Fee-for-carriage, value-for-signal, negotiation for value, or the "TV tax" all refer to a proposed
Canadian
Canadians (french: Canadiens) are people identified with the country of Canada. This connection may be residential, legal, historical or cultural. For most Canadians, many (or all) of these connections exist and are collectively the source of ...
television
Television, sometimes shortened to TV, is a telecommunication medium for transmitting moving images and sound. The term can refer to a television set, or the medium of television transmission. Television is a mass medium for advertising, ...
regulatory policy which would require
cable and
satellite
A satellite or artificial satellite is an object intentionally placed into orbit in outer space. Except for passive satellites, most satellites have an electricity generation system for equipment on board, such as solar panels or radioiso ...
television companies to compensate
conventional, over-the-air television stations for the right to carry their local signals. Such a system has long existed in the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...
, under the name of
retransmission consent.
Various versions of the scheme are supported by most major conventional broadcasters, and all are opposed by virtually all
cable,
satellite
A satellite or artificial satellite is an object intentionally placed into orbit in outer space. Except for passive satellites, most satellites have an electricity generation system for equipment on board, such as solar panels or radioiso ...
, and
IPTV
Internet Protocol television (IPTV) is the delivery of television content over Internet Protocol (IP) networks. This is in contrast to delivery through traditional terrestrial, satellite, and cable television formats. Unlike downloaded med ...
(telephone company) service providers. These efforts have been promoted through a variety of means, including supporting ads on many conventional TV stations and their affiliated specialty channels, and opposing ads on local stations and during the local
ad avails of U.S. cable channels (which are inserted by individual service providers).
History
Various fee-for-carriage proposals have been put before the
Canadian Radio-television and Telecommunications Commission
The Canadian Radio-television and Telecommunications Commission (CRTC; french: Conseil de la radiodiffusion et des télécommunications canadiennes, links=) is a public organization in Canada with mandate as a regulatory agency for broadcast ...
(CRTC) a number of times over the years, and rejected each time until 2009. In the past, broadcasters sought to receive a fixed per-subscriber fee to be set by the CRTC; in 2007, broadcasters suggested a rate between 10 cents and $1.00 per subscriber each month. In some major markets there are nearly a dozen local over-the-air stations, which theoretically could have meant a monthly per-subscriber charge of $10 or more, assuming the CRTC had accepted the high end of the suggested range.
In July 2009, the CRTC indicated it was "now of the view that a negotiated solution for compensation for the free market value of local conventional television signals is also appropriate", and would begin setting a process to determine appropriate value for signal at hearings in the fall. However, following a court challenge by
Bell Canada
Bell Canada (commonly referred to as Bell) is a Canadian telecommunications company headquartered at 1 Carrefour Alexander-Graham-Bell in the borough of Verdun in Montreal, Quebec, Canada. It is an ILEC (incumbent local exchange carrier) in ...
arguing it had endorsed fee-for-carriage without giving carriers a chance to provide input, the CRTC said it would look at the concept ''
de novo'' at those same hearings.
At the same time as the original announcement, as an interim measure, the commission also announced a temporary one-year increase, from 1% to 1.5%, of the fee levied on cable and satellite companies to fund the Local Programming Improvement Fund (LPIF), which supports local programming at stations in smaller markets. The LPIF has been in place since 2008 and is a separate matter from the various signal compensation proposals; however, many cable companies used the increase as an opportunity to introduce the fee as a separate line item on customers' bills.
The CRTC later announced that it had received an
order-in-council from the
Harper cabinet requesting a separate set of hearings in early December 2009 to specifically consider the views of consumers on the matter, and will submit a report containing recommendations to cabinet shortly thereafter. This means that cabinet will ultimately decide whether or not to allow such fees.
It has been argued that the acquisitions of
Global from
Canwest by
Shaw Communications
Shaw Communications Inc. is a Canadian telecommunications company which provides telephone, Internet, television, and mobile services. Headquartered in Calgary, Alberta, Shaw provides home telecommunications services primarily in Alberta and Br ...
in 2010 and
CTV
CTV may refer to:
Television
* Connected TV, or Smart TV, a TV set with integrated internet
North America and South America
* CTV Television Network, a Canadian television network owned by Bell Media
** CTV 2, a secondary Canadian televisio ...
from
CTVglobemedia by
Bell Canada Enterprises in 2011 rendered the issue moot. In 2012, the
Supreme Court of Canada
The Supreme Court of Canada (SCC; french: Cour suprême du Canada, CSC) is the Supreme court, highest court in the Court system of Canada, judicial system of Canada. It comprises List of Justices of the Supreme Court of Canada, nine justices, wh ...
decided that this issue falls outside of the scope of the CRTC.
