CRTC decision could cost consumers hundreds of millions annually
Digital Home
March 23, 2010

After rejecting the proposal on two previous decisions, the CRTC has succumbed to intense political lobbying and is now recommending a form of fee-for-carriage (FFC) tax that could cost Canadian consumers hundreds of millions of dollars annually.

The CRTC Broadcasting order , announced yesterday, means that satellite and cable companies will be forced to negotiate a fee with broadcasters for the mandatory carriage of local television signals that are already available for free over the air.

In hearings last April, the CRTC released figures which suggested that cable and satellite companies would be required to pay conventional broadcasters over $352 million annually under the original fee-for-carriage proposals.

The actual amount from these revised proposals, however, is unknown since it will be subject to negotiations between the broadcasters and broadcast distributors.

Not surprisingly, reaction to the Broadcasting Order from the big television broadcasters who stand to gain hundreds of millions of dollars annually under the new policy was effusive.

“We’re very happy with that,” said Paul Sparkes, CTVglobemedia’s executive vice-president of corporate affairs.

Reaction to the Broadcasting Order from cable and satellite company’s was quick and negative.

“The CRTC today has essentially placed a tax on all cable and satellite customers,” said Phil Lind, Vice Chairman, Rogers Communications Inc. (RCI).

“It is unfortunate that TV networks that are already receiving millions in consumer subsidies for the very local programming they continue to cut are allowed once again to dip their hands in the pockets of Canadian consumers,” said Mirko Bibic, Bell’s Senior Vice President of Regulatory and Government Affairs. “There is no public policy merit in imposing yet another regulatory tax on consumers – especially when this is money broadcasters will simply send south of the border. We intend to participate in the Federal Court of Appeal hearing. We do not believe the CRTC has the jurisdiction to impose this TV tax.”

Before the new fee-for-carriage tax regime can be implemented, the CRTC must first consult with the Federal Court of Appeal to determine if it has the jurisdiction to impose such changes.