Source : National Post

Canada's biggest network television broadcasters are joining forces in a heated battle with cable and satellite services over compensation for carrying their channels.

In what several broadcasting executives called a "historic" pairing, CTVglobemedia Inc. and frequent rival Canwest Global Communications Corp. filed a joint submission to the federal broadcast regulator yesterday, saying their industry is in "crisis" and they must be paid for the channels that are beamed into customers' homes by cable and satellite companies.

The contentious issue of "fees for carriage" was debated last fall during TV policy hearings convened by the Canadian Radio-television and Telecommunications Commission. But the CRTC deferred a ruling on the issue, which is to be debated again during three weeks of hearings in Hull, Que., beginning on April 7.

CTVglobemedia, Canada's largest private broadcaster, declared yesterday that the model for local TV must "evolve" if the networks are to survive the proliferation of specialty TV channels and other options.

"Ad revenues are shrinking year after year and our expenses continue to rise," said Paul Sparkes, executive vice-president of corporate affairs. "Right now, cable companies pay nothing for our signal, yet they charge their customers to watch local news and programming. It's just not right."

The sole stream of revenue for conventional TV stations operated by CTV and Canwest, owner of the Global and E! networks, comes from advertising. Niche specialty channels, such as Treehouse and Sportsnet, receive revenue from both advertisers and the TV distributors in the form of regulated or negotiated fees.

Mr. Sparkes said compensating network broadcasters that air a specified amount of local programming "is a crucial part of the solution."

CTVglobemedia and Canwest yesterday filed a 53-page document that notes that four conventional broadcasting groups -- WIC, Craig, CHUM and TQS -- have been swallowed up or pushed into creditor protection since 1999.

Cable companies are pushing for reduced regulation. But the broadcasters contend more intervention, including new fees for carriage, is required because of the "lopsided" relationship created by large and prosperous cable companies that also distribute entertainment through their growing Internet services.

A study by Nanos Research, commissioned by CTV and Canwest, shows that 68% of subscribers "assumed" their monthly cable bill paid for local programming "when in fact local stations do not get any money directly from cable or satellite distributors."

TV distributors Rogers Communications Inc., Bell Canada Inc. and Telus Corp. countered with research from Harris/Decima that shows 84% of consumers are opposed to a new fee -- pegged by the researchers at $4 to $5--for conventional television stations that have always been free.

In a separate filing with the CRTC, media conglomerate Rogers "firmly opposes" fees for carriage.

© National Post

Related Documents:

January 25, 2008 - Policy Brief - Review of the regulatory framework for broadcasting distribution undertakings and discretionary programming services CRTC 2007-10
FRIENDS recommends that the CRTC permit over-the-air television equitable access to subscriber cable/satellite fees in return for the expansion of local programming.