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

[hugh]

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.

[ralph_sinclair]

How does Rogers equate a 1.5% tax to an additional $50-$100 per sub per year?

I pay about $50/mo before taxes for my TV. If that went up by 75cents (1.5%) per month to make this whole FFC thing go away, I think I would be more than OK with that. The providers raise their prices faster than that anyway.

[hugh]

Ralph,

Sorry my error.

Mr. Lind said "Canadian consumers should be very worried about major new consumer TV taxes that could cost Canadians an additional $50 - $100 per year depending on your cable package."

That comment was in reference to the LIPF and other taxes being bandied about by CRTC

He went on to say

"The Commission has announced that beginning in September it will raise the new local TV contribution (for a fund to subsidize local broadcasters in small markets) to 1.5% of cable broadcast revenues. This will mean an increase to our customers' bills of approximately $0.90 per month."

Therefore, total cost to average Rogers customer for LIPF for next year is $10.80 plus taxes. Total cost to all cable and sat customers for one year $100 million.

[vjose78]

Why are Rogers and Shaw calling this a consumer tax, they are the ones that are supposed to pay up, not us!

[57]

Because the tax will be passed on to the consumer. You didn't think they'd pay this out of their profits did you? It wouldn't surprise me if on future bills/statements from Rogers we get to see all these taxes, which have been hidden.

[spensar]

Can the CBC and put that money to these purposes. Or is this a back door way to flow more money to the corporate money pit???

[RingtailedFox]

so... the CRTC wants to have people abandon over-the-air TV and have us subscribe to cable and satellite television... and THEN have sky-high prices for it? that doesn't make sense.

[hugh]

Posts deleted.

Digital Home does not condone signal theft and we do not allow posts advocating members do so.

[hugh]

Bell Release entitled

Bell disappointed with CRTC decision to impose new taxes on television service providers and their customers

OTTAWA, July 6 /CNW Telbec/ - Bell is extremely disappointed with today's
announcement of two new television subsidies by the Canadian Radio-television
and Telecommunications Commission (CRTC) that will see millions of dollars
flow from consumers to broadcasting corporations.
The CRTC's decision to impose a 1.5 per cent tax on satellite and cable
service providers and their customers, called the Local Programming
Improvement Fund (LPIF), will see service providers and consumers pay more
than $100 million a year extra to fund the development of local programming by
Canadian broadcasters. Bell will begin collecting these fees on Bell TV bills
beginning in September.
Similarly, the CRTC's announcement today that it supports "fee for
carriage" will also mean significant new subsidies paid by consumers to
broadcasting corporations - despite multiple CRTC rejections of
fee-for-carriage subsidies in the past and no evidence that broadcasters need
such fees.
"With this new LPIF contribution requirement coming on top of the nearly
$400 million that television service providers and their customers already
contribute each year to support broadcasters and the production of Canadian
content, it's clear that there is more than ample funding in the system," said
Mirko Bibic, Bell's Senior Vice President, Regulatory and Government Affairs.
"That reality makes the CRTC's support of yet another new broadcasting
tax, in the form of fee-for-carriage payments to broadcasters by TV service
providers and their customers, all the more perplexing," he said.
Despite having twice denied demands by broadcasters, most recently in
2008, to impose an additional fee-for-carriage tax on over-the-air signals
that satellite and cable service providers are obliged to carry, the CRTC said
today that it is "now of the view that a negotiated solution for compensation
for the free market value of local conventional television signals is also
appropriate." The CRTC has even raised the possibility that it will cut off
Canadian consumers' access to U.S. broadcast signals if such fees cannot be
negotiated.
"The CRTC should simply have dismissed broadcaster demands for consumers
to pay yet more fees. It's clear that the only beneficiaries of these new TV
taxes will be the major broadcasting corporations," said Bibic. "The CRTC's
new stance is especially concerning considering the House of Commons Standing
Committee on Canadian Heritage decided last month not to recommend such fees -
a decision that included the categorical rejection of a fee-for-carriage tax
by the Heritage Committee's government members."

[Coop]

I received this in a email from Shaw some time ago, basically they asked all of their customers to email their MP's protesting the bail out of CTV, CBC and Global TV. I wonder if they will do it again for this issue.

http://www.shaw.ca/email/ProductsSer...OTVTAX0609ENL1

[ScaryBob]

So what it boils down to is that the CRTC is not only allowing FFC, they are also imposing an additional tax on top of FFC. Only in Canada, EH?

Wait, what's that big sucking sound? It's my dollars going down the CAB toilet.

[trask]

I found this interesting:

The CRTC has even raised the possibility that it will cut off
Canadian consumers' access to U.S. broadcast signals if such fees cannot be
negotiated.

I'm not condoning signal theft at all Hugh, but if they ever did this, it would be a major hit to Canadian Television in pretty short order. A large amount of Canadian viewers would look for other means to get the channels they wanted.

[gonkster]

Well once again it looks like the consumers are the losers in the battle of the broadcasters and distributors in the theatre known as the CRTC.

The LPIF is a bandaid solution to help keep smaller city station's heartbeat going thru these tough economic times and is supposedly a temporary solution. Well with most things that are designed to be temporary they become permanent. But whatever save local TV. Oh wait, thats what FFC is supposedly needed for.

So in the near future even more money (FFC) will be redirected to help support the struggling model that is conventional television.

Now of course all this new money will come from the distributors. They have nothing but profits they can afford it. But of course they have shareholders who want them to maximize profits, so eating the costs of any new funds won't help the bottom line so naturally these get passed on to the consumer.

So the distributors make the same money, the broadcasters have more free money available to them so they come out ahead, and we the consumers are left with less money for the same services.

I can live with the LPIF 0.5% increase but FFC too......grrrrrr.

There is one local station where I live and currently I do not receive it from my distributor so technically FFC shouldn't cost me a cent but i bet when the time comes the Calgary stations will be considered "local" for me. OTA is not an option where I live as there isn't anything really to receive, so as soon as I see an increase related to FFC on my bill, I will simply start dropping any channels I can that are owned by CTV or Canwest to offset whatever new charges they want to pass on my way, in fact I just may get a jump on them and do it now...wishing ala carte was here already. Just once it would be nice for someone to stand up for the consumer and be heard in the debates on how to split or take more of our money.

[dbarron]

Perhaps this will convince some of the lucky folk in southern Ontario and BC's lower mainland who have realistic OTA station access to switch to using an antenna.

[bigoranget]

trask,

I disagree, most people will just bend over and take it.

Another laughable thing that came out of the CRTC today not only giving MORE MONEY to broadcasters BUT in many cases stations received significant reductions in the amount of local programming they must have. Smaller markets have been reduced to a 7 hour programming requirement and larger markets to 14 hours.