The CRTC is giving Canadian broadcasters an extra $32 million to support local programming for the 2009-10 broadcast season, and may have finally opened the door to fee for carriage.
The Local Programming Improvement Fund will increase to more than $100 million from $68 million, the amount originally budgeted when the fund was announced last October to support local programming in markets with less than one million people.
The extra money will come from cable and satellite companies, who will now contribute 1.5% of gross broadcasting revenues to the fund, up from 1%. Cable and satellite already contribute 5% of revenues to support Canadian programming, so total contributions are now up to 6.5%.
Broadcasters like Canwest and CTVglobemedia insist they can no longer afford to run stations with local programming in smaller markets without additional funding or being freed up to develop new revenue streams. Specifically, the broadcasters have long called for the right to charge cable and satellite companies a fee for carrying their signals—fee for carriage—which the CRTC has long resisted.
While the CRTC insisted yesterday’s announcement had nothing to do with fee for carriage, language deep within the announcement released mid-afternoon Monday, suggested the commission has opened the door to the highly contentious prospect of fee for carriage.
Referring to two earlier decisions, the CRTC said it “elected not to grant fee for carriage to conventional broadcasters but did provide broadcasters with the right to negotiate the terms under which their distant signals will be retransmitted. The Commission is now of the view that a negotiated solution for compensation for the free market value of local conventional television signals is also appropriate.”
Cable giant Rogers was quick to respond with a release calling the CRTC announcement a “stunning policy reversal.”
“Cable and satellite companies will have to pay conventional over-the-air broadcasters a fee to carry their local signals. These are signals that by law cable and satellite companies must carry,” said Rogers.
In the press release announcing the changes, Konrad von Finckenstein, chairman of the CRTC, focused on the increases to the LPIF.
“We have taken steps to ensure that broadcasters, and particularly those in smaller markets, continue to provide Canadians with programming that reflects their needs and interests.”
The statement said the commission will consider the “appropriate long-term provisions for the Local Programming Improvement Fund at a public hearing to be held this fall.”
“The rapid evolution of the communications industry is forcing everyone to rethink the model for conventional television broadcasters,” said von Finckenstein.
“This fall, we will develop a new framework that will give broadcasting ownership groups the flexibility to adapt to this changing environment. However, in exchange for greater flexibility, we expect broadcasters to make meaningful commitments regarding the production, acquisition and broadcast of high-quality Canadian programming.”
Phil Lind, vice-chairman of Rogers, said that despite ruling twice since 2006 not to introduce fee for carriage, the CRTC is now “seeking to impose another new tax on consumers.”
Rogers said the increased charges to the LPIF alone will result in an increase to its customers bills of $0.90 a month, and that new fee for carriage charges would add “another $3 to $6 a month to cable bills, depending on where people live.”
“We are profoundly concerned about how these new taxes will affect our customers and the Canadian broadcasting system, and we intend to fight them on behalf of Canadian consumers,” said Lind.
The CRTC declined to comment on the Rogers statement by press time and both Canwest and CTV did not respond to a request for comment.
