ICTA calls for inputs on the future of local television broadcasting
Cayman Islands Information Communication and Technology Authority (ICTA), the body responsible for regulating TV broadcasting, is seeking public input on redefining the future of local television.
Only 4 weeks has been allowed for the public’s input with thoughts, comments, ideas, etc. must be submitted to the ICTA by 7th May.
The following is the whole of the ICTA document that we urge you to read carefully.
The future of local television broadcasting
Introduction
1. The Information & Communications Technology Authority (‘ICTA’ or the
‘Authority) issues licences to television broadcasters. There is an obligation currently on five Licensees, Infinity (referred to as ‘C3’), Digicel, Cable and Wireless (referred to as ‘LIME’), WestTel (referred to as ‘Logic’), and WestStar to provide a “public television service” (referred to in this paper as the ‘Local Television’ service) where they also provide a subscription television service.
2. The obligation to provide both services mentioned above was included in the Licences to ensure the provision of Local Television. As set out in the Authority’s recent Press Release, there is currently a discussion in the Cayman Islands as to what the provision of Local Television by ICTA Licensees means for those living here. Local Television, for the purposes of this document, is a reference to a free local television channel that is made available to television viewers, over which some amount of local content is broadcast.
3. The Local Television service obligation in all those Licences, apart from WestStar’s, also includes a definition of what that Local Television service is i.e. how the service is to be provided, what programmes should be broadcast and when those programmes should be made available to viewers (more on this later).
4. However, it is now nearly ten years since that obligation was first drafted and much has changed in the Cayman Islands as to how television is provided to customers and as to what content is shown to those customers. The Authority considers that it is appropriate to consider whether the Local Television service obligation in those Licences is still fit for purpose or whether it should be changed to reflect current market situations and the needs of those living here.
5. This paper is called a Call for Inputs because it is a way for the Authority to ask for your input on what you think the future of Local Television in the Cayman Islands should be. It provides an opportunity for all to provide their views to the Authority on an important issue of public interest.
6. What this paper does not cover, however, is whether or not the general television content provided by Licensees should be regulated as to the images and language broadcast, or whether or not the Cayman Islands’ current copyright legislation should be amended.
7. It is intended that the outcome of this process will be for the Authority to make recommendations, where appropriate, to the Government on possible amendments to current Licences and/or the introduction of Regulations dealing with the issues considered.
8. When providing your inputs, please first copy the issue you are providing inputs on. Please also note that all inputs received by the Authority will be posted on its website at www.icta.ky within 5 days of the closing date of this Call for Inputs paper, unless such input is considered by the Authority as being confidential.7
Background
9. There are currently five ICTA Licensees, Digicel, C3, LIME, Logic and WestStar, who are all licensed to provide a subscription television service. Such a service is where the Licensee provides a package of television channels to a customer who typically has to pay the Licensee a monthly subscription.
10. As mentioned above, the Authority requires those Licensees who provide such a subscription service to also provide a Local Television service as a condition of providing that subscription service.8 Each named Licensee was licensed to provide each of those services at different times; WestStar was licensed in October 2003,9 C3 in December 2004,10 Logic in February 2012,11 Digicel in April 201212 and LIME in November 2012.
11. In addition to providing the Local Television service, all those Licensees apart from WestStar have an obligation in Annex 1 to their Licences which sets out how the Local Television part of the service is defined. Namely, that:
� Any customer wishing to receive the Public Television service shall be provided such a service, either via cable or broadcast over-the-air, within a reasonable time frame and at no cost to the customer.
� Program content shall, at a minimum, be 20% local content which shall include such items as local talk shows, educational, cultural and religious programming, live sporting events, government information services and live coverage of the proceedings of the legislature.
� Public Television service shall involve programming offered 24 hours a day, 7 days a week, 365 days a year.14
12. The above definition is broad and was first drafted in late 2004 for insertion into C3’s Licence, nearly ten years ago. That obligation was then reflected in the other Licences in 2012.
13. The Authority in this procedure is reviewing whether the Local Television service obligation is fit for purpose
Considerations
14. In the following paragraphs, the Authority sets out the issues on which it is seeking inputs, and what some of the points for and against that issue might be. Those points are not intended to be exhaustive but are instead intended to help generate discussion on this important topic.
15. Given the above context, the Authority welcomes your input on what is set out below along with any supporting information, documentation, and detailed reasoning.
