Richmond, British Columbia
May 14, 2015
Stephen B. Simpson
Regional Commissioner for British Columbia and the Yukon
Check against delivery
Thank you very much. I'm glad to be here with you again.
I see that this is your 68th annual conference. You are at risk of becoming a venerable institution. Congratulations! Congratulations also to all the nominees for the awards that will be presented tonight.
When I spoke at your conference in recent years, much of what I said focused on radio. I'd like to take a different approach this year. Given that the question of where television is heading has been on everyone's mind of late, I want to recap our recent Let's Talk TV decisions.
Let's Talk TV
In 2013, the CRTC launched Let's Talk TV: A Conversation with Canadians about the future of television. Our aim was to ensure the system adapted to the technological shifts that are changing – and will continue to change – how Canadians find and watch content.
Let's Talk TV was an innovation for us — a new kind of collaboration right from the start. We did not draft proposals and then put them out there for comment. Instead we invited Canadians to tell us about their experience of television: what they liked, what they didn't like, what they wanted to have in the future.
More than 13,000 participated, sharing their views on the television system and how they saw it evolving in the future.
I'd now like to review the key decisions that have emerged from Let's Talk TV. These changes will encourage the creation of compelling content made by Canadians, provide viewers with choice and flexibility, and give them tools to make informed decisions.
Canadian-made content
In March, we announced measures to support the creation and promotion of content made by Canadians for domestic and global audiences. We're removing barriers to innovation and putting the emphasis on quality rather than quantity.
We're launching two pilot projects that take a more flexible approach to the production and financing of Canadian programs. Providing certain standards of Canadian participation are met, live-action drama and comedy series with budgets of at least $2-million will qualify as Canadian. So will series based on best-selling Canadian novels.
We're calling on other policy makers and funding agencies to follow suit. Our aim is to support a production sector that has the financial capacity and the right incentives to develop and market big-budget productions that can attract global audiences.
Our regulatory approach to Canadian programming is changing. Certain tools that we relied on in the past are becoming increasingly less effective in a world of choice.
So we are moving away from exhibition quotas for programs made by Canadians. We will focus instead on expenditures -- the amount of money invested in Canadian shows. Those expenditures will be required from a greater number of programming services. We will, however, retain some exhibition requirements in key time periods.
We are also removing the genre restrictions on specialty channels. This will encourage new entrants and greater competition among existing channels through creative programming strategies.
Discoverability and promotion
No matter how good the content is, it's wasted effort if the audience isn't aware of it or doesn't know how to find it. Traditionally, the broadcasters' schedules provided a display window for the programming they had to offer. But viewers can now bypass these traditional content curators.
Viewers are no longer passive. They are now in control and can access huge libraries of material from anywhere at any time. The latest numbers from the Media Technology Monitor show that Canadians are watching an average of 8.2 hours of online video each week.
New applications, algorithms and interfaces are needed to help connect viewers with the content they want.
Last month, panelists at the National Association of Broadcasters convention looked ahead to 2020. They agreed that discoverability was the Number One challenge facing the industry as viewers face an overwhelming flood of possibilities. Tools are needed to sort and organize content or, as Bob Greene of Liberty Global summed it up, "the consumer experience will suck."
Our challenge will be to find ways of connecting viewers with the content they want to watch. This is not only a Canadian challenge – it is a global challenge.
So the CRTC will be hosting a Discoverability Summit.
We're inviting world-class experts and innovators. We'll be exploring the technologies and strategies to make content discoverable by everyone. Our aim is to create a spark to ignite new ideas, new tools and new business models that will help meet this challenge.
Over-the-air TV
In the Let's Talk TV conversation, we heard from many Canadians who did not want to lose their access to free over-the-air television. We have determined that this form of broadcasting, at least in the near term, will remain a competitive alternative to cable and satellite. Local stations provide important programming of all kinds to the communities they serve.
The uncompressed over-the-air signals provide exceptional image quality. Seventy-six percent of Canadians can receive at least five stations, and in some cities 15 or more.
Broadcasters who shut down their over-the-air transmitters will lose the regulatory privileges that come with that form of transmission.
Last week, we issued the latest financial results for over-the-air television stations. They indicate that in 2014, these stations had to contend with a challenging advertising market. Revenues were down 7.2% from the previous year and the sector recorded a pre-tax loss of nearly $140 million.
