Court sides with CRTC, broadcasters on TV fees

The Federal Court of Appeal has paved the way for Canadian broadcasters to charge TV cable and satellite providers for carrying their programs.
The CRTC, led by chair Konrad von Finckenstein, had called upon the Federal Court of Appeal to rule over whether the regulator could introduce a value for signal regime. (Pawel Dwulit/Canadian Press)

The Federal Court of Appeal has paved the way for Canadian broadcasters to charge TV cable and satellite providers for carrying their programs.

In 2010, the Canadian Radio-television and Telecommunications Commission had asked the court to issue a ruling on whether it had the right to establish a regime whereby broadcasters could attach value to their TV signals.

In a 2-1 ruling released on Monday, the court said yes.

Cable and satellite companies currently carry over-the-air network television signals without paying for it.

The ruling paves the way for broadcasters, such as CTV, CBC and Global, to begin negotiations with broadcast distributors, including cable giant Rogers, to determine rates. The federal regulator will likely set the framework for debate.

Consumers to foot costs

Cable and satellite companies have vowed that any new fees will be passed straight on to consumers.

Monday's court ruling clears the way for broadcasters to negotiate with cable and satellite companies to determine rates for carrying their signals. (Mike Groll/Associated Press)

In an interview with CBC News on Tuesday, Rogers vice-chair Phil Lind said the cable company will appeal the court's decision.

"For consumers, it would mean $5 to $10 a month extra that they would pay, so of course they are very opposed to it," he said.

Lind adding however that "we're a long way from being there at this point."

He also said Rogers would team up with other broadcast distributors to fight the introduction of any fee for service, taking the battle to the Supreme Court, if necessary.

The $5 to $10 increase is an estimate the cable and satellite firms publicized in 2010 during an effort to rally consumers against the proposed fee.

Industry changes

But according to analyst Greg O'Brien of Cartt.ca, the court decision may be irrelevant at a time when BCE has bought CTV and Shaw has bought Global. 

When all the major private networks are owned by distributors, any value-for-signal compensation would be akin to moving money to one business unit from another in the same conglomerate. Negotiations could also involve non-monetary compensation for a broadcaster's signal and might involve placement on the television dial or a cluster of placements for several stations.  

There is also a shift emerging in Canada concerning content deals, with a broadcaster potentially negotiating a package price for several different signals provided to a distributor.

The Conservative government had been cool to the idea of value for signal, citing the potential added cost for Canadian television subscribers.

However, the CRTC has said it believes Canadians can afford the extra fee. The regulator also recommended that cable firms rejig their offerings to provide consumers a less-expensive option.

Private broadcasters have warned that without the extra funds from a value for signal regime, they would have likely be forced to close more local stations and trim Canadian productions.

With files from The Canadian Press