Positions of major media companies
Local TV Matters coalition
The Local TV Matters coalition consists of the
CBC (owner of the
CBC Television
CBC Television (also known as CBC TV) is a Canadian English-language broadcast television network owned by the Canadian Broadcasting Corporation, the national public broadcaster. The network began operations on September 6, 1952. Its French- ...
and
Radio-Canada networks),
CTVglobemedia (owner of
CTV
CTV may refer to:
Television
* Connected TV, or Smart TV, a TV set with integrated internet
North America and South America
* CTV Television Network, a Canadian television network owned by Bell Media
** CTV 2, a secondary Canadian televisio ...
and
A),
Canwest (owner of
Global),
Remstar
Remcorp is a Canadian private investment firm founded by businessman Maxime Rémillard. Its head offices are located in Montreal, Quebec.
History
The company was founded in 1997.
At first involved in the entertainment industry, Remcorp now ma ...
(owner of
V), and the independently-owned
CHEK and
NTV.
Citytv, which was already owned by cable provider
Rogers Communications, was the only major television group not to participate in the campaign.
The campaign, which started in mid-2009, was an outgrowth of CTVglobemedia's "Save Local TV" campaign which started earlier that year.
The private broadcasters within this coalition supported a mechanism under which each station would receive the option of either:
* mandatory carriage on all cable systems in their service area without compensation, as is presently mandated for all over-the-air stations, or
* no mandatory carriage rights, but the right to negotiate with service providers for compensation.
In the latter case, stations would be able to withhold their signals, and potentially force blackouts of U.S. stations during programs that would otherwise be
simultaneously substituted, from a particular service provider in the absence of a compensation deal. Service providers would likewise not be required to carry stations that had sought, but failed to reach, a compensation agreement with that provider. This system would be similar to the
American
American(s) may refer to:
* American, something of, from, or related to the United States of America, commonly known as the "United States" or "America"
** Americans, citizens and nationals of the United States of America
** American ancestry, pe ...
FCC system of
retransmission consent.
The CBC supported the right to negotiate for compensation, but was not willing to waive its mandatory carriage rights due to its status as a public broadcaster. Instead, it would ask for binding arbitration in the event negotiations with service providers failed. The CBC's proposal instead focused primarily on requiring providers to offer a "skinny basic" package containing a small number of basic services, including local stations.
CBC comments in response to Broadcasting Notice of Consultation CRTC 2009-614
, 2009-11-02
Arguments
The broadcasters argued that:
* Such a rule is necessary in order for broadcast stations to gain parity with specialty channel
A specialty channel (also known in the United States as a cable channel or cable network) can be a commercial broadcasting or non-commercial television channel which consists of television programming focused on a single genre, subject or targeted ...
s, which receive revenues from both a share of cable/satellite subscription fees and advertising.
* Customers are already paying for the ability to receive local stations through cable or satellite, and in many cases believe that some of their fee goes to directly fund local stations, when in fact they receive nothing (although providers do pay into funds that indirectly help broadcast stations, such as the aforementioned LPIF and the Canadian Television Fund).
* Cable and satellite companies make enough profit
Profit may refer to:
Business and law
* Profit (accounting), the difference between the purchase price and the costs of bringing to market
* Profit (economics), normal profit and economic profit
* Profit (real property), a nonpossessory inter ...
to cover these increased costs without passing them on to their customers; broadcasters have suggested the CRTC reverse its decision to deregulate basic service rates in the early 2000s, in order to ensure customers aren't forced to pay more.
* The model for conventional television – i.e. generating revenues purely through advertising
Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
– has been "broken" for several years, with many smaller stations operating at a loss since the 1990s, and the global financial crisis of 2008-2009 has merely exacerbated this existing problem.
* Rejecting the proposal could mean the closure of more stations, particularly in small markets. Canwest closed CHCA-TV in August 2009, while CTV closed CKX-TV that October after a deal to sell the station for one dollar fell through; CTV simultaneously announced plans to shut down nearly all of its rebroadcast transmitters in smaller communities. CTV further indicated it may close more stations in the near future if it is unable to receive compensation from service providers. CHCH-DT went bankrupt in December 2015 (it remains on the air in a much lower-budget form).
Stop the TV Tax coalition / Shaw
Shaw Communications
Shaw Communications Inc. is a Canadian telecommunications company which provides telephone, Internet, television, and mobile services. Headquartered in Calgary, Alberta, Shaw provides home telecommunications services primarily in Alberta and Br ...
was an early and vocal opponent of fee-for-carriage. Shaw's efforts were later joined by a "Stop the TV Tax" coalition consisting of Rogers Communications (which owns both Rogers Cable and the conventional Citytv and Omni systems), Bell Canada
Bell Canada (commonly referred to as Bell) is a Canadian telecommunications company headquartered at 1 Carrefour Alexander-Graham-Bell in the borough of Verdun in Montreal, Quebec, Canada. It is an ILEC (incumbent local exchange carrier) in ...
