Early fee-for-carriage debate at CAB convention

Sitting on a panel of broadcast executives Monday morning for the TV.2011 session at the Canadian Association of Broadcasters convention, Rogers Broadcasting Ltd.'s president and CEO Rael Merson showed that although his employer is now a conventional broadcaster as owner of the Citytv channels, it will always be a BDU at heart - especially when the issue is fee for carriage. "I have nightmares about waking up and reading a newspaper headline that says broadcasters are charging for a service they have been providing for free for 40 years," said Merson when pressed on the issue, adding "the world is evolving towards advertising and away from pay...The answer isn't to look to Big Brother to bail us out; we have to be creative. That is television 2011." René Guimond, president and CEO of TQS inc., however, said the broadcasters aren't asking to be rescued by the CRTC. "It's not up to the commission to determine ," he said, "it's up to us to demonstrate that to them." Of course, the debate now seems quite prescient; less than two hours later the commission announced it was pushing back the upcoming BDU and specialty hearing from February to April and was expanding the proceeding to consider the possible introduction of subscriber fees for local conventional television stations. Depending what side you're on it seems that the commission is either bailing the broadcasters out or simply giving them a chance to make their case. "It would go a long way for helping conventional compete with specialty," said Charlotte Bell, VP of regulatory affairs, TV and radio, CanWest MediaWorks. She added that that the commission would have to mandate where the additional revenue would be used, such as towards more content initiatives or investment in the HD conversion. Added Rick Arnish, president of the Jim Pattison Broadcast Group: "Why should the specialties get all the sub revenue and have the base to sell advertising time as well?"And while CTVglobemedia senior VP of regulatory affairs David Goldstein agreed with Merson that consumers would have difficulty paying for what they "already think they are paying for," he made it four-against-one by backing fee for carriage as well. He said, however, that it's not so much as adding fees for conventional channels, but recognizing that local conventionals are effectively local specialty services. Given that, he said, there should at least be remuneration to the broadcasters for time shifting. The debate, however, wasn't restricted to fee for carriage, as all the broadcasters found common ground on how to best deal with the analog shutdown slated for 2011. The consensus, not surprisingly, is that including over-the-air transmission in a conversion to high-definition signals seems unduly expensive, especially considering where else the money could be spent. "We're going to have to balance the issue of accessibility with content," said Goldstein. "Does it make sense to invest half a billion dollars to $600 million to reach only 4% of the population?" Bell and Merson concurred that money could be better allocated on HD production, which will help drive the conversion as well. To see a representative from Rogers involved in debates on these issues from the side of a conventional broadcaster certainly reveals a new dynamic to the industry. Even if the company's interests are far more significant on the side of distribution than broadcasting, it is still in the exclusive position of having investments on both sides of the debate. In time, it may offer a unique perspective at CRTC policy hearings. The other broadcasters seem to think so. As Arnish said, "It'll be interesting to see what Rael's opinion will be after a year of running CHUM."

Early fee-for-carriage debate at CAB convention

Broadcast | November 6, 2007

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