Tuesday, April 21, 2009

Fee for carriage lemmingship

Saw some of the Heritage Committee's hearings yesterday on video last night (yes, really) and would offer the following brief observations...

As reported in the Financial Post last night, it seemed to me that the cable guy, Phil Lind from Rogers, was surprisingly the one who made the most sense and in his opening statement in particular, smacked around this notion that anyone should be subsidizing these over leveraged private broadcasters at this moment. He was quite clear in stating that a lot of the facts you're hearing from private broadcasters at the moment are not true. For example, the notion that viewership is declining and being lost to digital media, the new generation of Ipod watchers, for example, that James Moore has been known to cite. Slight decrease but not happening in the "tuning" numbers, the Rogers people offered. He also challenged the notion that on air television is not a profitable business at the moment based upon recent earnings. Here are some of Lind's comments from the aforementioned report:
Rogers' vice-chairman, Phil Lind, warned the fee-for-carriage conventional broadcasters are pushing is nothing more than a "tax on consumers," with the funds raised to be used to acquire U.S. programming.

Instead, Ottawa is best served by waiting for the economy to improve - at which time the over-the-air sector will bounce back, given the TV industry is cyclical.

"At Rogers, we have mortgages too; we're also having difficulties with our over-the-air TV interests," Mr. Lind said. (Rogers, besides being the biggest cable company, also owns the City-TV and OMNI conventional brands.)

"We're not here seeking a bailout. We are not asking consumers or other companies' shareholders to underwrite our problems. The economic situation will hopefully improve shortly. When it does, history tells us that over-the-air TV will be back in the black."(emphasis added)
One of the key arguments from the private broadcasters at the moment, and picked up feverishly by the Conservative MPs with stations in their ridings, is that fee for carriage is needed to maintain those local stations and local content. But note what Michael Geist wrote yesterday on that point:
Last year, the Canadian Radio-television and Telecommunications Commission established the $60 million Local Programming Improvement Fund (LPIF) to support programming in smaller markets. Broadcasters have been cool to the idea. MPs may want to ask why they continue to ask for new carriage fees, but have not embraced funding that targets the local programming that is said to be in dire straits.
The "LPIF" was an issue Liberal MP Scott Simms questioned Rogers about yesterday. That programme would be a logical choice to grow if local programming is indeed what these private broadcasters are seeking funds for. But we don't hear anything about it, just please give me the blanket fee for carriage to go into the larger corporate mix.

Also, typically of note, questions from Conservative Peterborough MPDean Del Mastro, as reported by CP last night, evidencing an interest in the rob Peter to pay Paul form of public policy:

Rogers faced some pointed questions from MPs.

A Conservative MP challenged the suggestion that fee-for-carriage would necessarily result in higher cable bills.

"You're making a lot of money," Tory MP Dean Del Mastro told the cable executives.

"Nobody says it has to be passed along to consumers. . . Why can't we just take it out of the money Rogers is making?"

Oh, I don't know...because Rogers will ensure the consumer pays at the end of the day in any event? Because this is embarrassing thinking that betrays short-term panicking rather than good public policy?

Other points, BQ MP Carol Lavallee did raise the issue with Pierre Karl Peladeau of his rumoured interest in the Canadiens, but in a rather joking manner. She seemed more interested in constitutional arguments over Quebec having its own version of the CRTC. That seems useful at the moment...not.

The hearings are continuing this week and next. The focus in MPs' questions thus far on fee for carriage suggests that this simple tool may be top of mind as a remedy for private broadcasters. Whether we will see effective policy making come out of all this when the broadcasters are applying such tremendous political pressure, doubtful.