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Front Page, Industry News
Canadians can afford higher cable fees, CRTC says
Wednesday March 24th 2010Cable subscribers have shrugged at rate increases in the past and might be willing to do so again if new fees are passed on to them, the national broadcast regulator suggested Tuesday.
In a report submitted to the federal cabinet, the Canadian Radio-television and Telecommunications Commission (CRTC) said it does not believe “that significant affordability issues would be created” for consumers if a new compensation regime is introduced as early as next year.
Called “value for signal” or “fee for carriage,” the new system would see big cable firms such as Rogers Communications Inc. and Shaw Communications Inc., for the first time, pay conventional-TV networks such as Global and CTV Inc. a fee for station signals.
On Monday, the CRTC moved to adopt the measure to help offset declining revenues at network-TV stations and preserve the Canadian content they produce.
Tuesday’s report stems from a rare order-in-council from Heritage Canada in September and a subsequent public hearing in December.
The Harper Conservatives have been cautious about supporting a CRTC ruling that would raise costs for consumers and create a potential backlash from voters.
But the regulator’s decision would almost certainly do just that, causing “modest price increases” for cable.
But Canadians may be willing to eat the charge, the CRTC’s submission suggests.
The average cable rate was $53.22 a month last year, according to CRTC figures. That’s up almost 50 per cent since 2002 when rates were deregulated, representing an annual rise of 5.6 per cent to the average bill.
“Such results do not seem to suggest a significant withdrawal of demand for [cable or satellite] television services when consumers are faced with rate increases,” the CRTC said.
The rise has helped lift revenues and profits at the major cable firms. Now, with the fortunes of networks dimming, the CRTC aims to buoy the entire system with a new negotiation regime similar to one that exists in the United States.
The CRTC has put the decision to the Federal Court of Appeal, which it has asked to determine whether it has the jurisdiction to impose what some term a new “TV tax.”
The move opens up a new battleground on which the broadcast and cable-satellite consortiums will continue the years-long fight over fees for over-the-air station signals.
Mirko Bibic, senior vice-president of regulatory affairs at BCE Inc., which operates satellite service Bell TV, said the telecommunications giant is preparing its case.
Phil Lind, vice-chairman of Rogers Communications Inc., the largest cable company in the country, also said the company would fight the decision in court.
Neither CTV or Global could not be reached for comment. (Global is owned by Canwest Global Communications Corp., parent of the National Post.)
The most critical scrutiny, however, could come from the federal government, which has the option of overturning Monday’s decision.
Prime Minister Stephen Harper reiterated his party’s position during question period on Tuesday.
The government, he said, is “concerned about anything that imposes fees on consumers without their consent.”
The price tag on individual station signal is anyone’s guess. Specialty channels such as TSN and HGTV command upwards of $1 or more a month, a fee lumped into a customer’s cable bill.
Source: The Financial Post
Front Page, Industry News
Canadians can afford higher cable fees, CRTC says
Wednesday March 24th 2010Cable subscribers have shrugged at rate increases in the past and might be willing to do so again if new fees are passed on to them, the national broadcast regulator suggested Tuesday.
In a report submitted to the federal cabinet, the Canadian Radio-television and Telecommunications Commission (CRTC) said it does not believe “that significant affordability issues would be created” for consumers if a new compensation regime is introduced as early as next year.
Called “value for signal” or “fee for carriage,” the new system would see big cable firms such as Rogers Communications Inc. and Shaw Communications Inc., for the first time, pay conventional-TV networks such as Global and CTV Inc. a fee for station signals.
On Monday, the CRTC moved to adopt the measure to help offset declining revenues at network-TV stations and preserve the Canadian content they produce.
Tuesday’s report stems from a rare order-in-council from Heritage Canada in September and a subsequent public hearing in December.
The Harper Conservatives have been cautious about supporting a CRTC ruling that would raise costs for consumers and create a potential backlash from voters.
But the regulator’s decision would almost certainly do just that, causing “modest price increases” for cable.
But Canadians may be willing to eat the charge, the CRTC’s submission suggests.
The average cable rate was $53.22 a month last year, according to CRTC figures. That’s up almost 50 per cent since 2002 when rates were deregulated, representing an annual rise of 5.6 per cent to the average bill.
