This week a steady stream of television and cable executives will appear in Ottawa before the Standing Committee on Canadian Heritage to discuss the "evolution of the television industry in Canada and its impact on local communities." My weekly technology law column (Toronto Star version, homepage version) notes that MPs from all parties will demand to know what companies like Rogers, CTV, and Canwest are prepared to do to ensure that local television broadcasting does not disappear in many smaller and medium sized communities.
The current "crisis" feels new, yet the issues are nearly as old as Canadian broadcasting itself. The economics of Canadian broadcasting have relied on a range of policy support mechanisms that include: lucrative commercial substitution, which lets broadcasters substitute Canadian commercials during the simulcast of popular U.S. programs; market protection that has limited local competition; declining programming commitments that allows broadcasters to fill airtime with cheaper foreign programming; and corporate convergence approvals that have resulted in only a handful of big Canadian broadcasters.
Broadcasters now argue these measures are insufficient and with the latest round of threats to shut down some local stations, MPs will be anxious to identify solutions to keep broadcasters in business. As they grapple with the issue, the MPs would do well to remember that at least three separate issues are often lumped together into the single umbrella issue of local broadcasting.
The first is local programming, primarily local news. Last year, the Canadian Radio-television and Telecommunications Commission established the Local Programming Improvement Fund (LPIF), a $60 million fund targeted at supporting local programming in smaller markets. While the LPIF would seem to be an ideal mechanism to address programming concerns, broadcasters have been cool to the idea. MPs may want to ask why they continue to ask for new carriage fees, but have not embraced funding that targets the local programming that is said to be in dire straits.
The second issue is local broadcasting, particularly the financial viability of stations in smaller markets. Private broadcasters have announced plans to downsize or drop certain stations, raising questions about how (or whether) those stations should receive support.
The broadcasters have been using the threatened closures to build support for a fee-for-carriage system that would see cable and satellite subscribers pay upwards of $75 per year for over-the-air television signals that are currently free. The CRTC has already agreed to demands for millions to compensate for "time shifting" of those channels, but has twice rejected the fee-for-carriage proposal, noting that broadcast executives have been unwilling to commit the money to local broadcast stations.
Looming on the horizon is the third issue – local access to over-the-air broadcasting (OTA). Canadian broadcasters will switch from analog to digital signals in 2011 and they have left little doubt that some communities will lose their signal as part of the transition. With one in ten Canadians relying on OTA broadcasts, this means that millions of Canadians may lose access to television, with residents in smaller communities particularly hard hit.
Each of local programming, broadcasting, and access presents its own set of challenges. Some may be hoping for a silver bullet solution, yet the reality is that the Canadian policy toolkit that has long supported local television broadcasting is now nearly exhausted. Moreover, there have been no indications that politicians or policy makers are willing to consider radical reform the Canadian broadcasting landscape by relying more heavily on community access channels or creating new demand for commercial advertising on private broadcasters by shifting to a commercial-free CBC.
The committee will hear much about "business-to-business" solutions. However, it appears that the answer will ultimately lie in asking Canadians to pay – directly or indirectly – for the continuation of local broadcasting in the digital era.