Canada cable firms warn of U.S.-style blackouts

Tue Apr 17, 2012 2:54pm EDT
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By Randall Palmer

OTTAWA (Reuters) - Television blackouts could happen in Canada as they occasionally do in the United States if television broadcasters are allowed to charge cable companies fees for their signals, Canadian cable-TV firms warned on Tuesday.

In arguments before the Supreme Court of Canada, the cable companies said a value-for-signal plan advocated by broadcasters violates Parliament's intent for stable, affordable access to television as a cornerstone of cultural and communications policy.

"Canada for 50 years has avoided blackouts. Look at the U.S. regime, where blackouts become a nightmare for ordinary consumers," cable lawyer Kent Thomson told the court, pointing to what he said were U.S. "games of brinkmanship... where consumers become pawns in negotiations."

In 2010, the country's industry regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), accepted broadcasters' arguments that local stations needed new money to stay viable.

But before imposing fees on cable companies, the CRTC asked the courts to decide whether it had the jurisdiction to do so. The Federal Court of Appeal said yes, and the cable companies appealed this ruling to the Supreme Court.

The case originally pitted broadcasters against cable and satellite-TV companies, but the lines have become muddled after Canada's two biggest private-sector TV networks were bought by a cable company and a telecoms company.

Ultimately, it is consumers who may lose as the cable companies threaten to pass on any extra costs, estimated by the cable companies at C$10 ($10) on customers' monthly bills.

Television blackouts in the United States are rare but have a high profile when they happen. They are usually the result of last-minute pressure tactics exerted on cable companies by broadcasters.   Continued...