CRTC approves more TV ads, nixes proposed fee

Canadian viewers won't see a hike in their cable and satellite TV bills because of a new subscription fee broadcasters proposed last fall, but they will likely start seeing more commercials soon, under changes the CRTC announced Thursday.

The Canadian Radio-television and Telecommunications Commission revealed its decisions regarding several contentious issues discussed during hearings last November that scrutinized the state ofCanada's TV landscape.

The federal regulator has denied the proposal from conventional broadcasters including CanWest and the CBC to introduce a subscription fee to cable and satellite companies who carry their signals, currently available free over the airwaves.

Supporters had argued that the so-called "carriage fee" was a necessary measure because traditional broadcasters are facing an increasingly difficult climate where audiences are fragmented and advertising growth is slow.

However, the cable and satellite companies called the proposal a new "tax" that would force a hike to the consumer, which could then cause viewers to drop their service and seek out other TV alternatives, like grey-market satellites from the U.S.

Gradual reduction of advertising restrictions

While the CRTC did not feel the subscriber fee "to be warranted at this time," it recognized the financial difficulties faced by conventional broadcasters and decided to remove restrictions on how much advertising they can air as an alternate way to increase revenues.

Currently, broadcasters can show up to 12 minutes of advertising per hour, including segments promoting programs in their lineups.

As of Sept. 1, thiswill increase to a maximum of 14 minutes of advertising in prime time between 7 p.m. and 11 p.m.

A year later, the limit will increase to 15 minutes across all time periods. As of September 2008, all advertising time restrictions will be lifted. The CRTC will review the impact of these increased ad times.

"The Commission considers it essential that [over-the-air] broadcasters have the flexibility to maximize advertising revenues to respond to the negative impact of audience fragmentation," according to a statement from the regulator issued Tuesday.

Analog-to-digital deadline

The CRTC also set Aug. 31, 2011, as a deadline for Canada's switch from analog to digital and High-Definition broadcasting signals. An exception will be made for northern and remote regions that lack digital transmitters.

Many other countries around the world have already set their target dates for the switch.

In December, the Netherlands became the first country to switch completely to broadcasting digital signals for television. Other European countries are set to switch this year, while the U.S. is scheduled to end analog TV transmission in 2009.

Japan and the U.K. plan to complete their own move to digital by 2011 and 2012, respectively.

A deadline was necessary, the regulator said, to avoid a situation where Canadian viewers "turn to foreign programming to take advantage of this new technology because there is not enough Canadian digital programming available."

The commission also said that it is confident that the next few years will provide ample time for broadcasters to make the necessary technological transition, as well as give creators enough to time to produce Canadian programming in HD.

Tuesday's announcement also included a new closed captioning policy English- and French-language broadcasters will have to caption 100 per cent of their programs between 6 a.m. and midnight.

CRTC defers look at Cancon

The commissionpraised French-language broadcasters for devoting a "consistently high" level of their programming budgets about 90 per cent to Canadian content.

The corresponding situation in English Canada was "cause for concern" because the proportion English-language broadcasters spent has decreased to approximately 40 per cent, the regulator said.

However, the CRTC deferred its examination ofspecific spending by broadcasters on Canadian programming until the licence renewal hearings scheduled for spring 2008.

For years, various groups have criticized the CRTC's 1999 decision to remove the rule forcing private conventional television broadcasters to spend a minimum amount on Canadian dramatic programming. They charge that the result has been a sharp drop in Canadian-made TV shows.

The Directors Guild of Canada; the Communications, Energy and Paperworkers Union of Canada; the Writers Guild of Canada; and the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) are among the groupsthat issued statements Thursday criticizing the CRTC for failing to issue clear directives on what broadcasters should spend on Canadian-madeprogramming.

The CBC said it was "disappointed" with the decision and, in a statement, called it "a great day for broadcasters airing U.S. programming.

"By increasing the number of advertising minutes in American programming aired by Canadian private conventional broadcasters, both English and French, the CRTC has effectively increased the value of this programming, and removed the incentive for private broadcasters to create more Canadian drama," the public broadcaster said.