Despite these challenging circumstances, over-the-air stations invested close to $620 million in programs made by Canadians – everything from drama series to news programs to documentaries.
Given the importance of local and community programming, we will be examining whether our policies are appropriate to ensure the creation of content that is both relevant to local communities and reflects their realities.
Choice
Canadians also made it clear that they want more freedom of choice in choosing the channels and packages that they want to subscribe to.
They want to be able to tailor their subscriptions to their budgets. They find that the basic packages offered by cable and satellite companies have grown too large and expensive.
Subscribers don't want to be forced to take channels they don't want in order to get the ones they do want. And if they don't get what they want, they can easily go elsewhere.
We have responded to these concerns. We have set down the specifications for an entry-level TV service costing no more than $25 a month. Through Let's Talk TV, Canadians told us how important it is that they have access to the channels that carry local and regional news and information programs. So the entry-level service will include all local and regional stations, as well as public interest and education channels. It will also provide community channels and services operated by the provincial legislatures, if they are available.
This entry-level package will be available by March of 2016.
By December of 2016, Canadians will be able to build on their entry-level service with much more flexibility than they've had in the past. They can add their choice of channels either on a pick-and-pay basis or through small packages at reasonable prices. These packages can be created by viewers or pre-packaged by the provider.
Subscribers will also have the option of keeping the offerings they currently have.
Other decisions
Other aspects of our decisions will contribute to a more dynamic marketplace.
For instance, we prohibited 30-day cancellation policies for television services. Individual and small business customers should be able to switch to another provider with as little inconvenience as possible.
We are also developing a code of conduct for cable and satellite companies. This code will require that Canadians receive easy-to-understand agreements that contain complete information on packaging, prices and other terms of service. We want to make sure we get the code right.
Earlier this week, we launched an online consultation to generate broader public discussion. Canadians can participate at: consultation.crtc.gc.ca.
Finally, we have required the industry to form a working group to develop an audience measurement system based on set-top boxes. Such a system will enable the industry to tailor their offerings to what viewers want and provide broadcasters with new opportunities to monetize advertising. The working group is working on technical standards, privacy protection, governance structure and other issues. We will be receiving their progress report next month.
The future
As we look into the future of television, we know we will continue to move from scheduled and packaged services towards programming chosen by the viewers from a wide variety of sources and delivered on different devices.
For many years the broadcasters broadcast and the viewers viewed. That old linear model is being absorbed into a web of platforms and broadband Internet connections.
There is no question that telecommunications are fundamental to our daily lives and to the functioning of our society. We recently launched a consultation to what should be considered a basic telecommunications service in this day and age.
The first phase of the proceeding began in April. We're collecting information from the industry to give us a clearer view of the services that are now being provided to Canadians. We'll be examining what prices Canadians should be expected to pay for them. And we want to determine which areas of the country are not being adequately served.
We'll then move on to the second phase, when we'll be inviting Canadians to comment on the services that they consider necessary if they're to participate fully in the digital economy. This will lead us to a public hearing in April 2016.
How should we define basic telecommunications services today?
In 2011, the Commission decided that the rollout of broadband services should continue through a combination of market forces, targeted government funding and public-private partnerships.
But considering the increasing importance of the Internet, we established universal target speeds of 5 megabits for downloads and 1 megabit for uploads. These are actual speeds and not advertised “up to” speeds. We expected that this would be achievable for all Canadians by the end of 2015.
But these have not yet been achieved in a significant number of Canadian homes, typically in rural and remote areas, including the North.
In our consultation, we are asking if broadband Internet should be defined as a basic service. And are there any other services that should be put into that category?
What speeds are necessary? What other performance requirements are appropriate?
What funding mechanisms might be needed?
What are the roles of the private sector, governments and the CRTC?
I invite you to participate in this consultation to help us ensure that telecommunications services meet your changing needs.
Conclusion
The Canadian communications industry is changing very rapidly. New technologies. New services. New choices. New challenges.
At the CRTC, our eyes are fixed on the future to ensure that Canadians can make the most of this environment, whether they are watching content, listening to the radio or connecting to the Internet.
When encountering change, people have two choices: they can resist it or they can embrace it. What's certain is that it cannot be stopped. I have every confidence that you will make the right decisions as you look ahead to the future, and continue to serve the needs and interests of Canadians as you have done for over 60 years.
Thank you very much.
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