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Consumers ask Minister to fix local TV and expensive basic cable-satellite service

(OTTAWA)—The Public Interest Advocacy Centre (PIAC) today called for a review of the Canadian Radio-television and Telecommunications Commission decision which refused over-the-air (OTA) carriage fees.

In a letter to the Minister of Canadian Heritage James Moore, PIAC proposed that cable and satellite service first offer a much reduced package of basic service. The new basic service would be costed by Commission and be subject to a price cap like basic telephone service. Included in basic service, local OTA broadcasters would receive carriage fees in the same way as other channels frequently owned by cable and satellite companies.

“It’s ridiculous that Canadians have been paying higher prices for TV at a time when it is supposed to be competitive. As well, our plan will help the 4 million Canadians who only receive OTA television when analogue OTA is eliminated in 2011,” Michael Janigan PIAC general counsel says.

Janigan also notes both the CBC and the local broadcasters proposed a much reduced basic service package in the CRTC proceeding that decided the issue.

 


April 8, 2009

VIA Fax and Mail

Honourable James Moore
819-953-8055 Minister of Canadian Heritage
Les Terrasses de la Chaudiere
1497-25 Eddy Street
Gatineau, Quebec
K1A 1K5

Dear Minister Moore:

Re: Future of Local Broadcasting

The Public Interest Advocacy Centre (PIAC) is a nonprofit NGO based in Ottawa that has, since its inception in 1976, been concerned with the delivery of important public services to ordinary and vulnerable consumers. In particular, PIAC has been engaged in broadcasting issues before and outside the CRTC, with a view to enhancing the value received by Canadians for broadcasting services and to ensure equitable and affordable access to such services enabled by distribution undertakings.

The issue of support for Canadian broadcasting is, of course, currently vexing various broadcasting stakeholders and the government. In PIAC’s view, the current circumstances call into question the wisdom of the determinations made by the CRTC in the course of its October 30, 2009 decision on the regulatory framework for Broadcast Distribution Undertakings (PN 2008-100). In that decision, the CRTC refused PIAC’s request on behalf of consumer groups, and similar requests made by the CBC, and the Canwest Broadcasting CTV Globemedianet. Al. to redefine basic BDU service as a minimum package of channels, local + 3+1, and the must carry stations.

PIAC also requested that basic service then be costed and capped in the same way that basic telephony is capped. This, in our view, would stop the current escalation of basic service fees now running well ahead of inflation, and the cramming of more and more channels (frequently owned by the BDUs themselves) into the basic service package. It would also possibly ease the transition to full digital broadcasting when over the air (OTA) analogue distribution signals go off the air in 2011, and help the 4 million Canadians that currently receive TV signals via OTA get service.(although more may be necessary to deal with this problem).

The decline in local broadcasting advertising revenue has brought this problem to a head and there are real financial issues to confront. But it may well be possible to craft a solution that will not just look to BDU subscribers to fund local broadcasting assistance. Consumers are tired of being the insulation for economic shocks in this industry, and would thoroughly resent the imposition of more charges in these difficult economic times. This is particularly the case where the BDUs are thriving largely because cable/satellite is a duopoly with little meaningful competition.

Our suggestion is that, in the context and as part of a capped regulated basic service product, broadcasters with an OTA signal might be able to recoup a fee for carriage from the distributor. The basic service package would be costed in Commission hearings and priced on a fair and reasonable basis. The price capped basic service offering would be subject to a yearly adjusted price cap in the same way as basic telephone service. The packages that are offered outside of basic service would be left to the market. It might be anticipated that the revenue reduction associated with removal of much current programming from basic service may create incentives for the cable and satellite companies to more aggressively price these packages to continue customer take-up.

In the result, local broadcasters would get the same place in the queue as, for example, the Food Channel in terms of getting paid for getting their channel carried. The government would be responsibly carrying out the objectives of saving local broadcasting and, at the same time, lowering television bills for basic service for Canadians. In addition, this solution would promote a harmonious transition to digital only broadcasting in 2011.

We are strongly of the belief that a much reduced basic service package that also accommodates the needs of current local OTA broadcasters is the best policy fix. We would be pleased to meet with you and/or your staff advisers to discuss the same.

Yours truly,
Michael Janigan
Executive Director/General Counsel

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