CRTC opens hearings into broadcast industry
GATINEAU, Que. - Canadians could soon be able to watch their favourite television programs when they want and view a wider variety of domestic and foreign specialty stations under a proposal before federal regulators.
Many current restrictions on Canadian TV have outlived their usefulness and viewers will desert the tube for the Internet unless dramatic changes are made, cable heavyweight Rogers Communications said Tuesday at hearings into the future of the medium.
"We think the commission should eliminate the genre protection rule as between Canadian services,'' Rogers vice-chairman Phil Lind told the Canadian Radio-television and Telecommunications Commission hearing.
"It would allow them to compete for customers, like other businesses do.''
The way forward for the television industry, said Lind, is for it to offer the same choices as the Internet but with better quality by allowing anyone who wants to start a Canadian specialty channel to enter the market, regardless of whether a similar service already exists.
However, CEO Ted Rogers, who made a rare appearance at the commission, pointed out this did not mean restrictions should be lifted on foreign cable stations.
"We are not in favour of removing restrictions on foreign services,'' he said. "Some of my cable friends would disagree with me, but we are not in favour of that.''
Rogers Communications owns a wide range of businesses, including Rogers Cable, Rogers Sportsnet and other specialty channels, conventional television including the Citytv stations in five cities and several radio stations.
Lind said one of the few restrictions in the Canadian broadcasting landscape of the future should be a requirement that Canadian signals comprise at least a majority of those carried by cable and satellite distributors.
But under questioning from commission chairman Konrad von Finckenstein, Rogers official Ken Engelhart admitted that customers that order a-la-carte from a menu of programs could wind up with a majority of U.S. stations, although he said most viewers buy packages offered by the distributor.
And he said no channels other than basic service would be guaranteed a spot in the packages offered by the cable distributor.
"It's an opportunity for us to say to our customers: Whatever you want, you can get it in our services,'' said Engelhart.
The company said if its proposals were approved, Canadians would have a broader choice of both foreign and Canadian stations.
For instance, once a robust video-on-demand service is in place, viewers would not be restricted to watching Oprah at the time it is broadcast, but when it is convenient for them to watch it.
The three-weeks of hearings on the future of Canadian broadcasting, which opened Tuesday, have already seen clashes among the key players -- distributors, so-called over-the-air broadcasters like CTV and Global, small specialty channels and program content producers.
In one of the most bitter flashpoints, Rogers officials told the commission it should reject a proposal that cable operators pay to carry over-the-air networks, saying the networks are profitable and would cost cable and satellite recipients $5 to $10 a month while getting nothing new.
"If that happens we'll have an all-out war because our customers will say we'll leave you and this is not like the '50s and '60s -- they can go somewhere else,'' said Lind, suggesting more people will drop cable and turn to the Internet.
But CTV executive vice-president Paul Sparkes, who was in the room listening to the testimony, reacted with anger over Lind's characterization.
"They just want to continue the free ride they've been getting while also having all the benefits of the American system with the protection of the Canadian system,'' he said, noting that the cable operators' position on foreign specialty stations would shelter its own Sportsnet from competition from ESPN.
Von Finckenstein pressed the Rogers officials on the fee-for-carriage issue, suggesting over-the-air broadcasters are facing hard times due to the fragmenting of the advertising market.
And he said mandating fee-for-carriage charges would come with strings, like a requirement for more local programs.
But Lind said Rogers would not be able to explain to customers why they should have to pay $5 to $10 more a month just so they can have an extra hour of local programming on Global and CTV a day or every week.
"People would say, 'Are you mad? I'm not going to pay more for that,''' he said. "They'll absolutely cancel their subscriptions.''
In a glimpse of what TV viewers will be facing in the future, Rogers officials outlined an array of advertising tools made possible by the new technology, including targeting ads for a specific neighbourhood, allowing viewers to register responses to ads through their remote control, or substituting new ads on rebroadcast shows on "on demand'' services.
The three weeks of hearings represent the first major review of Canada's broadcasting system in more than a decade, igniting turf wars and challenges among the players, from the networks to the cable operators, specialty stations, and program producers.
Unlike many CRTC hearings that deal with a specific issue, almost everything is up for grabs.
Some cable operators are asking the national regulator to take the chains off their ability to bring Canadians the foreign specialty networks they say their customers want, such as HBO and USA Network.
Meanwhile, over-the-air broadcasters like CTV and Global are demanding that cable and satellite distributors such as Rogers, Shaw and Bell ExpressVu start paying for the right to carry their channels, which could add anywhere from $2 to $8 to what subscribers would pay.
In establishing the policy review, von Finckenstein said he wanted to "re-balance'' the system and introduce "more market forces ... as long as they work towards the objectives of the Broadcasting Act.''