CTV says TV system broken without more money

GATINEAU, Que. — Canada’s largest private broadcaster laid out a scorched earth scenario Monday if it doesn’t get paid for its TV signals, suggesting more stations could close and signals could be yanked from cable television.

GATINEAU, Que. — Canada’s largest private broadcaster laid out a scorched earth scenario Monday if it doesn’t get paid for its TV signals, suggesting more stations could close and signals could be yanked from cable television.

CTVglobemedia president Ivan Fecan warned that conventional television is in financial dire straits and needs to be compensated by cable companies for its currently free signals.

And if cable firms don’t pay up — something they say they will not — Fecan said he would be prepared to pull his network off any cable company that refuses to negotiate a fair fee.

“We are not going to be here operating conventional TV unless we can make a business of it,” he told the Canadian Radio-television and Telecommunications Commission.

The warning comes as the federal regulator opened two weeks of hearings on whether conventional TV stations must continue to give cable and satellite companies their signals for free, in exchange for a guaranteed place on the cable and satellite menu.

But CTV’s arguments were disputed in the afternoon when it was the turn of cable company Rogers Communications’ to testify.

Rogers chief executive Nadir Mohamed said conventional television faces problems but “is not in a state of crisis” — and even if it is, it is one of its own making.

“The destructive overspending by CTV and Canwest (Global TV) on U.S. programming is well known,” he said.

He estimated English-language networks pay 75 per cent more today — about $700 million — than the $400 million they allotted nine years ago, a period in which revenues only increased by 16 per cent.

For months, Rogers Communications, Canada’s largest cable TV operator, and Bell, which owns the country’s largest satellite TV operation, have waged an expensive TV and newspaper ad war containing their own threat — if they are forced to pay broadcasters for the signals, they will charge their customers up to $10 a month.

To which, Fecan and officials responded, the CRTC should again get into the business of regulating cable firms like Rogers Communications and Shaw Communications to force them to offer a basic package of programs for a low cost set by the regulator.

Addressing Fecan, CRTC chairman Konrad von Finckenstein showed his unhappiness with the bitterness of the battle between the broadcasters and the carriers.

“I am very frustrated by this very confrontational view,” he told a packed hearing room.

“You need each other and yet we have seen, for the last five months, a public battle never seen before and at the end of the day I can see nothing else than the consumer has to pay more.”

He repeated the plea later to Rogers executives. “At the end of the day it’s all about the money; you are making this sound like a religious crusade,” asking why they don’t just sit down and negotiate a fair value for the TV signals.

Von Finckenstein said it was his job to ensure that broadcasters, which by the CRTC regulations must carry Canadian programming, survive.

At the same time, he said, he did not want Canadian consumers to pay more for their TV programming.

“We don’t have our hands out, they do,” Rogers vice president Phil Lind said, adding that if the distributors are forced to pay for the over-the-air signals, consumers will wind up paying.

Lind said von Finckenstein is asking for an industry-made solution to the impasse because he doesn’t want to be seen as the bad guy, imposing extra charges on viewers.

“He doesn’t want to have his hand on it,” he told The Canadian Press during a pause in the hearings.

“We are not going to be the culprits, they (CRTC) are going to be the culprits. They are in a bit of a corner because they (broadcasters) can’t get more money unless they raise it from consumers.”

One fear, said CRTC commissioners, is that with the parties at logger-heads, negotiations will not work, resulting in Canadians having to get the rabbit ears and antennas out to watch CTV or Global stations.

But Fecan and his executive vice-president, Paul Sparkes, said they did not believe negotiations for so-called fee-for-carriage would break down since the carriers would face the wrath of subscribers if CTV or other networks went dark, taking with them viewers’ favourite shows, like CSI, House or Desperate Housewives, as well as some sports broadcasts.

Under CTV’s proposal, cable companies would not only lose out on the network signals, but would have to black out shows on American stations that the Canadian network owns rights to.

But Rogers said that is not on. If a Canadian network pulls out, Rogers would continue to carry U.S. stations with many of the same shows, insisted Ken Engelhart, the cable firm’s vice president of regulatory affairs.

“If you are going to go down the path of the U.S. system, let’s have the whole U.S. system,” he added, noting that the CRTC imposes many costly requirements on cable firms the regulator in the U.S. does not.

The two sides disagreed on all issues facing the CRTC, including whether conventional television is in as much trouble as it makes out.

Broadcasters have been pleading poverty for several years, but the recession has given greater urgency to their warnings.

Two western stations recently shut down, and there were scant bids for local stations put on the block in Hamilton, Ont., and Victoria.

Fecan said any cable firm “could have bought them for the cost of a two double-doubles and a box of Timbits.”

Rogers officials countered the recession has hurt, but the sector is on sound footing with the economy improving. And he said it could be highly profitable if broadcasters made better business decisions, noting that Rogers also owns an over-the-air network, the CityTV stations.

At a news conference held outside the hearing room, a group of about a dozen Canadian actors called on the CRTC to allow broadcasters to seek a fee for their signals, but added that any new money that would flow to the networks should come with strings.

Actors guild president Ferne Downey said the CRTC should insist broadcasters invest at least six per cent of gross revenues on Canadian dramas and comedies.

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