GATINEAU, Que. - The federal broadcast regulator has turned down a controversial request from Canada's conventional television networks to charge viewers an additional fee to watch their programs on cable or through satellite.
But the Canadian Radio-television and Telecommunications Commission did give broadcasters a small win, saying the restriction on how many minutes of advertising they could pack into one hour of programming would be phased out and eventually eliminated.
Canada's major networks, such as CTV, CBC, Global and the French TVA, had argued last fall they needed the new fees because the dramatic fragmentation of media and advertising dollars had cut into their advertising base, and to pay the cost of converting to high definition digital.
In a ruling handed down Thursday, the CRTC said the networks' argument of necessity "has not been demonstrated," adding that, "the current financial situation of conventional television broadcasters does not justify such a measure."
Canadian Association of Broadcasters president Glenn O'Farrell said he was disappointed by the decision.
"We are disappointed that there is not a commission that understands where things are at or where things are going for the sector, which we believe is not in a healthy position," he said.
O'Farrell pointed out that the CRTC's own financial data shows that while broadcasters' revenues had increased an average of 2.75 per cent between 2002 and 2006, expenditures had jumped an average of 5.4 per cent.
Our Public Airwaves, an Ottawa-based advocacy group for public broadcasting, said the commission had inexplicably failed to distinguish the needs of private broadcasters and the CBC.
"It's outrageous that the commission lumps the cash-starved CBC in with profitable private broadcasters," said Arthur Lewis of the group. He said a $2 per subscriber charge would have provided CBC and it's French service Radio-Canada an additional $240 million to spend on Canada programming.
"The CRTC has missed an incredible opportunity to help our national public broadcaster pay its bills," he said. "It's even more outrageous that it turns around and gives private broadcasters permission to air more commercials."
Currently, conventional TV stations are restricted to 12 minutes of advertising per hour in prime time, between 7 and 11 p.m. But the maximum limit will increase to 14 minutes on Sept. 1, 2007, to 15 minutes on Sept. 1, 2008, and will be unlimited after Sept. 1, 2009.
The CRTC said relaxing the restrictions will "provide broadcasters with additional revenues to respond to the changes this industry is experiencing."
Most U.S.-based programs bought by Canadian networks leave room for between 14 and 16 minutes of advertising. The Canadian broadcasters currently fill the extra minutes with promotions, public service announcements or news briefs, but will presumably be able to increase their ad content in the future.
O'Farrell said while the change was welcome, it was unclear how much revenue the extra minutes will bring.
CanWest MediaWorks Inc., a wholly-owned subsidiary of CanWest Global Communications Corp., said it is encouraged by the review of advertising regulations, but disappointed by the commission's decision to deny additional fees to watch their programs on cable or through satellite.
"This is especially problematic given the increased competition from foreign signals, specialty services and unregulated services which, for the most part, receive payment for their services from distributors," CanWest said in a release.
The CBC also praised the increase in advertising minutes, calling it a "a great day for broadcasters airing U.S. programming," but said the "future of Canadian programming is much less promising" after the fee increase was rejected.
"By refusing to make conventional broadcasters eligible to receive fees for the carriage of their local conventional television signals, while recognizing their full jurisdiction in this area, the commission has missed another opportunity to help ensure a sustainable future for Canadian programming," the CBC said in a release. "Over the longer term, the net result will be fewer opportunities for Canadian stories to be told."
The CRTC decisions were part of a sweeping television review conducted last fall, with the fee request being the most controversial, resulting in heated debate and angry words during public hearings as program distributors lined up against the networks. Cable operator Ted Rogers scoffed at broadcasters' cry of poverty, at one time calling them "greedy."
As well, the commission said by Aug. 31, 2011, television channels must be broadcast in high definition digital, with the possible exception of remote regions where there are no digital transmitters.
And the CRTC said under a new policy, English and French-language broadcasters must caption all programs between 6 p.m. and midnight for the hearing impaired.
