Consumers group says viewers shouldn't pay for war between cable and broadcast giants
Source: Toronto Star
The Canadian Press
MONTREAL–Consumers shouldn't be stuck with the bill in a battle between television broadcasters and cable companies over who pays for TV signals to deliver programming, says the Consumers' Association of Canada.
"Consumers should not be paying any more than we're paying now," said association president Bruce Cran, noting that Canadians' cable bills are among the highest in the world.
The CRTC will rule Monday on the so-called TV tax or fee for carriage, a cost that cable companies have said could add $10 a month to consumers' bills if the regulator rules they have to pay broadcasters for their local signals.
"We don't want to pay anymore to what just virtually comes out to being a tax on everybody," Cran said.
The Canadian Radio-television and Telecommunications Commission is expected to release details of a negotiating framework to allow the two parties to work out the value of a TV signal, along with other financial issues.
The two sides have waged a high-profile advertising campaign with the cable industry asking consumers to say `No' to what it calls the TV tax, while broadcasters have appealed to consumers to save local programming and news.
Cable provider Rogers Communications Inc. repeated that the burden will fall on consumers if the CRTC implements a fee for carriage.
"If the CRTC says there's a tax, we pass it on," said Phil Lind, vice-chairman of Rogers.
"If there's a tax, consumers are going to be very, very angry because there's no reason for it," he added.
"I guarantee we will pass it on, just like I guarantee that Shaw will pass it on, Bell will pass it on."
Lind said the only "happy scenario" is to increase the local programming improvement fund for broadcasters, something that consumers already pay into that currently amounts to about 1.5 per cent of their monthly cable bill.
Friends of Canadian Broadcasting spokesman Ian Morrison said he expects the commission to mandate some kind of compensation for the broadcasters and have both sides sit down to work out the value of local television signals.
"The issue will be how they go about that and how they enable the broadcasters to get a fair return for their local signals," Morrison said.
If broadcasters and cable companies can't reach a decision, then there could be some kind of arbitration, Morrison added.
But he said consumers have to be mindful of having the costs pushed to them, noting that the cable companies booked profits of more than $2 billion in 2009 and that could be used to pay for signals.
"The CRTC has the power, if it has the gumption, to prevent the cable monopolies from taking the money from the subscribers," Morrison said.
CTVglobemedia declined to comment until after the CRTC decision is released, but it's in favour of compensation for its signals.
The CRTC has said that private-sector conventional TV stations – which include the likes of Global and CTV – reported losses before interest and taxes of $116.4 million in 2009.
That was after a massive 93-per cent drop in profits to $8 million in 2008.
The federal broadcast regulator has also reported that the economy took a lesser toll on Canadian cable operators' results, as they booked profits before interest and taxes of $2.3 billion, an increase from $2.1 billion a year earlier.
Cran said Canadians should be upset about the possibility of their cable and satellite bills increasing, but he's not sure they would do much about it.
"We seem to almost take everything that's thrown at us. Anything that costs us more money, we should be upset about it," he said.
"The straw sometimes falls on the camel's back and breaks it."
© Toronto Star