Rogers accuses Torstar of asking commission to ‘subsidize its business’

Rogers Communications Inc. said at a CRTC hearing Tuesday that Torstar Corp. is asking the commission to “subsidize its business” in a dispute over the carriage of Torstar’s ShopTV channel. “Torstar has come to this hearing seeking the equivalent of mandatory analogue carriage on all of Rogers’ Class 1 systems,” Pamela Dinsmore, vice-president of regulatory affairs at Rogers, told the commission. “Essentially, it is asking the commission to order Rogers to subsidize its business.” Tuesday’s expedited hearing was put into action after negotiations between Rogers and Torstar, on the carriage and associated carriage fee for the ShopTV channel, came to a standstill. ShopTV is an “exempt” television service, so that it does not have apply for a broadcasting licence. But to operate ShopTV, Torstar must pay Rogers to carry the teleshopping and infomercial service. “Despite our repeated requests, we still don’t have access to all of Rogers’ 2.4 million homes, even though Rogers has given its own service, The Shopping Channel, full carriage,” Mark Goodale, vice-president and general manager for Torstar Media Group Television, said during the hearing. Goodale said Torstar pays Rogers $3 million per year for access to 1.5 million homes in Ontario, mostly in the Greater Toronto Area (GTA). The company would like to see the service’s carriage expanded to other parts of Ontario, all of New Brunswick, and St. John’s, Nfld. But Rogers said it is not required to carry ShopTV in those markets. Canada’s broadcasting distribution regulations recognize two types of exempt television channels: third-party channels, in which the carrier has less than a 15 per cent stake in the service, or affiliated channels, in which the cable carrier has a stake of 15 per cent or higher. ShopTV, as a third-party exempt channel, is subject to the CRTC’s “1:1 linkage rule,” which stipulates that for each affiliated channel carried by the cable distributor—in this case Rogers—the distributor must also carry a third-party channel. In Ontario and New Brunswick, Rogers carries two affiliated channels, the Shopping Channel and TV Listings channel, in which Rogers has a 15 per cent or more ownership stake. To meet the 1:1 rule in those provinces, the company says that it is carrying two third-party exempt services, in which it does not have a 15 per cent stake, through the provincial legislature channel and CPAC. Although CPAC is must-carry channel, Rogers argues that 40 per cent of the channel’s content—specifically its House of Commons proceedings—fits within the definition of a third-party exempt service. “It is Rogers’ submission that all of our Class 1 cable systems are operating in full compliance with the 1:1 linkage rule set out in section 21 of the Regulations, and that we have no obligation to distribute ShopTV on those systems ,” Dinsmore said. Rogers added that it has limited cable spectrum available for an analogue television service like ShopTV, which takes up 6 MHz of spectrum, or the equivalent of two to three high-definition digital channels. David Purdy, Rogers’ president and general manager of television products, told the commission that the company offers 71 analogue channels, at 6 MHz each, and 115 high-definition channels in its Toronto market. “The demands on our spectrum are acute,” Purdy said. He added that the demands on spectrum are greater today than they were a year or a year and a half ago. Negotiations to renew the carriage contract for the channel began three years ago. But Torstar says that CPAC and the provincial legislature channels were never meant to serve as a match for an affiliated exempt service under the commission’s rules. “The history behind the access rules shows that carriage priority services, such as the parliamentary and legislature services, were never intended to be used to satisfy the matching requirements,” Goodale said. He added that ShopTV could satisfy the 1:1 linkage rule as a third-party service, and that Rogers brought up the carriage issue to delay a resolution on carriage payments. “Just since we initiated the request for an expedited hearing in early May, Torstar has paid Rogers just over $750,000 in carriage fees,” Goodale said. Rogers has asked Torstar to pay a rate of $0.162 per subscriber per month for continued access to its cable system. But Torstar wants to pay Rogers $0.08 per subscriber per month. Torstar based its suggested fee per subscriber on international benchmarks, the rates it pays other cable and satellite providers, and its own internal study, the company said. But Rogers said Torstar’s research on foreign carriage rates for teleshopping channels is flawed. “No context or background analysis as to how these rates were determined was provided,” Dinsmore said. “Nor is any information provided as to why these particular countries were chosen.” But Torstar maintains that its proposed rate is fair and that it would not exceed the maximum access rate established in CRTC public notice 1997-35, which established guidelines for exempt channel carriage rates. jmigneault@thewirereport.ca

Rogers accuses Torstar of asking commission to ‘subsidize its business’

Broadcast | July 27, 2010

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