Angry in the Great White North

When I read this story about CRTC chairman Konrad von Finckenstein pushing the broadcasters to negotiate fee-for-carriage on their own, I was perplexed.  So much so that I sat on this for quite some time, waiting for the other shoe to drop.  What expanded power is the CRTC getting in return?

But nothing happened, and maybe von Finckenstein  is serious.

He seems to think people in the television business can solve their own problems and set their own prices:

CTV and Global have been seeking for nearly three years to charge cable and satellite carriers 50 cents a subscriber for their signals in an effort to drum up new revenue.

However, CRTC chairman Konrad von Finckenstein told the networks the idea was akin to "hammering a dead horse."

Instead, Mr. von Finckenstein proposed a scenario in which the networks could seek money from cable and satellite carriers for their signals, likely through arbitration, and instructed CTV and Global on how to pursue the funds they seek.

The CRTC's idea would see the networks given the right to negotiate money from the carriers for their signals, as cable channels do, and potentially withhold their signal. That rate would not be set by the regulator. If a deal could not be reached, the matter would be settled in arbitration.

Set their own rates?  Is von Finckenstein mad?

Not surprisingly, the broadcasters sounded a cautious, almost suspicious, tone:

Peter Viner, CanWest's head of broadcasting, told Mr. von Finckenstein the idea could work for the networks, according to the transcripts, if the CRTC allowed arbitration.

"I think both of us would welcome your intervention, if I can call it that," Mr. Viner told the regulator, according to the transcripts.

Ivan Fecan, the chief executive officer of CTVglobemedia Inc., did not respond in detail to the proposal, according to the transcripts, but indicated he would consider the idea. A CTV official would not comment Thursday.

Now based on this report, this discussion was just with CTV and Canwest, the two broadcasters looking for fee-for-carriage.  The cable and satellite companies were not involved.  Publicly, the CRTC continues to give a thumbs down to fee-for-carriage, and instead suggests greater regulation, not less:

The federal broadcast regulator says TV networks will have to make meaningful commitments to local news and programs if they want financial relief.

Konrad Von Finckenstein of the Canadian Radio-television and Telecommunications Commission (CRTC) has told a Commons committee that there are several avenues to help networks bring in more revenue.

Von Finckenstein shrugs off the idea of allowing broadcasters to charge cable and satellite companies for carrying their signals, a process called fee for carriage.

But he says a local programming fund and protecting Canadian signals from American competition might help.

So in open forums, von Finckenstein continues to promote the CRTC's role as tinkerer, pushing this button or twiddling that dial, overseeing the flow of money through the industry (broadcasters, distributors, producers, etc).  But privately, he tells the broadcasters that they should pursue the right to negotiate all this on their own, and most remarkably, be allowed to control how their signals are broadcast.  In particular, to be able to withhold transmission on cable or satellite.  Technically, that's not possible, since the signal is already in the air, and the cable and satellite companies can grab it and transmit it.  That sort of power is a legal one, that is, the broadcast signal would have to be recognized as the property of the broadcasters, and any retransmission without permission would be considered theft.

Canadian broadcasters owning their own transmissions?

You can see why I've been wondering what von Finckenstein was playing at.  He recent public comments seem to be standard CRTC fare.  So I'm thinking that von Finckenstein knows that the problem is best sorted by the affected parties themselves, without government intervention.  That is remarkable.  Maybe he sees fee-for-carriage as part of the solution, but can't be seen to implement it for some reason.  Still, the idea seems to be a good one.  With competing broadcasters (CTV and Canwest) and competing cable and satellite companies (Rogers, Bell, Starchoice, Shaw, and so on), competition ought to keep prices fair.  The free market ought to be given the chance to work its magic and come up with an optimal solution. 

As for the third group in this, the independent Canadian-content producers, the protection they've enjoyed from the CRTC might start to fade, leaving them to compete among themselves  The CRTC already decided against imposing a 1:1 content ratio of Canadian to non-Canadian content.  That leaves a smaller segment of time for them, meaning the broadcasters can pick and choose what they'll broadcast.

So far, there has been no hint that I've seen that this plan -- allowing the broadcasters and the cable and satellite companies negotiate among themselves -- being implemented.  But that it was discussed seems remarkable enough.