CRTC Dreaming and Other Modern-Day Regulatory Fantasies (Guest Column)

Observations by Dave Charles, an award-winning broadcaster and the CEO of Media RESULTS Inc.

I believe in 'Dream Time.' This is where you allow your mind to wander and ask questions such as;

What is the future of media in the new world?

Does the Canadian Radio-television and Telecommunications Commission (CRTC) understand the complexities of today's media offerings?

Let's start with two things the CRTC got right and then two things the CRTC got wrong.

CRTC positives;

1. In relative terms, it moved quickly to initiate the Modernizing of the Canadian Broadcasting Act. We will see how far it goes and whether or not the efficiency with which the process began will continue.

2. Staff retention at the CRTC is relatively stable. Institutional memory in an organization such as the CRTC is essential for consistency, transparency and, to some degree, predictability.

CRTC negatives;

1. They take too long to go through their process, resulting in long delays in issuing policies and decisions that impact the day-to-day business of stakeholders and licensees.

2. Averse to making sweeping changes to policy. For example, the radio review resulted in little to no change in how radio operates, frustrating many radio licensees.

Suppose you were to run a broadcast regulatory body with all the challenges facing them and are aware of how the Brits, Aussies and Americans face their new media realities. What legislative alternatives would you suggest?

We've all heard that if Trump is re-elected, he plans to bring the U.S. FCC in-house. We all know what a disaster that would be. But that's what dictators do.

This said, understand that the Brits, Aussies and Americans do not face the same issue as Canada does – they do not share the border with the world's most powerful and prolific producer of entertainment. The regulatory system in Canada was designed to create a Canadian broadcasting system that reflects Canadian culture in an attempt to minimize the impact of the U.S.

In Canada, we both despise and exalt regulation. Some hate it because it handcuffs them from making timely decisions regarding how to invest in programming, what kind of programming and when it should be aired. We have all heard the word pivot in the ever-changing media landscape, and stakeholders want the ability to pivot when necessary but claim that regulation prevents them from doing so. Their solution is always – less regulation, which would give them the freedom to not only react to competition but, perhaps more importantly, be proactive on how they spend their money to fend off competition.

Those who believe in regulation want more – artists, producers, writers, etc. This cohort believes that the only way to keep a Canadian system alive is through more regulation – not less. Spending and exhibition requirements must increase, and so should funding to the various groups that produce the content that broadcasters rely on.

We must recognize the third component in the Canadian media landscape: the foreign streaming platforms. There is no question that after some 15 years of streaming in this country, we are finally hearing the outcry from those in the industry that these streaming companies are indeed impacting their business – some positive, some negative, of course. Is it bang on time or too late for the outcry? Only time will tell.

Fourth, and most importantly, is the Canadian consumer. The consumer who wants choices – the ability to watch what they want, where they want, and when they want – all at an affordable price.

Balancing these four key components takes work for any policymaker or regulator.

Taking on the role of a CRTC Commissioner in the environment, as described above, is challenging but, at the same time, can be rewarding. It would be difficult – not impossible – to find 13 (the maximum allowed) individuals knowledgeable and experienced in both the broadcasting and telecommunications sector to accept such an appointment, knowing that every decision issued by the CRTC reflects your contribution – good or bad.

It is a very steep learning curve. Stakeholder visits and meetings, staff briefings and reading – lots of reading is essential.

The Chair and senior staff must also navigate the legislative bodies under whose auspices the CRTC runs. Canadian Heritage, ISED, and Senate Committees call on the CRTC for various reasons, and the Chair and staff must know how to communicate the CRTC's priorities to these bodies effectively.

Is it a perfect system? Not necessarily, but there has been a concerted effort to appoint individuals to the Commission to balance the knowledge base between broadcasting and telecommunications.

Could the CAB have a broader role in a new broadcast entity?

Maybe it should. So should the OAB, WAB, and BCAB, representing broadcasters in their respective regions. These provincial organizations represent actual broadcasters. I will leave the CBC out of this as they have an extremely wide programming and cultural mandate for both T.V. and radio. But even the CBC is cutting back. Is this the canary in the coal mine? We can't and should not use the two years of Covid as an excuse.

In Canada, what are we talking about? Protectionism versus globalization?

Global music streaming, podcasts and other global media sources are widely available. I have the world at my fingertips now. But I still want local information and local experiences.

We have learned from research that local content is vital to the success and survival of today's radio stations.

Smaller broadcast companies like MyFM Radio are successful because they super-serve their local markets with relevant news and events of the day.

