Court submissions from Canadian broadcasters and cable & satellite carriers, stating their positions regarding so-called ‘fee-for-carriage’ decisions made by the Canadian Radio-television and Telecommunications Commission (CRTC), are to be filed within a week.
Leading the legal challenges and appeals process is Bell Canada, owner and operator of the Bell TV satellite service. The company alleges in documents already filed with the Federal Court of Appeal that the CRTC overstepped its bounds in making the decision.
Following Bell’s announcement that it was “disappointed” in the CRTC's findings, and it has now has asked the court to intervene.
The CRTC announced earlier this year that it would let large conventional networks, such as CTV and Global, negotiate with cable and satellite carriers on compensation for their signals.
At stake are potentially millions of dollars in collected fees, which would be charged to cable and satellite carriers by broadcasters. Among other worries, the carrier community says those fees would have to be passed along to consumers, amounting to an unwanted ‘tax’.
If no agreement on compensation between the networks and carriers is reached, the matter would be sent to an arbitrator.
As Bell owns 15 per cent of CTVglobemedia, the parent company of CTV, the corporation could end up arguing with itself in the process.
The CRTC’s position is that it has only opened the door for negotiations, not actually set compensation nor approved rates. However, Bell says the regulator has set the stage for the networks to collect new revenues, as an arbitrator would ultimately impose a settlement.
"It's clear that there is more than ample funding in the system,"
Mirko Bibic, Bell's Senior Vice President, Regulatory and Government Affairs, said in a release. “That reality makes the CRTC's support of yet another new broadcasting tax, in the form of fee-for-carriage payments to broadcasters by TV service providers and their customers, all the more perplexing," he said.
"The CRTC should simply have dismissed broadcaster demands for consumers to pay yet more fees. It's clear that the only beneficiaries of these new TV taxes will be the major broadcasting corporations," said Bibic. "The CRTC's new stance is especially concerning considering the House of Commons Standing Committee on Canadian Heritage decided last month not to recommend such fees - a decision that included the categorical rejection of a fee-for-carriage tax by the Heritage Committee's government members."
The networks want to charge about 50 cents a subscriber, similar to fees that specialty channels are allowed to collect. Some estimates put that total value of the proposal between $60-million and $90-million a year, depending on the size of the network and its audience.
Other cable and satellite carriers, including Rogers and Shaw are being called upon to comment on Bell’s application.
Phil Lind, Vice-Chairman of Rogers Communications Inc., has said that Canadian consumers should be very worried about major new consumer TV taxes that could cost Canadians an additional $50 - $100 per year depending on the cable package selected.
"The Commission has announced that beginning in September it will raise the new local TV contribution (for a fund to subsidize local broadcasters in small markets) to 1.5% of cable broadcast revenues. This will mean an increase to our customers' bills of approximately $0.90 per month," he has stated.
Twice in recent years, the CRTC rejected fee-for-carriage proposals, so its most recent decision about compensation for carriage was seen as a major reversal.
The CRTC was scheduled to review the matter of fee-for-carriage, as well as other issues in the broadcast TV sector, at hearings beginning Sept. 29. The court appeal will impact on that timetable.