Rogers disagrees with CRTC decision on cable carriage of out-of-market signals

Rogers Cable Communications finds unfair a CRTC decision that could cost it $3 million more than its rival satellite TV distributors in compensation for not having to perform simultaneous substitution for the carriage of time-shifted Canadian TV signals. The CRTC has ruled that Rogers will have to pay 50 cents for each subscriber who receives Canadian distant TV signals in incremental payments (Broadcasting Decision 2005-198). In contrast, the DTH distributors were given commission approval to divert 0.4% of revenues they paid into independent production, but not the Canadian Television Fund (CTF), to a small market TV programming fund for the right to carry out-of-market Canadian TV signals without having to perform simultaneous substitution (CCR, July 31/03; Jan. 16/03). Not only do the satellite TV distributors not have to put in additional money for the right, the amount translates to a lower monthly figure of about 28 cents per subscriber who opts for a time-shifted Canadian channel. Rogers to no avail had proposed diverting 0.4% of revenues paid to its community channels and independent funds, other than the CTF, to the local programming fund as compensation (CCR, Nov. 22/04). The CAB was seeking $2 per customer based on its analysis of the level of damage incurred by the broadcasters in Rogers’ markets. "The CRTC ignored the costing studies submitted by both Rogers and by the Canadian Association of Broadcasters (CAB), but still made a ruling that results in different prices being paid by cable and direct-to-home (DTH) operators," Rogers’ VP of regulatory affairs Ken Engelhart tells Canadian Communications Reports. "I can’t understand why they did that." He says that if Rogers were to appeal the decision, there is no doubt that a court would overturn the CRTC decision. However, he notes that the agreement ends in August 2006, and that it would take longer than that to push the case through the courts. "Without pronouncing on the merits of the methods of calculating compensation advanced by the parties, the commission determines that, in light of the fees currently paid by other cable and DSL-based distributors, monthly fees of $0.50 for each subscriber receiving Canadian distant television signals and $0.25 for each subscriber receiving a second set of U.S. 4+1 signals on a discretionary digital basis are appropriate compensation for broadcasters for this period," reads the May 16 CRTC decision. But CRTC commissioner Barbara Cram takes issue with this reasoning in her dissent on the decision. She says that a public notice should have been issued immediately to assess and then decide the actual economic impact of distant signals prior to the expiry of all agreements and decisions in August 2006.The CRTC urges the parties involved to work toward a negotiated agreement to cover the period after the agreements’ end. "When I weight the risk of losing local programming, something all Canadians and committees of Parliament value highly, against the accelerated workload to the commission of commencing a public proceeding, my judgement would have been to commence a proceeding immediately," writes Cram in her dissent. "I fear that August 2006 will arrive with no settlements, as the majority has given no guidance whatsoever, and then a process will be commenced and given the complexity of the issue no guidance will be given until one to two years later. I fear this will be too late." Cram also faults the majority for basing what Rogers should pay on rates negotiated by other cablecos on timeshifted TV channels. "Also unfortunately the decision of the majority does not even attempt to quantify any economic impact but simply picks the same number as three out of four other agreements presently in place. It should be noted that three out of four BDU-CAB agreements are with some of the newest BDUs in the country, one of which is not even fully operational. Given that the compensation awarded in this decision and any previous decision on carriage of distant signals bears no resemblance to any empirical data or economic facts and given the disparity between the economic impact assertions of the parties, I cannot understand any basis upon which the parties can negotiate as urged by the majority." Engelhart says that cableco should have at least been treated the same as the DTH operators. "Because satellite offers timeshifted TV channels, we have to as well. Otherwise they advertise that satellite TV is the only place to get them," he notes. "Bell Canada continues to insist that competitors have the same rules as they do in the phone business, yet they are constantly getting competitive advantages with their direct-to-home operations. That’s fine with them."

Rogers disagrees with CRTC decision on cable carriage of out-of-market signals

News | 06/08/2005 4:00 am EDT

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