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Bulletin | Covid-19

Canada’s Communications Regulators Take Action in the Fallout from COVID-19

Fasken
Reading Time 5 minute read
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Communications Bulletin

Canadian Heritage Minister Steven Guilbeault announced on March 30, 2020 that after discussions with the Government of Canada, the Canadian Radio-television and Telecommunications Commission (CRTC) will not require broadcasters to pay Part I licence fees for the 2020–21 fiscal year. The Minster also indicated that the government will transfer necessary funds to the CRTC to support its operations. This is the first concrete step to provide fiscal support to the broadcasting industry in the fight against COVID-19.

Like all other essential services that must operate during the pandemic, broadcasters are facing immense challenges amid widespread concerns about meeting programming requirements and their employee obligations despite declining revenue.

The Government and the CRTC Take the First Step

In response to the challenges faced by Canada's broadcasting industry, it was announced on Monday that the Part I licence fees payable by broadcasters for the 2020-21 fiscal year will be waived, benefitting over 100 broadcasters that pay annual licence fees to support the CRTC's operations. This will result in an immediate injection of $30 million in cash to sector that has a vital role to play in helping Canadians fight the spread of COVID-19.

Minister Guilbeault stated in the news release that this assistance serves as recognition that "Canadian broadcasters are working hard to fulfill the mission of sharing credible and verified information with Canadians." In addition to serving as a vital conduit for essential public health information, broadcasting services provide Canadians with meaningful entertainment options, assisting all of us in our individual and collective responsibility to self-isolate and stop the spread of the coronavirus.

Canada is not alone in its reliance on the broadcasting sector to achieve these critical public policy goals during this crisis. Also on Monday, U.S. Federal Communications Commission (FCC) Chairman Ajit Pai announced $200 million in support of telehealth initiatives.[1] That investment was swiftly followed-up on Tuesday by a host of decisive, technical rule changes that will reduce the regulatory burden and red-tape for the U.S. broadcasting sector.[2]

This type of decisive action in support of broadcasters  reminds us that more can be done in response to the social and economic upheaval brought on by the coronavirus outbreak.

The Industry is Stepping Up despite the Challenges

Canada's communications industries joined many other sectors of the economy in stepping up to respond to the pandemic.

Telecom carriers immediately suspended data caps for home internet plans in order to facilitate the mass shift of our workforce from offices to homes. Cable companies began providing free channels and digital educational services in order to keep families entertained. Meanwhile, companies across the communications sector are stretching themselves to accommodate customers who, understandably, are worried about their personal finances during the crisis.

All of these measures come at an additional cost to the broadcasting industry. Most importantly, they all come on top of the increased operational costs associated with keeping employees safe and healthy throughout a crisis in which we rely on them for the provision of essential services.

Investment market analysts have already started to issue reports lowering earnings estimates for the sector in light of dimming economic prospects for the Canadian economy.  These analysts fully expect the advertising and subscription revenue that supports the broadcasting industry's efforts to decline materially in the months ahead.

For his part, Heritage Minister Guilbeault is aware of the financial difficulties facing broadcasters, stating in the news release that Monday's announcement comes in light of "significant drops in advertising revenue" and goes on to promise that the federal government "will continue to monitor the impacts of COVID-19 on all sectors, ensuring we remain well-position to respond to this rapidly changing environment."

Immediate Measures are Needed to Support the Broadcasting Sector

In light of these major economic headwinds, all departments, agencies and other governmental bodies will need to take bold, concrete actions to help vital Canadian industries. As the body with access to most of the key policy levers for Canada's broadcasting industry, the CRTC has a considerable responsibility in this regard.

Elimination of regulatory fees and charges, such as the one announced on Monday, is an effective and efficient way to assist Canadian companies facing economic challenges since the onset of the COVID-19 crisis. But the broadcasting industry is facing many other regulatory and operational challenges in light of the pandemic.

Here are a few other measures within the CRTC's existing regulatory frameworks that would provide needed relief and assistance to the broadcasting industry:

  • Extend the timeframes for radio licensees to make Canadian Content Development (CCD) contributions for the current broadcast year into the 2020/2021 broadcast year;
  • Allow radio licensees to use their current broadcast year revenues to determine the CCD contributions they must make;
  • Extend the timeframes for television licensees to spend their Canadian Program Expenditures (CPE) for the current broadcast year into the 2020/2021 broadcast year;
  • Allow television licensees to use their current broadcast year revenues to determine their CPE spending this broadcast year;
  • Provide video-on-demand (VOD) licensees with additional flexibility in determining what content to include in their libraries;
  • Eliminate the requirement for television licensees to spend a portion of their CPE on Programs of National Interest (PNI) for the current broadcast year;
  • Eliminate the requirement for local television stations to broadcast specific levels of local news and local programming;
  • Extend the timeframes for BDU and VOD licensees to make their contributions to the Canada Media Fund (CMF) for the current broadcast year into the 2020/2021 broadcast year;
  • Allow BDU licensees to use their current broadcast year revenues to determine the amount that they must contribute to the CMF this broadcast year; and
  • Eliminate all requirements for BDUs to offer a specific percentage of access programming on their community channels and to ensure that 50% of direct programming expenses be devoted to access programming. 

The Way Forward

The challenges presented by the COVID-19 crisis will be different in each country and that will require distinct policy responses. One commonality in this truly global response, however, is the central role of broadcasting services in arresting the spread of the coronavirus and restoring our economy going forward.  Proactive measures taken to support our broadcasting industry, like the one announced on Monday, are an important recognition of this industry's critical role throughout the crisis.

As the crisis invariably deepens, so too should our regulator's support for Canadian broadcasters.


 

[1] Chairman Pai Announces Plan for $200 Million Covid-19 Telehealth Program (PDF) (FCC News from the Federal Communications Commission)

[2] FCC Seeks Comment on Proposed Change to Distributed Transmission System Rules to Support Use of Next Generation TV Broadcast Standard(PDF) (FCC News from the Federal Communications Commission)

FCC Seeks Comment on Updates to Rules Governing Significant Viewed Stations(PDF) (FCC News from the Federal Communications Commission)

FCC Seeks Comment on Revisions to Process for Resolving Program Carriage Disputes(PDF)  (FCC News from the Federal Communications Commission)  

 

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