Rogers emerges winner in carriage dispute with Torstar, experts say

Rogers Communications Inc. emerged the winner Wednesday in a CRTC decision that attempted to settle a dispute over the carriage of Torstar Corp.’s ShopTV channel, experts say. “In think Rogers comes out as a winner,” David Elder, an Ottawa-based communications lawyer, said in an interview. He said the CRTC left Rogers off the hook on carriage because it does not necessarily have to distribute the ShopTV channel as an analog service. The commission also rejected Torstar’s proposed fees to access Roger cable system. The CRTC put an expedited hearing into action last month after Rogers and Torstar could not agree on terms of carriage and associated carriage fees for the ShopTV channel. ShopTV, a teleshopping and infomercial channel, is an “exempt” television service, so that it does not have to apply for a broadcasting licence. But to operate ShopTV, Torstar must pay Rogers to carry it. The commission said in its decision Wednesday that Rogers violated the broadcasting distribution regulations by not carrying ShopTV. But the CRTC also determined that the rates Torstar suggested for carriage of the channel are too low, and that the company did not present enough evidence to support the proposed rates. Some observers said the CRTC tried to strike a balance between the parties’ demands. “I think that what the commission tried to do was to strike a balance between the needs and the wants of both groups,” broadcasting industry expert Martha Fusca, president and CEO of Stornoway Communications, said in an interview. During the July hearing, Mark Goodale, vice-president and general manager for Torstar Media Group Television, said the company pays Rogers $3 million per year for access to 1.5 million homes in Ontario, mostly in the Greater Toronto Area (GTA). The company asked the CRTC to have ShopTV’s carriage expanded to other parts of Ontario, all of New Brunswick, and St. John’s, Nfld. Rogers argued it was not required to carry the channel in those markets because it was already meeting the CRTC’s “1:1 linkage” criteria for exempt television services. There are 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. Torstar’s ShopTV falls under the third-party category. Under the “1:1 linkage rule,” a carrier, such as Rogers, must carry a third-party exempt television channel for each affiliated channel it carries. In Ontario and New Brunswick, Rogers carries two affiliated channels, the Shopping Channel and the TV Listings channel. To meet the 1:1 rule in those provinces, the company said it carries 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 a must-carry channel, Rogers argued during the hearings 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. But the CRTC said in its decision Wednesday that the House of Commons programming service, carried by CPAC, cannot be counted toward the 1:1 linkage rule because Rogers must carry the channel anyway. “The Commission determines that where Rogers is counting the House of Commons programming service as a third-party exempt service in order to meet its regulatory obligations under section 21(3) of the Regulations, it is not in compliance,” the CRTC said. The commission gave Rogers three options to come into compliance with the regulations: stop carrying its own exempt television services (the Shopping Channel or the TV Listings channel) as part of its basic analog service; add ShopTV or a similar third-party exempt channel to its analog line-up; or add a third-party exempt service to its digital line-up in markets where analog spectrum is scarce. During the July hearing, David Purdy, Rogers’ president and general manager of television products, argued that spectrum demand on the company’s cable system is acute and that some markets do not have the room for extra analog channels that use 6 MHz of spectrum, up to three times as much as a high-definition digital channel. As a result of the decision, Rogers can argue not to carry an analogue version of ShopTV in spectrum-scarce markets, cutting off customers who don’t subscribe to digital cable. “I think that’s actually a severe blow ,” Fusca said. “While Rogers has done quite well with digital penetration … suddenly Torstar will find itself unable to access the rest of those analog basic subscribers.” The CRTC also said that Torstar did not provide enough supporting evidence for a lower carriage rate. Rogers asked that Torstar pay a rate of 16.2 cents per subscriber per month for continued access to its cable system. But Torstar proposed that it pay Rogers eight cents per subscriber per month. “Torstar, it seems to me, comes away no further ahead than they were, in fact a little behind, and Rogers as well is embarrassed a bit by the commission finding that they were in violation of the 1:1 rule, but really are no worse off than they were before,” Elder said. Rogers will have 30 days to come into compliance with the broadcasting distribution regulations. Rogers and Torstar were not available for comment by deadline Wednesday. jmigneault@thewirereport.ca

Rogers emerges winner in carriage dispute with Torstar, experts say

Broadcast | August 18, 2010

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Rogers emerges winner in carriage dispute with Torstar, experts say

Broadcast | August 18, 2010

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