After the first couple of weeks, the highlight of the CRTC’s BDU hearings has been the surreal sight of Ivan Fecan and Leonard Asper pleading their case to the commission side by side.

It would take desperate times to bring together these archrivals, and, according to Fecan’s CTVglobemedia and Asper’s Canwest Global, that’s what these are.

They might not seem so desperate, however, to an impartial observer. Last year, profits before interest and taxes for private conventional broadcasters were $113 million, up 24% over the previous cycle, according to CRTC data. But the broadcasters contend that these numbers are misleading, as their PBIT margin was ‘only’ 5.2% – which happens to represent a one-year increase of 23%, but which is below totals between 2003 and 2005.

Whether you believe the broadcasters’ cries that the sky is falling is up to you – or more, specifically, the regulator. Nonetheless, this claim is the casters’ justification for much of what they have been asking for at the CRTC hearings, including fee-for-carriage.

The notion that conventional casters should be compensated by cable and satellite companies to carry their signals, as is the practice for specialty channels, is not unreasonable in and of itself. And it is legitimate for broadcasters to want greater control in the carriage of their local stations as distant signals. Though it is certainly wonderful for a viewer in, say, Toronto, to be able to watch The Office off Global’s Manitoba feed if they missed their local airing, broadcasters deserve some say in the way their product is used, and are due compensation for lost advertising dollars.

But the casters demand of fee-for-carriage is asking for a reinterpretation of what the fees were about in the first place. They were granted to the specialties to help them get off the ground and compete in a TV universe then dominated by conventional networks. It was startup money, not bailout money.

And again, are the private nets actually in need of a bailout? Are their ‘flat’ profits – if you interpret the situation thusly – the result of forces beyond their control in the fragmented digital universe, or are they the consequence of some flawed business decisions?

It is curious how the broadcasters can talk out of both sides of their mouths. An executive at one of the private nets, in touting the strength of his company’s conventional network, points to flat ratings numbers for the company’s specialty properties to illustrate that the specialties are not in fact taking a growing bite out of network audiences. And yet specialty television is one of the chief culprits cited in over-the-air TV’s imminent demise.

The private conventionals’ massive spending on Hollywood programming – which is their single biggest operating expense ($722 million last year, up 4.9%) – could be the reason their profits are not to their liking. And this growing payout for foreign fare comes as they are spending less on domestic shows ($616 million in 2007, down 1.2%). 

CTV and Canwest argue that they need fee-for-carriage money to be able to meet what Asper refers to as ‘our obligations and contributions to Canadian television.’ Unfortunate choice of words, that ‘obligation.’ Makes it sound like you’re doing it against your will.

While CRTC vice chair Michel Arpin accused Fecan and Asper of being ‘alarmist,’ chair Konrad von Finckenstein has expressed sympathy for their request. But if the regulator was to simply go ahead and greenlight fee-for-carriage for the conventionals for Asper’s reason, it would basically amount to the networks off-loading part of their Cancon expenditures onto the cable and satellite companies, which already pay about $140 million a year toward Cancon via the Canadian Television Fund – and we all know how happy some of them are about that.

Von Finckenstein suggested at the hearings that fee-for-carriage, if approved, might come with requirements for greater spending on Canadian shows and local news, to which Asper replied, ‘We have been wronged for a long time and we’d like to have that wrong righted, and we shouldn’t have to do something extra to right that wrong.’ 

So let’s get this straight. Canwest wants fee-for-carriage, but would not even spend some of this new revenue on Canadian content. What they want is for the BDUs to help subsidize their increasingly spend-happy ways at the L.A. screenings. And, of course, the domestic broadcasters also want the protections to keep U.S. services out, so that they are the only ones who can benefit from these U.S. shows.

And what if they do get fee-for-carriage, and the BDUs carry through with their threat of passing the difference on to Joe Q. Consumer? Well, no worries, one network exec explains – most people don’t even read their cable and satellite bills, anyway.

It’s rather surprising that these are the best arguments the networks are making. One can only assume that the CRTC will require far more persuading.