The Canadian Radio-television and Telecommunications Commission (CRTC) reports that a 'new framework' will give English-language private television broadcasters greater flexibility to offer high-quality programs that are of interest to Canadians."The new approach to licensing on the basis of ownership groups reflects the trend of media convergence," said Konrad von Finckenstein, Q.C., Chairman of the CRTC. "Our framework will enable the large groups to attract viewers to their different television services while encouraging the creation of original Canadian programs. In doing so, we are providing the industry with flexibility to adapt to the new reality of increased consumer choice in a digital world."
Consolidation in the industry has resulted in large groups controlling both conventional television stations and specialty services. The CRTC’s approach will take into account a group’s total revenues when setting obligations related to the objectives of the Broadcasting Act.
In 2011, the CRTC will hold licence-renewal hearings for the largest English-language private ownership groups, CTVglobemedia Inc., Canwest Television Limited Partnership and Rogers Communications Inc.
This approach will permit the CRTC to introduce new requirements to encourage and support the creation of Canadian programs, proposing that the three largest ownership groups spend at least 30 per cent of their gross revenues on Canadian programming. They will also be able to shift resources among their English-language conventional television stations and specialty services to meet this obligation.
As part of its framework, the Commission has set out a market-based solution to allow private local television stations to negotiate with cable and satellite companies. Each television station would have the option of entering into negotiations to establish a fair value for the distribution of their programs.
"The current dispute between conventional broadcasters and distributors threatens the overall integrity of the broadcasting system," said von Finckenstein.
"Broadcasters and distributors have a symbiotic relationship. The time has come for them to put their differences aside and work together to ensure the continuation of conventional television, which Canadians clearly value."
During its proceeding, the CRTC received conflicting legal opinions as to whether it has the authority to implement a negotiation regime. Given that this issue is vital to the future of conventional television, the Commission has initiated a reference to the Federal Court of Appeal seeking clarification on its jurisdiction under the Broadcasting Act. The CRTC has asked the Court to consider its request on an expedited basis.
The Commission also launched a proceeding to ensure an orderly transition to digital television for consumers. Local television stations in major markets, as well as provincial and territorial capital cities, must complete the switchover by August 31, 2011.
The Commission will allow video-on-demand services to insert commercial advertising in programs acquired from Canadian English- and French-language broadcasters. This will provide the broadcasting system, and conventional broadcasters in particular, with an important new source of revenues. However, the CRTC will keep its current policy restricting the sale of advertising in the local availabilities of programs broadcast by foreign pay and specialty services. This time, usually two minutes per hour, will continue to be used primarily for the promotion of Canadian programs.
In addition, the 'Local Programming Improvement Fund' will be maintained in its current form. As a result, cable and satellite companies will continue to contribute 1.5 per cent of their gross broadcasting revenues to support local television programming in markets with a population of less than one million. The CRTC will conduct a comprehensive review of the Fund during the 2011–2012 broadcast year...
