The Canadian Fee for Carriage Boondoogle
The CRTC began hearings on Monday. The Canadian Broadcast Television Networks are demanding a Fee For Carriage from cable and satellite providers. For my US and Int’l readers, the CRTC is the government body which licenses and regulates the use of all public air waves in Canada (specifically radio and television). It is probably one of the most hated institution in the country – right after Revenue Canada Taxation but before the CBC.
The Broadcast Networks came out swinging and CTV has threatened to cut transmission to the cable and satellite providers unless the CRTC allows them to charge a Fee for Carriage to cable and satellite broadcasters. Broadcast Networks revenues are primarily based raised from advertising. The more viewers the greater the rate the Broadcast Networks can charge for advertising. Since the recession hit, advertising revenues are down by at least 40% and the networks are complaining they will have to start closing local stations unless they get a ‘fee for carriage’ fee. Of course, Cable service provider seems to have very little issue funding local programming….
Cable and satellite providers are objecting to the FFC, and threaten- if they have to start paying a FFC fee now; the cost will be pass immediately unto their customers whose rates have all recently been raised as per the CRTC decision allowing an increase in their services. Cable and satellite providers suggest it makes no sense to negotiate a FFC fee when Broadcast Networks broadcast free, and furthermore, without cable and satellite providers carrying their networks in their cable satellite line-up; it increases Broadcast Networks revenue stream substantially. And it’s an interdependent relationship which has mostly worked to the benefit of all concerned.
First things – first. I cannot believe the absolute chutzpah of the CBC for climbing on board with the other broadcast networks. It’s bad enough that Canadians have been forced to fund this government stain to infinity and beyond but demanding a fee for carriage on top of taxation dollars already received – is equivalent to stabbing the back of the hand of all Canadian taxpayers.
No one in this country forced the major broadcast networks to buy all out those little local stations; so why should we Canadian consumers have to pay for the poor business judgment of Broadcast Networks? Thirdly, no one forced any of the broadcast networks to get into bidding wars for the Canadian rights to air shows like Jeopardy, CSI or House. I could never really understand why Canadian broadcast networks wanted to broadcast exactly the same television fare which could be found on any cable provider in the country who also carries ABC, NBC, CBS, or FOX. Ask yourself this; -does anyone really need two stations to broadcast the same episode of ‘Survivor’? Apparently, in Canada we do….
In the end, I suspect the CRTC will be forced to impose FFC on the cable and satellite providers in order to save the broadcast networks from the consequences of their own worst judgment. Remember the phrase ‘big to fail’ is just another way of saying; “give me more, more, more!” The cable and satellite providers will dully pass on the increased costs to consumers. I expect many consumers will look at the increases in their cable and satellite bills as kind of new fangled accelerant and start the process of disconnecting from cable and satellite services for their television viewing. Boxed set series/movie DVDs, internet and old fashioned television antennas can be easily and cheaply made to work in lieu of either cable/satellite providers. Then, of course, the Cable and Satellite providers will demand a hearing in front of the CRTC to ask permission to raise fees to make up for declining revenues because bail outs are what we do.
It would be bold and innovative; if the CRTC were to allow Cable and Satellite providers to offer Canadian consumers some real choice if some version of the FFC is introduced. The CRTC could start by demanding 65% of all Canadian Broadcast Network television must be produced in Canada to justify the FFC charge, and any aired television shows which are already broadcasted on a US Network carried by the Cable and Satellite provider will results in a rebate from whatever the full FFC charge is. Finally, let the consumer decided how far the knife is to go by allowing us to purchase individual channels without the cumbersome and costly bundling which goes on now. There is something deeply sadistic in making consumers pay for 100’s of channels when potentially there are only 10 stations we want to watch.


