Source: Ottawa Citizen

The country's two major conventional broadcasters told MPs that the industry is in the midst of a crisis from which it can recover only with a second source of revenue -- a carriage fee -- and fewer regulatory obligations.

Executives from CTVglobemedia Inc. and Canwest Global Communications Corp. denounced arguments from cable companies that oppose the carriage fee. They noted cable operators have increased their rates -- as recently as this past March -- without vocal opposition from subscribers or a "revolt," as cable executives predicted would happen if the carriage fee were to pass.

The carriage fee "is not just a matter of fairness -- it has become a matter of survival," said Peter Viner, president of Canwest's TV unit. "A properly designed fee-for-carriage regime would put Canadian local broadcasting on a sustainable footing and would go a long way in addressing the ongoing decline of the sector," Viner said.

Added Ivan Fecan, CTV chief executive: "Please give us new revenue sources or reduce the obligations, or some mix of both. Otherwise, we don't believe there is a business there in the future."

The Canadian Radio-television and Telecommunications Commission has twice rejected requests from conventional broadcasters -- led by Canwest and CTV -- to allow them to charge cable companies a fee for carrying their signals. At present, they can collect revenue only from advertising. Meanwhile, specialty channels, such as TSN and HGTV, rely on carriage fees and advertising sales for their revenue.

In the past nine years, U.S. specialty channels received $2 billion in carriage fees, "while (Canadian conventional) TV received nothing," said Charlotte Bell, Canwest's senior vice-president of regulatory affairs. "The time to act is now."

MPs on the House of Commons heritage committee are examining why this is happening and what can be done.

The country's second-biggest cable provider, Shaw Communications Inc., also testified Wednesday and said Ottawa should reject broadcasters' demands for such a fee.

© Ottawa Citizen