CTV stands by fee for carriage, Bell hesitates

OTTAWA—Bell Canada told the House of Commons heritage committee Thursday it cannot clarify its position on fee for carriage in light of its acquisition of CTVglobemedia Inc. “We don’t have the answer today,” Mirko Bibic, Bell’s senior vice-president of regulatory and government affairs, said. The Federal Court of Appeal is currently considering whether the CRTC has the jurisdiction to implement a fee for carriage regime where distributors would compensate broadcasters for the carriage of their free, over-the-air signals. When the CRTC issued its ruling in March, CTV said it was pleased with the decision, but Bell said it would like to see it overturned. But in September, Bell parent company BCE Inc. announced an agreement to acquire CTV. At the time, industry insiders questioned whether it meant the so-called death of fee for carriage. CTV was the only large broadcaster not owned by a distributor. On Thursday, when heritage committee member and Liberal MP Scott Simms asked Bibic whether he thought fee for carriage is dead, Bibic said Bell is awaiting the court decision to clarify its position. “It’d be premature to try to say what the courts are going to do,” Bibic said. But Conservative MP Dean Del Mastro, the parliamentary secretary to the heritage minister, said the committee needs clarity instead of “skating,” and asked Bell to clarify its position. Del Mastro added he hopes Bell’s position does not change its position “of principle.” Bibic said there are a number of events that need to take place before Bell can state its position, starting with the CTV acquisition, which has not yet been approved. “Then we need to see what the court says. If the courts say the CRTC has no jurisdiction, the issue is dead,” he said. “If the courts say the CRTC has jurisdiction, then obviously, as a business, this is what we have to do: We have to bridge the gap between the CTV business unit, which wants it, and the Bell TV business unit, which doesn’t.” Mirko added that the two entities will have to find the right balance after the acquisition. “We’re going to have to balance those two considerations as an executive team and come up with the best answer for both business units, and viewers and consumers, and of course our shareholders,” he said. But Paul Sparkes, CTV’s executive vice-president of corporate affairs, told the committee the private broadcaster is sticking to its position. “Our position is quite clearly that our troubles don’t go away just because Bell bought us. They don’t. We have a healthy specialty business, which obviously was very attractive to Bell, but we have a fragile conventional TV business that needs help,” he said. “If you’re a businessman and you look at the business you just bought, and you look at how they’re performing, you’re going to want to see at the bottom of the line that they’re making money.” Sparkes said CTV needs the revenue generated by value for signal to continue its operations. He added that CTV’s acquisition ultimately won’t save its ailing conventional stations. “We need value for signal to be able to have the stability in the industry that we need to continue to do the things we do. We’re going to be in the Bell world a business unit and conventional television will have to stand on its own,” he said. “Just because Bell buying us allows us to get out of the rain for a short period of time doesn’t fix the overall problem for conventional television.” In June, CTV told the CRTC its A Channel stations had lost $98 million since 2007. Bibic told the committee that Bell is committed to local television, but wouldn’t say what will happen to the A Channel stations. “We understand that a significant part of what we’re buying is local TV, so we’re going to do everything possible to make sure that it succeeds,” he said. “As for the A channels specifically, they’re in some financial difficulty as I understand it. I can’t speak now as to what will happen to the A Channels, but generally speaking, every business unit has to stand on its own two feet.” Sparkes said CTV needs to find solutions to save the A Channel stations and that one of these could be value for signal. “We need to get creative with the help of the commission and internally as well,” he said. “But the fact remains that they are certainly a troubled asset that we need to find a way to fix sooner than later.” Bibic added that approving the acquisition would allow Bell to marry CTV’s local programming with technology, offering local content on mobile devices so that people who are out of town can watch their local news. “It’s all these opportunities that we have that we’d love to explore. And we fully intend to if we’re lucky enough that regulators approve it and we take ownership of the asset,” he said. Michael Hennessy, Telus Corp.’s senior vice-president of regulatory and government affairs, who also appeared at the committee Thursday, said he does not support fee for carriage. Telus offers Internet protocol TV distribution services. Hennessy said that if distributors must pay broadcasters a fee it would inevitably raise consumers’ cable and satellite bills. “We think it’s wrong, and we think it would be absurd at this point to create a process where particularly independent players and all consumers are expected to help underwrite some of this vertical integration through fee for carriage,” he said. Ken Engelhart, senior vice-president of regulatory affairs at cable carrier Rogers Communications Inc., also told the committee Thursday the company does not support fee for carriage. The court is expected to deliver its decision before the end of the year. kfournier@thewirereport.ca

CTV stands by fee for carriage, Bell hesitates

News | 11/26/2010 9:42 pm EST

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