Speech by Suzanne Lamarre, Regional Commissioner for Quebec, Canadian Radio-television and Telecommunications Commission
To the annual meeting of the Central Canada Broadcast Engineers
September 21, 2012
Check against delivery
Thank you for that kind introduction.
I am pleased to be here today. Being with you gives me the feeling that I have come “home.” I have participated in your annual general meetings throughout my career, and enjoyed seeing familiar faces from my days at the CBC. Throughout those years, I never expected that I would be delivering an address to this audience.
For the next few minutes, I want to underscore just how important it is for you, as members of Canada’s broadcasting industry, to continue working closely with the CRTC, so we can collectively offer Canadians what they want and need. After all, our shared working environment is all about services to citizens, including giving consumers choice.
To remain competitive and relevant, our broadcasting system must continue to offer consumers affordable, high-quality, cutting-edge technologies in every corner of the country.
I would like to highlight some issues that I feel would be relevant to you, as broadcast engineers—the people who make things work:
- First, the publication of the CRTC’s new Three-Year Plan
- Second, the latest data from the Communications Monitoring Report
- Third, the new rules to control the loudness of television commercials
- Fourth, the process by which radio licences are approved
- Fifth, issues that are emerging out of last year’s conversion to digital television, and
- Finally, the future of radio.
The CRTC’s Three-Year Plan
As you know, Jean-Pierre Blais began his term as our 10th Chairman in June. He brings experience, knowledge and innovative ideas to the position, based on his many years of public service. I know that he will serve Canadian citizens and our communication sector well in the years to come.
Mr. Blais has a strong vision for the CRTC’s future. He is championing a new approach to equip us to achieve our legislative mandate. This approach has just been released under the banner of the CRTC’s Three-Year Plan.
I would like to take a couple of minutes to summarize it for you. The entire Plan is available on the CRTC’s website, and I would encourage all of you to read it.
The Plan outlines the principal activities we intend to carry out between now and 2015. It has the needs and interests of Canadians at its heart, and structures the CRTC’s future activities around three key areas: create, connect and protect.
The first area—create—captures activities that will be geared to ensuring that Canadians have access to compelling creative content from diverse sources on a variety of platforms. We are planning to:
- Undertake targeted reviews of the commercial radio policies for both French and English-language markets, the ethnic radio and television policies, and the Native radio policy. These reviews are not expected to result in an increase of radio applications.
- Review some licensing processes and renewals, ownership issues, and streamlining requirements.
Activities under the second area—connect—are designed to ensure that Canadians can connect to quality and innovative communication services at affordable prices, and can have access to content. We are planning to:
- Review some of our policies and regulatory frameworks, including those for small incumbent telephone companies; wholesale telecommunications services and prices; voice network interconnection; and telecom accessibility.
At a time where broadcasting programs and telecommunications products share a large part of the infrastructure, both wired and wireless, your contribution will be key.
Protect is the third area. It includes activities to enhance the safety and interests of Canadians by promoting compliance with, and enforcement of, the CRTC’s regulations. We will be:
- enforcing our regulations related to unsolicited telecommunications
- continuing our preparations to enforce Canada’s anti-spam legislation once it comes into force
- reviewing the regulatory framework for next-generation 911 services, and
- monitoring deployment of the public alert system.
I’d like to take a moment to address this last activity, the public alert system. Pelmorex has installed its system and signed agreements with the appropriate federal and provincial organizations, including Environment Canada. While the system is ready, we still need to take a final but crucial step – getting alert messages to the public.
Not all broadcasters and broadcasting distributors are participating in the project. This creates a situation where some consumers are paying for the public alert system through their monthly television subscriptions, but are not yet seeing its full benefits. I understand that some video equipment may not be available until next year. We would hope that this is not an impediment to the participation of broadcasters and distributors in the deployment of the system.
Holding a broadcasting or distribution licence is a privilege and comes with certain expectations that are in the public interest. One of these is ensuring that Canadians are warned as quickly as possible of severe storms or other events that could endanger lives. At the end of the day, I am confident that everyone will do their part to ensure the success of the public alert system.
State of the communication industry
We also recently published the latest edition of our Communications Monitoring Report. I would like to share with you some of the data that I found to be of interest:
- In 2011, revenues for the communication industry rose 3.3% to reach $59.3 billion. This represented 4.6% of Canada’s gross domestic product.
- Canadians, as you would suspect, are favouring faster Internet connections, with 54% of households subscribing to a service offering download speeds of at least 5 megabits per second.
- The number of wireless subscribers increased by 6% to reach 27.4 million, while the number of wireline subscribers fell by 2.7% to 12.2 million.
- Canadians are spending more time watching television and listening to the radio. In fact, they watched an average of 28.5 hours per week of television in 2011, compared to 28 hours in 2010. They also listened to an average of 17.7 hours of radio last year, compared to 17.6 hours in 2010.
- Finally, Canadians are also actively consuming digital media. Typical users watched 2.8 hours of Internet television each week, an increase from 2.4 hours in 2010.
