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Shaw, Canwest and the Fee-For-Carriage Campaign

Derek DeCloet notes that Shaw's plans to purchase the Canwest TV assets may leave CTV isolated in its campaign for fee-for-carriage.

5 Comments

  1. Shaws purchase of Canwest supports and reconfirms the push by Canadian television stations for retransmission fees from cable and satellite companies. In fact, the CRTC has to move on it now for the sake of the Broadcasting Act, and the federal government and the heritage minister in particular are more boxed in on the issue as the 2011 date rapidly approaches on the digital conversion.

  2. Bob: Not sure I follow your reasoning, could you explain some more please?

    Lets not forget that CanWest as a whole suffered from unchecked expansion in the early part of the 2000’s. They bought up properties at a premium, requiring all of the profit that they could wring from them in order to finance the purchase. Once the recession hit, the profits dropped and they could no longer afford to pay the loans.

    And with respect to fee for carriage, they can’t really claim to be a “local” broadcaster in the sense of the CBC or CTV, they are more of a regional broadcaster (for instance, on the Global OTA transmitter in Ottawa we get Toronto news, and frankly I really don’t care about traffic on the Don).


  3. “may leave CTV isolated in its campaign for fee-for-carriage. ”

    Considering the strong ties between CTVglobemedia and Bell, I think this campaign has already been firmly proven to be a manipulative, propanganda-spewing, waste of money and time. Not to mention the fact that a big reason that local TV is in “trouble” is because of the stations’ parent companies wasting money on big acquisitions (especially in the case of CanWest). Both of the “official” sides of this “debate” have been complete jokes.

  4. Take, for example, the recent US experience with cable giant Comcast purchasing NBC. This move served to reinforce the right of the NBC stations to charge retransmission fees to satellite and cable companies free from meddling by Comcast. The move to purchase the network only confirmed that the signals from these stations are valuable and comcast went a step further by committing before US congress that “Comcast will be prohibited in retransmission consent negotiations from unduly or improperly influencing the NBC and Telemundo stations’.” In making the purchase, Comcast, the cable company, committed before congress to not interfere in the TV operations of NBC. From this, assumption that CanWest claims for retransmission fees from cable or satellite companies will somehow be deminished is very questionable. These are the assumptions that need to be questioned from a competition law perspective in Canada. Perhaps a similar commitment will be required from Shaw in the purchase of Canwest…

  5. Bob: Thanks. I can’t quite agree with the statement “the signals from these stations are valuable”. I look at it more as the “advertising revenue generated by NBC programming is valuable”.

    While the FFC proposal makes some sense, it needs to be put into context and the claims of both sides looked at. The broadcasters use the US and an example; the FCC allows them to collect retransmission compensation from the cable/satellite operators. However, what the broadcasters fail to mention is that under FCC rules, the broadcaster needs to make a choice. They get either “fee-for-carriage” or “must carry”; they cannot have both (http://www.fcc.gov/mb/facts/cblbdcst.html). The broadcasters in Canada want both.

    Note, however, that under FCC rules the amount is negotiated with individual carriers… from what I have seen, the smaller carriers often get charged more. This means that Comcast could direct NBC to, at the next renegotiation, charge more for the compensation to Comcast competitors. Or they could simply replace the execs at NBC to put in place a group that is more amenable to Comcast wishes.

    Now, with respect to the claims of the cable/satellite operators. Obviously they’ve presented publicly the worst case scenario; given the number of mandatory carriage channels, claims of $12 – $15 per month are excessive (at $0.25 per channel, that means that the basic digital cable in Ottawa FFC would be $8.25 assuming every channel got paid); it depends on what the final amounts are. One does need to remember, though, that the broadcaster claims are low; they seem to have accounted only for the fees paid to them, without including fees paid to other broadcasters such as CITY-TV, OMNI, and the French networks. The basic monthly fee is not all profit; it pays basic salaries and for the provision of the system itself. There appears to be reasonable profit there; however I am certain that the “Save Local Television” campaign is ignoring the costs of delivering the signal to the customer.