FEE FOR CARRIAGE - CONSIDER THE POSSIBILITIES

I watched the Shaw Cable presentation to the CRTC Wednesday and have to confirm that I remain a fan of Jim Shaw and his company. Now, I admit my viewpoint is blinkered since I don't reside within the Shaw Cable semi-monopoly and don't have to deal with the boneheaded program packages I'm sure they offer, idiot billing minions who'd drive me nuts or greed-centric net throttling like I get from my own broadcast delivery unit.

No, I'm sure if I had to deal with Shaw on a daily basis, I'd detest them as much as all my friends and neighbors detest Rogers and Bell Expressvu.

And as I've said right from the start, Jim Shaw is just another puffed up and self-important "Al Swearengen" born on third base and figuring he got there on merit. And like his foul mouthed brothel owning and saloon keeper fictional twin, our pal Jim isn't above shooting off his mouth and then hiding behind some paid muscle (or a Prime Minister) who'll do his dirty work.


I also know we don't have similar programming tastes and that he's a little less than forthright about programming services either competitive to his own or that don't share his societal views.

But I admire Jim and his gang because they very clearly speak some important truths to power and seem far more wrapped in the mantle of what it means to be "Canadian" than any of the broadcasters, including our own Government mandated public one, who all preceded Shaw in speaking at this latest regulatory round.

Despite what the hearings are supposed to be about, we all know they're really about "fees for carriage", the desire of broadcasters to start charging cable and satellite companies for what have to date been "free to air" services.

Broadcasters have been very clear that they won't improve or enhance current programming, nor do they feel they should have to add more Canadian drama or comedy to get this perk.

Nope, they're in big financial trouble if this doesn't happen. Just like they're always in big financial trouble if the CRTC doesn't see things their way.

Mostly, they're in trouble because of their own inability to read the changing TV landscape which has left them non-existent libraries with which to access the new online revenue streams. In other words, they forgot that their core business was creating programming instead of re-broadcasting somebody else's stuff.

They've also fallen victim to the pro-sports malady of paying far too much for their franchise players (ie: American series) in order to make sure the competition doesn't get them. And of course, they needed to gobble up the competition, CTV with CHUM and CanWest with Alliance, (acquisitions and the inevitable downsizing that follows always hide poor profit numbers) discovering too late that the cost of becoming and remaining a bigger dog was more than the new assets can generate.

No matter how much the broadcasters claim the cable/satellite guys could cover the "fee for carriage" costs if they were good corporate citizens, we all know this is really just another opportunity to charge TV viewers an additional $5 or $6 a month to watch the exact same programming they're watching now.

Here's how Shaw phrased that in their presentation...

"The CBC already receives $1 billion from Canadians in annual Parliamentary appropriations. It also enjoys nearly another $100 million from Canadians every year from the CTF... The large private broadcasters have made it absolutely clear during this hearing that the demand for a fee is about only one thing: increasing their profitability. They have strongly resisted making any commitments to incremental spending on local programming or drama.

It is unacceptable for these large, well‑financed and profitable conglomerates to demand a fee from consumers that will subsidize their own costs of doing business, their increasing expenditures on U.S. programming and their recent multi billion dollar acquisitions."

It's amazing how similar that last bit is to what the creative guilds and unions argued before the commission last week. Like I've always said, Jim Shaw and us creative types are on the same side when it comes to forwarding the cause of Canadian drama.

As a result of past hearings, the CRTC has already granted our Broadcasters:

Free spectrum
Simultaneous substitution
Mandatory carriage
Additional commercials in prime time
License fee subsidies through the CTF
Tax credits that further support Canadian production
And freedom from drama expenditures granted in the 1999 Policy Review

Now they want to be paid simply for being on the air.

Okay -- so, imagine for a moment that you're Jeff Zucker at NBC. Easy for me, tough for those of you with a discernible waistline or a conscience.

Jeff's had a tough year. Profits are down. Audiences are disappearing. Those internet billions are still a couple of years distant. The Z-man's ass is in trouble! Surfing the net for ideas, he happens on CPAC and sees what Global and CTV are wringing from the same BDU's who carry two different time zones of NBC.

Well if they can get paid for rebroadcasting his shows -- how come Jeff can't ask for the same?

The identical local broadcast arguments the private broadcasters are using apply to NBC. So Jeff calls Jim Shaw and Ted Rogers because he also could use 50 cents per subscriber per local station to help his bottom line. That's a buck a subscriber in total and suddenly Shaw is sending $3.3 million per month to NBC and CBS and ABC and Fox, not to mention anybody else who might want in on the action.

Even if it's only the Big 4, that's another four or five bucks on your cable bill and $13.2 Million a month going South to assist the profitability of the competition for CTV, CBC and Global and also $13.2 Million a month that doesn't get "taxed" as a share of profit paying into the CTF, further reducing the funding for Canadian drama.

According to the numbers Shaw presented to the Commission, the final number paid to American broadcasters alone could be $570 Million a year.

Given the Canadian apetite for American Prime Time shows, this could mean subscribers would opt for the US services rather than paying twice for virtually the same program schedule. So there's a chance that winning "fee for carriage" could put CTV and Global out of business for good.

Now, go to the other end of the scale. You're a guy running the Rogers cable Community channel in Mississauga or the Shaw Cable Community channel in Red Deer. If the truth were told, you're delivering more "local programming" than CTV, CBC and Global combined.

I travel a lot and can honestly not see much difference (beyond weather and traffic) between the local broadcasts of any of our big guys. Test it out for yourself. Watch the six o'clock CBC news from Halifax, watch it again from Toronto and then catch the same supper hour broadcast from Calgary. Upwards of 60% of the stories will be identical right down to the wire service copy, the video and the graphics. Sometimes all that changes are the bad ties on the newscasters.

But those guys in Mississauga and Red Deer are broadcasting junior hockey the network affiliated locals won't touch even at the National championship level. They're talking to anti-gang crusaders about what parents need to do at specific local malls and schools or producing a gardening show about vegetables that'll actually grow in their part of the country.

How about we give all of them 50 cents a month for actually producing "local" programming? Seems fair. Unlike the network locals, they're not allowed into the ad market. And to be honest, they offer the only real alternative in the early prime hours when your network choices are Global's Cheryl Hickey shoe-horning one or two Canadian references into the American celebrity gossip that couldn't make it onto the A-team version of "ET" -- or Ben Mulroney doing the same damn thing on CTV.

Let's face it, this play by the broadcasters has nothing to do with local programming. This is a problem of mismanagement by companies who had it so good they never really had to figure out how to best run their operations. Now, like the guys who used to drive stagecoaches and sell DDT, their salad days are over. It's not up to us to keep their companies in profit.

And if they can't do the job they're licensed to do, there are plenty of people waiting in the wings who can.