Canada cablers prepare for fight

5:00 AM PST 04/02/2008 by Norma Reveler, AP

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VANCOUVER -- Canada's broadcasters will square off with their domestic cable and satellite TV operators next week in a battle that could pave the way for a sea change in the market -- the entry of such U.S. cable channels as HBO, ESPN and Nickelodeon.

The showdown comes as the nation's TV regulator, the Canadian Radio-television and Telecommunications Commission, begins three weeks of public hearings Tuesday.

While a number of U.S. channels targeting a narrower segment of the market already are carried by cablers here, CRTC rules have long denied market access to popular channels that are judged "partially" or "totally competitive" with existing Canadian TV channels.

According to Canadian Association of Broadcasters officials, 97% of the top 200 U.S. programs already are available here because their Canadian TV rights have been acquired by domestic broadcasters.

But next week, Canadian cable and satellite TV services will ask the CRTC to remove all barriers to entry for popular U.S. channels, a move the CAB argues would devastate Canadian TV services "from both a competitive and program supply perspective."

Such a move would have implications for existing program supply agreements between U.S. and Canadian networks.

For example, HBO series including "The Sopranos," "Curb Your Enthusiasm" and "Tell Me You Love Me" already air on Canadian premium pay TV networks the Movie Network and Movie Central. And ESPN provides a raft of original programming to Canadian sports channel the Sports Network, including "Sunday NFL Countdown," "Monday Night Football" and "Pardon the Interruption."

Western Canadian cable giant Shaw Communications has called on the CRTC to adopt an "open-entry approach" to non-Canadian TV channels governed "entirely by market forces and negotiations between services and distributors."

U.S. cable channels like CNN and A&E were granted entry into Canada in the early days of cable TV here as they were viewed as strong packaging partners for the new niche Canadian channels.

But the CRTC has since been choosy in which channels it allows into Canada and has denied entry to a host of unsuccessful applicants.



In its filing, Shaw complains that the CRTC's September 2007 decision to deny entry to USA Networks -- because some of its programming already aired on the Canadian digital specialty channel Mystery TV -- "disregarded the fact that these two services are entirely different."

"Consumers must have the ability to watch the channels they want, or they will turn to the black market in satellite TV dishes for U.S. signals," Shaw added.

Rogers Communications, Canada's largest cable company, also is asking that more non-Canadian cable channels be allowed distribution in the country, along with more flexibility for Canadian pay and specialty TV channels to meet their Canadian content requirements.

In the corner of conventional networks at next week's CRTC hearings will be the Canadian Film and Television Production Assn., which represents indie producers. That lobby group is calling for genre protection to be maintained when dealing with non-Canadian TV channels.

Other issues to be debated at the CRTC hearings include a potential required contribution by such U.S. networks as NBC and CNN to the development and production of Canadian programming.

Domestic broadcaster CanWest Global argues that foreign channels that air their programming in Canada pull revenue out of the country while leaving no money behind to create Canadian-content shows.

The U.S. channels are "not beholden to any Canadian programming expenditure obligation, none of that money was directly returned in any way to the Canadian broadcasting system," CanWest Global argued in a filing to the CRTC.

Canadian conventional TV networks also will ask the CRTC to allow them to charge cable and satellite TV operators for carriage of their TV signals. The CRTC will issue new rules for Canadian cable and satellite TV systems after it concludes the April hearings.
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