A proposal by Canada's major broadcasters to begin charging for their signal “would be devastating” to the television industry, the country's cable and satellite companies argue.
With the TV sector next week heading into its first federal policy review since the 1990s, cable and satellite carriers are trying to stop the proposal, led by Global Television and supported by CTV and CITY-TV.
Global parent CanWest Global Communications Corp. is expected to argue next week at hearings held by the Canadian Radio-television and Telecommunications Commission (CRTC) that fees for carriage, as they are known, should be extended to the major networks.
Only specialty cable channels — those higher up on the dial such as Showcase, MuchMusic and HGTV — are allowed to charge carriers for their signals. That structure was designed to compensate those channels for the smaller audiences they have because they aren't afforded prime placement on the dial, and not all are carried by every satellite or cable company in Canada.
The networks say they need to tap new sources of revenue because the industry faces a series of financial threats from Internet streaming and personal video recorders, which allow viewers to skip commercials.
The cable companies “have built their past and current existence on the backs of conventional ... television stations,” Canwest argues in its submission to the CRTC.
“And yet we have never received any direct payment or subscription fee all this time.”
A proposal by CanWest to allow the major networks to charge 50 cents a month per viewer for its signal could increase monthly bills by between $3 and $7 if the idea is approved for all major networks, depending on the province.
In a statement issued Thursday on behalf of the cable and satellite industry, Rogers Communications Inc. called the idea a tax on television by the networks, saying that it could drive down cable subscriber numbers or prompt customers to scale back their service.
That would hurt the entire TV sector, the company argued.
“The impact of these findings would be devastating on the Canadian television industry,” said Phil Lind, vice-chairman of Rogers. The fees “would lead Canadians to alter their current viewing habits likely resulting in decreased viewership ... potentially moving viewers to alternatives outside the broadcasting system.”
Both sides have commissioned public surveys to support their arguments in advance of next week's hearings.
Rogers said a survey it conducted shows as many as 20 per cent of cable subscribers would discontinue their service if bills were increased substantially, while 37 per cent said they would reduce the number of channels they buy.
Conversely, CanWest has cited a survey in recent months that supports its argument that the fees will have little impact on the market.
Speaking at an industry conference in Vancouver this month, CanWest chief executive officer Leonard Asper said respondents to that survey indicated they were willing to pay to receive the major networks, and that some Canadians already believe they are paying for that service.
