07.06
More Support For Broadcasters Coming At The Expense Of BDUs
On Monday, the CRTC bolstered support for the struggling broadcasting
industry by increasing available funding, largely at the expense of the
broadcasting distribution undertakings (BDU) – mainly cable and satellite TV
distributors like Rogers, Shaw, Bell Canada, and Cogeco Cable.
Firstly, the CRTC raised the levy it collects from BDUs to support
conventional TV stations in smaller markets – to 1.5% of TV revenues from
1.0%. While this is shy of the Heritage Committee’s proposal of 2.5%, it still
increases subsidies to over $100 MM from $68 MM paid currently.
More importantly, the CRTC also reversed its stand on fee-for-carriage. The
CRTC will now allow negotiated agreements, and will impose binding
arbitration if needed. Given the Heritage Committee had argued against
this, the fact that the CRTC has approved FFC may be a surprise to some.
In summary, the CRTC policy reversal on fee-for-carriage had been hinted
at and has now been confirmed. Although the direct effect on the cablecos
and satellite TV players should be small (if additional fees can be passed
through), the issue will continue to create uncertainty for the BDUs.
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