support for the idea of charging cable services more for carriage. However, they don't think the raised cable fees alone would be enough, and are reserving their comment about supplemental subscription fees. Instead, their counter-proposal would increase the amount of commercial time allotted per hour beyond the current limit of 12 minutes.

Commercial broadcasters argued that some of those 12 minutes have to be used for self-promotion; and some of that self-promotion has to be delegated to ads for shows acquired from US producers. "So we actually don't get 12 minutes per hour in any hour where we advertise US programming," the CBC quotes CanWest Global President Leonard Asper as telling the CRTC today. In the commercial proposal, promotion for US shows wouldn't count against the 12 minutes.

(In the US, the FCC officially regulates commercial networks to 12 minutes of promotional time per hour as well, though they notoriously have overstepped those bounds without so much as a peep from regulators. Prior to its merger with The WB network to form The CW, UPN was criticized for showing between 18 and 20 minutes of commercials per hour.)

The CBC went on record as opposing the commercial counter-proposal, on the grounds that basing any kind of business mainly upon an advertising-driven model is simply asking for trouble. In a written statement released this morning, the CBC said, "In television, the advertising-based business model on which conventional broadcasting has relied is at risk due to the number of channels vying for the same revenue; commercial skipping; and the migration of marketing spending to the Internet and other platforms."

"The weakening advertising market will make it impossible for conventional broadcasters to advance the commission's goals for original Canadian programming," stated the CBC's Rubinovitch in testimony yesterday. "The future does not look promising if conventional broadcasters continue to rely on ad revenues as a major source of funding."

For its part, the Rogers Cable division of Rogers Communications is opposed to both proposals. As a major Canadian employer, and with its CEO, Ted Rogers, as admired/envied in Canada as Ted Turner has been in the US, and also with its technology partner being none other than Microsoft, Rogers Communications has tremendous influence, including on government policy.

In a statement, Rogers said a 50¢ per month per subscriber increase in cable coverage fees paid to broadcasters could end up costing the subscribers as much as $5.00 more per month, for reasons it did not explain. It did comment, however, "The [terrestrial] television industry is not in the dire straits some broadcasters make it out to be," and suggested an accelerated DTV transition date to sometime in 2010.

The Third Option -- simply eliminating broadcast TV altogether -- is not without its merits, as broadcasters see it. In its own statement, station owner CHUM Ltd. told the CRTC, "Investing hundreds of millions of dollars for a very minimal percentage of the population is not a wise investment for a system that is already suffering from finite resources."

Recent government reports estimate about two-thirds of the Canadian population already receives cable TV; while the CBC estimates that 9 out of 10 TV viewers watch a program from a broadcaster at some time of the day, even if they do so through cable. Simply canceling transmitter upgrades could end up hurting fewer viewers than some might think.

But which ones? Since DTV transmitter upgrades were primarily planned for leading southern urban areas of the country anyway, conceivably, viewers in the far north could be just as likely to become orphaned from all TV once the upgrades are complete, as they would be if they were canceled altogether.

As CanWest MediaWorks CEO Peter Viner told the CRTC, "We're at a very ugly intersection in terms of the television industry...I'm afraid it's under so much stress that it's going to crash."