When governments talk about cutting
taxes, usually they’re talking about switching bank accounts to collect
money from. It means that while they reduce the formal level of
taxation, the same amount of money will be collected through the cost
increase of services provided or regulated by the government.
In fact, while the
federal Minister of Finance, Jim Flaherty, talks about cutting our
taxes, last week the CRTC was examining the request from some
broadcasters that might result in an increase of our cable or satellite
bill of an amount of $3 to $7 dollars per month.
Last week, the
over-the-air broadcasters like Global, CTV, City, CBC, CHCH, and other
networks and local TV stations that we watch without paying cable or
satellite fees, said they want to be paid for their signals.
Of course, they’re not
asking for the money for the signal that we can receive just by using a
metal coat hanger as an antenna; but they want us to pay for what we see
on cable and satellite. They’re not asking the CRTC for the
authorization to send us the bill at home, they want the Canadian
Radiotelevision and Telecommunications Commission to force satellite and
cable companies to collect the money for them.
As some readers will
remember, I’ve never been a big fan of satellite or cable companies.
However, for heaven’s sake, to reduce their role to the one of
collection agencies for some broadcasters, this would be too much to
swallow.
Let’s take a look at the
request before the CRTC. Broadcasters suggest that 50 cents per
channel/per month should be paid to them by the cable or satellite
companies.
This would be an increase
on our bill (cable or satellite) of between 3 and 7 dollars.
There are many reasons
why those bills have increased in the past for Canadian customers.
Some of those reasons
were justified, other were much less. However, it was always the
consumer getting something in return: more channels, better reception,
or, a different colour of billing paper. This time, if the CRTC accepts
the request, we will pay more while getting nothing in return. It would
be a collection from our pockets to finance the broadcasters.
Leonard Asper, CanWest
Global CEO, who champions this idea, in an interview with
TV Review
recently said, that “the research
shows cable, and satellite, have consistently raised prices with one
excuse or another. They’re adding new services, they’re adding high
definition, they’re doing this or that. Sometimes there is no excuse.”
And, he adds, “if cable markets (fee-for-carriage) properly, and they
can, there should not be a disruption to this in the marketplace. We’ve
survived many, many other price rises.” Are broadcasters telling the
CRTC that because satellite and cable companies increased so many times
the rates for them, that they should do that once for the broadcaster?
The question is: what will the consumers get in return? Nothing.
The broadcasters argue
that, because the specialty channels receive this money from cable
companies, they should get the same treatment. They also argue that the
specialty channels can collect fees and advertising money and that this
increase “is the best way to re-balance the system.” This argument
doesn’t hold water if you consider the advantages of having priority
carriage, located on channels 2 to 20.
These channels bring in
higher audience numbers, and, more advertising revenues.
Having a priority and
mandatory carriage has been a big issue in the past.
Many applications asking
for priority and mandatory carriage have been denied by the CRTC for
obvious reasons: being on that tier brings obvious advantages compared
to being down to channel 400.
Of course, it is good for
the cable and satellite companies to offer, for free, those services to
their costumers, but it is also good for the broadcaster to be on the
priority list of the cable and satellite companies.
For this, they receive
simultaneous substitution, meaning that the distributors (cable and
satellite companies) substitute the Canadian broadcasters’ version of
U.S. shows with their commercials for the U.S. channel version, like
NBC, ABC and CBS.
According to some
estimates, this brings to them something like $300-million. Of course,
they can argue about this number, but I’m sure they would argue much
stronger if that substitution were removed. Furthermore, contrary to the
specialty channels, they have access to local advertising.
If the CRTC accepts the
request for this cash grab from broadcasters at the expense of the
consumers, it means that we will pay more for nothing in return, or, I’m
sure, many of us will be forced to reduce service, or cancel
subscriptions to some channels, in order to offset the increase. And,
maybe, that’s exactly what some broadcasters want, they want to reduce
the competition in order to increase the profits which is something that
goes against the principles of the CTRC.
Last weekend, I was
talking to some broadcasters and they told me that the new technology
has now developed in a way that there is no much difference between
priority and specialty carriage, the advantage for the specialty
channels is obvious: they have the revenue from the fee and the
advertising.
If this is the case,
meaning that specialty channels do not need the help of the fees the
consumers are paying for them, then why don’t we ask the cable and
satellite companies to remove the fee altogether and give a financial
break to Canadian viewers?
