The battle over retransmission consent in the US is resident at the FCC, which believes it has very little jurisdiction over what is essentially a free-market negotiation. But in Canada, the dispute has moved beyond the CRTC (its version of the FCC) and is headed for the nation’s highest court.
Canadian cable company Cogeco applauded the decision of the Supreme Court of Canada. It is in response to Cogeco’s appeal of a 2/28/11 2-1 split decision from the Federal Court of Appeal that affirmed CRTC’s right to impose a broadcast retransmission compensation regime.
According to Cogeco, CRTC issued its order in March of 2010 and actually asked the Court of Appeal for a ruling on its ability to do so.
According to a CBC report, Cogeco will have plenty of support, from the likes of Rogers Communications, Telus and Shaw. Bell Canada, Canwest Television and Canada’s Attorney General are supporting CRTC.
Kevin Crull of Bell Media said that the Federal Court finding was correct and was confident its opinion would be upheld on rehearing. “As with most other channels on the dial, local television stations should receive compensation for their signal. Otherwise they are left to rely solely on advertising revenue, which continues to prove to be unsustainable. This antiquated compensation model is not viable in today’s media landscape,” Crull said.
RBR-TVBR observation: MVPDs like to point out that broadcast television is available free off-air, so why should it cost to be resident on their system? We would counter with this: Broadcasters might be very happy with a system in which basic cable systems that charge for carriage can do so only as long as they refrain from accepting and competing with broadcasters for advertising dollars.
Income is a key component of producing news and entertainment programming – if cable channels are allowed a dual income source, the same is necessary for broadcasters if they hope to remain competitive.
It is important to remember that the regulatory priority of encouraging localism favors broadcast programming over the national fare produced by virtually all MVPD-oriented programming services.
Finally, it must be noted that MVPDs hate it when broadcasters pull their service during a stalemated negotiation because the broadcast programming is of very high value. It brings in subscriptions. Its loss costs subscriptions.
Why MVPDs believe they have a right to this high value programming for free – a right which if won would ultimately cost the MVPDs the very same programming because broadcasters would eventually no longer have the financial resources to produce it – is beyond us.
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