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Speech
by Elizabeth Duncan
Commissioner for the Atlantic Region and Nunavut
Canadian Radio-television and Telecommunications Commission
to the Conference and Annual General Meeting of the Canadian Cable Systems Alliance
Niagara-on-the-Lake, Ontario
September 27, 2010
(Check against delivery)
Thank you, Chris [Edwards, Vice-President, Corporate & Regulatory Affairs], for your kind introduction.
I’d like to start by saying that I’ve been looking forward to your conference. As someone who worked in the cable industry for many years, I appreciate the opportunity to catch up with colleagues and acquaintances from those days.
Your conference also gives us a chance to talk about some of the Canadian Radio-television and Telecommunications Commission’s recent decisions. I know that the review of the community television policy, for instance, was a high priority for the Canadian Cable Systems Alliance (CCSA) and its members.
Community television policy
The new policy, which was announced a month ago, contains some important changes.
The Commission feels very strongly that the door to the local community channel should be as open as possible. Anyone can approach a community channel with a proposal for a television show or a desire to learn how to produce television shows. This open access encourages members of a given community to become active participants in the broadcasting system, and is at the heart of the new policy.
After weighing the views of various parties, including your Association, we decided that local citizens should be involved in the creation and production of at least 50% of a community channel’s programming. But ensuring that access programming is aired is only part of the equation. Cable operators will have to direct at least 50% of their programming expenditures to this type of programming.
The Commission took into consideration the fact that community channels will need some time to adjust to these changes. The new programming and spending requirements I’ve just described will go up gradually between 2011 and 2014.
However, I should point out that, in keeping with the exemption order the Commission introduced last year, the revised access requirements will only apply to licensed cable operators. In most cases, exempt systems are located in communities where there are no private local television stations. We recognize that you have developed good partnerships with the communities you serve, and that your community channels represent a competitive advantage over satellite distributors.
On the topic of exempt systems, the CCSA and other parties argued that they should have the same flexibility as larger cable operators to create zone-based community channels. We found that there could be some merit in this suggestion. Allowing two or more exempt systems to share local and community access programming could benefit not only cable operators, but also communities that have common interests.
Later this fall, we will ask for your comments on some proposed revisions to the exemption order. These include the specific conditions for zone-based community channels and the reintroduction of the obligation that exempt cable systems with more than 2,000 subscribers contribute to Canadian programming. As part of this process, we will also be interested to hear suggestions regarding any other measures that would provide small systems with flexibility in programming and advertising.
Throughout our review of the policy on community channels, the CCSA played a key role in submitting ideas based on your past experience. While we may not have agreed with you in every instance, we do appreciate and value your views. It’s obvious to everyone at the Commission that you are passionate about your business and your customers.
Digital transition
One of the other issues on the front burner over the past year was the transition from analog to digital television.
All local television stations operating on channels 52 to 69 in mandatory markets will have to move to a channel under 52 and convert their transmitters to digital by August 31, 2011. Television stations operating on those channels in non-mandatory markets will also need to vacate channels 52 to 69. While we hope they will also convert, they will have the option to continue broadcasting in analog on a lower channel or shut down their transmitter.
Demand for spectrum is expected to grow significantly in the next few years with the increasing use of wireless technologies. Channels 52 to 69 will help meet this demand since they will be repurposed for new wireless services. The channels must also be freed up for public safety services and to coordinate spectrum use with the United States.
In March, we finalized the list of markets where the transition will be mandatory for all broadcasters. They include provincial and territorial capital cities, as well as markets served by more than one local television station.
This means that stations on channels 2 to 51 in most of your communities – which are considered non-mandatory markets – will be able to continue broadcasting in analog after the deadline.
What does this mean for viewers in smaller markets who do not subscribe to either cable or satellite? To ensure they don’t lose access to their local stations, we are allowing distributors to provide a package of local and regional stations at no charge to viewers.
All this is to say that the digital transition should have a minimal impact on you and your customers over the short term. You should not have any problems obtaining analog signals from local stations after the August 2011 transition.
Current proceedings
While I have a few minutes, I’d like to talk about the Commission’s agenda for the coming months.
One of our current proceedings is examining whether the rules surrounding the transfer process when customers switch local and long-distance providers should be the same for telephone and cable companies. A related issue is whether a similar customer-transfer process should apply to wireless and high-speed Internet service providers.
We have received the CCSA’s submission, which is opposed to changing the customer-transfer process for cable companies or implementing new regulations for high-speed Internet services. Failing that, it requested that any change made by the Commission not apply to small cable operators. This is something we will take into consideration as we evaluate the different options available to us.
There are two other proceedings that are of particular interest to the CCSA and its members.
Starting on October 26, we will hold a hearing to review whether the obligation to provide certain basic telephone and Internet services should be changed in light of new technologies.
As part of that hearing, we are taking another look at whether further competition should be introduced in the markets of small telecom providers. We are aware that many of you now offer home telephone service and have expressed an interest in entering those markets. Rest assured that this will be up for discussion at the hearing.
Then, on November 16, we will hold a hearing to review our regulatory policies for direct-to-home satellite distribution. At that hearing, we will look at which local stations satellite distributors must carry and how simultaneous substitution is performed. I expect that your Association will be participating in this hearing as well.
And, of course, we will review the major transactions that have been announced in recent months. In fact, a hearing was held in Calgary last week to examine Shaw’s application to acquire Canwest’s Global Television Network as well as its specialty channels.
You may be wondering how this transaction, if approved, will affect our television policy for the large ownership groups. In that policy, we said that local stations could choose to negotiate with cable and satellite carriers to establish a fair value for the distribution of their programs. This is known as the value for signal regime.
The Federal Court of Appeal recently heard arguments over whether the Commission has the authority to implement this type of market-based regime that promotes negotiations between parties.
We look forward to the Court’s ruling on this matter. If it finds that the Commission acted within its authority, it will then be up to the local private broadcasters to decide whether they want to enter into negotiations.
Conclusion
As you can see, it’s certainly an interesting time to be involved in the Canadian communications industry. Trying to keep up with the changing landscape can make it seem like we’re running on a treadmill at times.
The fact that you have formed close relationships with your customers is to your advantage. We look forward to working with you over the next year, and to learn from your experiences.
I hope you enjoy the cocktail and wish you an excellent conference.
Thank you.
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