Canadians are still wondering who should pay for "free TV"

Local TV Matters

Local TV Matters - Big Bad Cable ad (click on picture to see full-size poster)

It may seem that Canadians don’t have to pay when they watch programs offered by local TV stations. In reality, most Canadian TV channels are not available « over-the-air »; they can only be seen by those who subscribe to cable or satellite delivery services.

Cable companies like Bell TV, charge their subscribers for various programs, including those produced by local TV stations like CTV. According to CTV and other local stations, cable companies like Bell or Rogers do not pay them for redistributing the shows that they produce at their own expenses.

Recently, local TV stations are making it known that they want to stop the “free ride”. It means that they want to charge cable and satellite companies for their signals. TV networks call it “subscription fees’ but the cable industry refers to it as “tax on free TV”.

Who will pay for free?

Local TV stations on one side, and TV/satellite companies on the other, are tearing each other’s hair out to determine who should pay the price for TV taxes.

A notice of consultation has been opened by the Canadian Radio-television and Telecommunications Commission (CRTC), a commission that regulates all Canadian broadcasting and telecommunications activities. The CRTC will hold hearing on the matter starting December 7th.

In the meantime, Local TV stations and Cable/Satellite companies have launched separate advertizing campaigns to get Canadians on their side.

On one hand, cable and satellite companies are arguing that if the CRTC allows the TV tax, Canadians will be the ones to pay. According to estimates, Canadians will have to pay $10 more each month on their TV bills because of the “cash grab” – as they call it.

On the other hand, local TV stations are making public alarming numbers that demonstrate how the broadcast industry is slowing dying. Advertising revenues keep getting lower because of the advent of internet, the competition from speciality channels and the ability to skip commercials with personal video recorders. To sustain their activities, they proposed many measures.
One of them is to get Canada’s cable and satellite companies to pay the proposed fees – not TV subscribers.

The way they are painting each other in not so glowing colors has similar fashion with custody cases. Children (viewers) are torn apart because they don’t know if they should stick with mommy (local TV) or daddy (cable/satellite).

Cable companies to TV channels: Bunch of “Pinocchio” liars

Incredibly enough, Rogers is now teaming up with Bell, its biggest competitor in the telecommunications industry in Canada. Along with other companies specializing in telecommunications, they have launched the Stop The TV Tax campaign.

In an email sent to its subscribers, Bell makes it clear that if the CRTC submits to the proposals of local TV stations, TV bills will inflate.

“The CRTC has told satellite and cable companies to hand over $100 million a year as of September 1, 2009. These fees are being passed on to you.
(…) If the CRTC gives in to the broadcasters’ latest demand and lets local TV stations charge for their currently free over-the-air local signals, it would more than double the portion of your Bell TV bill going to government fees – and into the bank accounts of the broadcasters, like CTV, Global and the CBC.” – Bell to its subscribers.

Stop The TV Tax doesn’t only arm Canadian with arguments; they also give them the tools to protest against a TV Tax proposal. Via their website, visitors can send a personalized video message to the CRTC to ask them to stop the proposed TV Tax.

In addition, cable companies ridicule the “alarming numbers” disseminated by the broadcast industry that is represented as Pinocchio in one video.

Stop TV Tax - Pinocchio ad

Stop TV Tax - Pinocchio ad

Conventional broadcasters to cable companies : Flying cows

Ivan Fecan, President and CEO for CTVglobemedia, is not too happy that cable and satellite companies are involving Canadians in an “industry-to-industry matter”.

The fact remains that local TV stations, have also created an united front in an effort to sway public opinion. Together, CTV, A, Global, CBC, and CHEK news, have launched the Local TV Matters campaign. Their main focus is to encourage all Canadians to share their voice and support local television.

“Consumers already pay for local TV. (…) Cable and satellite companies have chosen to intimidate consumers with increases on basic cable rates and threats of more fee hikes. This is not fair to the Canadian consumer.”

On the www.localtvmatters.ca, viewers can use a form to write to their MPs and cc to Heritage Minister James Moore and Prime Minister Stephen Harper.

They, too, have used ads to portray the cable industry as bad guys. In one of their ads, they state that cable companies are trying to manipulate the public into thinking that they will be the ones to pay for charges that already appear on their TV bills. As they put it: “In the land of cable, cows can fly”.

The CRTC: We want to hear Canadians

Three days ago, the CRTC called upon the public to guide their decision in the TV fight for taxes. They are various options, including the possibility of negotiations between local stations and cable and satellite companies. Canadians are asked to comment on television.askingCanadians.com until Dec. 21. Next Monday, hearings will be held in Gatineau, in the Province of Quebec.

« So unless there’s some real value being put forward, I don’t think that you need to canvass 30 million Canadians to ask them if they want to pay more for anything. » – 
Telecom analyst Mark Goldberg

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