CanWest Global Communications Corp., today called on the Government of Canada to proceed urgently to modernize the public policy and regulatory framework for broadcasting in Canada. CanWest’s detailed recommendations were released today in the Company’s submission to the House of Commons Standing Committee on Canadian Heritage, in connection with the current review by the Standing Committee of the state of Canadian broadcasting.
CanWest is scheduled to appear before the Committee at a formal hearing in Winnipeg on March 1. The full text of the CanWest submission, originally filed with the Committee on September 10, 2001, can be viewed from today on the CanWest web site. The text of the remarks to the Committee by Leonard Asper, President and Chief Executive Officer of CanWest,
will be posted on the CanWest web site on March 1.
The CanWest submission to the Standing Committee argues that a new policy framework is required urgently to ensure that the Canadian television industry can compete effectively in a rapidly changing domestic and international marketplace while continuing to deliver on its mandate under the Broadcasting Act to provide quality Canadian programming. Conventional television broadcasters remain the primary Canadian providers of local and national news and information programming and are the only significant providers of first-run Canadian drama, entertainment, and documentaries. CanWest projects total spending by Global Television of $1 billion on Canadian content during its current licence period.
Parliament last reviewed the Broadcasting Act more than a decade ago. In the intervening period Canadian consumers have gained access to over 50 new Canadian and foreign channels via Canadian cable and satellite service providers. Canadians have more viewing choices today than consumers in any other country. The deployment of new technologies including the rapid expansion of digital television, and eventually the video streaming of programs on high speed Internet services, will create even more viewing choices for Canadian consumers. Together these new developments have fragmented the television market and undermined the integrity of the existing
broadcast regulatory framework that relies primarily on extracting Canadian content commitments from conventional broadcasters to meet the government’s public policy goals for the promotion of Canadian culture in broadcasting.
Market fragmentation also challenges the traditional business models that provide the economic basis for investment by the television industry in Canadian programming. In particular, the Canadian television advertising market, that provides the only significant source of revenues for conventional television, is now shared among a rapidly growing number of analog and now digital specialty channels. Subscription revenues, currently paid by cable and satellite companies only to specialty channels and unavailable to conventional television broadcasters, now exceed advertising revenues as the largest single
source of revenue to the industry. Moreover, a significant component of those Canadian subscription revenues, currently more than $250 million annually, is paid out to US specialty channels that contribute nothing to Canadian programming. At the same time, Canadian specialty channels capture a growing share of advertising revenues. The net result is that conventional television is left at a significant disadvantage in the market while continuing to shoulder by far the largest contribution to the production and carriage of quality original Canadian content.
The CanWest submission to the Standing Committee contains detailed analysis and numerous specific recommendations designed to modernize the Canadian broadcasting policy and regulatory framework. The recommendations are designed to encourage the production of internationally competitive and viable Canadian programming and to facilitate continued financial support by conventional broadcasters for the development and broadcasting of Canadian programming. A summary of the ten main recommendations follows.
Create a level playing field and enhance prospects for the successful international distribution of Canadian films and programs by making broadcaster-affiliated production companies eligible to participate in the government financial support programs.
Allow Canadian conventional broadcasters to share directly in subscription revenues collected by cable and satellite companies.
Support development of Canadian programs with an appropriate portion of the $250 million in subscription revenues paid to US cable specialty channels.
Ban time-shifts by cable and satellite companies that bring extra broadcasts of identical programs into local markets and undermine the value of programming rights paid for by broadcasters and further fragment advertising markets.
Allow more flexibility in rules for advertising including leveling the playing field with the US on prescription drug advertising.
Update the Canadian copyright regime to provide broadcasters with greater control over their own signals and stronger legal recourse to defend against copyright abuse.
Ensure that the costly conversion to digital signals for conventional television is accomplished within a policy framework that protects the access of broadcasters to consumers, and broadcaster access to the revenues required to produce and carry Canadian content. Retain the simultaneous substitution rules for digital and analog signals.
Introduce mandatory technical standards for set top boxes and other electronic devices deployed to consumers by cable and satellite
distributors that provide consumer access to their distribution systems. Such standards should ensure that distribution intermediaries treat broadcaster signal fairly, do not provide preferential treatment to distributor-owned or affiliated channels, and do not use proprietary technology to divert audiences and revenues from television broadcasters.
Streamline the regulatory process, by relating CRTC licence fees to the actual cost of regulation, and by phasing out the current benefits policy when a service is sold. Both of those policies and practices represent a form of taxation. The CRTC should also simplify the process for renewal of broadcast licences by making renewals automatic except in circumstances of significant abuse of licence conditions.
Increase the permitted limit for direct foreign ownership in voting
equity of a broadcast licensee to 49% based on reciprocity and initiate early negotiations with the U.S. and other countries to facilitate Canadian strategic investment in foreign broadcasting markets.
In sum, the goal of the Standing Committee should be to define a new policy and regulatory framework for broadcasting that takes account of the rapid changes in Canadian broadcasting and in the media industry generally.
The objective should be to create a new framework that fosters a strong Canadian presence in the highly competitive, highly fragmented media industry of the future.