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CRTC tax could mean $100 million hike in cable/sat tv rates

59K views 441 replies 101 participants last post by  hugh 
#1 · (Edited by Moderator)
The CRTC today announced that it will tax cable and satellite companies 1.5% of their gross revenues in the upcoming broadcast year in order to fund its recently created Local Programming Improvement Fund (LIPF).

The Local Programming Improvement Fund (LPIF) tax will be in addition to the 5% tax currently embedded in cable and satellite TV subscriber’s bills which pay for the Canadian Television Fund.

That's a combined $430 million or so in LIPF and CTF funds sucked out from our cable and satellite bills.
 
#415 ·
They pay for signals from out of area, but don't for locals. Locals need help for many people to receive their signals, so the BDU's helped them get the signal increasing the number of people which increases their revenue. If their station is interesting enough they could be picked up out of area, and I think they have to pay to carry out of area stations.
 
#416 ·
Why should they get a free ride.
Every Canadian already pays for a programming fund through taxes. On top of that, BDU customers pay again to this through their bills. Then we have the LPIF fee, which is paid only by BDU subs. In addition, I also pay GST & PST (soon HST) on my bill. The current amount I pay each month that is itemized on my bill (LPIF & taxes) is $8.27. How much do you pay? Now you want me to pay more, but feel that you shouldn't have to pay anything. How much will this be? As I mentioned, there are many people who don't have any choice but to subscribe to a BDU. Why are they supposed to pay, when a neighbour with an antenna doesn't have to? Why do you feel you are entitled to be subsidized by BDU customers and not have to pay a nickel yourself???

As for the basic channels, I am paying a BDU to bring me local signals that I might not otherwise be able to receive. I am also paying for several cable channels, many of which are owned by the very same broadcasters who are crying poor. As I understand it, they are making money there. Also, any charges forced on the BDUs will eventually be paid by the customers, whether it appears as a line item or not.

Once again, if anyone has to pay the broadcasters, then everyone, OTA included, must pay. Otherwise, you simply have your hand in my pocket, to pay for your viewing.
 
#418 ·
Actually no. Currently over-the-air broadcasters have no actual right to get paid for carriage, and nor do BDUs have to absorb added costs to their bottom line.

The current debate (or should I say, the debate of a few months ago) is whether OTA broadcasters should get paid, and whether or not BDUs can increase their rates because of it. IMHO, the CRTC should just allow it, and allow stations and BDUs to negotiate carriage terms on their own, yes with the possibility that carriage may be dropped if negotiation fails, and that any added fees go directly to customer's bills.
 
#420 ·
Obviously broadcasters have different opinion
Let's set up a hypothetical situation. Customer A, for whatever reason, is unable to set up an antenna for OTA. He is forced to use a BDU, but gets only the basic service, consisting of little more than local channels. Customer B has installed an antenna for OTA, although he still has the option of using a BDU, should he choose. The two viewers can watch pretty much the same stuff. Now, A has to pay to have signals delivered to his home, the same signals as B gets for free. In addtion there are taxes and LPIF on top of the basic charges. Now the broadcasters demand the BDUs pay them, which means A gets to pay even more. However, B is still riding free. Is that fair? Is it fair for B to expect A to subsidize him? Also, what is A paying the BDU for? Are they paying for content? Or transport of the content? There's a big difference. If the BDUs are considered common carriers, then the charges are for transport of content, which means they are making money from providing a transport service and not selling content.

Also, given that BDUs bring more customers to the broadcaster, perhaps the broadcaster should be paying them instead.
 
#426 ·
I would gladly pay for the OTA stations I receive. In fact, I already send money to WNED PBS Buffalo. However, the mechanism to collect fees on behalf of OTA viewers doesn't exist in Canada. And the cost of implementing such a program would likely be cost prohibitive for the 10% of viewers who apparently use OTA.
 
#422 ·
I think the entire problem here is the CRTC. They should just get out of the way, remove all subsidies & corporate welfare (such as free use of spectrum by the broadcasters and LPIF), and let everyone compete for my money on merit. As it is now, we have a situation where broadcasters are operating like businesses but yet are also like charities, which muddies the water. For those who want "free OTA", you already have the CBC which you are funding through your taxes.
 
#425 ·
I know this is going a bit off topic about fees, but the discussion seems to leading away from fees paid from cable companies to TV carriers, to OTA versus cable/satelite.

A little bit of history/re-focus is in order here....

Long before TV came to be, when there was only radio, it was very chaotic, anybody with enough money to buy and set up radio stations did so, and there was much interference when these "broadcasters" grabbed whatever channel they wanted to broadcast on. The government of the day deemed that the "airwaves" belonged to the people, and began regulating the airwaves. Thus creating a whole new industry, but also standardized radio transmissions and reception. When TV came to be, they regulated just as they did with radio. Which is why you don't have radio and TV stations interfering with each other. The main source of revenue for both radio and TV is commercials. Businesses would pay the broadcasters for the airtime that is used to broadcast shows (This program is brought to you by...)

