Federal government considering relief for private TV networks

The Harper government is considering help for Canada's troubled private TV broadcasters, including the possibility of looser regulations and tax changes.

Heritage Minister James Mooretold the Canadian PressWednesday that the federal cabinet is aware of the threat to local news content should more local stations close.

And he confirmed that the government is looking specifically at how to assist CanWest Global Communications, which is teetering on the edge of bankruptcy.

"We're mindful of that and we're thinking about whether or not there's anything the government can do, but I can't be any more specific than that right now," Moore said.

He hinted the help could come in the form of looser regulations and changes to the tax system, which would also help other private networks.

"The role of the government is to make sure the regulatory regime the tax regime is more flexible, more forgiving and more open in the future," Moore said. "We're a low-taxation government that does not believe in over-regulating industries that are struggling."

Several high-placed industry and government sources say discussions at the highest levels of government have intensified as CanWest's April 7 deadline to satisfy creditor demands draws nearer.

Former Harper adviser to lobby for aid

Public records show that CanWest, along with other broadcasters such as CTVglobemedia and Quebecor, have been lobbying Prime Minister Stephen Harper's office to ask for relief in the form of regulatory changes.

CanWest has contracted the services of Ken Boessenkool, a former top adviser to Harper, to help plead its case. Boessenkool works for consulting firm GCI Canada.

Harper has had at least one face-to-face meeting with CanWest CEO Leonard Asper and two with Quebecor's Pierre Karl Peladeau since the new year, according to public filings with the lobbyist registry.

John Douglas, vice-president of public affairs for CanWest Global, said there hasn't been any more lobbying than usual by his company.

"We've been clear for two years that we believe that the model for allocating the funds paid by consumers for programming that we carry needed to be fixed and needed to corrected," he said.

"It's no secret that we just think that the current system favours cable and satellite providers."

Douglas would not comment on whether CanWest has requested loan guarantees from the government.

Industry hit hard

The industry is hurting because of a sharp decline in advertising revenues and the fragmentation of TV viewing audiences.

CTV has closed three channels in southern Ontario this year and ended some local newscasts.

CanWest, which owns 39 daily and community newspapers and the Global Television network, has put some of its stations up for sale.

Moore has said there is no question of additional assistance for the CBC, which is facing a budgetary shortfall this year of up to $200 million because of declining ad revenues, increased salary, infrastructure and programming costs. CBC employees are bracing for announcements of potential layoffs.

"I would say the challenge in the mix is what to do or not to do with the CBC," said one industry insider. "The political and economic reality of helping the private broadcasters is part of a policymaking problem."

Contentious carriage fee debate on horizon

One of the key requests of the private broadcasters is for something called "fee for carriage."

Cable companies who carry conventional broadcasters' signals which can be received for free over the air would be charged a sort of rental fee for that privilege. Revenues from those fees have been estimated at $150 million annually, to be divided among all the conventional broadcasters.

The idea has been rejected several times before, deemed unpalatable because the cable companies would likely pass down the fees to the consumer something no politician would want to be associated with.

But there are signs the political landscape has shifted this spring.

Members of Parliament have grown concerned by a number of local television station closures and newscast cancellations, both because of the ensuing public outcry but also because they depend on those outlets for coverage of their own activities.

CanWest's financial woes in particular could also put some of its local newspapers in peril, compounding the problem.

The Commons heritage committee has struck a sub-committee to look at the issue of the broadcasting industry, and has summoned the chairman of the Canadian Radio-television and Telecommunications Commission, Konrad von Finckenstein, to appear next week. Industry watchers expect von Finckenstein will be pressed to explain why fee for carriage is such a bad idea.

Von Finckenstein has publicly recognized that the conventional TV "model is broken" in an age when more and more viewers are watching specialty channels and Internet broadcasts, and with an economic crisis swallowing up advertisers. He has asked the industry to submit their views on how the regulatory regime should be changed.