The four-year blood feud between television networks and cable and satellite companies over signal fees is far from over.
In the same breath that the CRTC ruled Monday that Canada’s conventional networks can seek payments for their television signals from cable and satellite companies, the regulator took the unusual step of seeking approval of its ruling from the Federal Court of Appeal.
Regulators seldom ask courts to endorse decisions, but the CRTC is apparently moving pre-emptively against cable and satellite distributors, which have questioned the regulator’s power to enforce the fees. Experts said they expect cable and satellite companies will mount an aggressive courtroom assault against the regulator, whose chairman, Konrad von Finckenstein, recently complained that the high-pitched confrontation over television signal fees had descended into a “religious crusade.”
Another battle looms for the CRTC in the political arena. Industry players are betting that Ottawa will review a decision that cable and satellite companies warn could cost consumers an additional “tax” of tens of millions of dollars to cover the new fees. It was concerns about uncompetitive fees that prompted the Conservative government three months ago to reverse a CRTC decision to halt internationally backed cellular carrier Wind Mobile from competing in Canada.
“This isn’t over,” said Lawson Hunter, a former federal regulator and communications lawyer with Stikeman Elliott LLP. “The government has been particularly sensitive to anything that could result in additional costs to consumers.”
The potential conflicts are the latest assault to the CRTC’s four-decades-old mandate to protect Canadian content over the airwaves. The public policy has become increasingly difficult to enforce at a time when technological advances are shifting consumers away from conventional broadcasters to Internet-based media. Indeed, the same day that the CRTC ordered cable and satellite companies to pay television networks for their signals, a new survey from Ipsos Reid showed that the average Canadian now spends more time on the Internet than watching television.
At the heart of the anticipated court challenge to television signal fees is a claim that the CRTC lacks the authority to order what satellite and cable companies say will be a second copyright fee. Television networks pay outside producers for the right to license their content on Canadian airwaves. Many of these programs are popular television shows produced in the United States, and cable and satellite distributors have complained the networks would be earning extra money for shows produced by third parties.
Television broadcasters counter they are doing distributors a service by collecting shows and arranging schedules that they can easily carry over cable and satellite transmissions at the flip of a switch.
The Conservative government signalled in September that it may take a stand against any move by the CRTC to levy additional broadcast fees on cable and satellite companies. That month, Heritage Canada sent a rare order-in-council to the CRTC warning that extra fees “may negatively affect affordable access by Canadians to Canadian programming.”
