Court Battles Looming Over Fee for Carriage

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 next 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.

BREAKING NEWS -- CRTC To Examine Negotiated Compensation for Convential Broadcasters

 The Canadian Radio-television and Telecommunications Commission today announced that in the context of the policy hearing on the structure for the group-based licensing of television stations, it will examine de novo the establishment of a framework for the negotiation of a fair market value of the conventional and distant television signals carried by cable and satellite providers.

As a consequence, the policy hearing on the structure for the group-based licensing of television stations planned for September 29, 2009, is rescheduled to November 16, 2009.

On August 4, Bell Canada filed an application in the Federal Court of Appeal alleging that the Commission has denied interested parties the opportunity to comment on the issue of a negotiated, fair market value for local conventional signals.

By proceeding this way, the Commission will ensure a fair, open and transparent hearing and remove any uncertainty on its outcome.

Is Canwest still Canadian?” union asks PM

FOR IMMEDIATE RELEASE                                                        August 4, 2009

OTTAWA - Prime Minister Stephen Harper needs to assure Canadians that the country's largest media company has not fallen under foreign control, says Canada's largest media union.

“We have serious concerns that Canwest Global and Canwest itself may now be under the direction and control of U.S. investors, contrary to federal law," says Peter Murdoch, Vice-President, Media for the Communications, Energy and Paperworkers Union, which   represents more than 20,000 media workers, including employees at Canwest's print and broadcast outlets.

“When Canwest Global purchased Alliance Atlantis, it barely reached the Canadian ownership threshold by including all of its broadcast operations in the deal -- but since the value of those assets has now dropped so sharply, it's clear that Canwest's U.S. debt holders may now be calling the company's shots,” explains Murdoch. 

“But Parliament has demanded that our communications media remain in Canadian hands, to ensure our sovereignty and security.  Canadian newspapers receive tax breaks and Canadian broadcasters benefit from many regulatory incentives, all to promote Canadian ownership.

“Since Canwest's existence hinges on the consent of its major creditors -- largely foreign -- CEP's concern is that control of the company has de facto shifted to non-Canadians already -- a situation that requires federal government intervention.  

"The Canadian government should be monitoring Canwest's actions to ensure that control is being exercised by Canadians, particularly while this debt-ridden company restructures itself to meet the massive debt it took on.

 "We cannot allow financial advisors from Los Angeles to make decisions about the Canadian media landscape - that's our turf," says Murdoch.       

 MORE INFORMATION:  Peter Murdoch, (905) 516-5720

« Est-ce que Canwest est encore une compagnie canadienne? », demande le syndicat au premier ministre

POUR DIFFUSION IMMÉDIATE                                                       Le 4 août 2009

OTTAWA – Le premier ministre Stephen Harper doit certifier aux Canadiennes et Canadiens que la plus grande compagnie médiatique au pays n’est pas tombée sous contrôle étranger, affirme le plus grand syndicat des médias du Canada.

« Nous avons de sérieuses préoccupations devant la possibilité que Canwest Global et Canwest elle-même soient maintenant sous la direction et le contrôle d’investisseurs américains, en contravention à la loi fédérale », affirme Peter Murdoch, vice-président Média au Syndicat canadien des communications, de l’énergie et du papier qui représente plus de 20 000 travailleuses et travailleurs des médias y compris des employées et employés des secteurs de l’impression et de la radiodiffusion de Canwest. 

« Lorsque Canwest Global a fait l’acquisition de la compagnie Alliance Atlantis, elle a à peine respecté le seuil de propriété canadienne en incluant toutes ses opérations de radiodiffusion dans la transaction, mais puisque la valeur de ces actifs a maintenant chuté de façon si abrupte, il est clair que les créanciers américains de Canwest peuvent maintenant dicter à la compagnie quoi faire », explique Peter Murdoch. 

« Mais le Parlement a demandé que nos médias de communication restent de propriété canadienne afin de garantir notre souveraineté et notre sécurité. Les journaux canadiens bénéficient d’un allègement fiscal et les radiodiffuseurs canadiens profitent de plusieurs incitatifs réglementaires, dont l’objectif est de promouvoir la propriété canadienne.

« Puisque l’existence de Canwest dépend du consentement de ses principaux créanciers – la plupart étant étrangers – la préoccupation du SCEP est que le contrôle de la compagnie se soit déjà déplacé de facto à de non-Canadiens, une situation qui exige une intervention du gouvernement fédéral.  

« Le gouvernement du Canada devrait surveiller les manœuvres de Canwest afin de s’assurer que le contrôle soit exercé par des Canadiens, en particulier pendant que cette compagnie criblée de dettes se restructure pour faire face aux énormes dettes qu’elle a contractées.

 « Nous ne pouvons accepter que des conseillers financiers de Los Angeles prennent des décisions sur le paysage médiatique canadien, il s’agit de notre territoire », affirme Peter Murdoch.       

POUR TOUT RENSEIGNEMENT : Peter Murdoch, 905 516-5720