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Let's Talk TV: A Conversation with Canadians (Broadcasting Regulatory Policy 2015-86) was a regulatory process facilitated by the Canadian Radio-television Telecommunications Commission (CRTC) which resulted in major broadcasting changes in Canadian television. Prior to the release of Broadcasting Regulatory Policy 2015-86, the Commission invited Canadians to share their opinions on the future of television over three phases of information collection and online discussion.

Major provisions of the policy include the prohibition of 30-day cancellation policies, the establishment of new funding models, and the prohibition of simultaneous substitution during the Super Bowl. Media responses to the Let's Talk TV process were mixed, especially in regards to the decisions surrounding simultaneous substitution.

Stated Objective
On 24 October 2013, the Commission released Broadcasting Notice of Invitation 2013-563. The document stated that the CRTC was devoted to making sure “the Canadian television system delivers compelling and diverse programming in an age of digital technology marked by an abundance of channels and on-demand content”.

The Commission invited Canadian citizens to share feedback surrounding their views and experiences as content consumers and creators through three phases of information collection. The Broadcasting Notice of Invitation also stated that “Canadians are entitled to an open, diverse and affordable television system that is responsive and forward-looking”.

Participation and Information Collection
The CRTC launched Phase 1 of the Let's Talk TV conversation on 24 October 2013 by inviting Canadians to respond to the following questions:

“What do you think about what's on television?"

“What do you think about how you receive television programming?"

“Do you have enough information to make informed choices and seek solutions if you're not satisfied?"

The Commission encouraged Canadians to write, e-mail, fax, or phone in their personal views until 22 November 2013. Public discussion forums and online submission forms were created as avenues for discussion on the CRTC website. Additionally, the Commission provided information and tools for Canadians to hold their own volunteer-organized "Flash!" conferences to deliberate issues at a "grassroots level". Phase 1 of information collection through discussion forum comments, public interventions, and flash conferences continued from 24 October 2013 to 22 November 2013.

A quantitative telephone survey was conducted by Harris/Decima with 801 Canadian adults aged 18 years and older in December 2013.

During Phase 2, Canadians were invited to participate in the Choicebook, an interactive questionnaire available online and via paper copies provided by the Commission. Participants were asked to comment on scenarios that “reflect the realities Canadians face daily with respect to the television system”. The research was formally conducted by Hill+Knowlton Strategies and featured over 7,500 participants from its launch on 18 February 2014 to 14 March 2014.

Enactment
The Let’s Talk TV process was first launched on 24 October 2013 with the release of Broadcasting Notice of Invitation 2013-563. Following three phases of feedback collection, Broadcasting Regulatory Policy 2015-86 was enacted on 12 March 2015.

Resulting policies of the Broadcasting Notice of Invitation 2013-563 also include Broadcasting and Telecom Regulatory Policy 2014-576, Broadcasting Regulatory Policy 2015-24, and Broadcasting Regulatory Policy 2015-96. The CRTC acknowledges all decisions made in the aforementioned policies as part of the Let’s Talk TV regulatory process.

Framework
The overarching goals of the policy, as described by the Commission (presented below in bold), were structured under four categories.

Set the stage for innovative approaches: this category described the Commission's commitment to fostering an environment where the creation and promotion of Canadian programs is supported, as well as accessible by Canadian audiences.

Shift in emphasis from quantity to quality of Canadian programming: the Commission stated changes to Canadian programming regulation and funding would contribute to the production of compelling high-quality content.

Regulatory support for specific types of programming deemed to be public interest, but only where market failure is demonstrated: the Commission claimed eliminating current regulatory barriers would lead to the development of further program diversity, programming flexibility, and greater domestic competition.

A simplified and streamlined licensing process: amendments to the process of licensing broadcasters and programming services would reduce regulatory burden on the Commission.

Discoverability
The Broadcasting Act, initiated in 1991, established the policy objectives for the Canadian broadcasting system. One of the main objectives of the Act stated that the Canadian broadcasting system should provide “a wide range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity” in efforts to reflect the interests and circumstances of Canadian society.

