Cable companies have gained so much power they have become a threat to Canadian broadcasting, and the federal regulator is mostly to blame, says Canada's second-largest network.
Canwest Global Corp. president Leonard Asper blamed the Canadian Radio-television and Telecommunications Commission (CRTC) for setting ground rules that have impoverished broadcasters and made cable companies wealthy.
Cable firms like Rogers and Shaw have most of the power in the industry today, he said.
"Broadcasting is a regulated business. Once you decide to regulate, it should be fair regulation," he said during hearings on the future of broadcasting, now underway in Gatineau, QC. "Yet over the past 40 years, regulatory policies and decisions have favoured one sector to the detriment of another, resulting in a massive wealth transfer."
As he has on each day of the hearings to date, CRTC's Konrad von Finckenstein again stressed that he is interested in a solution that won't involve a rate increase for subscribers to cable and satellite services. The CRTC chairman has at times alternated from pleas to frustration in asking broadcasters and distributors to get together and take the hot potato out of his hands.
One of the worries for the CRTC is that the Conservative government has put the regulator on notice it will not tolerate charging consumers more.
In an earlier presentation, Quebecor president Pierre Karl Peladeau, who runs both Quebec's dominant broadcasting and cable service, noted the CRTC's concerns. "You seem to be worried about the public reaction of (fee hikes). Well you are right to be," he warned. "The government is absolutely right ... (to) care about the customers," he added, stressing there is enough money in the system to support all the stakeholders.
Peladeau, whose Quebecor firm has a foot in both camps as both the province's dominant broadcaster and cable operator, said the solution is not to increase what consumers pay, but to divvy it up differently. The party that needs to give, he said, is specialty channels that have risen from virtually nothing in the 1980s to capturing almost half the television viewership today.
He asked the CRTC to give stakeholders three years to rebalance the system, in essence allow both specialty channels that currently get a fee-for-carriage and conventional stations that don't to duke it out. And to make sure there is real negotiation, he said, the regulator should remove the "must-carry" label on all signals except for the English and French-language CBC, which would be excluded from the bargaining.
That way, Canadians get to pay for only the stations they want to watch and the market determines the value of specialty and conventional signals.
Peladeau said the CBC should be excluded from fee-for-carriage since it already receives $1.1 billion in government funds, adding it was "scandalous" that the public broadcaster is also asking to be paid for its signal.
Like all the broadcasters, Peladeau said the system began losing its balance with the advent of specialty channels, which fragmented viewership and ad revenues. He noted that while conventional television revenues keep dropping, the CRTC imposes on them the onerous costs of producing domestic programming.