1. Should each Television Service Licensee be obligated to provide a Local Television service?
16. This relates to the scope of this Call for Inputs. Put simply, it asks whether or not each Licensee who provides a subscription television service should be required to provide a Local Television service at all.17. Briefly, the Authority has required Licensees who provide subscription television services to also provide Local Television services at the same time: some of the profits from the provision of the subscription services can help cover the cost of producing and providing the Local Television service. The Local Television service may also generate revenue from its own services through the provision of advertising or selling promotional sponsorship.
18. Without there being such an obligation, it may be that Licensees would not provide a Local Television service.15 This is because producing Local Content for that service and the delivery of that content to the viewer costs the Licensee money. The Licensee has to pay for, for example, the necessary equipment and personnel to do the scripting, filming, editing etc. to produce and broadcast that content, while any revenue generated from the Local Television service may not be enough to cover those costs.
19. On the basis that Licensees will only invest their money where they expect to receive a reasonable return on that investment, Licensees would only invest the money needed to produce a Local Television service if they are able to make such a profit from that investment.
20. In theory, for example, a Licensee may be able to make a profit through charging for advertising on the Local Television channel or consider it necessary to provide a Local Television service to their viewers because people buy their subscription television service specifically to receive that service (this is sometimes called a ‘market driver’).
21. On the one hand, those who consider that Licensees should not be obliged to provide a Local Television service might likely argue that, as the production and provision of Local Television can be expensive, and given the declining advertising revenue where subscription television services now compete in the market with content being provided by other means, such as over the Internet, it is not cost-effective for them to continue to do so. I.e. they are not able to recoup their costs through such things as advertising.
22. Requiring the provision of Local Television is, in this way, an inefficient use of resources as the money that it costs to provide it could be used for more useful purposes, such as upgrading the Licensees’ distribution networks or other parts of their infrastructure. Further, it is an example of unnecessary Government interference into the commercial interests of a private body; if customers want to watch Local Television (and there is profit in it) then the market will provide such a service without such intervention. If the Government and/or the Authority wants a Local Television service, it should be directly involved in its funding and delivery.
23. On the other hand, those in support of the imposition of the obligation for Licensees to provide a Local Television service might likely argue that Local Television is an important link and source of information for the general community, especially in times of national need or in an emergency situation, such as when there is a hurricane. It is also a way of cementing cultural interests and a national identity.
24. Thus, Local Television should be required regardless of the cost as there are greater benefits to society as a whole in its provision, and anyway, there are ways to fund and run a Local Television service which seeks to minimise its production and provision costs (for further discussion of funding options, please see paragraphs [50] to [55] below). Licensees should be required to provide a Local Television service because they may not provide that service without such a requirement.
25. Further, it is likely that those supporting such a licence obligation would submit that a non-Government influenced body should provide the Local Television service to prevent the possible use of such a service for, among other things, Government promotion purposes.
2. How should Local Content be defined?
26. Currently, as can be seen from paragraph [11] above, the Local Television service obligation defines what Local Content should be shown on that service by reference to the types of programmes to be shown by each Licensee e.g. “live sporting events” or “talk shows”. What the definition does not do is make it clear whether all of the listed types of programmes need to be shown, or what the minimum number from that list needs to be shown; it merely states that the content “shall include such items as”.
27. As to whether such a definition of Local Content is still appropriate, it may be helpful to review how some other jurisdictions consider this issue.
28. In the Bahamas there is one designated public service broadcaster, ZNS. The Bahamian Regulator in this area, the URCA, has recommended to the Bahamian Government that “public service broadcasting” should be defined as:16
the provision of domestically-produced content that is intended to serve Bahamian audiences by reflecting, reporting on and portraying life in The Bahamas.
Public service content in The Bahamas should, in particular, seek to fulfil the following purposes:
� Cultural: Promoting Bahamian arts and music, other forms of culture and sports, and events taking place in The Bahamas and elsewhere, or featuring Bahamian participants
� Social: Showing and giving voice to the diverse lifestyles and culture of people living all over The Bahamas
� Democratic: Reporting on regional (i.e., Caribbean), international, local (i.e., New Providence) and national Bahamian news and current affairs, holding elected officials and public institutions to account, and providing platforms for a wide range of views and perspectives
� Educational: Offering entertaining, engaging and accessible programmes and services with educational value to Bahamians of all ages.