The Commission stated that in Canada, viewers are able to access more content from international and domestic sources than ever before in the current on-demand environment. Hence, the promotion and accessibility of Canadian programming, or the ‘discoverability’ of Canadian programming, “will be critical to its success”.

To further discuss processes in which to enhance the visibility and discoverability of Canadian programming to both Canadian and international viewers, the Commission proposed a Discoverability Summit. The CRTC proposed the summit as a forum for government and industry stakeholders to discuss measures and approaches to making Canadian content discoverable, and indicated that the summit would take place during the fall of 2015.

The Discoverability Summit was held by the CRTC and the National Film Board of Canada (NFB) on 10 May 2016 and ended on 11 May 2016.

Pilot project funding models
The CRTC stated that a significant amount of Canadian programming is produced independently, and those independent producers rely on various measures of financial support such as program subsidies, tax credits, and private loans.

The Commission mandates broadcast distribution undertakings (BDUs) with more than 2,000 subscribers must contribute financially to the “creative sector”, which includes independent production funds and the Canada Media Fund (CMF). Between 2010 and 2014, the CMF contributed to the production of $4.8 billion in Canadian content (such as television programs and digital media applications), but in Broadcasting Regulatory Policy 2015-86 the Commission acknowledged that a more flexible funding system would lead to further improvements in the Canadian production sector.

Productions in Canada are certified as ‘Canadian’ by either the CRTC or the Department of Canadian Heritage through the Canadian Audio-Visual Certification Office (CAVCO). The process of determination is done through a “points system” based on the citizenship of the people involved in the production. Certified Canadian productions are eligible to apply for funding and tax credits.

In Broadcasting Regulatory Policy 2015-86, the Commission announced that it would be launching two pilot projects as part of its commitment to “consider more flexible and forward-looking approaches” to the production of future Canadian programming.

Pilot Project 1: The Commission and CAVCO would recognize “live-action drama/comedy productions based on the adaptation of best-selling, Canadian-authored novels” as Canadian.

Pilot Project 2: The Commission and CAVCO would recognize “live-action drama/comedy productions with a budget of at least $2 million/hour” as Canadian.

Additionally, criteria such as the hiring of a Canadian screenwriter, a Canadian lead performer, and a Canadian production company would have to be met for the aforementioned pilot projects to be certified as Canadian.

The Commission claimed that it would evaluate the success of the pilot projects after a period of at least three years.

Regulation for video-on-demand services
In Canada, video-on-demand (VOD) services that are packaged as part of a subscription to a BDU (i.e. Optik TV, Shaw on Demand) generally operate under a VOD license. Licensed VOD services are required to contribute to Canadian programming in various ways, including but not limited to: the requirement to list all new Canadian feature films in the feature film inventory, the payment of 100% of revenues from Canadian feature films to the Canadian rights holder, and the requirement to contribute 5% of gross annual revenues to an existing Canadian program production fund.

Canadian and non-Canadian online video services, on the other hand, operate as exempt undertakings under the Digital Media Exemption Order (DMEO). These services are commonly known as subscription-based video services and can be fully accessed independent of interacting with a BDU (i.e. Netflix, Hulu). Services under the DMEO are not subject to any requirements pertaining to the contribution of funding Canadian programming.

The Commission acknowledged in Broadcasting Regulatory Policy 2015-86 that the restrictions placed on VOD services, both traditional and online, might negatively impact future competition between Canadian VOD services and online video services. As such, the Commission established a third category of VOD services based on a “hybrid regulatory approach”.

The Commission stated that the new hybrid category of VOD services would have the ability to offer “exclusive programming” similar to video online services operating under the DMEO, as well as the ability to offer their service on a closed BDU network without the regulatory requirements that would be imposed on traditional VOD services. This new category of hybrid VOD services would be required to be accessible via the Internet by all Canadians, regardless of BDU subscription.

Simultaneous substitution
Simultaneous substitution occurs when a BDU temporarily replaces the signal of one television channel with that of another channel broadcasting the identical program at the same time. At the broadcaster’s request, Canadian BDUs such as cable and satellite providers perform simultaneous substitution to maximize audiences and advertising revenues for non-Canadian programs.

