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The Globe and Mail

Rogers to take TV fee battle to top court

A Rogers Plus store sign is seen in Toronto February 16, 2011.


A year ago, a battle raged between Canada's broadcast networks and the cable and satellite companies that beam them into millions of homes. Now, the country's television distributors may be headed for a fight among themselves.

Rogers Communications Inc. will ask the Supreme Court of Canada to hear its appeal of a court decision that allows private broadcasters, including CTV and Global, to negotiate fees from cable and satellite companies for carrying their conventional TV stations.

The decision to permit such fees was made nearly a year ago by the Canadian Radio-television and Telecommunications Commission, after a lengthy industry battle. But, sensing that the cable and satellite companies would challenge it, the CRTC referred the decision to the Federal Court of Appeal because it involved issues, such as copyright concerns, that fall outside the broadcast regulator's jurisdiction.

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The appeal court ruled on Monday that the CRTC was within its rights to approve a system for "value for signal" negotiations.

During the year that the issue was before the court, however, the Canadian broadcast industry has undergone a major shift. Both CTV and Global have been acquired by major television distributors (BCE Inc. and Shaw Communications Inc. , respectively).

In the new industry landscape, the networks' argument - that they were in financial trouble and needed fees from distributors to survive - "ought to be moot," argues Rogers chairman Phil Lind.

"They're not in trouble. And now they've got all these heavy distributors that can carry the load too … and the advertising market is back," Mr. Lind said in an interview Tuesday. "You can't leave this thing out for grabs. It has to be overturned at some point."

The possibility of a dispute in the industry now lies with BCE, which is awaiting CRTC approval for the CTV deal. Cable and satellite firms, including BCE, last year came out firmly against paying for broadcast network signals the way they do for specialty channels such as TSN or Food Network Canada.

At hearings into the BCE-CTV deal in Gatineau in early February, Rogers (which also owns the City-TV network) expressed concerns that BCE executives might reverse their position and begin asking competitors to pay to carry CTV.

On Tuesday, BCE executives refused to comment on the Rogers appeal or on whether they had changed their minds, saying only that they are reviewing the court decision - a stark departure from their very vocal position one year ago. CTV also declined to comment Tuesday.

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This issue has divided the industry south of the border as well. In the United States, disputes about fees have resulted in networks blocking their signals from cable companies. Last October, customers of Cablevision Systems Corp. in the New York area, New Jersey, Connecticut and Philadelphia were faced with a blackout of News Corp.'s Fox network during the World Series. A year ago, Cablevision raised the ire of Walt Disney Co.-owned ABC, resulting in blocked signals during the Academy Awards.

Shaw Communications, which last summer purchased the TV stations formerly owned by CanWest, does not plan to join the Rogers appeal to the Supreme Court. But Shaw president Peter Bissonnette said the company continues to oppose the CRTC decision.

"Our position hasn't changed, even though we've acquired Canwest," Mr. Bissonnette said. "We just don't think it's good, we don't think it's warranted. I believe frankly that the commission may look at the world now differently than they did a year ago. ... The over-the-air broadcasters are in pretty good hands."

Telus Corp. will join in the Supreme Court appeal, senior vice-president of regulatory affairs Michael Hennessy said in a statement. "It would make no sense for consumers to underwrite the current takeovers in the industry."

Quebecor Inc., another company which owns a cable provider as well as broadcast network TVA, said in a statement that it is happy with Monday's decision. Quebecor does not oppose paying broadcasters for their signals, but also says they support lowering fees for specialty networks to compensate for those new costs.

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