29. In the UK, there is a definition of a “public service remit”, which is what those providing public service television have to fulfil. The definition is set out in the UK Communications Act 2003 and includes similar broad concepts such as ensuring: 17
� the dissemination of information and for the provision of education and entertainment;
� that cultural activity in the UK, and its diversity, are reflected, supported and stimulated;
� facilitating civil understanding and fair and well-informed debate on news and current affairs;
� a comprehensive and authoritative coverage of news and current affairs in, and in the, different parts of, the United Kingdom and from around the world;
� that the services satisfy a wide range of different sporting and other leisure interests;
� a suitable quantity and range of programmes on educational matters;
� that the services include a suitable quantity and range of programmes on science, religion and other beliefs, social issues, matters of international significance or interest and matters of specialist interest;
� that the services include a suitable quantity and range of high quality and original programmes for children and young people;
� that the services include a sufficient quantity of programmes that reflect the lives and concerns of different communities and cultural interests and traditions within the UK, and locally in different parts of the UK; and,
� an appropriate range and proportion of programmes are made outside the London area.
30. One approach to defining Local Content might be to provide a broad definition of what Local Content means along the lines set out above. However, any consideration of whether or not such a ‘test’ has been met would be by its nature subjective.
31. In Canada, the Broadcasting Act 199118states that the programming provided by the Canadian public broadcaster, CBC, as the national public broadcaster, should:
� provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains;
� be predominantly and distinctively Canadian;
� reflect Canada and its regions to national and regional audiences, while serving the special needs of those regions, be varied and comprehensive, providing a balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes;
� be drawn from local, regional, national and international sources,
� include educational and community programs;
� provide a reasonable opportunity for the public to be exposed to the expression of differing views on matters of public concern; and,
� include a significant contribution from the Canadian independent production sector.
32. However, the Canadian system goes further and sets out specific criteria as to what is considered to be a Canadian production for the purposes of that Act. The regulatory body in Canada that oversees compliance with this, the CRTC, has listed the criteria which it uses when deciding whether content is defined as being Canadian.19
33. In summary, the CRTC will certify a program as being ‘Canadian’ if it meets specific requirements which include such things as the producer of the programme must be Canadian, and must control and be the central decision-maker of the production from beginning to end.
34. Also, sports events will be considered Canadian if a Canadian production company exercises control over the production and provides the commentators. If the event takes place outside Canada, the production would qualify only if Canadian-based teams or athletes participate.
Additionally, in all cases one of the major on-camera personalities (commentators, analysts or hosts) must be Canadian.
35. The above paragraphs [28] to [34] are only examples of how other jurisdictions have looked at this issue. The Authority seeks inputs on how you think Local Content should be defined specifically for the Cayman Islands.
36. In this discussion, the Authority also seeks inputs on what the definition of Local Content should not cover. For example, as set out in the Canadian system, Canadian content does not cover infomercials, promotional and corporate videos/films, such as those produced by groups and businesses for public relations reasons, recruitment, etc.
37. The consequence of setting out what Local Content should not cover would be that such content would not be included towards any Local Content percentage broadcast requirement.
3. a. Should there be a quality standard as to the Local Content produced?
3. b. In relation to 3. a., if there should, what should that quality standard be?
3. c. Which body is best placed to assess whether Local Content meets that quality standard and how should that body be funded?
3. a. Should there be a quality standard as to the Local Content produced?
38. The current definition of Local Content does not address whether such content should be assessed against a quality standard; the content just needs to be “local”. In such circumstances, a Licensee may consider that it is able to fulfil at least part of its Local Content obligation by putting a webcam on 7-mile Beach and broadcasting that feed as “local”.
39. Given that a Licensee’s economic incentive may be to invest as little as possible to meet their regulatory commitments, if Licensees are obliged to produce and provide Local Television, there is potential for such productions to have low budgets, rushed production schedules, poor writing and limited production values. The end result in such circumstances could be that the quality of the content produced would likely not be attractive to potential viewers. If no one would want to watch the programmes, there is little public value in making such programmes.
3. b. In relation to 3. a., if there should, what should that quality standard be?
40. If Local Content should be of a required quality standard, what should that standard be?
41. By its definition, whether something is of sufficient quality is a subjective test; what is considered a quality programme by one person may not be by his or her next-door neighbour. For example, should such a standard be based on how many viewers watch the Local Content produced?
3. c. Which body is best placed to assess whether Local Content meets that quality standard and how should that body be funded?
