CCA Bulletin 27/09

November 3, 2009

CCA urges CRTC to regulate cable and satellite rates

Just the Facts

The federal government has recently instructed the CRTC  to hold a public hearing to ask the assess the impact on consumers of compensating over-the-air television broadcasters – such as CTV, Global and CBC – for the distribution of  their signals by the cable and satellite industry. This is an important issue indeed because, as the Order in Council (OIC) points out, the vast majority of Canadians receive their television broadcasting services, including Canadian over-the-air (OTA) television services, through distribution undertakings.

In a brief presented yesterday, the CCA supports the establishment of  “value for signal” (or fee for carriage), provided the CRTC also imposes Canadian programming expenditure requirements on OTA broadcasters.  The CCA also urges the CRTC to re-regulate cable and satellite rates to ensure that this payment, as well as the Local Programming Improvement Fund (LPIF) contribution, is not passed along to consumers, and to otherwise protect consumers’ interests.

Tell me more

Twice over the past two years, the CRTC has rejected a the notion of “fee for carriage”, which the broadcasters have relabeled “value for signal”. However, the Commission reopened the question for the hearing due to start in Gatineau (Quebec) on November 16. Over the past months, a fierce public campaign has pitted broadcasters against distributors, the latter using both traditional advertising as well as social networking tools like Facebook to denounce what they call a “tax on television”, which they claim they will be forced to pass on to consumers.

This has led the government to ask the CRTC to hold a special consultation on the specific issue of the impact on consumers. Prompted by the two parties at war over the issue, thousands of Canadians have sent their comments to the Commission over the past several weeks. The deadline for public interventions was yesterday and this additional hearing on the issue is scheduled to start on December 7. The CRTC will then make recommendations to the government, who will make the final decision.

In its brief, the CCA notes that in the OIC addressed to the CRTC, the government refers to only two consumer interests at stake in the debate, namely cable rates and access to local news services.  The CCA states that there is actually a third consumer interest which the Commission should consider, namely access to high quality Canadian drama and other underrepresented programming genres, as provided in section 3 (i) of the Broadcasting Act:

“the programming provided by the Canadian broadcasting system        should be varied and comprehensive, providing a balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes.” (emphasis added)

The CCA states that with profits of $2 billion a year, the distribution companies can and should absorb the new contribution which would ensure that Canadians have access to quality Canadian programming, and that the best way to protect consumers is to start again regulating rates for cable and satellite services. 

Finally, the CCA submits that the Commission should determine itself the appropriate level for a value for signal payment, taking into account the impact this would have on both the broadcasters and the distribution undertakings.  Given the tone that the debate has taken in recent months, the CCA considers it would be both utopian and irresponsible to hope that such an issue can be determined through a direct negotiation between the parties involved.

What can I do?

It is too late to intervene in the public consultation, but you can contact both your MP and the Minister for Canadian Heritage, the Hon. James Moore, to say that your support both the “value for signal” concept and the regulating of cable and satellite subscription fees to protect consumers.