CRTC says TV networks can negotiate signal fees
Published Monday, March 22, 2010 6:43PM EDT
Last Updated Saturday, May 19, 2012 1:15AM EDT
The Canadian Radio-television and Telecommunications Commission has paved the way for broadcasters to negotiate fees for their local signals.
In a ruling handed down Monday, the CRTC said it won't impose so-called fee for carriage on Canada's cable companies. However, it said broadcasters can opt out of the current system -- whereby cable companies transmit local signals for free -- and both sides can work out a fair price.
The CRTC also said broadcasters can withhold their signals from cable companies if negotiations hit an impasse. That means broadcasters can also black out U.S. channels when they air programs for which they've purchased the Canadian rights.
Before the new system can come into effect, however, the CRTC said it will ask the Federal Court of Appeal to confirm that it has the authority to enact its ruling.
Broadcasters say cable companies made more than $2 billion in profits in 2009, while private-sector TV companies, such as Global and CTV, reported losses before interest and taxes of $116.4 million in the same year.
Paul Sparkes, CTV Vice-President of Corporate Affairs, called the ruling "a good first step" and warned that private broadcasters can't survive under the current system.
"This system cannot continue," Sparkes told CTV's Power Play. "And our view is that consumers are already paying for this product and the difference is we're not getting paid for the content we're providing."
Television broadcasters and cable companies have fought a high-profile advertising campaign, with the cable industry asking consumers to say "No" to what it calls a "TV tax" and broadcasters appealing to consumers to save local programming and news.
Broadcasters want cable companies to pay to transmit their local signals, as they do for cable channels. Cable and satellite providers have said that any fees or new costs imposed on them will be passed on to consumers.
Phil Lind, Vice-Chairman of Rogers, told CTV's Power Play that his company was "very unhappy" about the decision.
"It's going to raise the rates of cable and satellite customers, and it also opens the prospect of black-outs, so deleting programs all over the place," he said. "And in an age when everyone wants to get what they want when they want … it just seems to be unbelievable that they can endorse such a backward scheme."
Lind said his company will continue to oppose paying for local signals and will not raise rates "unless we're absolutely forced to."
Mirko Bibic, Senior Vice-President of Regulatory and Government Affairs at Bell, said Monday his company would also raise fees for consumers under the new system.
Should the new rules go ahead, broadcasters would lose the protections they enjoy under the current system. Cable providers could opt to drop their signals or assign them to a place anywhere on the dial. Broadcasters will have the option of staying under the current system.
While the new regime would apply to Canada's private broadcasters, the CBC is excluded from the new regime.
CRTC chair Konrad von Finckenstein said both sides have an incentive to negotiate: broadcasters don't want to lose viewers for their programs and cable and satellite providers don't want to lose customers.
"They both have an incentive to come to an agreement and work something out," von Finckenstein told Power Play. "They have to negotiate in good faith and we will make sure that they do negotiate in good faith and we will lay down the standards of what it means to negotiate in good faith."
Von Finckenstein also pointed out that payment wouldn't have to come in monetary form. Cable and satellite providers can choose to pay "in kind," such as deciding to carry a broadcaster's new specialty station.
Heritage Minister James Moore, who has opposed higher fees for consumers, released a statement about the ruling Monday, expressing his support both for customers and broadcasters.
"Our government's primary focus has always been the interests of Canadian consumers," said Moore. "We appreciate today's decision of the CRTC on the future of an important industry for all Canadians."
The CRTC also said Monday it will change regulations on how private broadcasters spend and allocate resources for Canadian programming.
The CRTC said it will take into account how a broadcasting group, including specialty and pay channels, spends on Canadian programs as a whole. Thirty per cent of spending must be on Canadian shows, but that money can be distributed among all channels.
CTV's Roger Smith said it could be six months before the Appeals Court decides on the CRTC ruling. Should the court decide the CRTC cannot impose the new negotiating system, broadcasters would likely have to seek changes to the Broadcasting Act from the government.
"This has been a long-running war," Smith told CTV News Channel. "We've seen massive ad campaigns on both sides. It's still a long way from over."
With files from The Canadian Press