I have a radio friend in the U.S. who bought three radio groups. He changed the name of his company to 'Local First Broadcasting'. Owner Cliff Dumas, a Canadian, is a seasoned and savvy broadcaster. He gets it and is already making a difference in the markets he serves.

Addressing big money versus private enterprise

Radio and all media undertakings are expensive. Is it possible to level this playing field, allowing others to contribute to a more balanced media system?

In my consulting career, I've undertaken many radio station start-ups and am familiar with what it takes to launch and market a new radio brand. At best, it's a multi-tiered marketing challenge. Most new radio start-ups don't have the skills to enter this arena. And if you do it right, getting ratings and revenue traction will still take two to three years.

A few conglomerates still control the radio universe?

Bell, Rogers, Stingray, CORUS and Pattison.

How does local government protect Canadians' rights against the dominance of multinational corporations that organize themselves through tax havens?

How do you feel about the CRTC's recent announcement that it is placing a moratorium on new licenses and other significant decisions for two years while it digests new legislation like Bill C-18?

We know that Bell Media is very upset that the CRTC issued administrative three-year renewals for all major broadcast outlets, effectively denying Bell its ability to present its case at a public hearing per this past summer's application to reduce its commitments to local programming sharply. Bell has appealed the CRTC action to the federal court. Bell has gone ahead and is reducing local programming in some markets anyway.

There are smaller broadcast groups that welcome the moratorium on new licenses due to the economic hardships that radio is now facing, some due to Covid, while others are due to bad business practices.

Case in point…recently, CTV Montreal cut its one-hour 5 pm newscast to 30 minutes, followed by a 30-minute CTV National newscast with Sandy Rinaldo. A touch of research might find similar changes in other Canadian markets.

Bell also made local programming reductions at NOOVO, their new Franco channel.

Quebecor has also applied for similar local programming reductions but did not wait for CRTC approval and made significant reductions around Quebec.

Is CRTC defiance becoming the norm rather than the exception by major media companies that will not wait around for the CRTC to respond?

Recently, Bell filed suit against the CRTC's demand that Bell and Telus give access at a price fixed by the CRTC to last-mile fibre to smaller internet providers to make good on a Liberal government promise to increase competition in the field. Bell says they spent the money and should not have to share the Cap Ex. At the same time, they announced a reduction of one billion dollars in fibre investment in the coming fiscal.

There is confusion in the halls of the CRTC.

The new Chair seems to be the right person for the job, but is a rebellion brewing among the big broadcasters and telcos? These are direct frontal challenges by major media companies against the inaction of the CRTC on critical matters.

There is a new adversarial tone to the dealings between masters and subjects.

Licence holders are doing what they want and appealing to federal court for things they don't like, which is their right to do.

This Liberal government has promised a new broadcasting act since its election. The Commission is now in the process of "Modernizing the Broadcasting Act." No small feat, let me assure you. It just completed three weeks of hearings with representation from Canadian broadcasters, producers, writers, directors, funding agencies and those seeking funding, giant foreign streamers, YouTubers, and individuals. This process is only Step 1 of 3 needed to complete the process, which could take as long as two years to reach its conclusion.

When the representatives from Netflix say to the CRTC, What more do you want from us? We spend millions of dollars developing content in Canada – the production of which employs thousands of Canadians.

The broadcasters and other stakeholders are expecting a large influx of funds from these outside media giants to supplement their stations during a challenging economic climate. It remains to be seen whether this will happen.

Can the CRTC continue to be relevant as it applies a broadcasting act that is so outdated it didn't even anticipate the internet?

As stated on the CRTC website, the CRTC "is an administrative tribunal that operates at arm's length from the federal government.

It is dedicated to ensuring Canadians have access to a world-class communication system that promotes innovation and enriches their lives.

Its role is to implement the laws and regulations set by Parliament that create legislation and oversee departments that set policies. It regulates and supervises broadcasting and telecommunications in the public interest."

I see the fundamental role of the CRTC staying the same in the near future. This said, just as stakeholders in the industry strive for more innovation and the ability to respond in a timely manner to consumer needs, so too should the CRTC find ways in which it can act in ways that are much more timely, effective and flexible to ensure a broadcasting and telecommunications system that does provide Canadians with "a world-class communication system that promotes innovation and enriches their lives," and I would add the word "affordable" to this mandate.

Dave Charles, CEO, Media RESULTS Inc.

dcharles@mediaresults.ca