Canada’s cash-strapped free-to-air TV networks may be able to charge cable and satellite distributors fees for carrying their channels.
In a ruling Monday, the Canadian Radio-television and Telecommunications Commission said it wants broadcasters — such as CTVglobemedia and CanWest Global — to negotiate with cablers and satcasters on a carriage price. The ruling cited the practice among U.S. stations, although that is coming under fire in the States amid increasing battles between station owners and cable/satellite operators.
The CRTC is unclear whether it has the right to force both parties into talks, so it is taking the matter to the Federal Court.
Cable and satellite companies have been fighting carriage fees for the past couple of years, arguing that they are akin to a new TV tax that will be passed on to consumers.
The networks say they need the fees to survive in the current economic climate.
Profits for the main commercial broadcasters have plummeted over the past decade, while distributors continue to rake in cash.
It is unclear what will happen if negotiations break down.
In the past, the networks have threatened to pull the popular U.S. shows to which they own Canadian rights, while distribs argue the networks don’t have the legal right to do that.
“The current dispute between broadcasters and distributors threatens the overall integrity of the broadcasting system,” said CRTC chair Konrad von Finckenstein, in a statement. “Broadcasters and distributors have a symbiotic relationship. The time has come for them to put their differences aside and work together to ensure the continuation of conventional television.”
Initial industry reaction to the decision was mixed.
The country’s biggest media union, the Communications, Energy and Paperworkers Union of Canada, said the CRTC had failed to save local TV.
“Referring jurisdictional issues to a federal court while cable companies rake in billions of profits from Canadian consumers is simply buying time — but for what?” said CEP veep Peter Murdoch. “For the introduction of higher foreign-ownership levels in broadcasting?”
The union is also unhappy with the decision to cut overall Canadian content levels on TV from 60% to 55% of air time.
“If this increases fees for cable consumers, then it has to benefit the system,” said Norm Bolen, CEO of the Canadian Film and Television Production Assn., adding that the money raised shouldn’t just go to the broadcasters.
He also warned that the ruling did nothing to curb the amount Canadian broadcasters spend on pricey U.S. programming.
Bolen liked other aspects, particularly the decision to force broadcasters to spend 30% of their revenue on homegrown programming.
The ruling also states that 75% of all programming has to be produced by independent producers rather than come from the networks themselves, reinforcing a rule already in place.