So by all accounts, we are not likely to witness the demise of traditional broadcasting platforms any time soon. If anything, Canadians are watching more programming on more platforms, which is good news for you and your companies. The trend we are seeing, which will continue to grow, is that Canadians expect to find what they want, where and when they want it. Traditional platforms are not alone anymore.
New rules to control the loudness of TV commercials
Let me turn to some more technical issues, starting with the rules that just came into effect on September 1, 2012.
For years, Canadians have been complaining about loud commercials on TV. Thousands have urged the CRTC to do something about them. In 2011, we decided to take action, and set out clear rules that would put an end to excessively loud ads.
Last September, we announced that broadcasters had to implement the Advanced Television Systems Committee’s (ATSC’s) Recommended Practice A/85—the internationally recognized technical standard for measuring and controlling television signals to minimize fluctuations in loudness between programming and commercials.
The Commission has been very pleased with the steps the industry has taken to adopt the new rules on time. We recognize the amount of work, expense and coordination that has been required, and we applaud the efforts many of you have made over the last year to comply.
On August 30, we published Broadcasting Information Bulletin CRTC 2012-471. This document outlines how the CRTC intends to enforce compliance with the new rules and address complaints. I would encourage you to read this bulletin, if you haven’t already done so. My intention today is not to go into the details, but to highlight a few key points.
First of all, I would like to stress that the onus is on the entity that inserts the commercial to ensure that the audio content or format complies with the ATSC’s standard. That means that broadcasters must ensure that all programming, including described video, is in compliance.
Similarly, cable or satellite television providers must ensure the pass-through of accurate audio metadata and that the loudness on Canadian channels is not changed when it is transmitted to a viewer’s home. In addition, distributors are responsible for the loudness of commercials on the foreign channels they import into Canada, as well as when they modify the programming on Canadian services, such as in the case of simultaneous substitution or local availabilities.
We have also set out steps to enforce compliance. Broadcasters and distributors must submit a report to the Commission no later than October 15, confirming how they have implemented the new rules. I expect that your organizations will be relying on your technical expertise to put together such reports. So, be prepared.
I would point out that we expect broadcasters and distributors to demonstrate how they will continue to coordinate their approaches to ensure that programs and commercials are transmitted at a similar volume.
Finally, we are urging them to inform their viewers and subscribers of their actions. After all, the new rules were instituted in response to the needs and demands of Canadians, to allow them to enjoy their favourite television programs without having to adjust the volume at every commercial break.
The approval process for radio licences
Let me now address my next topic: the process by which radio licences are approved. As you very well know, the CRTC’s approval process operates on a parallel track with that of Industry Canada. A radio station cannot launch until Industry Canada and the CRTC have both given their consent.
While the two processes are complementary, they are driven by different criteria and considerations. Industry Canada’s approval process is technically-based, and deals with frequency and broadcast certification. It is designed to control interference between signals.
The CRTC’s process is concerned with the Canadian broadcasting policy set out in the Broadcasting Act. As such, it needs to consider a wide range of socio-economic factors when approving radio licences, including: the manner in which an applicant is committed to fostering the local community’s diversity and distinct nature; the proposed percentage of Canadian content; the applicant’s business plan; and the competitive state of the market.
There has been some speculation that the CRTC’s approval process has changed. This is not the case.
In the past, we sometimes approved applications that proposed the use of alternative frequencies, although Industry Canada may have only approved the primary frequency being sought. This was an exception to our established procedure.
Applicants have always been required to obtain Industry Canada’s approval at least 20 days before a CRTC hearing. In our June 2011 call for radio applications to serve Miramichi, New Brunswick, we clarified that this procedure not only applies to the primary frequency, but also to alternative frequencies. Any application that had not been deemed “technically acceptable” by Industry Canada would be withdrawn.
Our overall aim is to ensure that the parallel approval process operates as it was originally intended. We want to provide all parties with an opportunity to put their best foot forward, while avoiding follow-up procedures that may create unexpected conflicts.
Emerging issues from the transition to digital television
I would now like to address a few issues stemming from the transition to digital television.
The world is going digital. Changing consumer needs and innovative technologies are driving this trend. Last year, most Canadian conventional television stations made the transition from analog over-the-air signals to digital.
The digital transition was essential to make the most efficient use of a scarce resource—spectrum. It has been largely successful for consumers, broadcasters and the government.
- It has delivered positive results for Canadian viewers, as they now have access to HD over-the-air television.
- It has given Canadian producers and broadcasters the infrastructure they need to reach viewers with crystal-clear programming in HD, thus offering them a competitive advantage particularly in an age when content from around the world can be watched on different platforms.
- It has cleared key channels, freeing up much-needed spectrum in the 700 megahertz (MHz) band for public safety and advanced wireless services, and
- Finally, its supporting regulations were developed and implemented in an efficient way, ensuring that market-driven solutions were relied upon as much as possible.
