Troy Media
Why you still subsidize some channels when you pay your cable bill
Peter Menzies
Forget for a moment that roughly five per cent of your cable bill goes to subsidize films and shows that not enough people watch: the Canadian Radio-television and Telecommunications Commission is about to dip back into the 20th century and tell you what to watch and make you pay for it.
The federal regulator announced last month that a hearing will be held next spring to "examine applications by programming services that are currently distributed on a mandatory basis (and) … assess whether these services should continue to benefit from such distribution."
In the regulatory world, this refers to those channels that get mandatory distribution on basic cable thanks to section 9(1)(h) of the Broadcasting Act. In the real world, its annual cost to you is about the same as a monthly basic cable payment.
Many folks – including commissioners – treat 9(1)(h) as if the regulator is obliged to determine which channels get this designation. But the Broadcasting Act doesn't insist upon it; it merely permits it.
Here's the list of services involved, along with the per-subscriber fee the CRTC makes carriers (and therefore you) pay: APTN $0.31, AMI-audio $0.04, AMI-tele $0.28, AMI-tv $0.20, CPAC $0.12, Canal M $0.02, CBCNN or RDI $0.15/0.10, territorial legislature channels $0, OMNI $0.12, TVA $0, TV5 $0.24 to $0.28 and The Weather Network/MeteoMedia $0.23.
Multiply those by Canada's roughly 14 million cable subscribers and the cost is about $28 million a month or well north of $330 million a year. And for what?
There was a time – despite some interpretations of all this as Ottawa's cultural broccoli being force-fed to a gagging public – when mandatory carriage may have been excused: services for the visually impaired or territorial legislature broadcasts, for instance. Maybe.
But that was before the Internet, worldwide web and streaming audio/video.
Even if these services are vital to society, each can be delivered online. So mandatory distribution can no longer be justified as assuring vital information flows to citizens – if it ever was.
It's just a subsidy.
In the case of TV5, which offers little or no Canadian content, it's considered by many to be a deal that gives Quebec programming access to international markets. In the case of CBCNN and RDI, it's a boost of roughly $25 million to the $1.2 billion that Parliament already allocates.
Perversely, the CRTC's granting of 9(1)(h) status to CBCNN and RDI effectively keeps them offline, forcing Canadians who already pay to support those products to subscribe to cable in order to consume them.
In the case of The Weather Network, its legacy status was extended in consideration of its role in the development of a public alerting system, with the understanding that it would expire once that job was done, which it has. It's popular – also available and much consumed online – but here it is applying for continuation of 9(1)(h) in front of a newly-minted panel of commissioners unfamiliar with the history of this file.
Yet who can blame The Weather Network? Who walks away from $38 million a year when, rather than having to negotiate your worth on the free market, you can get it from the stroke of a regulator's pen?
Little wonder then that the CRTC's devotion to this file and its sense of paternalism have been the focus of so much public contempt.
The regulator appeared conscious of that as it struggled to rebrand itself recently as an audacious innovator, pushing to modernize the system and make it more consumer friendly.
Alas, in its anachronistic rush to shepherd others into the 21st century, the CRTC and its codependent 9(1)(h) file remain anchored in the previous century.
Peter Menzies is a former newspaper publisher who served as a CRTC commissioner for 10 years.
Peter is a Troy Media Thought Leader. Why aren't you?
Peter Menzies is a former newspaper publisher who spent 10 years as a CRTC commissioner and vice-chairman.
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