Fee-for-carriage, value-for-signal, negotiation for value, or the "TV tax" all refer to a proposed
Canadian
Canadians () 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 their being ''C ...
television
Television (TV) is a telecommunication medium for transmitting moving images and sound. Additionally, the term can refer to a physical television set rather than the medium of transmission. Television is a mass medium for advertising, ...
regulatory policy which would require
cable
Cable may refer to:
Mechanical
* Nautical cable, an assembly of three or more ropes woven against the weave of the ropes, rendering it virtually waterproof
* Wire rope, a type of rope that consists of several strands of metal wire laid into a hel ...
and
satellite
A satellite or an artificial satellite is an object, typically a spacecraft, placed into orbit around a celestial body. They have a variety of uses, including communication relay, weather forecasting, navigation ( GPS), broadcasting, scient ...
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 (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
, under the name of
retransmission consent
Retransmission consent is a provision of the 1992 United States Cable Television Consumer Protection and Competition Act that requires cable operators and other multichannel video programming distributors (MVPDs) to obtain permission from commerc ...
.
Various versions of the scheme are supported by most major conventional broadcasters, and all are opposed by virtually all
cable
Cable may refer to:
Mechanical
* Nautical cable, an assembly of three or more ropes woven against the weave of the ropes, rendering it virtually waterproof
* Wire rope, a type of rope that consists of several strands of metal wire laid into a hel ...
,
satellite
A satellite or an artificial satellite is an object, typically a spacecraft, placed into orbit around a celestial body. They have a variety of uses, including communication relay, weather forecasting, navigation ( GPS), broadcasting, scient ...
, and
IPTV
Internet Protocol television (IPTV), also called TV over broadband, is the service delivery of television over Internet Protocol (IP) networks. Usually sold and run by a Telephone company, telecom provider, it consists of broadcast live telev ...
(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; ) is a public organization in Canada tasked with the mandate as a regulatory agency tribunal for various electronic communications, covering broadcasting and telecommunic ...
(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, Quebec, in Canada. It is an ILEC (incumbent local exchange carrier) in the province ...
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
An Order in Council is a type of legislation in many countries, especially the Commonwealth realms. In the United Kingdom, this legislation is formally made in the name of the monarch by and with the advice and consent of the Privy 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
Global may refer to:
General
*Globe, a spherical model of celestial bodies
*Earth, the third planet from the Sun
Entertainment
* ''Global'' (Paul van Dyk album), 2003
* ''Global'' (Bunji Garlin album), 2007
* ''Global'' (Humanoid album), 198 ...
from
Canwest
Canwest Global Communications Corporation, which operated under the corporate name Canwest, was a major Canadian media conglomerate based in Winnipeg, Manitoba, with its head offices at Canwest Place (now called 201 Portage). It held radio, ...
by
Shaw Communications
Shaw Communications Inc. was a Telecommunications in Canada, Canadian telecommunication, telecommunications company which provided telephone, Internet, television, and mobile services. The company was founded in 1966 as Capital Cable Televisio ...
in 2010 and
CTV from
CTVglobemedia
Bell Media Inc. ( French: ) is a Canadian media conglomerate that is the mass media subsidiary of BCE Inc. (also known as Bell Canada Enterprises, the owner of telecommunications company Bell Canada). Its operations include national television ...
by
Bell Canada Enterprises
BCE Inc., an abbreviation of its former name Bell Canada Enterprises Inc., is a publicly traded Canadian holding company for Bell Canada, which includes telecommunications providers and various mass media assets under its subsidiary Bell ...
in 2011 rendered the issue moot. In 2012, the
Supreme Court of Canada
The Supreme Court of Canada (SCC; , ) is the highest court in the judicial system of Canada. It comprises nine justices, whose decisions are the ultimate application of Canadian law, and grants permission to between 40 and 75 litigants eac ...
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, or simply CBC) is a Television in Canada, Canadian English-language terrestrial television, broadcast television network owned by the Canadian Broadcasting Corporation, the national public broadcasting, p ...
and
Radio-Canada networks),
CTVglobemedia
Bell Media Inc. ( French: ) is a Canadian media conglomerate that is the mass media subsidiary of BCE Inc. (also known as Bell Canada Enterprises, the owner of telecommunications company Bell Canada). Its operations include national television ...
(owner of
CTV and
A),
Canwest
Canwest Global Communications Corporation, which operated under the corporate name Canwest, was a major Canadian media conglomerate based in Winnipeg, Manitoba, with its head offices at Canwest Place (now called 201 Portage). It held radio, ...
(owner of
Global
Global may refer to:
General
*Globe, a spherical model of celestial bodies
*Earth, the third planet from the Sun
Entertainment
* ''Global'' (Paul van Dyk album), 2003
* ''Global'' (Bunji Garlin album), 2007
* ''Global'' (Humanoid album), 198 ...
),
Remstar (owner of
V), and the independently owned
CHEK and
NTV.
Citytv
Citytv (sometimes shortened to City, which was the network's official branding from 2012 to 2018) is a Television in Canada, Canadian television network owned by the Rogers Sports & Media subsidiary of Rogers Communications. The network consis ...
, which was already owned by cable provider
Rogers Communications
Rogers Communications Inc. is a Canadian communications and media company operating primarily in the fields of wireless communications, cable television, telephony and Internet, with significant additional telecommunications and mass media ass ...
, 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 FCC system of
retransmission consent
Retransmission consent is a provision of the 1992 United States Cable Television Consumer Protection and Competition Act that requires cable operators and other multichannel video programming distributors (MVPDs) to obtain permission from commerc ...
.
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 targete ...
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 (business), product or Service (economics), service. Advertising aims to present a product or service in terms of utility, advantages, and qualities of int ...
– has been "broken" for several years, with many smaller stations operating at a loss since the 1990s, and the Great Recession
The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009. exacerbated the 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
CKX-TV (channel 5) was a television station in Brandon, Manitoba, Canada, which served as a private affiliate of CBC Television. Owned by CTVglobemedia, it was the first privately owned television station in Manitoba. It shared its call letters ...
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. was a Telecommunications in Canada, Canadian telecommunication, telecommunications company which provided telephone, Internet, television, and mobile services. The company was founded in 1966 as Capital Cable Televisio ...
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
Rogers Communications Inc. is a Canadian communications and media company operating primarily in the fields of wireless communications, cable television, telephony and Internet, with significant additional telecommunications and mass media ass ...
(which owns both Rogers Cable and the conventional Citytv
Citytv (sometimes shortened to City, which was the network's official branding from 2012 to 2018) is a Television in Canada, Canadian television network owned by the Rogers Sports & Media subsidiary of Rogers Communications. The network consis ...
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, Quebec, in Canada. It is an ILEC (incumbent local exchange carrier) in the province ...
, Bell Aliant, 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
A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...
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 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 syst ...
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 pay television, broadcast distribution undertakings (BDUs) in ...
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 targete ...
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. Jim Pattison, a Vancouver-based entrepreneur, is the chairman, CEO, and sole owner of the company. The Jim Pattison Group, Canada's second largest privately held company, h ...
, Newcap, and Corus Entertainment
Corus Entertainment Inc. (often simply known as Corus) is a Canadian mass media and television production company. The company was founded in 1987 as Shaw Radio Ltd. as a subsidiary of Shaw Communications and was spun-off from Shaw in 1999. It h ...
(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