The Commission acknowledged in Broadcasting Regulatory Policy 2015-25, a resulting policy initiated by the Let’s Talk TV process, that there may be a day in which simultaneous substitution will no longer need to be a practice carried out by BDUs. This is partly as a result of an increasing number of Canadians reporting frustration with quality of service errors that occur during the simultaneous substitution process.

As the Commission believed that certain BDUs were not meeting an appropriate level of service “as it relates to simultaneous substitution”, it was proposed that recurring, substantial simultaneous substitution errors could result in the BDU having to provide compensatory rebate to its customers, or losing the privilege to request simultaneous substitution for a period of time.

Furthermore, as a result of comments from Canadians that the non-Canadian (American) advertising produced for the Super Bowl was an “integral part of the special event programming”, the Commission mandated that BDUs would no longer be allowed to perform simultaneous substitution for the Super Bowl as of the end of the 2016 NFL season.

Entry-level service offerings
One of the CRTC’s main objectives, as described in the Broadcasting Act, is to maximize consumer choice by providing Canadians with a variety of programming sources and content. Prior to the decisions of Broadcasting Regulatory Policy 2015-86, the Commission mandated that certain “basic services” (i.e. local and regional television stations, provincial educational services) be provided by BDUs but the overall size or price of that service was left unregulated.

Many comments from Canadians over the three phases of information collection expressed that basic packages had become “too large and too costly”. Some Canadians questioned eliminating basic service packages altogether, while others suggested a $20-30 price cap on offerings.

Broadcasting Regulatory Policy 2015-96 mandated that all licensed terrestrial and direct-to-home (DTH) distributors provide an entry-level service offering priced at no more than $25 (not including equipment) per month by no later than March 2016. The service offering was also required to be “promoted in a like manner to the distributor’s first-tier offering” and include all local and regional Canadian television stations and provincial or territorial educational services (as described under the Broadcasting Distribution Regulations).

The CRTC stated that it believed BDUs should be required to offer an entry-level service package that “prioritized Canadian services”—local Canadian stations and other services designated by the Commission under section 9(1)(h) of the Broadcasting Act, such as territorial educational services and community channels in one or both of the official languages.

Pick-and-pay packages
Following the Let’s Talk TV proceeding, a report presented by Harris/Decima stated 44% of respondents were not satisfied their the price of their television service and 71% of non-TV subscribers would consider subscribing to a television service provider if the packages were cheaper. The Commission found the results of the report to indicate that Canadian viewers felt disappointed and “restricted” by the service offerings from BDUs in regards to package choices and prices.

The Commission also stated that relying purely on market forces or BDUs to even out the prices through competitive pricing and incentives may have the potential to negatively impact future choice and flexibility in the television services market. The approach of prohibiting BDUs from offering services on a pick-and-pay basis was also rejected, as the Commission did not believe vertically-integrated BDUs would be properly incentivized to make such changes.

Broadcasting Regulatory Policy 2015-96 mandated that by December 2016, all licensed BDUs would be required to offer all discretionary services on both a pick-and-pay basis as well as in entry-level service packages. The Commission stated that this policy would give Canadians the ability to “create their own value proposition” based on the television services they are interested in paying for.

Free over-the-air television
In Broadcasting Notice of Consultation 2014-190, the Commission invited Canadians to comment on their experiences with local television and over-the-air-transmission services in Canada. According to Numeris population estimates, 8.1% of Canadians access television services for free using over-the-air antennas even though 97% of Canadians live within the range of a transmitter.

Programming broadcasted on public airwaves is permitted by the CRTC so long as the conventional broadcasters broadcasting on public airwaves broadcast local Canadian programming. The Commission claimed that these requirements create jobs and professional development, and the programming developed is often independently-owned (which suggests that they may provide different perspectives to national programming).

