Carriage fees dominate CRTC hearing
'There should be a symbiotic solution,' CRTC chief says
During a day-long hearing in Gatineau, Que., von Finckenstein repeatedly appealed for the two sides to come together to negotiate an industry-approved solution.
The Canadian Radio-television and Telecommunications Commission chair appeared visibly annoyed on several occasions with both CTVglobemedia, Canada's largest conventional private broadcaster, and cable TV giant Rogers Communications.
"You need each other and yet we have seen, for the last five months, a public battle never seen before and at the end of the day I can see nothing else than the consumer has to pay more," von Finckenstein declared during CTV's morning session, referring to the ubiquitous TV and print advertising campaigns run by the rival sides.
"All I see so far [are] antagonistic suggestions," he said. "You are in a symbiotic relationship. There should be a symbiotic solution."
In the afternoon, von Finckenstein turned his criticism to the Rogers team.
"I think you and the [over-the-air broadcasters] are destroying each other and chasing the viewers off television," he said, also accusing the cable company's representatives of making an issue about money "sound like a religious crusade."
"There must be a way — with people of your calibre — to find a solution where we carve up the pie and it's a win-win situation and the consumers don't pay more."
Conventional TV biz endangered: Fecan
The CTVglobemedia president Ivan Fecan led his group's presentation, arguing in favour of carriage fees, now being referred to by the terms "negotiation for value" and "value for signal."
Under the proposal, if a deal cannot be reached, broadcaster CTV would have the right to threaten to pull its signals off cable and satellite services. Officials argued on Monday that broadcasters would also have the right to force the distributors to black out the U.S. signal for programs to which they own the Canadian rights.
However, Rogers disputed that notion, saying that if a Canadian network pulled its signal, the cable company would continue to air the U.S. stations that have many of the same shows, according to Ken Engelhart, Rogers' vice-president of regulatory affairs.
CTV officials blasted cable and satellite companies (known as broadcast distribution undertakings, or BDUs) for raising fees for consumers over the years despite not having to pay to carry conventional over-the-air TV signals of broadcasters including CTV and the CBC for four decades.
"It is not about TV taxes or government bailouts" if the profitable cable and satellite TV providers are made to pay for these signals as they already do for specialty channels, CTV argued.
"Since deregulation, consumers have been hit with fee hike after fee hike," said Paul Sparks, CTVglobemedia's executive vice-president of corporate affairs. "It's clear that consumers don't want their bill to increase and we agree."
Fecan offered a dire prediction, suggesting that without a change to the current system, it will no longer be profitable to pursue conventional television broadcasting in Canada.
"We are not going to be here operating conventional TV unless we can make a business of it," Fecan told the CRTC.
"We need to see some cash value for our signal in order to maintain the commitments you require of us to operate a conventional TV station."
Von Finckenstein and the other CRTC commissioners challenged CTV on several points in its proposal, including the amount of local programming hours the network would guarantee if the fee-for-carriage model were approved.
Broadcasters calling for handout: Lind
Rogers officials disputed the dire situation put forth Monday morning by CTV, with CEO Nadir Mohamed acknowledging conventional television is in a rough patch.
However denied the industry is in a state of crisis and placed the blame on "the destructive overspending by CTV and Canwest on U.S. programming."
Von Finckenstein took the cable company's representatives to task for refusing to consider negotiating with the traditional broadcasters.
"Why is it so difficult [to find a solution]?" he asked, to which Rogers vice-chair Philip Lind retorted: "We don't have our hand out. They do."
Rogers officials suggested other possible revenue sources, including digital media, and argued that their own rate increases in recent years have been tied to inflation, continuing network costs and the addition of flashy new services, such as high-definition, video-on-demand and broadband portals.
They also rebuffed the broadcasters' proposal that the CRTC mandate a slimmer or "skinny" basic TV offering, with additional channels sold à la carte.
"Don't tinker with the system, it works very well," Lind said. "Nobody wants [skinny basic]. Not the customer."
CRTC chair wants industry-made solution
"At least three times I pushed you on the point that there has to be a way to find a solution ... 'We have got market power, we are entrenched and we aren't doing anything,' is what I'm hearing," he said.
"I don't think it's helpful for you or helpful for the system," he said, adding that if the CRTC is ultimately left to devise a solution, it will likely be received poorly by all parties and considered worse than anything the industry players could negotiate themselves.
Representatives from ACTRA, the country's largest performers union, were also at the hearing in Gatineau Monday, while others staged a rally on Parliament Hill to coincide with the hearing.
The union supports fee-for-carriage, but insists that the CRTC also should require broadcasters to increase their spending on Canadian-created shows and provide guaranteed prime-time exposure for Canadian dramas, documentaries and children's programs.