Bark may be worse than bite in Canadian TV fight

Tue Mar 23, 2010 5:02pm EDT
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By Nicole Mordant

VANCOUVER (Reuters) - Rogers Communications Inc was quick to blast a ruling that could force Canadian cable and satellite companies to pay private broadcasters a fee for their signals, but any financial hit is likely to be small and not felt for some time, analysts said on Tuesday.

The country's broadcast regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), gave cash-strapped TV networks the green light on Monday to start charging cable companies such as Rogers, Shaw Communications Inc and Quebecor Inc for their signals.

A system whereby broadcasters like CTVglobemedia Inc and Canwest Global Communications charge cable and satellite companies for carrying their content copies the arrangement in the United States.

But the fee plan is not expected to be in place anytime soon in Canada as the Federal Court of Appeal still has to confirm the CRTC has the authority to implement such a regime, and further legal challenges are expected.

Even if the fee-for-carriage plan does eventually see the light of day, cable companies have already said they will pass along any added costs they negotiate with broadcasters to consumers.

Negotiations may not be highly contentious because, in the highly convoluted and overlapping ownership structures in Canada's communications sector, all the major cable companies own meaningful stakes in television networks, or are in the process of acquiring stakes, analysts said.

A drop-off in the high-decibel acrimony between the two sides ahead of CRTC hearings in December may come as a surprise but analysts point out that two major opponents -- Shaw and Canwest Global -- may soon end up as partners.

Cable, phone and Internet provider Shaw recently bid for a 20 percent equity stake in bankrupt Canwest's TV arm. The deal, which will give Shaw an 80 percent voting interest, has court approval but faces a possible appeal court challenge.   Continued...