Television broadcasters have won concessions from Ottawa that will help pay for programming, in a move that escalates their long-running battle with the cable and satellite companies that carry their signals.
The CRTC opened the door for the system of payments from cable companies to broadcasters, known as fee-for-carriage, as part of a review of licensing and conventional television it announced Monday. But rather than approve a fee outright, the regulator wants the broadcasters and cable carriers to negotiate what the payment should be, and if the two sides can't reach a deal, they would go to arbitration. Broadcasters such as CTV Inc. and CanWest Global Communications Corp.'s Global Television have been seeking these payments for years, arguing that they incur losses on the Canadian and local programming the CRTC mandates them to provide.
The CRTC also awarded the broadcasters more flexibility to reduce local programming hours in small markets and increased their funding for that programming.
"I'm very pleased," said Paul Sparkes, executive vice-president of corporate affairs for CTV Inc.'s CTVglobemedia Inc., of the hearings that will look at carriage fees. "Negotiating fair market value for our services is key to our viability." CTVglobemedia owns The Globe and Mail.
The CRTC said it "is now of the view that a negotiated solution for compensation for the free market value of local conventional television signals is also appropriate."
That's a reversal from decisions the commission took in 2007 and 2008. At least one cable company said it plans to push back.
"I'm fighting mad. We'll explore all avenues" to contest the move, said Phil Lind, vice-chairman of Rogers Communications Inc. "This is such a massive tax grab by the broadcasters."
How exactly the fee will be negotiated, and how much cable companies can expect to pay, are still unclear. The larger review of conventional TV broadcasting is set to begin on Sept. 29.
"That's why the CRTC is calling for comments," said John Douglas, vice-president of public affairs at CanWest.
The CRTC said it will increase the charges cable and satellite companies pay for the Local Programming Improvement Fund by 33 per cent for one year, to 1.5 per cent of their gross broadcasting revenues from 1 per cent. The House of Commons Heritage Committee had be calling for an increase to 2.5 per cent.
The move is one-time measure by the CRTC to help broadcasters meet their local programming requirements during tough economic times. Global said that 14 of its 16 local stations are money-losers.
The Writers Guild of Canada applauded the increases to the Local Programming Improvement Fund (LPIF). "The CRTC's interim increase to the LPIF to cover local program costs is the right solution to help the broadcasters over this difficult economic period," the guild said.
BCE Inc. , which runs satellite broadcasts, said it was "extremely disappointed" with the day's rulings. Cable provider Shaw Communications Inc. said it would reserve comment until it had studied the decisions more closely.
The prospect of more charges to cable broadcasters could mean higher monthly fees for cable watchers. "Taxes generally do get passed on to consumers, when they're issued by government bodies," Mr. Lind of Rogers said.
"It's ironic that the cable companies want to be a champion of the consumer, because cable and consumer don't go in the same sentence," CTV's Mr. Sparkes said. "If they pass on [the charges] it's time to regulate basic cable rates."
The commission also changed the minimum local programming requirements in English-speaking TV markets, so that locally owned stations will now be required to air at least 14 hours of local programming a week in metropolitan markets and seven hours in smaller markets. In most cases, that's a cut, the CRTC acknowledged.
The commission also awarded one-year renewals of licences for over-the-air TV stations owned by CTV, Rogers, CanWest, and Montreal-based TVA Group Inc.Report Typo/Error