Fee for Carriage - Broadcast Distribution Undertakings (BDU) Regulation II

Author

Michael Janigan

Organization

Public Interest Advocacy Centre (PIAC)

Published

2009

Summary

In accordance with the Broadcasting Public Notice CRTC PN 2007-10, the Public Interest Advocacy Centre participated in the proceedings on behalf of ordinary and residential customers. These CRTC proceedings reviewed the current regulatory framework for broadcast distribution undertakings (BDU) licensed by the Commission. These BDUs include cable and satellite service offerings.

In the course of these proceedings a specific proposal was made to the Commission to provide for fees for carriage of programming currently provided by over the air (OTA) local broadcasters. These fees would be paid by cable and satellite offerings and presumably passed on to customers of BDU offerings. The Commission decided to add this issue to the list of issues under consideration in the proceeding and provided for the submission of argument on this point by the interested parties.

Accordingly PIAC researched the issue and made oral and written submissions to the Commission. PIAC submitted that any new additional charges for OTA services offered by the BDUs would largely be based on the need to curb the losses associated with the diminished growth of advertising revenue for OTA local broadcasting. PIAC was of the view that the market in its current state and that proposed by the BDUs is in such a non-competitive state that any new charges will simply be an extra burden placed on the consumer alone. PIAC was also concerned about the fee for carriage for formerly free over the air broadcasting in the context of the current negotiations surrounding the latest draft of the World Intellectual Property Organization's (WIPO) Broadcasting Treaty dated April 20, 2007 and released on May 1, 2007. One of the potential consequences of this Treaty could be the mandatory payment for carriage of signals by BDUs in signatory nations, triggering an outflow of funds from Canadian consumers to American broadcasters.

Finally, PIAC stated that any consideration of the apportionment of revenues that OTA broadcasters may receive in a redesigned basic service package was likely premature. A more comprehensive examination of the underlying economics was needed hopefully in tandem with the suggested cost review of basic service.

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This research received funding support through the Office of Consumer Affairs' Contributions Program.

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Source: Consumer Policy Research Database