What is fee for carriage?
Cable companies and content providers battle over fees and costs
Questions remain about what's at stake after the Supreme Court of Canada today overturned a lower-court decision that let the CRTC rule on fee for carriage, at the centre of a long-running dispute between cable companies and private televisions networks.
Here's a backgrounder.
What is fee for carriage?
It's a fee that Canada's private broadcasters want to be paid by cable television companies. The broadcasters say the cable companies are profiting without sharing the cost of creating content.
Here's how the Supreme Court of Canada summarized the question of fees before its decision:
"The CRTC has concluded that the existing model does not adequately deal with recent changes to the broadcasting business environment. Among the changes noted by the CRTC are the development of direct‑to‑home satellite television services, the development of specialty television channels that are permitted to receive fees directly from [cable companies] that carry them, and the widespread adoption of alternative media platforms. These changes have caused advertising revenues for private local television stations to fall while the revenues of [cable companies] have increased, resulting in a significant shift in their relative market positions and a financial crisis for the private local television stations."
Who's in favour of fee for carriage?
The private broadcasters in favour are mainly CTV owner Bell Media Inc., which is looking for new sources of revenue as advertising declines. They support the idea that the CRTC can decide the matter. Also in favour, of course, is the Canadian Radio-television and Telecommunications Commission, which decided the matter in the first place.
What about the CBC?
As a content provider, the Canadian Broadcasting Corporation also wanted a share of revenue from cable companies. However, the CRTC specifically excluded the public broadcaster from the matter, saying that unlike private broadcasters, the CBC was not allowed to withhold its signals. In other words, it has to be delivered free.
Those opposed include the major cable and satellite companies: Rogers, Telus, Cogeco and Shaw. Their view is that the CRTC cannot decide the matter. And since they, in effect, deliver eyeballs to the broadcasters, they see no reason to pay for what has been broadcast over the air for free.
What's this court case about?
It's not directly about fee for carriage, actually. The CRTC already decided that broadcasters should be able to negotiate payment for content with carriers. But because that might lead to higher cable fees, the CRTC decided to get a court opinion on whether it had the right within its mandate to make such a decision. The Federal Court of Appeal said yes to the CRTC. The cable companies appealed to the Supreme Court — hence Thursday's decision.
If the CTRC can't decide it, who can?
With the Supreme Court saying the issue of fee for carriage is outside the CRTC's mandate, the decision could go to the federal government.
What does it mean to me?
The cable companies said they would have to pass on to consumers any increased costs. So if you are a cable television subscriber, you might see higher cable fees, depending on how this plays out over time.
That's unknown at this point, but speculation was that the cable TV fees paid by individual consumers could have risen by as much as several dollars a month.