This is why with the current setup, we don't pay for OTA TV transmission, just like when we to listen to AM-FM radio. The price we consumers pay, is that we are forced to listen to the commercials as well. This situation has served everybody well for the last 60 odd years.

Now the cable/sat companies and TV stations are battling each other for what the TV companies falsely consider a very large piece of pie (we want some of your revenue).

This battle is being played out in the public, and we the people are hearing everybody's "spin" on why it should be their way. And now, the media (news?) are helping push their "bosses" agenda (TV companies), causing discussions like, if I have to pay more for my cable, then OTA viewers have to pay too. Remember...we are ALL paying anyway, by watching/listening to commercials!

If somehow, they can manage to have some way of making OTA viewers/listeners pay (as they once did in the UK), TV companies would gladly try to do it. However, I believe this system failed in the UK as technology surpassed their own system of "monitoring" who was watching TV without a license. If someone in this forum knows more about UK TV licensing, please feel free to chime in.

Is this really the way we want to have our TV viewing managed in the future? I for one, will have a problem paying to watch TV (I am an OTA user), and still have to endure TV commercials. Just as I would also have a problem paying to use my radio and still hear commercials there too (hello XM-Sirius).
 
#423 ·
Another point is the BDU's have to have the ability to sim sub so that channels you pay for are substituted by the locals so that they can get the advertising revenues. They don't pay the bdu's for that service, yet they gain revenue by having extra viewers who would probably have chosen the out of town or American feed. If you get these OTA then you have free unsubstituted choice.
 
#424 ·
I also think that the real problem is that the Canadian Networks are competing as in out bidding each other for American shows, they bid to a level they can't really afford and then hope some one else makes up the short fall. If they get more money they will bid higher for those programs and again your and my money goes South.
 
#429 ·
How does it benefit Canadians when they bid for these US shows? Almost all Canadians can get these shows from US networks via BDUs or US OTA stations. The only folks that see a benefit are those that only have access to Canadian OTA from commercial networks such as CTV and Global - and the other folks that benefit are those that work for CTV and Global.

Would most Canadians really even care if CTV and Global went off the air today? I doubt it - sure there would be less local news but is it worth keeping these networks alive for local news?

Regarding the UK OTA fees - the situation in Canada is very different than the UK for a couple of reasons. First off, a very large majority of Canadians use BDUs rather than OTA. Secondly, many (most?) Canadians who use OTA can get US stations and the most desirable programming on Canadian stations comes from these US stations. Therefore there is very little to be gained by paying for Canadian commercial networks - CBC is a bit different since they don't rebroadcast US shows.
 
#431 ·
One point that seems to be ignored here is the cause of the broadcasters financial position. According to what I've read, the crunch is essentially 2008-2009 or when the financial markets collapsed. Does this mean this is a temporary situation that will soon revert to normal? If so, then that money the broadcasters want is nothing better than a cash grab at the expense of the BDUs and subscribers. Also, some bad decisions by the broadcasters, partitcularly Global, contributed to the current problems. Why are BDU customers expected to pay for those bad decisions?
 
#432 ·
James, I think there are two problems here. Yes, the recession has no doubt had a temporary negative effect on the networks. But I think the real problem here is that the business model is broken due to forces beyond the networks' control (hey, look, it's free video on the Internet!) and they don't know how to fix it other than try to squeeze money out of a currently successful business model.
 
#435 ·
Maybe we're simply overdue for a culling of television channels, both cable and OTA. We've arrived at a point where there are simply way more television channels than the market can bear, especially during a recession. If we were to lose, say, 25% of our Canadian television channels, that would mean the remaining 75% would have a much better chance of surviving, and possibly thriving.
 
#439 ·
I have sent the following to Rogers' Office of the President.

Dear Sir.

As has been covered recently in the news, the broadcasters are trying to get cable and satellite subscribers to pay an additional fee to receive their signals, even though those same signals are available at no charge over the air. In general, I find the majority of the shows on the Canadian broadcast channels to be not worth watching. Other than news, there is very little that I watch on the broadcast channels, other than PBS (an American broadcaster). Therefore, should the broadcasters get their wish and place fees on receiving their signal via cable, then I demand the option to delete those stations from my cable package. I do not need those broadcasters and I do not wish to pay for them.
 
#440 ·
You won't get anywhere making such demands of BDU's, as the conventional stations are must-carry stations in the regulated basic package. The BDU's have no choice but to carry them. You can't opt out.
 
#442 ·
This thread is about LIPF not fee-for-carriage.

I am closing since no one is discussing LIPF
 
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