(Submitted by CRTC Broadcasting Interventions/Comments Form)

Mr. Robert A. Morin
Secretary General
CRTC
Ottawa, ON
K1A 0N2

Dear Mr. Morin:

1. Friends of Canadian Broadcasting supports mandatory carriage of services which the Commission determines to be in the public interest.
2. We strongly support the Commission’s policy that Broadcasting Act Section 9(1)(h) mandated services should be licensed only on an exceptional basis and endorse the idea that this principle should be the Commission’s guide when considering future 9(1)(h) applications.
3. Heretofore, services may have been considered for 9(1)(h) carriage primarily because they appealed to a specific limited-size audience and, without mandatory carriage, would have no prospect to survive financially based on the tastes of a general viewing audience.
4. In this consultation, the Commission has proposed several categories of evidence, including audience demand. We suggest that the Commission should exercise enhanced selectivity when asked to licence new 9(1)(h) services, and that the Commission should also be prepared to review existing 9(1)(h) services periodically to determine whether the criteria which originally led to their licensing still apply.
5. As the Commission acknowledges in the Notice, every additional 9(1)(h) service adds to the cost of every subscriber’s basic monthly invoice. We note that the Commission has asked applicants to provide “evidence of the likely impact of the proposed wholesale rate on the price of the basic package and of its widespread acceptability to Canadians”. We suggest that such evidence would be viable only when based on the retail rate that the subscriber will actually have to pay.
6. Friends recommends that the Commission prohibit broadcasting distribution undertakings from marking up the cost to subscribers of 9(1)(h) services.
7. We also recommend that a 9(1)(h) order should be reviewed every five to seven years for all services.
8. Taking the example of the Weather Network, we consider that it is inappropriate for Pelmorex Communications Inc., with 2008 broadcasting year revenues of $49 million (of which nearly $20 million came from the sale of advertising) and a profit before interest and taxes (PBIT) of $13 million (26%) to hold 9(1)(h) status.
9. We suggest that the Commission should consider limiting 9(1)(h) status to no-profit entities.
10. While we respect the overall utility of Commissioner Michel Morin’s formula for comparing applications, the primary criteria for evaluating 9(1)(h) services should, as proposed by the Commission, be based on the “exceptional” contribution that the proposed channel will make to the “diversity of voices on the basic service” while at the same time ensuring “that the programming is not in any way currently provided on the basic service”.
11. The Morin formula would be improved by including, in addition to the existing criteria, points for the exhibition of Canadian programming in peak viewing periods.

Yours sincerely,

Ian Morrison
Spokesperson

For information: Jim Thompson 613-567-9692