42. Someone has to decide whether Local Content produced by Licensees meets any quality standard put in place.
43. There are various potential ways of doing this. For example, the Authority or another regulatory body could be set up to consider this issue and then publish its findings.
44. In addition, whichever body is best placed to undertake this role, that body will require funding to be set up to consider such an issue and it will then incur annual running costs. Who should pay for this (this ties in with the issue of how the provision of Local Television should be funded, which is considered at paragraphs [50] to [55] below)?
4. a. How many hours of Local Content per day should each
Licensee provide?
4. b. When should the Local Content be shown?
4. c. How much of that Local Content should be original?
4. a. How many hours of local content per day should all Licensees provide?
45. The current Licence obligation states that Licencees must provide their Local Television service “24 hours a day, 7 days a week, 365 days a year” and that, at a minimum, 20% of that service should be Local Content (roughly 5 hours per day).20 The remaining time, the Licensee’s Local Television channels are then made up of content from non-local sources such as content about other Caribbean Islands, other
Broadcaster’s content and/or advertisements/infomercials
4. b. When should the local content be shown?
46. At present, the Local Television obligation does not set out when during the day each Licensee should broadcast its Local Content. For example, a Licensee could broadcast its content between 1 a.m. and 6 a.m. each day and technically meet its requirement to broadcast 5 hours of Local Content per day. It could also broadcast 35 hours of Local Content on a Monday and Tuesday, and then not have to broadcast any more until the following week.
47. The Authority is seeking inputs as to whether or not Licensees should be obliged to broadcast their Local Content during certain hours of the day (for example, between 6 p.m. – 9 p.m. each evening), and a certain amount of hours each day (for example, only a maximum of six hours in any one day).
4. c. How much of that local content should be original?
48. Also, the Local Television obligation does not address the question whether the Local Content should be original or can be repeats of previous original content shown (original in this context meaning when the programme is first shown). So, a Licensee may consider that it is able to fulfil at least part of its Local Content obligation by repeating an hour of content three times daily. The Authority seeks input on how much of the Local Content needs to be original.
49. Something to bear in mind when considering your inputs to each of the issues above is that the more hours per day original Local Content is required, the more expensive it will be to produce and provide that content. For example, it will be financially easier on Licensees if they are required to produce only one hour of original content per day, and then be able to repeat that hour of content throughout the day.
5. How should the production and provision of Local Television be funded?
50. There are various potential funding models for the provision of a Local Television service, from a fully public-funded broadcaster (for example, similar to the BBC in the UK which is funded through an annual licence fee paid by those who own a television), to a hybrid model where the Government funds part of the service (for example, with CBC the main funding is provided by the Government, with the rest of the funding being met through advertising etc.), to a model where Licensees are required to fund the Local Television service themselves (which the Cayman Islands currently has).
51. At present, as there are five Licensees all obliged to provide a Local Television service each, there could be five “local” channels available to television viewers in the Cayman Islands, each providing different content of varying quality. It is part of this Call for Inputs as to how the production and provision of Local Television should be funded in the Cayman Islands.
52. For example, one way to fund the provision of Local Content might be for all five Licensees to form a consortium to produce and provide one Local Television channel. The funding for producing and providing that Local Television channel could come from different sources.
53. However, a consideration of such a funding model is that there would likely be no competition in the independent production of Local Content as there would only be one purchaser for Local Content, and that purchaser could either produce all the content itself or set a low price when purchasing from independent content producers.
54. Another consideration would be that, without competition, there are reduced incentives for that organisation to be efficient in the way it provides its services and in controlling its costs.
55. This part of the Call for Inputs also includes consideration of whether Licensees should be allowed to monetise the Local Content produced and provided on their Local Television channel, through such things as advertising, promotions or infomercials. In such circumstances, the amount generated could then be offset against at least some of the costs of providing the channel (which is in the main what happens at the moment in the Cayman Islands).
6. Should Licensees be obligated to commission a certain percentage of their Local Content from local producers?
56. There is a developing interest locally in people wishing to supply Licensees with (paid for) Local Content for those Licensees to then broadcast on their Local Television service. The Authority has been approached by various people expressing such an interest.
57. If Licensees are obliged to provide Local Content, Licensees then face a decision whether or not to generate that Local Content themselves or purchase such content from independent content producers, or a mixture of the two.
58. When making such a decision, a Licensee would normally consider the costs involved in the production of the Local Content and whether such content can be produced more cheaply by an independent content producer. The answer to such a question will depend on how much each Licensee would be willing to pay for the independent production of Local Content.
