Source: Montreal Gazette

Pierre-Karl Péladeau occupies an uncomfortable seat in the current battle between the cable industry and conventional TV broadcasters.

The Quebecor Inc. chief has assets in both camps, as owner of cable carrier Vidéotron and of the TVA television network.

So he's tried to stay out of the nasty fight between cable and TV, which has boiled over into negative ad campaigns and furious lobbying.

But precisely because of his divided loyalties, Péladeau might be one person we should listen to in the increasingly strident shouting match between the two sides.

When he appeared at the current CRTC hearings into the future of Canadian broadcasting, Péladeau proposed a model that would put consumers first, not the interests of one industry or the other.

The issue, of course, is who gets access to scarce consumer dollars.

Over-the-air broadcasters are crying poor and seeking the proverbial "level playing field." They want the same kind of deal as specialty channels, which are paid carriage fees by cable and satellite operators.

You can see the TV industry's point. As it now stands, local broadcasters are among the only ones who don't get compensated for use of their signals. This is happening as their profits plummet, while specialty channels are earning handsome returns.

Even foreign specialty channels like CNN get paid a carriage fee by cable and satellite providers. It's hard to understand the logic behind compensating foreign-based channels that don't invest in any Canadian content, while leaving out conventional broadcasters who are required to provide Canadian programming and news.

As Péladeau told the CRTC, TVA was forced to cancel a couple of high-profile productions because ad revenues alone weren't enough to support programming costs.

Of course, there are other sides to the story. The cable companies, for their part, are warning that any fees imposed on them will be passed on to consumers.

And yesterday, Astral Media Inc. argued before the CRTC that compensating conventional broadcasters for the value of their signals would have a negative impact on the specialty and pay-per-view channels it operates.

Astral warned that such a move would weaken specialty services and amount to a losing proposition for both consumers and overall Canadian content.

Consumers probably would balk at higher fees and cut back on subscriptions to specialty and pay services in difficult economic times, it said. Subscribers, revenue and program quality would drop.

Trying to sort out the competing claims on all sides is enough to give you a headache - which is why Péladeau deserves a listen.

He's got to live with the impact of any change in policy on both the cable and broadcasting sides of his business.

And as Péladeau sees it, there needs to be some rebalancing.

"I don't see anything outrageous in the proposition that all players ... have access to the same sources of financing."

Some of the fees paid by carriers to specialty channels could be redirected to private over-the-air broadcasters in order to resolve the crisis, he advocates.

Note his use of the word "private."

Péladeau doesn't want the same kind of deal extended to Radio-Canada and CBC, seeing the public broadcasters as unfairly subsidized competitors.

And he attached a couple of other conditions to his proposal: fees paid by cable and satellite operators would be negotiable; and any change in fees "must have no impact on the prices paid by consumers."

Okay, this does sound a bit like having your cake and eating it, too. Under his proposal, Péladeau's TVA network would essentially take money away from competing specialty networks, while Vidéotron subscribers would see no extra charge on their monthly bills.

The latter condition would be a tough one to swallow for the likes of Astral Media and other specialty services.

Where Péladeau is on more solid ground is his view that "rebalancing of the broadcast system must enable consumers to watch the programs they want, when they want, on the platform of their own choosing."

For someone with assets in both cable and wireless, this is obviously good business strategy.

But it's also the logical way to go in a multi-channel universe that's expanding into the Web and mobile worlds

"The system must let consumers decide which channels they want to pay for," he says.

It's hard to argue with that.

© The Montreal Gazette