Canada declines to implement US-style retransmission fees for local TV signals

Michelle Clancy | 14-12-2012

Canada will not be implementing a United States-style retransmission fee arrangement where cable and other TV operators will be required to pay a fee for carrying local broadcast signals as part of their cable packages.

In 2010, faced with declining advertising revenue, Canada's free-to-air stations approached the broadcast regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), asking for the implementation of a fee for carriage (dubbed a 'value for signal' system) to help fund news-gathering efforts and help cover escalating costs for creating sustained quality programming.
"Local news, entertainment and other programming distinguishes Canadian broadcasting from everything else on TV," Mirko Bibic, Bell Media's chief legal and regulatory officer, told CBC. Bell owns CTV and 30 specialty TV channels.
CRTC sided with the TV affiliates, but the case went to the courts for review. However, it is not to be: the Supreme Court of Canada ruled that CRTC does not have the authority to impose a value-for-signal plan.
The 5-4 decision was heralded with acclaim from pay-TV operators like Telus, Cogeco Cable, Rogers Communications and Shaw Communications, who had warned of higher costs to consumers from fees being passed along (they said it would mean an additional $10 per month for subscriptions), and the high probability of TV blackouts amid fee negotiation impasses, as the US market has seen.
Despite the broadcasters pointing to the system actually working in the US most of the time, the Court found too much potential harm to consumers. About 90% of Canadians receive their signals through their cable subscriptions.
"No provision of the Broadcasting Act expressly grants jurisdiction to the CRTC to implement the proposed regime," Justice Marshall Rothstein wrote in the majority opinion.