OTTAWA (CP) _ Allowing TV networks to charge subscription fees for their conventional signals carried on cable and satellite, is just a cash grab, a senior Bell Canada executive told the CRTC on Thursday.
Gary Smith, president of Bell Video Group, which runs the Bell ExpressVu direct-to-home satellite service, said the idea is "the wrong solution to an unsubstantiated problem."
And he suggested that if the fees are introduced, then consumers should be able to opt out of taking those channels.
"We think our customers should have the right to choose whether they essentially pay it or not by putting it in a discretionary package."
Jim Shaw, the rough-hewn boss of Shaw Communications (TSX:SJR.B) _ which owns western Canada’s biggest cable business and the StarChoice satellite service, said broadcasters are lining up at a trough.
"Is this like a big feed trough? You just come and feed on Canadians? And we’re so dog docile we just sit there and take it? Cmon."
However, Quebec-based Cogeco Inc., (TSX-CGO), which runs cable systems in Ontario and Quebec and which has a controlling interest in the TQS network in Quebec, took the opposite tack, saying broadcasters need the money.
"It would be a tragic and irreparable mistake, particularly in a market as confined as the francophone market in Canada, to resign ourselves to the shrinking and eventually the demise of the major conventional television networks as the result of our failure to restore, on a timely basis, a balance in the use of financial resources available," said Yves Mayrand, Cogeco vice-president for corporate affairs.
The CRTC is holding public hearings into the future of over-the-air TV and the subscription fees, also called fee-for-carriage, have become a controversial item.
The networks say the cable and satellite distributors should pay for off-the-air signals they carry to consumers through their systems, just as they pay for the speciality channels. The broadcasters say they are hurting financially as advertising dollars get spread over new media and as costs for high-definition TV equipment are stretching their budgets.
The size of the fee is still being bounced around, with estimates ranging from a low of $2 or $3 per customer per month, to a whopping $19.
The cable and satellite industries aren’t buying the broadcasters’ tales of woe.
"These are hardly businesses in dire need, as they would have you believe," Bell’s Smith said, echoing remarks made on Wednesday by Ted Rogers, who heads Canada’s largest cable company.
Smith said broadcasting is a cyclical business and depends on making the right decisions about programming and where to expand services, such as speciality channels. Overall it’s a healthy business. Investors don’t seem reluctant to buy into the industry, he said.
The distributors are worried that a new fee, especially a fee charged for a signal that consumers can pull in for free with an antenna or rabbit ears, will prompt a customer backlash, with people cancelling or cutting back services and turning to the grey or black market for dishes.
They remember the uproar a decade ago when the second-tier speciality channels were introduced with a so-called "negative option." The CRTC got thousands of complaints.
Shaw said people will be furious.
"When was the last time somebody went to you and said, ‘Got five bucks? Everybody got five bucks? Give it over. Get nothing back."’
The Shaw Communications boss took out full-page ads in major newspapers earlier this week, laying out his view of the fee-for-carriage idea and urging consumers to contact the CRTC. The ads produced a deluge of e-mails and prompted Michel Arpin, commission vice-president, to chide Shaw at Thursday’s hearings.
"We are not pleased," he said.
Shaw said the barrage of e-mails will be nothing compared to the complaints he expects to field from consumers if fee-for-carriage is approved.