59. This issue will also depend on how many Licensees are interested in buying such content. For example, in a situation where there is only one purchaser of Local Content, such as a Local Television consortium, that purchaser is likely to have sufficient buying power to dictate what the cost of the content should be. It would not be a two-way negotiation with the independent content producers.
60. In such circumstances, the Licensee is less likely to offer sufficient payment to independent content producers for those producers to create and continue to create Local Content. On the other hand, if Licensees are obliged to purchase all their content from independent content producers, those producers would have reduced incentive to offer competitive pricing.
61. The Authority is seeking inputs on whether or not there should be a requirement for Licensees to commission a certain percentage of their Local Content output from independent content providers. If the reply to that input request is “yes”, how much of that content should be made independently (10%, 20%, 30% etc.) and how should the price of that content be determined?
7. How should Local Television be provided to customers?
62. Licensees have an obligation to provide their Local Content free of
charge to any person who wants to view it. Currently, each Licensee can do this by providing their Local Television broadcast either via a wired or wireless network (i.e. via a fibre/copper network or over the air).
63. There are costs and benefits of each of those content delivery methods.
For example, if the requirement is only to provide the service over the air, viewers currently would need an analogue or digital receiver. The received signal quality varies greatly and depends on such things as how near the transmitter is to where you live and even where in your house you have your receiver.
64. In relation to providing the Local Television service over a wired network, whether or not you can receive it depends on whether the Licensee’s wired network (copper or fibre) passes by your home. While there are fibre rollout obligations on each Licensee, apart from LIME which already has a copper network which reaches most, if not all, potential customers in the Cayman Islands, a Licensee may not pass by your home for the next two to three years which would mean that their Local Television service would not be available to you until that time.21
65. The Authority is also seeking inputs as to whether the Licencees’ broadcast should be provided by way of analogue or digital technology. There are benefits to a picture being provided by way of a digital signal, including that digital television can provide for a better quality picture (i.e. HDTV – 720p and above) and additional services such as multiplexing (which means more than one program on the same channel can be provided), electronic program guides and additional languages (spoken
or subtitled).
66. However, there would be additional costs involved in migrating the way Licensees provide their Local Television service for those currently broadcasting over the air on analogue. In addition, there may also be costs involved for television viewers to update their television sets or the requirement for a digital interface in order to receive the digital signal. In such cases, who should bear those costs.
8. Do you have any other inputs on this topic?
67. In the Authority’s view, Local Television is an important issue of public interest. As the Authority wants to make sure it has not missed any helpful input on how Local Television should be produced and provided, please feel free to provide any other comments on this particular issue that you think are not covered by the above.
Summary of Requested Responses
68. Therefore, the Authority welcomes comments along with supporting information, documentation, and detailed rationale on the following.
1. Should each Television Service Licencee be obligated to provide a Local Television service?
2. How should Local Content be defined?
3. a. Should there be a quality standard as to the Local Content produced?
b. In relation to 3. a., if there should, what should that quality standard be?
c. Who is best placed to assess whether Local Content meets the quality standard?
4. a. How many hours of Local Content per day should each
Licensee provide?
b. When should the Local Content be shown?
c. How much of that Local Content should be original?
5. How should the production and provision of Local Television be funded?
6. Should Licensees be obligated to commission a certain percentage of their Local Content from local producers?
7. How should Local Television be provided to customers?
8. Do you have any other inputs on this topic?
Procedure for Submissions
69. All inputs on the issues as listed above should be in writing and received by the Authority by 5 pm, 7 May 2014, at the latest. Reference the issue you are providing a response to first in your response.
70. Please note that all inputs received by the Authority will be posted on its website at www.icta.ky within 5 days of the closing date of this Call for Inputs paper, unless such input is considered by the Authority as being confidential (as stipulated in paragraph 8 above).
Submissions may be filed as follows:
By e-mail to:
Or by post (post marked no later than 7 May 2014):
Information and Communications Technology Authority
P.O. Box 2502
Grand Cayman KY1-1104
CAYMAN ISLANDS
Or by courier:
Information and Communications Technology Authority
3rd Floor, Alissta Towers
85 North Sound Road Grand Cayman CAYMAN ISLANDS
Or by fax to:
(345) 945-8284
END
NOTE: The original that contains all the appendixes can be downloaded on the ICTA website at: www.icta.ky
See also today’s Editorial: “The pendulum is swinging against local television”
