TV broadcasters, distributors spar over carriage fee at heritage hearing

Canadian private broadcasters clashed with representatives of the cable and satellite industry again in Ottawa on Wednesday, as members of the House of Commons heritage committee began to show some frustration with the two sparring sides.

CTV and Canwest Global continued the same pitch their colleague Quebecor made on Monday, calling for regulatory changes to help what they described as the dire, heading-to-extinction state of the Canadian television industry.

CTVglobemedia Inc. CEO Ivan Fecan pleaded once again for the introduction of a fee-for-carriage, in which conventional broadcasters would charge distributors a fee to carry their over-the-air signals, as specialty channels like TSN, Food Network or American offerings such as CNN or A&E already do.

He also asked for a reduction in the amount of Canadian and local content broadcasters must provide.

"Please give us new revenue sources or reduce the obligations or some mix of both. Otherwise, we don't believe there is a business there in the future," Fecan urged the committee, which is examining the evolution of Canadian television and its impact on local communities.

"We are not asking for bailouts or short-term fixes," Fecan insisted.

'The crisis is real. The conventional television business model is broken and it's been broken for some time.' —Peter Viner, president and CEO, Canwest Television

He revealed that CTV has tried to sell some of its local television station assets — some for as little as a dollar — but received no takers.

Peter Viner, president and CEO of Canwest Television, echoed Fecan's sentiment and added that the problem has been building over time, with the current recession simply accelerating the damage.

"The crisis is real. The conventional television business model is broken and it's been broken for some time," Viner said.

Fecan argued that cable companies, who he said raised their rates 36 per cent between 2003 and 2007, are in a profitable enough situation that they should not have to pass on the carriage fee cost to consumers.

Shaw scoffs at broadcasters' claims

However, Peter Bissonnette, president of cable giant Shaw, rejected the broadcasters' pleas.

"Broadcasters made business decisions to spend more than $700 million annually on American programming and, in one case [Canwest], amass a $4-billion debt from the purchase of non-Canadian TV stations and publishing properties," Bissonnette said.

"They should be held accountable for these decisions."

He added that if current local television stations fail, he believed new ventures would pop up to fill the void.

The contradicting numbers, diametrically opposed views of the two sides and what appears to be an industry standoff appeared to exasperate some MPs on the committee.

'I've never seen so many very well-off companies coming and blaming the other guy — and that's what we're hearing.' —MP Charlie Angus, NDP culture critic

"I get the impression this is a type of blackmail," Liberal heritage critic Pablo Rodriguez said at one point.

"I've never seen so many very well-off companies coming and blaming the other guy — and that's what we're hearing," said NDP culture critic Charlie Angus.

So far, the Canadian Radio-television and Telecommunications Commission has rejected the fee-for-carriage proposal twice, with the broadcast regulator's chair, Konrad von Finckenstein, calling it simply a short-term solution and expressing concern that the money might not flow directly to fund the ailing local TV industry.

CBC/Radio-Canada president Hubert Lacroix is set to appear before the heritage committee on Monday, with von Finckenstein also summoned to return in May to clarify past comments.