Re: Broadcasting Regulatory Policy 2010-629 -- Criteria for assessing applications for mandatory distribution on the digital basic service

Sep 28, 2010

To: The Canadian Radio-television and Telecommunications Commission (CRTC)

Friends of Canadian Broadcasting intervened with respect to Broadcasting Notice of Consultation 2009-732. The Commission's criteria for mandatory carriage as expressed in Broadcasting Regulatory Policy 2010-629 are largely consistent with our recommendations. In our view, however, the positive aspects of the decision are heavily compromised by the two-year moratorium on the consideration of any 9(1)(h) applications.

As the Commission is aware, preparing applications takes significant time, effort, and money.  This is especially true for 9(1)(h) or Category 1 applications, which must be accompanied by market studies that substantiate the value of, and/or the demand for the proposed service. While the Commission does not release details of applications that it has received until they are gazetted, several companies with pending applications have come forward since the release of this decision to voice concerns about the impact of a two-year moratorium on their respective businesses.

We are concerned about the fact that many of the existing 9(1)(h) applications have been filed by some of the smaller independent companies in the Canadian broadcasting system-and this, at a time when the Commission is considering the sale of Canwest Global to Shaw and CTV to Bell.  If and when approved, these transactions will result in a situation where both private English over-the- air networks, the largest private French-language network, and many of the largest and most profitable specialty channels will all be owned by BDUs, and therefore guaranteed favoured access to carriage.

Indeed, carriage is a critical component to the success of any channel.  The reason that the smaller independent companies often apply for mandatory carriage is-as the Commission heard repeatedly during the BDU hearing-that they do not otherwise have the business "clout" to secure carriage on their own.

A review of the BDU submissions to this consultation confirms that a two-year moratorium on new 9(1)(h) applications would have no negative consequences for the BDUs, nor to the broadcasting companies that they may soon control.  However, it will be highly prejudicial to the smaller, independent members of our broadcasting system.  We urge the Commission to consider this fact.

This inequity between the independent sector and the BDU-owned broadcasting world is underscored by the close proximity of this decision to the announcement that the Commission will hear the Sun TV News application for a Category 2 licence-by a BDU-owned company, with the proposed benefits and privileges, but not the obligations-of a Category 1 application.

Friends notes that there would appear to be no such moratorium on Category 2 applications, nor, for that matter, on new foreign services, all capable of taking up valuable capacity during the critical transition of over-the-air services and specialty channels to high-definition digital.  

Friends urges the Commission to reconsider its position with respect to a two-year moratorium and to provide fair and timely access to due process with regard to 9(1)(h) applications-both those already filed, and for all interested applicants. Existing applicants should also be granted the opportunity to modify their submissions, as the Commission has proposed.

The public interest requires that all applicants receive a fair, equitable and timely opportunity to demonstrate whether or not they meet the new criteria set out in CRTC 2010-629.

Yours sincerely,

Ian Morrison
Friends of Canadian Broadcasting