Pelmorex sees nothing but ‘downside’ for itself in current hearing

The removal of genre protection and must-carry rules would have a catastrophic impact on the Weather Network and MétéoMédia, their parent company told the CRTC Monday. As the first independent specialty service to appear at the BDU and specialty review, Pelmorex Communications Inc. also warned that a market-forces regulatory approach would lead to public fighting amongst players in the broadcast system. The issue came to light when commissioner Len Katz asked Pelmorex how it hasn't been able to leverage the Weather Network and MétéoMédia's brand strength to negotiate higher wholesale rates for the services over the last decade. The broadcaster replied that regardless of a service's popularity, power ultimately resides with the BDU. "If a BDU wants to reduce our rate or move us off basic, what can we do?" asked Paul Temple, Pelmorex's senior VP of regulatory and strategic affairs. "Other than raising a stink in the press and mobilizing our subscribers to call the BDU and complain, what's our leverage? Is that what the commission wants? Public fighting all the time?" Because Pelmorex operates as a fixed-cost business, any major shake-up to the system that affects its audience size, like removing genre protection, cuts into its profitability, the company maintains. If carriage fees are approved for conventional broadcasters, Pelmorex worries BDUs will make up the difference by negotiating lower rates from the specialities. Either way, Pelmorex chair and CEO Pierre Morrissette said the current hearing is bad news for services such as the Weather Network and MétéoMédia, which is why it is advocating a status quo approach. "The Canadian broadcasting system is the envy of the world because of the number of domestic television services, and the quality, quantity and diversity of the Canadian productions they broadcast," said Morrisette in his opening remarks to the commission. "The current regulatory regime has built this system." Deregulation, argued Pelmorex, puts more power in the hands of the BDUs. The broadcaster offered a chart showing the drastic increase in basic cable rates since rate deregulation began in 2001. Specifically, Rogers Ottawa increased the price of its cable package from about $17 in 2002 to approximately $32 in 2007 and Shaw Calgary increased the cost of its basic package from about $18 to more than $27 over that same period. "We can't think of a model that adds more uncertainty to programming services than the regime proposed by BDUs," said Temple. "On each of the key issues, the BDU proposals solidify and expand their already excessive market power, at the expense of diversity and Canadian content."

Pelmorex sees nothing but ‘downside’ for itself in current hearing

News | 04/15/2008 1:38 pm EDT

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