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Rogers Argues Against Fee-For-Carriage

Rogers filed its submission with the CRTC in advance of November’s hearing on the structural reform of the Canadian television industry. While many issues will be discussed at this proceeding, of critical importance to Rogers and its 2 million customers, is the issue of fee-for-carriage.

The CRTC has already twice rejected a fee-for-carriage scheme, once in 2007 and again in 2008. This year, Parliament’s Standing Committee on Canadian Heritage studied the issue and decided not to support the concept. Yet, broadcasters, seeking to increase their profits at consumers’ expense, have once again forced fee-for-carriage back onto the CRTC’s agenda. "The CRTC has done a 180 on this issue," charges Phil Lind, Vice Chairman, Rogers Communications. "The Commission got it right the first two times out; there is simply no need for a third hearing."

Rogers continues to oppose fee-for-carriage as an unnecessary bailout for over-the-air (OTA) broadcasters and an unfair tax on cable and satellite television subscribers. "Claims by CTV and Canwest/Global that the advertising-supported business model for over-the-air conventional television broadcasting is broken, are simply wrong," Lind says, "advertising revenues will rebound at the end of the recession." In its submission, Rogers argues that while OTA television services have always been distributed by cable and satellite companies without payment, OTA television broadcasters profit enormously from the quality and extended audience reach this carriage gives them, and are well-positioned to get through the current economic downturn.

Rogers also charges that on the basis of speeches delivered by the Chair and another member of the CRTC in June publicly supporting fee for carriage, as well as in the Commission’s decision on July 6 to impose such a regime, the Commission appears to have prejudged the outcome of the hearing. Says Lind: "The CRTC has broken the rules of procedural fairness. In order to ensure an impartial hearing, any Commissioners who were a party to the July 6th decision to impose fee-for-carriage should not take part in this proceeding."

The Rogers submission also argues that fee-for-carriage would create an irritant on the trade front between Canada and the United States. Lind added, "U.S. border broadcasters would also demand carriage fees if fee-for-carriage were to be implemented. And if successful, consumers would face even higher monthly bills."

A research report filed with the Rogers submission, and prepared by Strategic Counsel, confirms that Canadian consumers overwhelmingly oppose the fee. 85% of customers surveyed rejected the notion of fee-for-carriage. 61% of Rogers subscribers said the proposed fee would result in them downgrading their service and 16% said they’d drop their cable service outright. Analysis of similar surveys reveals a consistent pattern of consumer unhappiness with subsidies for broadcasters. Eight-in-ten respondents register opposition to fee-for-carriage and at least 6-in-ten register "strong" opposition. "The public view of this fee remains clear," Lind says, "Canadians do not want to pay additional charges for services that have always been available over the air for free."

 [September 16, 2009]


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