New regulations must balance consumer, broadcaster needs, says BCE

Photo: The Canadian Press. All rights reserved.

Bell Media President Kevin Crull listens to an associate make a presentation during CRTC hearings on the future of television, Wednesday, September 10, 2014 in Gatineau, Que. THE CANADIAN PRESS/Adrian Wyld

GATINEAU, Que. - Consumers will get less and pay more, and jobs will be lost, under proposals being debated this week to modernize television program delivery, the country's broadcast regulator has been told.

A throng of frustrated media executives warned Wednesday of dire times ahead for the country's TV world as the Canadian Radio-television and Telecommunications Commission held a third day of hearings on how people get and pay for TV programming.

Outside of the hearing room, a political debate was brewing, with federal New Democrats accusing the Harper Conservatives of interfering in the hearing process.

That came after the Ontario government suggested Tuesday that online video services such as Netflix be regulated — effectively forcing them to contribute to the country's television production system.

The suggestion, which has also been floated by the Quebec government, the CBC and cultural groups, prompted Heritage Minister Shelly Glover to state that the federal government wouldn't stand for it.

"We will not allow any moves to impose new regulations and taxes on Internet video that would create a Netflix and YouTube Tax," Glover said in a statement.

The NDP responded to the minister's statement on Wednesday, accusing her of meddling with an arm's-length organization.

"It is extremely inappropriate for the Conservatives to play partisan politics with these hearings," said NDP Heritage critic Pierre Nantel.

"The CRTC is an independent body and must be allowed to come to its own conclusions."

While Bell Media executives said that they need a level playing field with their competitors, specifically mentioning Netflix, they appeared far more focused on changing regulations to make it easier to stay profitable while protecting Canadian cultural content.

The CRTC has proposed new regulations that would, if enacted, bar TV stations from replacing U.S. advertising with Canadian spots on American shows.

The regulator has also proposed that consumers be allowed to pick the individual channels they want from cable and satellite service providers, over and above a price-capped, trimmed-down mandatory service that includes mainly local channels.

It has also opened the door to allowing TV stations to shut down transmitters, which would mean the end of free, over-the-air broadcasting of television signals.

All of that would do more harm than good, Bell Media president Kevin Crull told the hearing.

"Merely shutting down transmitters would actually make a dire situation even worse," said Crull.

Even if the CRTC accepted all of its proposals for reforming TV regulations, BCE may still have to shutter between seven and nine specialty channels, he added.

Rather than banning simultaneous substitution of Canadian advertising over American programming, the regulator could help local TV survive by extending the practice to local broadcasters, said the company's executive vice-president Mirko Bibic told the hearing.

Stuart Garvie, an executive with media marketing company GroupM Canada, said the CRTC's proposed changes, if enacted, would hurt the economy.

Barring Canadian TV broadcasters from airing Canadian advertising with shows from the United States would dramatically cut revenues, Garvie added.

The practice has frustrated Canadian viewers, particularly during major sporting events such as the Super Bowl, when they are unable to see the ads that American watchers see.

Hundreds of viewers have also complained to the CRTC that Canadian networks often cut off the final few minutes of the shows they broadcast by arbitrarily switching from American to Canadian programming, something BCE said is an issue that it needs to resolve.

BCE said it also had concerns about being forced to offer TV channels to consumers on an a la carte basis, although Bibic said his company supports a proposal to offer consumers individual channel choices on top of a so-called skinny basic package.

But he urged the commission to build flexibility into the regulations so service providers can tailor basic packages to the needs of their customers.

The CRTC proposal would see the cost of basic service capped at between $20 and $30 a month.

But it has stressed that the proposals up for debate this month are merely a guideline with no decisions made yet.