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Media giant Quebecor Inc. says the rules that govern Canadian television no longer make sense and have wildly distorted the market, helping the strong and punishing the weak.

Executives of the Montreal-based conglomerate, whose media holdings embrace broadcasting, cable TV and newspapers, testified Tuesday before the federal regulator on the future of Canadian television, calling for a relaxation of the 400 rules and regulations that they contend were designed for a world that no longer exists.

The previous weak sisters of the TV industry - specialty channels - now are in a formidable position because they are allowed both to carry advertisements and to charge cable and satellite operators for their signals, said Quebecor chief executive officer Pierre Karl Peladeau.

Meanwhile, he said, conventional broadcasters are being squeezed between the fragmentation of advertising spending and regulations that force them to bear the brunt of paying for costly domestic programming, including local news.

Mr. Peladeau said that with the advent of digital TV signals, unless rules are loosened, the Internet may become the main distributor within a few years, piping content over a global network that escapes regulation.

With one foot on each camp, Mr. Peladeau came down on the side of the broadcasters on the issue of whether conventional networks such as CTV and Quebecor's TVA should be allowed to charge cable operators, such as Quebecor-controlled Videotron, for the right to carry their stations.

"We have to try to square the circle and survive without carriage fees, with falling advertising revenues and an unchanging regulatory burden," he said of the broadcasters' plight.

"This is a situation that cannot long endure."

Canadians want domestic content, he added, but if the industry is to remain robust and able to compete, it must have greater freedom and wider ability to generate revenue.

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