Source : Toronto Star

Imagine if the government handed public parks over to the Star and other big fat papers to clear-cut for newsprint. The price of that paper? No more than what it would cost to ensure we don't take an axe to each other's turf. Imagine the public outcry. Now, what if, at the same time, the newspapers were benefiting from hundreds of millions of tax dollars going to writers — that is, we toner-stained wretches? Picture the uproar. Wait, there's more: Now throw in government protection. Think along these lines: If the Wall Street Journal carried the same Associated Press stories we did, we get to substitute their pages with our pages and their ads with our ads, in hard copy or on the Internet? Yikes. There's still more: How about ... you want to start a competing newspaper, and should the other papers claim that that could hurt them financially, you probably don't stand a chance because there is federal legislation designed to protect the established players? All these benefits in return for running Canadian and local stories, hiring some minorities, and little else. What a scandal! Private enterprise exploiting public property, plus indirect subsidies, plus protection — and then earning operating profits of 18 per cent or more. Welcome to the "private" TV business in Canada, folks. In an era when spectrum and bandwidth are the equivalent of beachfront property on the Riviera, you get to mine the public airwaves, fulfil much of your Canadian content obligations with taxpayer support through the Canadian Television Fund, substitute U.S. programs with your telecasts (remember the Super Bowl?), and have a Broadcasting Act that explicitly protects you. No wonder they call a TV licence a licence to print money. Two days ago, the Canadian Radio-television and Telecommunications Commission presented its annual financial report on the broadcast industry. Guess what? Net profits have doubled, rising from $95.6 million in 2002 to $189.8 million in 2003. Sure, as broadcasters will wah-wah-wah, things ain't as good as they were back in 1985, when PBIT (profits before interest and taxes) was 20.8 per cent. So now they're 14.4 per cent. Hey, that's showbiz. Things change, innovation brings in new products, markets fragment and competition comes and goes. You adapt or you die. Isn't that how private enterprise is supposed to work? All of which is why it's hard to sympathize with the Canadian Association of Broadcasters. In December, it sued the federal government to recoup the $274 million that its members say they have been overcharged in licence fees since 2001. The CAB says it has no problem with the "Part I" fees that the CRTC collects. In 2002-3, the fees were $23.1 million — in total, for both TV and radio stations — which cover the regulator's broadcasting activity costs. It's those danged Part II fees — $92.6 million in 2002-3 — that really grate. They're calculated at 1.365 per cent of a licensee's gross revenue. The CRTC collects them on behalf of the government, with all of it going into the general federal kitty. Much of the rationale for the Part II fees is to provide a "fair return for the Canadian public for access to, or exploitation of, a publicly owned or controlled resource ... and to represent the privilege of holding a broadcasting licence for commercial benefit." But, in its statement of claim, the CAB says the fees bear "no relation to the expenses of the government for services provided" — without getting into the privilege of holding a licence. They also say that the fees are "a tax.'' Ottawa, itself, opened the door to a legal challenge last fall, thanks to a committee that examined regulations and fees. But, just because there may be a flaw in how the fees are structured does not mean that broadcasters should get spectrum for nothing, plus all the wonderful protection that comes with it. Word of the suit leaked out last week — for obvious reasons. The CAB would like to fly this way below the public radar. When asked for comment, a spokesperson, who was otherwise helpful, said, "No, no and no." This is one issue that should result in a lot of paper being used in reporting on it. But, oh, wait a minute.

The broadcasters own all the other major papers, don't they?

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