A Heritage committee report into local TV has sparked controversy after it failed to take a stand on the thorniest issue in Canadian broadcasting: fee-for-carriage.

While industry unions, independent producers, the CBC and the cable industry applaud the ‘Challenges Related to Local Television’ report released Friday, CTVglobemedia believes the MPs who authored the report let conventional broadcasters down.

‘We are deeply disappointed that the Conservative government members of the committee choose to protect the record profits of cable companies over the interests of consumers and their local television stations,’ said the network in a statement Friday

While the Heritage committee, which is chaired by Tory MP Gary Schellenberger (Conservative Perth-Wellington) didn’t recommend implementing fee-for-carriage, it didn’t reject the idea either, suggesting that it be studied further to assess whether it would help local broadcasting. Networks such as Canwest Global, CBC, CTVgm as well as a number of industry unions have been lobbying the CRTC to implement fee-for-carriage as a way of ensuring the survival of conventional TV and Canadian content.

But in a dissenting report, the Conservative members of the committee said the majority report had ignored its duty to study and make recommendations on fee-for carriage. They also said their opposition to fee-for-carriage was ‘fervent and vigorous’ and that it was ‘fundamentally unfair to expect Canadian consumers to pay new and subsequent fees each month to their cable and satellite providers.’

In May, CRTC chair Konrad von Finckenstein said it would be better to have distributors and broadcasters get together and come up with their own payment plan.

The Communications, Energy and Paperworkers Union — which represents more than 150,000 people in broadcasting, telecommunications and other industries — applauded the report’s recommendation that cable and satellite companies beef up their contribution to the Local Programming Improvement Fund from 1% of their gross revenue to 2.5%.

‘It’s a good first step. But the real answer is fee for carriage,’ said union spokesman Peter Murdoch.

The report said the government should ensure that independent producers have access to the upcoming Canada Media Fund and are consulted on its administration.

The report also recommends that any programs designed to assist local broadcasting be open to both private and public broadcasters. The government is rumored to be considering a bailout to help conventional private broadcasters weather the recession.

The committee also called for stable, multi-year, and predictable financing for CBC/Radio-Canada and asked the feds to consider reducing the reliance of CBC/Radio-Canada on commercial advertising.

Other recommendations:

• Part II licence fees should be eliminated.

• The CRTC must address the growing discrepancy between foreign and Canadian program spending by broadcasters.

• The CRTC should include in its annual monitoring report statistics on the hours of original local news and non-news content originated and broadcast by each over-the-air television station.

• When the CRTC conducts its review of licence terms for private conventional television broadcasters it should consider the impact of concentration of media ownership on the broadcast sector.