It is expected that the government will begin to auction off the 700 MHz wireless spectrum next year. This will foster the deployment of next-generation services with wide coverage for rural and remote Canadians, which is a positive development for you and your industry. Canadians are starting to watch programming on their smartphones and tablets. This trend should grow as more people have access to wireless networks that offer faster data-transfer speeds.
The government will also consider creative ways to free up even more spectrum, including using white spaces, for example. These unused frequencies, which are reserved to avoid interference between broadcast channels, could be used to deliver high-speed Internet access or to support wireless devices. Industry Canada’s consultation on the use of white spaces closed in November 2011. I’m sure that everyone in this room will be interested in the results of the consultation, as you have to ensure that such shared spectrum does not result in unwanted interference to broadcasting services.
In the meantime, work on the so-called American “spectrum crunch” is underway. The U.S. Congress recently gave the Federal Communications Commission (FCC) the authority to explore the idea of “incentive auctions,” an innovative approach in which the FCC would cooperate with broadcasters, and profits and benefits could potentially be shared. As many as 20 TV channels could be affected by this initiative. American broadcasters are lobbying for and against this approach, and it will be instructive to see how the issue plays out.
The Government of Canada will certainly be watching these developments with interest. No decisions have been taken in Canada at this point. Nevertheless, I think it is fairly safe to assume that more and more U.S. channels will eventually be freed up to direct spectrum to American wireless devices in response to consumer demands. And a similar trend may well have to emerge in Canada, too.
If that’s the case, the CRTC would have to examine what impact these actions could have on its existing regulatory framework.
The future of radio
Meanwhile, how is radio doing?
Vacant frequencies are almost impossible to find in Canada’s major markets. Earlier this year, we held a public hearing in Toronto to consider 22 applications for a single frequency in that market. And this frequency did not appear out of thin air. It became available after the CRTC revoked an existing licence in 2011.
This example illustrates the challenges facing the radio industry. Established companies seeking to enter an urban market must sit patiently on the sidelines and wait for a frequency to open up or make a deal to buy an existing station. It also makes it more difficult for entrepreneurs who are new to the radio industry and who could potentially add to a market’s programming diversity.
Before I joined the Commission, I was among those who suggested that new spectrum could be set aside to expand the FM broadcasting band. The idea would be to convert the 6 megahertz channel 6 bandwidth into digital or analog FM radio channels. This would create additional opportunities across Canada, but mostly in large urban areas.
While this is not a new idea, I suspect it will take time for such an approach to catch on. But time is of the essence. More importantly, it will take your continued involvement if this idea is to have any chance at all in North America. As you know, spectrum management involves a great deal of coordination with our neighbour to the south. If you think this approach is valid, you need to let Canadian policy-makers know what your spectrum needs are, and how you’re willing to assist them to implement a frequency band reallocation. You need to manage the issue in tight collaboration with policy-makers.
And in parallel, you need to address the issue of the receiver market. Sounds like déjà-vu? It is to a point. But the ending has yet to be written. It depends on you.
At the same time, the CRTC is monitoring the development of digital and hybrid-digital radio in the U.S. And I must say that I am looking forward to getting hands-on information on the latest developments through our discussions this weekend.
Digital radio has emerged much more slowly in North America than have other digital communication technologies. North American radio broadcasters have, when considering sheer numbers, fallen behind their counterparts in Europe and Australia. By the end of 2008, for example, 97% of people in the United Kingdom had access to digital radio.
To a degree, it seems that these trends are beginning to change. Digital radio has now been deployed by some 2,000 radio stations in the U.S. Auto manufacturers are equipping cars with digital radio receivers at an increasing rate—to date, approximately 8 million receivers have been installed in more than 140 different models.
As the regulator, the CRTC cannot kick start the evolution of digital radio on its own. We tried that approach and it did not work. In fact, in 2006, we reviewed our approach and did a full about-face. We decided to give licensees the flexibility to create whatever services they believed would be of greatest interest to the public to improve the prospects of digital radio broadcasting. In other words, we took the approach that the market, and not the regulator, should drive the evolution of digital radio to meet the needs and demands of Canadian consumers.
To be clear, our view is that digital radio has the potential of creating interesting opportunities for Canadian broadcasters. For example:
- broadcasters can use the technology to reach a much wider audience by providing multiple services within their licensed frequency band, and
- digital radio may offer potential solutions to the lack of radio frequencies in major markets, as we seek to provide Canadian consumers with a diversity of radio services.
In an environment where consumer choice is the ticket to success, radio must remain relevant to its audiences.
We are hopeful that Canada’s radio broadcasters will continue to think about how they can move towards digital radio. The Commission is ready to work in partnership with you as the trend evolves.
Let me conclude by thanking you, again, for the opportunity to share the CRTC’s vision and perspectives on key issues for you and Canada’s broadcasting industry.
This is an exciting time for all of us, as technologies continue to evolve and keep pace with ever-changing consumer needs and demands across our country, and around our world. I am looking forward to speaking with many of you over the course of the weekend.
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