CRTC report calls for more competition, choice

Simultaneous substitution and cable bundling bad for business, industry needs 'smart regulation,' say authors of 300-page report

The CRTC needs to inject more competition and more consumer choice into the Canadian broadcasting system — so-called ‘smart regulation’ — if the industry is to thrive in the multi-channel, multi-platform universe, according to review of the federal regulator released Wednesday.

The report, Review of the Regulator Framework for Broadcasting Services in Canada, was written by communications lawyers Laurence Dunbar and Christian Leblanc of the firm Fasken Martineau DuMoulin.

Many regulations governing Canadian broadcasting are complicated and ineffective and need to be either eliminated or streamlined, according to the authors of the report.

In April, the head of the CRTC, Konrad von Finckenstein, asked the lawyers to do a comprehensive review of Canada’s broadcasting system and to recommend ways to ‘maximize the reliance on market forces, always keeping in mind the overriding two objectives of Canadian content and access to the system.’ The CBC was deemed beyond the scope of the review.

While the review’s authors believe that market forces alone can’t achieve the Broadcasting Act’s Canadian-content objectives, they question whether current regulations are working to promote homegrown programming. Specifically, the report criticizes the practice of simultaneous substitution — whereby Canadian broadcasters substitute their own signal to broadcast American TV shows with Canadian advertisements. Because U.S. programs draw higher ratings — and hence ad revenues — broadcasters program shows such as Desperate Housewives and CSI during primetime rather than homegrown stuff, says the report: ‘This undermines the economic value of Canadian programming and the very great efforts that the regulatory system and the industry exert to produce more Canadian content.’

The 300-page report also says that Canadian-content requirements are largely being filled by ‘the broadcasting of entertainment magazines and reality TV programming.’ The authors suggest targeted incentives to encourage broadcasters to program Canadian shows, particularly drama, during primetime.

Among their numerous recommendations is to give TV consumers more choice by getting rid of the much-maligned cable bundle: ‘Forcing Canadians to subscribe to truly ‘discretionary’ services that they do not want in order to get one they do want is precisely the type of regulation that may drive consumers to the Internet, pay-per-view and on-demand types of services,’ say the authors.

However, to prevent Canadian channels from being marginalized, the authors suggest Canadian networks could be given better placement on the dial.

Dunbar and Leblanc also recommend getting rid of genre protections for cable networks, which are intended to prevent new specialty and pay channels in Canada from replicating an existing channel’s programming format. ‘While we see a need to continue to protect Canadian programming services from directly competing non-Canadian services, we question the need for genre protection between Canadian services,’ the report reads.

The CRTC was not available to comment on the report.