Cable firms should pay broadcasters, CRTC told

CBC President Robert Rabinovitch says a new business model is needed to ensure the survival of over-the-air broadcasting.

Rabinovitch appeared before a Canadian Radio-Television and Telecommunications Commission hearing into the future of conventional TV in Gatineau on Monday.

He proposed that traditional broadcastersreceive fees from cable companies for the transmission of their programs, similar to the fees that specialty channels receive.

"We're proposing an approach that would allow conventional broadcasters to operate on the same financial footing as specialty services," Rabinovitch said in a brief to the federal broadcast regulator.

"We believe it's crucial and criticalthat the commission take action now in order to provide an environment over the next several years where conventional broadcasters can continue to make a substantial contribution to the Canadian broadcasting system."

He told the CRTC that the traditional business model for television, in which money is raised from advertising, is at risk.

There is increased competition for ad dollars from a larger number of channels and the internet and consumers now have the option of skipping ads altogether with PVR and other new technologies.

"The weakening advertising market will make it impossible for conventional broadcasters to advance the commission's goals for original Canadian programming, including local programming, HD programming, drama, etc. The future does not look promising if conventional broadcasters continue to rely on ad revenues as a major source of funding," he said.

CBC would be able to offer more local programming, a guaranteed number of hours of Canadian drama and a transition to high-definition TV if it had additional dollars from subscription fees, Rabinovitch said.

Concern over higher costs for consumers: Rogers

Rogers Cable opposes the CBC proposal, saying that any increased costs to cable companies will result in higher costs to consumers, possibly as much as $5 a month.

"We're concerned that a $5 rate increase or a $3 rate increase with no additional value will annoy a lot of people," Ken Englehart, vice-president of regulatory affairs at Rogers, saidin an interview with CBC Television.

"Nobody's business model has been the same over 10 years. You have to constantly adapt and you have to constantly look at new opportunities, but you don't ask another industry to give you money. That's not really a solution."

The CBC submission before the CRTC also recommends that Canada set a date for transition to high-definition television as other jurisdictions have done, including the U.S.

The CBC is proposing a hybrid system to keep over-the-airtelevision available to as many people as possible while the transition is made to HDTV.

Over the next few months, the CRTC is expected to consider several aspects of the future of over-the-air television, including the impact of new technologies and how to ensure Canadians get quality programming.