Ottawa - Bell ExpressVu and the Canadian Association of Broadcasters have signed a new agreement (which requires CRTC approval) that will see the satellite company carry more small local broadcasters and change DTH license conditions.
The memorandum of understanding (MOU), submitted to the Commission in the summer after over a year of negotiations, promises to add some 20 additional small local broadcasters to ExpressVu's satellite and create a new multi-million dollar fund which will be invested in local television broadcasting across Canada.
The agreement will "ensure that subscribers of direct-to-home (DTH) satellite service avoid program blackouts," says a joint press release from ExpressVu and the CAB.
In the absence of this agreement, CRTC rules require Canadian satellite TV providers simultaneously substitute U.S. signals for Canadian ones so that the Canadian viewers are shown the local broadcasters' commercials. These rules are the same for cable operators as well. These rules will stay the same. An earlier story on this web site made a mistaken assumption.
However, since ExpressVu does not carry a number of small local broadcasters, regulations governing DTH in Canada say then that American channels showing the same programming as the broadcaster, must have its signal deleted entirely.
As well, DTH companies are required to delete any other distant Canadian broadcast channel if its programming is the same as the local station ExpressVu is not carrying. In some areas, the two above conditions would have the effect of erasing prime time viewing altogether. For example, "subscribers in Sherbrooke would never be allowed to view a TQS, TVA or SRC program on their ExpressVu system," reads ExpressVu's November 12th submission clarifying the MOU.
Since launch, both Canadian DTH providers have been operating under a temporary waiver of these particular conditions. The MOU aims to make it permanent.
According to the agreement between ExpressVu and the CAB, of the additional 20 local TV stations ExpressVu will add, (four will be added immediately and 16 more in 2003, seven of which will be French), the majority are small and independently owned and only two channels per ownership group could be added.
ExpressVu also agreed to put some limitations on distant signals as well where customers will receive their regular broadcast feed but will be able to choose only one other distant signal from one other time zone.
As well, the MOU between ExpressVu and the CAB will see the DTH provider inject new funding directly into the creation of local programming.
The deal calls for Bell ExpressVu to divert 2% of its gross revenues to an independently administered fund specifically for local and regional programming. This mimics CRTC policy where cable providers divert 2% of gross revenues to support their local cable community channels.
"Unlike cable, DTH has been unable to balance the contributions that it makes to the system between local programming and programming developed for national audiences," says ExpressVu's recent submission. "Through approval of this MOU, ExpressVu submits that a better balance can be achieved . . . If the MOU is accepted, DTH will have a similar opportunity.
"ExpressVu considers that the fund represents an opportunity for it to match the contributions made by cable undertakings to production of local programming for their community channels."
Expect the Canadian Television Fund to fight this since that revenue, estimated in the neighbourhood of $12 million to $15 million, will come from the 5% of gross revenues the CRTC compels all television distributors to hold back for program production. Large cable operators are allowed to keep up to 2% of its contribution for their community channels. Smaller operators can keep the whole 5%.
"Local programming is indispensable to the long term success of Canadian television and it has always been a priority of Canadian broadcasting policy," said Glenn O'Farrell, president and CEO of the CAB. "This agreement will help stabilize local stations by subsidizing local and regional programming Canadians watch."
In its August 12, 2002 letter to the Commission, the CAB also added that its TV members "consider the negotiation of a new MOU with the DTH operators the single most important issue for the television sector."
"Without this agreement the financial viability of the local and regional broadcast system will be in serious jeopardy," said Ken Ruptash, vice-president and general manager, Midwest Broadcasting, Lloydminister, Alberta.
Of course, all of this requires CRTC approval -and the re-writing of some of the DTH rules. Expect this deal to apply to Star Choice, as well, if approved.
ExpressVu and the CAB expect a decision sometime in 2003.
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