Role Reversal on TV Tax Debate

Yesterday I attended the Standing Committee on Canadian Heritage hearing into the television industry in Canada and its impact on local communities.  The hearing featured MPs from all parties taking CRTC Chair Konrad von Finckenstein to task for not doing enough to save local television broadcasting.  Von Finckenstein rightly noted that there is no obvious or easy solution, but that wasn't good enough for many MPs, who (given the usual demands that the CRTC stop regulating) oddly demanded that the CRTC engage in more regulation.

Even stranger were the positions on fee for carriage.  Six months ago, the notion of a monthly television tax on cable and satellite subscribers would have been rejected out of hand by most MPs.  Indeed, the CRTC itself has twice rejected broadcaster requests for it.  No longer.  In the current environment, the CRTC hinted it was possible and it was the Conservative MPs who were the most vocal in support of imposing a new television tax.  While one MP tried to characterize it as a business-to-business solution, the reality is that the television tax would add roughly $75 per year to the cable and satellite bills of millions of Canadians as the industry hopes to raise $300 million from the new fee.  This sounds like the sort of thing that Conservatives would strongly oppose, yet with many MPs hailing from ridings where local broadcasters are shutting down, they kept asking why the CRTC had not acquiesced to the broadcaster demands.


  1. Tax is wrong word
    A tax is the wrong word. It’s a subscription fee, one that all specialty channels (TSN, HGTV, etc.) already receive. Also, you talk about the consumer’s bill being raised. The only reason is because Rogers/Bell/Starchoice have already stated they would do nothing but pass the fees onto consumers (even though they absorb the specialty fees). Rogers recently raised my rates $10/month for “improved service”. So who’s hurting the consumer?

  2. Do I have this straight?
    If I don’t have cable service I’ll get these channels for free over the air. But if I get cable service I will be charged for them?

  3. Heh…
    Someone has been wined and dined a lot in the last 6 months?

  4. Andy Morris says:

    This is why the Conservatives will bail out CanWest, which now totally supports them in its newspapers. Prop up the TV side, and you get backed by the company that controls nearly a third of the market. CBC on the other hand….

  5. Harrison Bergeron says:

    Unless and until the CRTC is willing to apply the same logic of carriage fees to the manufacturers of FTA (Free to air) antennae then they are descriminating against a specific business segment which essentially performs the same function – access to television signals.

    I’m surprised the cableco’s haven’t gone to the CRTC and demanded financial compensation from the television industry for being forced to carry the crud that passes as Canadian content.

  6. ExSudburyGuy says:

    They’re just swimming against the current
    The more the government taxes, the greater the incentive for people to find other ways to get the television signals… whether it’s a grey-market dish that only picks up U.S. signals, Internet TV, downloading shows with bittorrent, or a myriad other ways. The result will be fewer people watching Canadian TV and eventually the cable companies are going lose customers too.

  7. Carraige fee for what?
    The current fare being served up by the networks is not worth even the price of an antenna, let alone cable or satellite. Should they do this I will cancel my VIP package with Rogers and simply get my stuff on line.

  8. Henry Olders says:

    Carriage fees are fair
    I am quite happy with my over-the-air antenna setup which receives HD channels Radio-Canada, CBC, CBS affiliate WCAX, NBC affiliate WPTZ, Vermont Public Television (4 HD channels!), TQS, and FOX affiliate WFFF. And none of these channels are compressed like on satellite or cable. I’m happy not to pay any monthly fee.

    That being said, I think there are two issues that should play a role in the retransmission of TV signals by cable and satellite operators. One is copying – amplifying a signal is, in my perspective, a form of copying; the second is redistribution. Both copying and distribution of copyright works are illegal as far as I know, without the copyright holder’s permission, for which a fee is often charged. When the choir I sing with performs a work in concert, we are required to pay a royalty fee. I really don’t see why it should be any different for cable and satellite companies.

    I you were a music group that had decided to distribute an album without charge over the internet, and then a large record label came along, made CDs and began selling them, you’d get pretty upset. Redistributing free OTA TV content and charging for it is really no different. Especially when the cable and satellite providers appear to be promoting the idea that you can get an HD signal only through them!

  9. Not Suprised
    Here in Windsor CTV will be pulling all the way back to Kitchener/Waterloo in August.

    CBC just cut half its local media staff here and may wind up going off air again (the CTRC already punished them for doing this in the 90’s)

    Windsor even though it has access to DTV broadcasts from ANOTHER COUNTRY is going to lose its local media completely much like most of the small towns in Canada it seems to look like.

    Small town and local media isn’t profitable at all and thus its why large private companies don’t go there. It costs too much and they don’t need the leeches on their balance sheet. This is true despite it being a necessity in a democratic nation.

    I’m not surprised people from all these ridings about to lose this tool of democracy have began to harp on the government that doesn’t seem to give a crap.

