How local TV could really matter: end of antiquated phone and cable companies

I suspect most Canadians have seen theadvertisements from the LocalTV Matters campaign from broadcast networks CTV (and the'A' Channel), CBC, and Global (and Chek News). This includes someof the PSA's and songs they (ironically) makeavailable through YouTube. You may also have seen thematerial from the Stopthe TV Tax campaign brought to you by re-broadcasters(cable/satellite/etc companies) Bell (and Bell Aliant), Cogeco,EastLink, Telus and Rogers.

Bell Canada is part owner ofCTV, and there are other complications. ACTRA (Alliance of CanadianCinema, Television and Radio Artists) is obviously infavor of cable companies paying for local programming (farbeyond news), and has a position different than either thebroadcasters or the re-broadcasters.

While Conservative MPspreviously opposed fee for carriage, they seem to nowbe far more supportive. I believe that this has been theresult of effective marketing on the part of the broadcasters inclaiming cable rates won't go up even if re-broadcasters are payingall broadcasters, including local stations. The CRTCis asking for consumer input into this debate (DeadlineNovember 2, 2009).

As a Canadian citizen you mayfeel stuck in the middle of a battle between massive televisionnetworks and massive communications (phone and cable) companies . This fee for carriage debate may turn out to be good news toCanadians in the long run as it may allow us to finally modernize ourcommunications infrastructure.

In March of 2008 I wrote aboutwhat I felt would be anideal future communications infrastructure, how do we get there, andwhat is stopping us. The short form is that I believe weneed to do away with current phone and cable companies as they arecurrently structured, and replace them with a utility model where thedistribution network within a municipality is handled likeelectricity is now. This would be a government owned utility wherepolicy is set by the government, even if management is outsourced tothe private sector. Services would be fully competitive betweenplayers outside the public sector, with the CBC being one narrowexception. We have this small blip in our history wherecommunications services stand out as being treated differently thanall other critical infrastructure, and we need to fix this specialcase.

Lets look at the currentskirmish, and how this may help us to eventually obtain an idealinfrastructure.

When cable companies werefirst formed, what they were doing was simply illegal. They weretaking television stations out of the air and retransmitting themwithout permission from or payment to the relevant copyrightholders. In Canada not only do the creators of the programming havecopyright, but a broadcaster has a copyright in the communicationsignals that it broadcasts (Section21 of the CanadianCopyright Act).

To legalize cable a deal wasstruck between governments, the cable companies and the broadcasters. This arrangement came out of an era when television was paid for byadvertising. It was thought that since increasing audience size atno cost to the television station would increase their advertisingrevenue, that cable companies would not have to pay televisionstations. Cable companies were also mandated to carry these freelocal stations in a given local area as part of the basic cablepackage such that consumers would not have to pay more.

Advertising is moving fromprint and television broadcasts to online. It is ironic that thetelevision networks are usinga YouTube station as part of their campaign given YouTube'sowner (Google) is where a significant part of this advertisementrevenue is going. Advertising alone will soon not (in some casesalready doesn't) pay enough to keep local programming going.

Integrated with the timing ofthis debate is the August31, 2011 date for the Canadian Digital Television switchover.Local broadcasters are already having to retool how they transmittelevision over the air, and are wanting to renegotiate theirarrangements with re-broadcasters at the same time.

While I don't have pointers tothe text of the relevant legislation (please add to comments if youdo), I believe that, if local broadcasters are to receive paymentfrom re-broadcasters, this long-standing deal will break down in allaspects. It won't simply be cable companies paying localbroadcasters (as is the case for other stations), but will likely endthe concept of a basic cable package. Consumers will want to decideon their own what stations they are paying for as the costs arepassed on to them. À la carte television will eventually becomethe norm, where television viewers pick individual stations and/ornetworks rather than purchasing any cable company created bundle atall.

When consumers are choosingwhat stations they want, is there any utility to a cable company asthey are currently organized? The next logical step will be tofollow what I detailed for an ideal infrastructure. Viewers wouldbe able to directly subscribe and pay television networks throughconnecting to them over the municipal communications utility, withthese competitive networks (rather than a monopoly cable company)deciding what packages viewers could choose (if any).

For some stations there willbe competition between these networks rebroadcasting some of the samestations. I might be able to choose between CTV, CBC, Global andsome new entrants to access foreign networks such as BBC or FOX. These foreign networks may also set up Canadian subsidiaries to offersubscribers direct access. For those subscribers who like the waythings are now, successors to cable companies can offer simpleone-stop-shopping bundles people could subscribe to and have someoneelse manage any complexity.

Once this utilityinfrastructure is in place, it will be trivial for new on-demandsubscription services for specific shows. I want to be able todirectly subscribe to a series like DefyingGravity, another great science fiction show filmed inVancouver like BattleStar Gallactica was. This direct and morepredictable revenue could make it easier for producers to end theuncertainty around the future of this great show. I'm really tiredof having less-than-scientific rating systems and (largely tuned-out)executives of large networks deciding what programming will exist,rather than more healthy communication/collaboration between thecreators and their fans/audiences.

The same type of thinkingapplies to voice services as multimedia services. There are alreadypeople promotingcompetition (including “foreign”) intelecommunications, with a utility model making this much cheaper fornew entrants.

If we follow through with thisutility infrastructure it will be a win-win situation for contentcreators, broadcasters and other Canadian citizens. The losers areof course the monopoly phone and cable companies who will eventuallyfade into memory like other obsolete companies.

Russell McOrmond is a self employed consultant,policy coordinator for CLUE:Canada's Association for Free/Libre and Open Source Software,co-coordinator for Getting Open Source Logic INto Governments (GOSLING),and host for DigitalCopyright Canada.