Hypocrites Versus Oligopolists: Canada’s TV-Cable Battle

Watching two greedy parties battle each other for financial advantage and self-exculpation inspires revulsion. Finding their partisan propaganda about the righteousness of their cause ubiquitous is even worse. But Canadians are now bearing witness to a putrid campaign between the country’s television stations and cable providers. At the core of their dispute is what’s known as fee for carriage legislation. Conventional television stations argue that cable providers should pay them to carry their signals. Cable providers refuse to pay, saying they would pass the increases down to consumers. Meanwhile, the federal regulator, the Canadian Radio-Television Telecommunications Commission (CRTC), has completely waffled on this legislation. Twice it rejected fee for carriage before changing its mind in July, ruling that stations can negotiate with providers to carry their signals. A hearing is being held on Nov. 16 to clarify what the regulator meant by “negotiating fair value for local conventional television signals.”

The impending hearing explains why the television stations and the cable companies are attempting to attract public support. Television stations named their campaign “Local TV Matters.”

Local TV Matters is a campaign launched by local Canadian television broadcasters with a focus on the protection and preservation of local television for viewers across Canada. Members include CTV, /A, Global, CBC, CHEK NEWS, V and NTV, with thousands of supporters across the country. The campaign encourages all Canadians to share their voice and support local television.

The key phrase is the protection and preservation of local television. To call that statement a lie is kind. The primary local content on most Canadian television stations is the news. Though the main three networks do invest in original programming, their productions are often poor and unwatched. More to the point, if you live in Canada and watch conventional television in the evening, you will be viewing American shows. Thursdays are a fine example. Ms. G, this correspondent’s partner, is a fan of Survivor and Grey’s Anatomy. Both shows are offered on Canadian stations with Canadian commercials. Even the CBC, the public broadcaster, embraces American shows. Its weeknight 7 pm hour consists of Wheel of Fortune followed by Jeopardy before unveiling its Canadian lineup. But the corporation’s private competitors are absolutely dependent on American shows in prime time: CTV and Global broadcast three-and-a-half hours of them between 7 pm and 11 pm.

Yet the influx of made-in-America dollars did not thwart the networks from playing the always-nationalist “local stories matter card.” They even drafted Dave Carroll, he of United Breaks Guitars notoriety, to sing the Cable Song.

httpv://www.youtube.com/watch?v=uKLS6sNKRGU

This correspondent finds the song so cloying and mawkish, his desire is to find Carroll with a guitar so he can emulate John Belushi in Animal House.

Of course, the cable companies hardly inspire reverence. Rogers, responsible for all communications technology at the homestead, seem to be incapable of proper billing. For the first few months, their representatives overcharged this correspondent and Ms. G, which required correction. Of recent, the company switched its billing to a bimonthly basis without notification, which upset Ms. G. More importantly, it’s not as if there is much choice for consumers in downtown Toronto who want cable television. They can opt for Rogers or Bell. In Halifax, Nova Scotia, where this correspondent spent 14 months, the choice was between Aliant, a Bell-owned property, or Eastlink. Clearly, cable companies enjoy an absolute oligopoly in Canada, defined as a market with few suppliers. The requisite conditions of an oligopoly are in place. Rogers and Bell dominate the market, there are barriers to entry, and each firm must take into account the likely reaction of their competitors when making pricing decisions.

Nevertheless, the cable companies campaign likely appeals to Canadian consumers because of the threat of increased costs. The companies say cable and satellite subscribers will have to pay an extra $5 to $10 per month on the bill under the fee for carriage legislation. The fee is not insignificant considering this correspondent’s cable bill is roughly $60 per month, not including taxes. Other consumers with satellite and an endless menu of choices are undoubtedly paying a lot more, and they are probably equally unimpressed. Within that context, it is easier for the cable companies to grab the viewers attention as they did with this advertisement depicting network largesse.

httpv://www.youtube.com/watch?v=RUGWcY_uYfE

 In a better world, there would be no oligopoly, and the television stations would not be so shameless in their invocation of nationalism. Unfortunately, this is Canada where communication and culture are regularly conflated.  

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