During Phase 3 of information collection, it was reported that over 95% of commenters on the topic of over-the-air television “referred to the importance and value” of over-the-air transmission of local programming. Some comments argued that the ability to receive local news and programming inexpensively, or for free, is the only way some Canadians are able to access television.

In response to suggestions that Canadians were more prone to accessing content through the Internet rather than from watching conventional television, the Commission stated that recent audience data suggested that conventional stations continued to attract large audiences—indicating that conventional stations still play “a significant role” in Canadian society.

For these reasons, the Commission decided against orders to terminate over-the-air transmission through the shutdown of transmitters (as suggested by Bell and CBC). The Commission stated that should a BDU choose to shut down their transmitters of their own accord, they were free to do so, but then that BDU would no longer retain certain regulatory privileges as described in the Broadcasting Distribution Regulations.

No more 30-day cancellation policies
The Commission mandated that as of 23 January 2015, the practice of requiring customers to provide 30 days’ notice prior to cancelling their contract, otherwise known as “30-day cancellation policies”, would be prohibited for local voice services, Internet services, and broadcasting distribution services.

The Commission had previously prohibited 30-day cancellation policies in Telecom Regulatory Policy 2013-271 (the “Wireless Code” policy) as a measure to provide customers with the ability to maximize choice in a competitive marketplace.

The Commissioner for Complaints for Telecommunications Services (CCTS) reported in its 2012 Annual Report that 30-day cancellation policies accounted for 9.5% of all customer complaints, making it the third most common complaint issue from customers. The Harris/Decima report following the Let’s Talk TV proceeding concluded that only 54% were satisfied with their options in modifying or cancelling BDU services.

The new conduct policy expected of telecommunications and broadcasting distribution services stated that customers must be allowed to cancel their contract at any time, and that the service cancellation must “take effect on the day that the service provider receives notice of the cancellation”.

Simultaneous substitution ban
The CRTC’s decision to prohibit the practice of simultaneous substitution during Super Bowl games, while prompted by Canadian comments, was generally disapproved of by Canadian BDUs.

The removal of simultaneous substitution has been repeatedly argued against by both broadcasters and media agencies since the Commission announced its decision in 2015. Bob Reaume, VP Policy and Research for the Association of Canadian Advertisers (ACA), claimed he was “disappointed” and that this happened “at a time when advertisers in Canada have fewer opportunities to reach Canadian audiences”.

In August 2017, Bell Media and a group of organizations including the National Football League (NFL) and the ACA asked the CRTC to reconsider the ban. The CRTC rejected the appeal, which led Bell to take their appeal to the Federal Court of Appeal.

In its judgement released on 18 December 2017, the Federal Court of Appeal dismissed Bell Media’s appeal against the CRTC’s decision, refusing arguments that the CRTC was outside of its jurisdiction.

On 10 May 2018, the Supreme Court of Canada announced that it would hear appeals from Bell Canada and the NFL against the simultaneous substitution ban.

Google and Netflix Testimony
During the Let’s Talk TV hearings, the Commission asked Netflix and Google to share information in confidence about Canadian viewership and activity on their video-streaming services. Both Netflix and Google declined the CRTC’s request for information, questioning the CRTC’s jurisdiction over the matter.

In response, the CRTC Secretary-General, John Traversy, publicized a letter claiming that “large corporations cannot unilaterally decide which part of the evidence-gathering proceeding they want to participate in”, and effectively removed all of Google and Netflix’s submissions and oral arguments from the public record of the hearings.

Both companies stood by their decisions to withhold information from the Commission.

The decision by the CRTC to strike Netflix and Google’s presentations from the record was called “petulant” and “self-defeating” by Sean Kilpatrick of the Canadian Press. “The CRTC’s wrath seems futile”, Kilpatrick argued, “Some information is better than no information”.

Michael Geist, professor at University of Ottawa, stated that the Commission was “backing down” to “get out of a difficult situation”. Geist suggested that the CRTC might be able to get the courts to rule in their favour by giving the Broadcasting Act jurisdiction over online media, but a representative of the CRTC stated that they have “no immediate plans” to attempt to enforce compliance from online media companies like Netflix.