TORONTO - Canada's television broadcast regulator says it's "predisposed" to issue one-year licence renewals for conventional television broadcasters, instead of the usual seven-year renewals, so it can take more time to grapple with major financial issues gripping the industry.

The Canadian Radio-television and Telecommunications Commission said Friday it considers the shorter-term licences as a necessary stop-gap move given the uncertainty and financial upheaval facing Canada's conventional TV broadcasters.

The CRTC figures this week showing profits at the country's largest private-sector TV broadcasters fell by 93 per cent last year to their lowest level in 13 years.

The major over-the-air broadcasters have warned for years that they need new sources of revenues to deal with a new reality in which an increasing share of advertising money is going to specialty cable television channels and the Internet.

The drop-off in advertising revenue for conventional broadcasts will likely accelerate due to a general slowdown in the Canadian economy.

At the same time, they face the expense of switching their systems to digital broadcasting by the end of August 2011, following the lead of American broadcasters who are to make the switch by this summer.

The CRTC said these factors, as well as consultations and public hearings on the administration of a fund for improving local programming, will require more time than is available before the current television licences have to be renewed.

"Furthermore, the commission is of the view that, given the increased consolidation of conventional and discretionary television holdings by the major broadcasters, assessing licence renewal applications by ownership group rather than on a sectoral basis would be more effective in furthering the objectives of the Broadcasting Act. Such group-based renewal applications will be heard at a public hearing to be scheduled for April 2010," the commission said Friday.

The major private-sector conventional TV broadcasting groups include Canwest Global Communications Inc. (TSX:CGS), Rogers Communications Inc. (TSX:RCI.B), Quebecor Inc. (TSX:QBR.B) and CTVglobemedia.

The CRTC said Friday that a public hearing scheduled for the spring of this year will be of a more limited scope than usual and focus on four key issues:

  • the appropriate contributions to Canadian programming in the current economic conditions;
  • terms of administering the Local Programming Improvement Fund;
  • whether to impose a requirement that spending on Canadian programming and non-Canadian spending is equal or, as the CRTC says, on a 1-1 ratio.
  • terms for the transition to digital.

The CRTC said it intends to keep conditions of current TV licences the same as they are now over the one-year term, but is giving licensees to Feb. 23 to indicate if they're seeking amendments in the spring licence hearings.

The financial outlook for the conventional broadcast industry has been dimming in the last year or so, with job cuts and rising losses that threaten the future of some stations.

Earlier this month, Canwest Global announced it is exploring the sale of five conventional television stations across Canada, which the company called non-core businesses.

The stations on the block are part of Canwest's E! network and include CJNT-TV in Montreal, CHCH-TV in Hamilton, CHCA-TV in Red Deer, Alta. CHBC-TV in Kelowna and CHEK-TV in Victoria.

Canwest also recently cut 560 jobs, or about five per cent of its workforce, including 210 at Global Television and its other TV operations.

CTV, a unit of CTVglobemedia (TSX:BCE), also recently cut jobs, as have other broadcasters.

Last fall, the CRTC rejected a request by conventional broadcasters to charge cable and satellite distributors for carrying their channels.

The fee-for-carriage charge would have added anywhere from $2 to $10 to a subscriber's monthly bill, if passed through, and brought in an estimated $300 million in revenues to the broadcasters.

The federal regulator said conventional networks such as CTV, Global and CBC failed to prove they had enough economic need for the higher revenues.