Canadian TV Carriage Fee Hearings Yield No Industry Consensus
TORONTO -- Frustrating the efforts of Canadian media regulators, TV broadcasters and pay TV providers remain as far apart as ever on the idea of cable and satellite operators paying carriage fees for over-the-air stations to support local Canadian programming. As a result, the issue will likely now be decided by the federal government, rather than the industries themselves.
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Two weeks-long sets of public hearings, staged by the Canadian Radio-TV and Telecommunications Commission (CRTC) over the last month and a half just outside Ottawa, didn’t yield the industry consensus sought by CRTC Chairman Konrad von Finckenstein. The CRTC chief had hoped the lengthy hearings would lead to a voluntary resolution of the protracted carriage fee debate, which has raged over the last few years, and industry negotiations over the costs and other terms of the fees. Instead, the oft-contentious hearings produced further stalemate as the pay TV providers refused to consider any new carriage fees and the broadcasters refused to consider any other solutions or commit any new funds to local programming, leaving Finckenstein to fume and rail at both of them at times.
“Could you not throw it all into the mix, sit down, and work out the relationship, what the regime is, and come to me for sanctions?” Finckenstein asked at one point, pleading for some kind of compromise that the Commission could review and approve. “All of it is a pie. Why don’t you guys split it up and come to me and we say yes or no.”
Openly “frustrated” by the intransigence of each side, Finckenstein also blasted both camps for alarming Canadian consumers by threatening to either drop more local stations and newscasts (broadcasters) or hike monthly bills (cable and satellite providers) if they don’t get their way. “You and the [broadcasters] are destroying each other,” he angrily told Rogers Communications executives during their testimony at the hearings. “We are talking about money. You make this sound like a religious crusade. I don’t know why you two don’t realize it’s in your long-run interests to come to some solution, rather than scaring the daylights out of Canadians.”
The public hearings also featured some stormy exchanges between CRTC commissioners and industry executives over the carriage fee issue, also known here as “value for signals.” In one notable exchange, for instance, Shaw Communications CEO Jim Shaw denounced the CRTC for dredging up the issue for the fourth time in three years without resolving it. “I'm getting tired of coming to these hearings,” he said. “You have to come to a conclusion on this stuff.” Finckenstein then shot back: “I'm sick of the debate but I'm also sick of not being able to find a resolution.”
With the two camps heavily lobbying the federal government and the public with dueling TV advertising campaigns, the hearings also featured bitter attacks by each side on the credibility and financial soundness of the other. The broadcasters accused the cable and satellite distributors of raking in huge profits while spending relatively little on Canadian programming. In return, the pay TV providers accused the broadcasters of wildly overpaying for U.S. programming while spending relatively little on Canadian content.
Finally, the hearings featured dueling proposals for a new, stripped-down basic package of TV programming for consumers. In a united front, the three biggest Canadian broadcasters -- CBC, CTV and Canwest Global -- floated the idea of a regulated “skinny basic” cable and satellite package of local Canadian stations, emergency services, and provincial educational stations to keep pay TV rates down. The Canadian Media Guild, representing content producers, countered with a proposed “skinny over-the-air” service to foster Canada’s upcoming digital TV transition. But Finckenstein expressed skepticism about the feasibility of both.
With the two sets of public hearings concluded earlier this month, the carriage fee issue now appears headed to the federal cabinet for resolution. Showing Ottawa’s fatigue with the debate, Canadian Heritage Minister James Moore ordered the CRTC to produce a formal report on the implications of a value-for-signals regime. In a written release, Moore said his department “directed the CRTC to consider what fee-for-carriage would mean for Canadians, because this is an issue that affects them directly.” He also instructed the agency to look at how fee-for-carriage would affect the communications industry at a time when new business models appear to be emerging.
Both broadcasters and pay TV providers publicly welcomed Moore’s move. But it’s not clear where the Conservative government, not eager to anger either of the two industries or consumers, stands on the carriage-fee issue. Moore did not indicate when his department might make a ruling.