    Carriage fees seem to be one idea to support the local broadcasting that has seemed to have popped up though there are many other solutions. All of them in some way mean spending money that Conservatives usually preach against at all costs.

  10. Conservatives are against more taxes
    unless it helps protect their friends from bankruptcy.

  11. Retransmission fees are not a tax. In the US cable and satellite companies have to pay fees to local TV stations to carry their signal and programming (“retransmission consent regimes”), yet in Canada, cable and satellite are exempt from these fees. And for no reason.

  12. Larry the Cable Guy says:

    Michael, you and your readers may find this site of interest and useful: http:/

  13. Allow fee-for-carriage but revoke the right of simultaneous substitution, which is why you don’t get the good commercials with the Superbowl. If CTV, Global et al get both, I’ll cancel my Shaw TV. That will only hurt the cable companies and CTV/Global because I will no longer get TSN, Showcase, etc.

    Alternately, make CBS NBC ABC Fox CW an optional package whcih does not have simultaneous substitution, but the fees go to support CTC/Global etc.

  14. Harrison Bergeron says:

    Henry Olders said:
    1. When the choir I sing with performs a work in concert, we are required to pay a royalty fee. I really don’t see why it should be any different for cable and satellite companies.

    The TV viewer does pay a royalty fee – it’s called watching commercials. The money for airing those commericals is paid to the TV network, not the cable provider,satellite provider, or antennae manufacturer.

    Basically what you are saying is that even though you have paid for the rights to use that music, the maker of my hearing aid (Beltone) must now also pay for the music rights so I can hear your choir sing it.

    2. I you were a music group that had decided to distribute an album without charge over the internet, and then a large record label came along, made CDs and began selling them, you’d get pretty upset.

    Your music group now has, and will continue to have legal recourse under copyright provisions, so there isn’t any reason for you or I to be upset.

    Sorry Michael, just trying to clarify the issues as I had posted on the subject of antennae. Hope this helps you understand what I was alluding to Henry.

  15. The only canadian channel I watch is CBC, i could care less about the rest
    I’m going to rather upset if this fee for carriage goes through and my cable bill goes up, especially if I can’t opt out of these Canadian channels(but I still want CBC HD). I am sick of the simsub’ing by canadian channels of american channels, as it seems that the Canadian simsub is a compressed version of the american, which becomes readily apparent when one watches HD with 5.1 audio. But then again for those on Shaw/Rogers/etc who cram 3 HD channels into 1 QAM, you may not notice it. If you are wondering, I am with Novus(a private cable operator in Metro Vancouver) that keeps it to 2 HD channels per QAM, and wow does it ever make a difference.

  16. HST adds 8% taxes to internet fees and now htey also want to increease tv taxes
    LIKE who do these bozos think they are getting all this cash form cause it aint anyone under 50,000 a year
    the rest of us a billed and taxed to death
    and think about those less fortunate
    NOW 8% less of them will have net access and TV
    yea civilization progreses
    cant wait for the star trek replicator to get invented, then they will cry about lost sales again……

  17. can we the people have a bailout please

  18. With the invention of movable type, we didn’t subsidize monks in copy rooms.
    Technology changes, and content originators must adapt or be supplanted. If local television was a more compelling watch, it could earn its own way.

    Originally, cable companies provided an alternative to RF off-the-air reception. The cable companies pulled in local and distant stations on their own antenna farms, amplified and remodulated them, and delivered the improved signals to customers who couldn’t reproduce the reception quality on their own.

    Cable companies were basically renting access to a better television reception system.

    There was no need to pay anything to the broadcasters themselves, as they saw their audience increased.

    Arguably, this is still the case. What other business sector gets its product delivered to the customer for free? What other business sector gets paid by the transportation provider for the “privilege” of shipping their product?

    Look, if we decide that subscribers should directly subsidize the broadcasters, above and beyond what they already pay in the form of attention to advertizing, then fine.

    But in that case, a subscriber must be allowed to choose which channels they wish to see, and pay appropriately. They should not be forced to pay a fee for local stations, and these stations cannot be forced upon a subscriber as a pre-condition to media access.

  19. Pirated Tv Shows Still Rising due to strict regulation and high prices
    Popularity of Pirated TV-Shows Still Rising: Instead of switching on the TV, several million people use …

  20. This is a debate that should have been settled when cable first began in the large urban centers. But television networks saw Cable service as a means of reaching a larger market and knew that their advertisers would be happy,thus providing them with more money. Now that Cable companies,basically, Rogers and Shaw, have kept their monopoly hold on Canada with significant profits each year. The television networks have seen advertiser dollars dry up and their profits decline.Now they want a piece of the Cable company pie.
    I find it interesting that the public and the television networks did not make a hue and cry, when Cable companies began charging their customers for HD service. Television networks spent millions of dollars to switch to HD and then Cable makes more profit by charging for HD service.
    Finally, I do not want and am tired of having to pay more and more taxes/fees/or increases to watch television. Maybe a more open less controlled/monopolistic system would improve the whole television/transmission issue.

