FEE-FOR-CARRIAGE will happen.
There. I said it. I don’t like it and sure don’t want to pay it, but I’ve come to believe – thanks to my talks and travels this year with folks from all sides of the issue – that in some form, the CRTC is going to grant the conventional broadcasters’ demand for more money from Canadians as additional compensation for the content they deliver.
"On the face of it, it’s a bizarre idea," Rogers vice-chairman Phil Lind told me recently. "(Consumers) get nothing extra, they just have to pay five dollars more."
True enough, but there are many signs pointing in the pro-fee direction. The cable operators and telephone companies who oppose it were prompted to issue their own press release last week saying Canadians want no such fee and that any additional costs will actually injure the Canadian television system.
If Bell Canada and Rogers Communications are worried enough to work together, well, that says more than I can about the possible conclusion they are trying to prevent.
If you read last week’s Tuesday Interview with CanWest Global CEO Leonard Asper, you surely got the broadcaster point of view. There’s not exactly solidarity among Canadian cable operators on the fee issue, either, which will also hurt the case against. Both Cogeco and Quebecor Media (owner of Videotron) have come out in support of such a payment. Of course, both are also broadcasters (Cogeco controls TQS and Quebecor has TVA) suffering far lower growth than in years past.
Also hurting the "won’t pay" argument is the fact that Canadian DTH and cable companies have been raising their customers’ rates by a few dollars every year for the past few – and all have still been gaining customers.
Plus, from what I’ve seen, there’s been little to no reaction so far from the everyday consumer – or from the everyday consumer media pundit. One would think that the likes of libertarian Financial Post editor Terry Corcoran would rage against such a proposition or that the Globe and Mail’s staid columnist Eric Reguly would take what would be an easy shot at the TV industry and its regulator over such a fee.
But they and their ilk been silent, from what I’ve read, on fee-for-carriage. I do hope that’s because they believe it a small issue when compared to such topics as the environment and softwood lumber and not that they think it would be a bad idea to oppose their companies’ corporate stands on the issue (CanWest owns The Post, Bell Globemedia owns CTV and The Globe and Mail – and both broadcasters want the fee).
Surprisingly, friends I’ve talked to have mostly shrugged their shoulders at the whole thing. "I’d be pissed, but I guess I’d pay it," said one, who’s a teacher. "We’re an affluent society and people would accept it." Would you cut your cable bill, I asked? "Probably not," he said.
I mentioned the same question to my barber and his second-chair but they each have illegal U.S. satellite hookups. Both laughed and said: "Who cares?!" But then he asked: "Don’t we already pay for them?" – meaning he thought it was built into subscriber fees already.
Truly, you could say the fee is built into the system. It’s not a cash payment but simultaneous substitution of Canadian signals over top of U.S. broadcasters by BDUs is a significant benefit. Data filed by the CBC says that simsub is worth $200 million-a-year to private broadcasters in Canada.
While CanWest Global has been the most vocal about needing a wholesale fee, I’m not saying the company’s request for 50 cents per subscriber per month per broadcast signal (except CBC) will be approved (and I’d bet even CanWest execs figure that isn’t going to fly). But some sort of fee – or approval of the possibility of such a fee – will come from these hearings. For the CBC, which is also asking for the new money, its case will be tougher because it will look like a double-dip where Canadians pay a billion or so through their taxes for the public broadcaster already and then will have to cough up an extra few bucks a year on top of that.
The real ticklish spot for the Commission will be structuring the move towards broadcaster payment in such a way so that it’s palatable for the federal government. As we’ve seen on the telecom side, this is an administration aimed squarely at deregulation and less taxation and any imposition of a new cost for the carriage of what was once "free" broadcast TV, will be seen as a new tax by many. A strict fee-for-carriage would not likely get past this government, minority or not.
Our federal government is about "letting the market decide", and maybe that’s the tack the CRTC will take on this issue. Perhaps commissioners will allow the broadcasters to charge a "retransmission consent" fee, as it’s called Stateside, and let them negotiate what it will be with cable, satellite and telcos. It’s kind of like letting the market decide but I wouldn’t want to try and negotiate the first one.
While ‘casters in the U.S. get such fees from satellite companies and even from some telco TV providers, they haven’t yet convinced any cable operators to pay. But reports there say it will soon come to a head. CBS CEO Leslie Moonves has said such fees will mean hundreds of millions of dollars for the broadcaster and if MSOs refuse to pay, CBS might then prohibit those cable companies from carrying sister cable channel MTV. (And with U.S. networks pushing for a retrans fee Stateside, you can bet if the rules change here, they will demand the same for their signals from Canadian BDUs, again increasing costs for Canadians.)
The virtuous aim, of course, of new money is that the Commission will certainly tie any new funds to Canadian production, especially drama. Good, new Cancon is a good thing – and broadcasters should be funding more of it, new money or not.
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