CBC tables new approach to regulate negotiations between broadcasters and carriers

The CBC came out swinging in defence of carriage fees on the second day of the group-based licensing hearing. It urged the CRTC to wield its influence and issue a distribution order, rather than amending the Broadcasting Distribution Regulations, saying it’s a simpler, faster and more efficient way for broadcasters and carriers to negotiate a fair price for television signals. “BDUs and local television broadcasters could then negotiate an acceptable level of compensation,” said Hubert Lacroix, president and CEO. “If the parties could not agree within a reasonable timeframe, they could seek arbitration from the CRTC.” In general, the CRTC has three options for requiring BDUs to start paying for local signals. It can amend the Broadcasting Distributing Regulations, add conditions to BDU licences, or as CBC has advocated, issue an order under section 9(1)(h) of the Broadcasting Act which would require BDUs to compensate conventional broadcasters for the value of their signals. Lacroix told commissioners that negotiations with BDUs over carriage fees are “doable” and crucial to saving conventional broadcasters. He reminded commissioners not to buy an argument posited by BDUs that creating a compensation regime is difficult because there is no way to value broadcasters’ signals. “This is nonsense,” he said, stressing that BDUs and specialty services have in the past successfully negotiated compensation deals. Asked by commissioner Timothy Denton whether the CBC would be willing to enter into negotiations with BDUs without the CRTC overseeing the process, Lacroix replied “we believe in negotiations, we believe it is the simplest way”, assuming, he added, that BDUs value broadcasters’ signals. For negotiations to move ahead, Lacroix referred commissioners to a proposal the CBC had submitted to on what a distribution order should take into account. It includes: the amount of local programming, number of BDU and television subscribers in a locality, total population of the local market served by a BDU, number of local and regional television stations in a local market, audience share of programming services of local and regional television markets, and the amount of compensation BDUs pay to other programming services. In light of comments made by BDUs over fee-for-carriage, Lacroix said the CRTC should take steps to ensure that consumers are protected. BDUs have long argued that a compensation regime would likely result in higher fees for cable subscribers. The CBC also wants the CRTC to require BDUs to offer a small basic service package, comprising only the local and regional conventional television services which are mandatory for the area where the subscriber lives. The “skinny basic” service would cost less than the larger basic services currently available. In a move likely to raise the ire of BDUs, the proposal would compel them to sell the cheaper package together with other services similar to their existing basic packages. However, consumers would not be obliged to buy the bundled package. “The end result would be an affordable basic package, a sustainable financial future for local television and more choice for consumers,” said Lacroix.

CBC tables new approach to regulate negotiations between broadcasters and carriers

Broadcast | November 17, 2009

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