“Such results do not seem to suggest a significant withdrawal of demand for [cable or satellite] television services when consumers are faced with rate increases,” the CRTC said.
The rise has helped lift revenues and profits at the major cable firms. Now, with the fortunes of networks dimming, the CRTC aims to buoy the entire system with a new negotiation regime similar to one that exists in the United States.
The CRTC has put the decision to the Federal Court of Appeal, which it has asked to determine whether it has the jurisdiction to impose what some term a new “TV tax.”
The move opens up a new battleground on which the broadcast and cable-satellite consortiums will continue the years-long fight over fees for over-the-air station signals.
Mirko Bibic, senior vice-president of regulatory affairs at BCE Inc., which operates satellite service Bell TV, said the telecommunications giant is preparing its case.
Phil Lind, vice-chairman of Rogers Communications Inc., the largest cable company in the country, also said the company would fight the decision in court.
Neither CTV or Global could not be reached for comment. (Global is owned by Canwest Global Communications Corp., parent of the National Post.)
The most critical scrutiny, however, could come from the federal government, which has the option of overturning Monday’s decision.
Prime Minister Stephen Harper reiterated his party’s position during question period on Tuesday.
The government, he said, is “concerned about anything that imposes fees on consumers without their consent.”
The price tag on individual station signal is anyone’s guess. Specialty channels such as TSN and HGTV command upwards of $1 or more a month, a fee lumped into a customer’s cable bill.
Source: The Financial Post
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Front Page, Industry News
Canadians can afford higher cable fees, CRTC says
Wednesday March 24th 2010Cable subscribers have shrugged at rate increases in the past and might be willing to do so again if new fees are passed on to them, the national broadcast regulator suggested Tuesday.
In a report submitted to the federal cabinet, the Canadian Radio-television and Telecommunications Commission (CRTC) said it does not believe “that significant affordability issues would be created” for consumers if a new compensation regime is introduced as early as next year.
Called “value for signal” or “fee for carriage,” the new system would see big cable firms such as Rogers Communications Inc. and Shaw Communications Inc., for the first time, pay conventional-TV networks such as Global and CTV Inc. a fee for station signals.
On Monday, the CRTC moved to adopt the measure to help offset declining revenues at network-TV stations and preserve the Canadian content they produce.
Tuesday’s report stems from a rare order-in-council from Heritage Canada in September and a subsequent public hearing in December.
The Harper Conservatives have been cautious about supporting a CRTC ruling that would raise costs for consumers and create a potential backlash from voters.
But the regulator’s decision would almost certainly do just that, causing “modest price increases” for cable.
But Canadians may be willing to eat the charge, the CRTC’s submission suggests.
The average cable rate was $53.22 a month last year, according to CRTC figures. That’s up almost 50 per cent since 2002 when rates were deregulated, representing an annual rise of 5.6 per cent to the average bill.
“Such results do not seem to suggest a significant withdrawal of demand for [cable or satellite] television services when consumers are faced with rate increases,” the CRTC said.
The rise has helped lift revenues and profits at the major cable firms. Now, with the fortunes of networks dimming, the CRTC aims to buoy the entire system with a new negotiation regime similar to one that exists in the United States.
The CRTC has put the decision to the Federal Court of Appeal, which it has asked to determine whether it has the jurisdiction to impose what some term a new “TV tax.”
The move opens up a new battleground on which the broadcast and cable-satellite consortiums will continue the years-long fight over fees for over-the-air station signals.
Mirko Bibic, senior vice-president of regulatory affairs at BCE Inc., which operates satellite service Bell TV, said the telecommunications giant is preparing its case.
Phil Lind, vice-chairman of Rogers Communications Inc., the largest cable company in the country, also said the company would fight the decision in court.
Neither CTV or Global could not be reached for comment. (Global is owned by Canwest Global Communications Corp., parent of the National Post.)
The most critical scrutiny, however, could come from the federal government, which has the option of overturning Monday’s decision.
Prime Minister Stephen Harper reiterated his party’s position during question period on Tuesday.
The government, he said, is “concerned about anything that imposes fees on consumers without their consent.”
The price tag on individual station signal is anyone’s guess. Specialty channels such as TSN and HGTV command upwards of $1 or more a month, a fee lumped into a customer’s cable bill.
Source: The Financial Post
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