The Canadian Radio-television and Telecommunications Commission (CRTC) released two policy decisions on January 29, 2015,[1]both of which were a product of its Let's Talk TV: A Conversation with Canadians proceeding. The two decisions are consistent with the CRTC's consumer-driven agenda and the goal of ensuring that "Canadians—as citizens, creators and consumers—have access to, and are at the centre of, a world-class communication system."[2]

Of the two policy decisions, the one that received the most media attention was the decision to prohibit cable and satellite distributors from performing simultaneous substitution over the Super Bowl beginning in February 2017. After Super Bowl LI, those Canadian cable and satellite subscribers who watch the game on an American channel will no longer see Canadian commercials.

While the decision was noted by some as a win for Canadian consumers,[3] the actual consumer benefit associated with the new rule would appear to be modest. The commercials aired during the Super Bowl are available online through well-known websites like YouTube and can be accessed directly off-air for those capable of receiving U.S. television signals via an antenna. With high-speed Internet and wireless subscriptions in Canada trending around the 80 per cent range[4] and so many Canadians living close to the U.S. border, it is likely that only a very small percentage of Canadians who actually want to watch the American Super Bowl commercials are unable to do so today.

Preserving 'free' over-the-air television: A win for consumers

To my mind, the most consumer-friendly decision that was announced by the CRTC in January was to continue to require television stations to maintain over-the-air transmitters as a prerequisite to retaining certain regulatory privileges, such as the right for their signals to be distributed on the basic service and the right to request simultaneous substitution.

The CRTC had indicated in a "Working Document" released in August 2014 that it would consider allowing local television stations to shut down their transmitters. That would have resulted in these stations being licensed as something akin to a specialty service, such as Sportsnet, HISTORY or FX, which consumers can only access through a cable, IPTV or satellite subscription.

From a consumer perspective, the immediate negative impact of a decision allowing stations to shut down their transmitters would have been the loss of "free" over-the-air television. There was considerable discussion during the Let's Talk TV hearing about the negative impact this would have on Canadians, particularly lower-income consumers.[5]

If local television transmitters could be shut down, these consumers would have to subscribe to cable or satellite just to continue to receive local programming. The prospect of issuing a decision encouraging Canadian broadcasters to take away the ability to obtain "free" TV, at a time when more Canadians seem to be considering that option, would clearly not be consumer friendly.

At the same time, it is likely that a decision to licence local television stations as specialty services would eventually result in substantially higher costs for consumers.

While the current CRTC appears to be resolute in its view that local stations would not be allowed to charge cable and satellite distributors a wholesale fee to carry these "local specialty services," it is possible (and perhaps probable) that over the next few years, as the current CRTC Commissioners and its Chairman are replaced, the momentum would grow for these stations to receive the same sorts of wholesale fees as other specialty services.

Today, specialty services derive revenue from both advertising and per subscriber wholesale fees. If local specialty services were permitted to receive a similar subscriber fee for the distribution of their stations, the financial impact on consumers would be substantial. This additional cost would be particularly significant in larger metropolitan areas like Toronto, as well as in bilingual communities like Ottawa and Gatineau (where there are a large number of local stations).

Despite the hoopla surrounding the CRTC's announcement that American advertisements would soon be accessible in Canada as part of the Super Bowl broadcast, there should be no doubt that the CRTC's decision to require local television stations to continue their over-the-air transmissions as the quid pro quo for basic carriage and simultaneous substitution is the most consumer-friendly decision taken by it in January 2015.