, Bell Aliant
Bell Aliant is a brand name used by Bell Canada for telecommunications services in Atlantic Canada.
Prior to 2015, Bell Aliant Inc. (formerly Aliant Inc.) was a separate company providing telecom services in the Atlantic provinces and a few othe ...
, Cogeco, EastLink, and Telus; Shaw's campaign remains separate of this coalition for reasons that are unclear.
Arguments
Service providers argue:
* Fee-for-carriage would be a tax on their subscription fees, forcing subscribers to pay a monthly charge for stations that would continue to be freely available via the public airwaves, i.e. antenna
Antenna ( antennas or antennae) may refer to:
Science and engineering
* Antenna (radio), also known as an aerial, a transducer designed to transmit or receive electromagnetic (e.g., TV or radio) waves
* Antennae Galaxies, the name of two collid ...
reception. (Broadcasters dispute the characterization as a "tax" on the grounds that it would not be set or collected by, or for, any government; service providers note that the decision on whether to allow the fees would be made by either the federal government itself or by the CRTC, a federal agency.)
* There is no guarantee that these funds would improve local programming or prevent station closures.
* The implementation of this policy would lead directly to increased basic cable rates for consumers, with most providers promising to list any broadcast-station carriage fees as a separate line item. Some providers suggest that fee increases of up to $10 per month remain a possibility (the broadcasters simply say that such fees would be subject to negotiation, but insist that they do not want consumers to pay more).
* Such fees would be little more than a bailout
A bailout is the provision of financial help to a corporation or country which otherwise would be on the brink of bankruptcy.
A bailout differs from the term ''bail-in'' (coined in 2010) under which the bondholders or depositors of global sys ...
for these broadcasters' allegedly poor financial management, i.e. buying expensive American programming or purchasing other media outlets, as opposed to producing more distinctive local or Canadian programming (the broadcasters have not directly responded to these claims, but historically, buying American programming has in fact been ''less expensive'' than producing Canadian programming).
* CTV's and Canwest's costs of running local stations can be offset by their more profitable specialty channel assets (broadcasters respond that specialty channels often have multiple partners and hence cannot be easily used to subsidize other properties).
* The fact that broadcast stations are carried by cable and satellite providers at all, not to mention simultaneous substitution
Simultaneous substitution (also known as simsubbing or signal substitution) is a practice mandated by the Canadian Radio-television and Telecommunications Commission (CRTC) requiring broadcast distribution undertakings (BDUs) in Canada to dis ...
privileges over U.S. stations, already provide a significant benefit to broadcasters (broadcasters argue that Canada is the only major English-speaking country to allow such wide distribution of the "big four" U.S. networks and hence that simsubs are necessary to protect their own broadcast rights).
Quebecor
Quebecor Media, owner of French-language network TVA as well as Quebec's largest cable company Videotron, also supports the principle of signal compensation but believes these funds should instead be deducted from the existing fees for specialty channel
A specialty channel (also known in the United States as a cable channel or cable network) can be a commercial broadcasting or non-commercial television channel which consists of television programming focused on a single genre, subject or targeted ...
s, rather than being either passed on to consumers or absorbed by service providers.
Other independent small-market broadcasters
Other companies that own small-market TV stations affiliated with other networks, such as Jim Pattison Group
The Jim Pattison Group is a Canadian conglomerate based in Vancouver. In a recent survey by the Financial Post, the firm was ranked as Canada's 62nd largest company. Jim Pattison, a Vancouver-based entrepreneur, is the chairman, CEO, and sole ...
, Newcap, and Corus Entertainment
Corus Entertainment Inc. is a Canadian mass media company. Formed in 1999 as a spin-off from Shaw Communications, it has prominent holdings in the radio, publishing, and television industries. It is headquartered at Corus Quay in Toronto, Ont ...
(an affiliate of Shaw), do not explicitly support or oppose signal compensation, saying that this would have limited impact on their revenues given the small markets in which they operate. Their primary concern is instead maintaining carriage on satellite providers, which have now overtaken cable in many rural markets.
References
External links
CTV "Save Local TV" campaign
Local TV Matters
Stop the TV Tax
{{DEFAULTSORT:Fee-For-Carriage
Television terminology
Mass media regulation in Canada
Cable television in Canada
Broadcast law