Battle over Canadian TV rescue package

CTVglobemedia says he's seeking 'sustainable future'

TORONTO -- Canadian broadcasters and cable operators this week clashed over the size and shape of Ottawa's local TV station rescue package.

"I just want to state that we are not asking for bailouts or short-term fixes, however well-intentioned they may be," CTVglobemedia CEO Ivan Fecan told the Standing Committee on Canadian Heritage as it probes the perilous state of Canadian broadcasting during the economic downturn.

"What interests us is a plan to build a sustainable future for conventional television in Canada," Fecan added before he called for cable and satellite TV operators to compensate local TV stations for their signals.

"Conventional television is in crisis," Quebecor Media president Pierre Karl Peladeau echoed during his own pitch for the introduction of a so-called fee-for-carriage system.

Domestic cable channels can charge cable and satellite TV operators for their signals, but bigger broadcasters cannot.

CTVglobemedia, Canwest Global Communications and other broadcasters have threatened to sell or shut down local TV stations in small- or medium-size markets to back their plea for a financial lifeline.

The broadcasters argue that their traditional business model -- in which the federal government allows them to air cheaper U.S. network shows to subsidize more expensive Canadian programming on their schedule, and also substitute Canadian for American commercials during the simulcast of U.S. shows -- has broken down as TV ad revenue collapses and audiences and ads migrate to cable channels and the Internet.

But cable and satellite TV operators have shown little appetite to pass on any fees-for-carriage charges to their subscribers as part of their monthly bill.

Phil Lind, vice chairman of Rogers Communications, Canada's largest cable operator, said the proposed "fee-for-carriage" tax on his subscribers won't solve the broadcasters' current financial woes.

"Believe me, it won't be spent on more local news coverage in parts of the country. The sad fact is that most of the money CTV and Global spend on programming goes straight to Hollywood," Lind told the all-party committee with a nod to the Los Angeles Screenings in May, where CTV and Canwest Global will be major program buyers.

The CRTC, Canada's broadcast regulator, also has proved reluctant to bail out domestic broadcasters after it earlier turned down their fee-for-carriage proposal on two occasions.

But the regulator is under pressure from Ottawa to reverse course and help reduce the mounting financial pressures broadcasters face as major TV advertisers pull back on their expenditures.

CRTC chairman Konrad von Finckenstein is due to face questioning next week before the Heritage probe after he expressed skepticism during a March 25 appearance before the committee that broadcasters will put any fee-for-carriage revenue toward local programming costs, as promised.

The Standing Committee on Canadian Heritage is expected to issue a report on the financial state of local TV stations in June.
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