  21. No More Greedy Taxes and Monopolies
    This is really pigs at the trough looking to tap into our pocketbooks in an extortionary and monopolistic way.

    If local stations want a piece of the action, fine, let them, But I want a way as a consumer to opt-out that isn’t bastardized. That is, no bundling deals or costs associated with consumer opt-out.

    Seems like the CRTC and Canadian media have a problem with giving the consumer a choice. Does not mater if it is Shaw, Rogers, Telus, Bell, CTV, CBC or other locals. The industry is not competative.

    Case in point, many stations are owned by the same people. They buy a movie and then show it on each station one after the other. While the station count is up, the diversity is down as in reality one station is simply replaying another stations content. SciFi versus Space… better skip that other than to say Americans would never pay to see Space.

    Canada needs to permanently open up this marketplace to more competition, more consumer choice and compete or die. Consumers should not be burdened by dysfunctional stations and anti-competative business practices.

  22. It should be the TV stations paying the Cable guys!
    Hey TV and I presume soon to be radio companies! You should be paying the cable/satellite companies to distribute your product to a greater audience with better quality than you ever could. What has changed over the last 40 years? We are still consuming your product locally and very far away from your transmitters thanks to the cable/satellite companies. We even get your product substituted when we tune to US feeds. It is a win/win for everyone. We the consumer pay the cable/satellite companies to bring us your product clear and distortion free from all across the country and you get it distributed for free so it seems to be a very fair arrangement to me. Ask the Bassets of the world where the billions your cash cows made over the years went before demanding this ludicrous tax. You squandered the good days and now you are crying broke. Tread carefully because, quite frankly, I could do without your product very easily. If you want to survive, you have to create a product I want. Buisness 101.

  23. Incredible
    Both the broadcasters and the local networks are running rampant with disinformation.
    True Cable and Satellite are enjoying too much of a monopoly and overcharging.
    But local networks do not deserve a dime of that money, they are already being given a much larger market than their transmissions could ever reach and they are getting it free of charge.
    True in the US local broadcasters get paid but in the states customers get to choose what local content they want to subscribe to, unlike in Canada it is not forced on them by government mandate.
    If a carrying charge is going to implemented, then the Canadian local content requirement should be removed, if it’s to be a fair process then the customer should have the choice of what they want to subscribe to.

  24. Honeslty I don’t watch the canadian networks anyways
    If they want to charge a fee for basic local “network” channels, let them. they should also allow the option to not subscribe to them. I am sick of being force fed channels that mostly show american content for the priviledge of watching the news for 30 mins a night. Sorry I read the news online. In response to this tax I think the cable companies should allow the packages to be more customized. Allow us to pick and choose the channels that we want and watch. The marketshare that the local channels recieve will be less then half. If not for the CRTC making mandatory use of local channels they would have been broke and gone long ago. I wish someone made it mandatory for people to use my business despite the quality and service I provide.

  25. Local TV has always been paid for by advertisers. I don’t see how that revenue has “dried up” when we are still subjected to so many, mostly stupid, commercials on every station–not to mention the very annoying ad campaigns on this issue. If we’re going to be forced to pay a “tax” for it, then it should at least be commercial free! Does anyone see that happening? I don’t think so.

    I bought a satellite system when I moved to the country, not knowing that the antenna brings in over 40 different channels. A converter for the digital signals is necessary now, of course, so I lost the US nets last summer, but I still get all my local Canadian channels just fine. I’m paying for basic satellite (plus one $5 package) to get a few specialty stations (SPACE and National Geographic, primarily) and have the convenience of not switching back-and-forth to the antenna. However, I will not pay another $10/mth for that! I’ll just get the converter and go back to free TV via antenna.

  26. content is king
    if networks want to charge a carrier fee for use of their content, why shouldn’t they? and don’t bother pointing out that they are airing it for free already, so what? if you want it for free, then go with the free digital tv and watch that.

    presumably the cable companies are providing SOMETHING for the already inflated price paid by a captive audience?

    calling this a “tax” is as ridiculous as the needless and insulting threat of passing it on to consumers.

    is this really about a “tax”, or even the “bottom line”, or is this about the future, where the playing field is leveling, and companies will actually have to provide competetive value and service for the dollars they charge. sad to see, but too often these dollars are instead spent on misinformation campaigns.

    do the carriers, or the CRTC for that matter really think Canadians are this dim-witted? Or is this yet another shining moment to illuminate the scope of these unfair and arguably illegal business practices.

    We stand on guard for Thee