When I was growing up, my father much preferred listening to hockey games on radio rather than watch them on television. It took him years to convert. He seemed to connect more with the play-by-play announcers on radio than TV, and cherished the experience of visualizing the play instead of actually seeing it.

Radio stations were once filled with massive studios producing live talk shows, soap operas and large-scale live music specials. But radio revenues were dramatically reduced over time as more consumers bought and watched TV.

Media changes by adapting to new technologies and new formats, and is driven by the consumer’s constant thirst for more, better, faster and cheaper content.

I am appalled by the latest actions of CTV, Global and the CBC, and their public demand to be granted what has been coined as ‘fee-for-carriage.’

These networks have historically been granted exclusive licences for over-the-air delivery of television service in a particular market – also known as free TV. All the consumer had to do was buy a TV and an antenna and they would receive the free TV signals of CTV, CBC and numerous U.S. over-the-air stations.

For example, CFTO, the lead station in the CTV Network group, has held the Channel 9 VHF frequency in a licence granted by the Government of Canada and regulated by the CRTC. No one else can gain access to this frequency.

Over the course of decades, the CFTO licence has been granted to an ever-changing group of owners, starting with the Eaton, Bassett and Rogers families in the early 1960s. The licences were granted to these ownership groups, often for a period of seven years, and they would make various programming commitments to the CRTC for national and local news, sports and drama, among others, in order to have their licences renewed.

In the late 1960s, along came cable TV, promising the consumer clearer reception of local and foreign signals as well as a host of information channels and local programming. The CRTC regulated that cable must carry all licensed over-the-air channels such as CTV and CBC and provide them exclusive channel positioning as well as a host of protective regulations – such as program substitution of shows (a policy through which a Canadian broadcaster carrying the same program at the same scheduled time as a U.S. station would be assured that all advertising revenues stayed with the Canadian version of the broadcast).

There once was commercial deletion of ads on U.S. stations to act as a market barrier to Canadian companies wanting to advertise on U.S. channels – and even tax regulation, Bill C-58, which disallows any expense deduction for a Canadian company advertising in the U.S. to reach the Canadian market.

All of these regulations remain in effect today and are limited to the over-the-air/free TV stations. In other words, Canadian specialty channels such as HGTV do not benefit from program substitution.

The over-the-air broadcasters fought hard and long throughout the ’60s and right through to the late ’90s to keep cable companies out of the programming and advertising business, and were very successful.

Today, CTV and Global own and operate some of the leading newspapers in the country, among them The Globe and Mail and the National Post. They have been running ads called ‘Cable’s dirty little secret,’ in which they ask the public to lobby the CRTC and government to make the cable companies pay fees to CTV and Global for carrying their channels.

The notion that there is a dirty little secret in the cable business is a very accusatory and misleading claim by these institutions. It suggests that the cable industry has been keeping a secret (with the government) that they have never paid the networks for service. Hardly a secret.

In response, the cable industry has had to take out full-page ads in these very newspapers (owned by broadcasters) to respond to the claim. Broadcasters have also been using their networks to run ads looking for support and the cable industry has had to buy expensive airtime to respond to these attacks.

I remain totally opposed to fee-for-carriage. I hope that when the CRTC hears this matter in the coming months that they ask a series of questions that need to be answered.

w Should the CRTC grant fee-for-carriage, would the broadcast licence owners agree that once a ‘tax-based’ revenue system is granted (if the regulator, and ultimately the government, changes the rules it will be seen by the public as a forced fee, i.e. tax), that these licences should be up for competitive renewal and only be granted for a five-year term to the applicant that brings the most innovative plan for Canadian programming?

w Should protective rules such as program substitution continue to be in effect if fee-for-carriage is granted?

w Should cable companies be obliged to carry the broadcast channels, or can they allow the consumer to determine if they want to receive and pay for these channels now that a direct fee is attached?

w What will prevent border stations affiliated with CBS or NBC, that have been carried on cable TV for as long as the Canadian channels, from asking the CRTC for payment for their channels?

w Will the Hollywood studios, seeing this new revenue stream, not want their share for the shows that they sell to CTV and Global? This is how they arrange payment for specialty cable networks that have dual revenue streams. If so, would these new fees not simply get gobbled up by the program supply market?

w Will fee-for-carriage not be seen by the public as simply a bailout for ailing media companies? Who’s next: newspapers, radio or possibly failing online content companies?

w Given that the CRTC has just authorized an enriched plan aimed at assisting Canadian broadcasters to fund local programming via a fee from cable, is this new request not premature? Is this current request really for local programming?

w Is free, over-the-air TV a true local service? Is it not true that the local cable community channel is becoming the true local voice and choice for content? Should these cable channels perhaps get a new tax break from government?

These are among the questions that need to be addressed at the upcoming CRTC hearings.

There is a very interesting comparison to the fate of one of the founding shareholders of CTV and the situation CTV finds itself in today: Eaton’s was a big national retail chain with stores in all the major markets. It was an aggregator of everyone else’s product, with a few private brands of its own.

Change came to the retail business and Eaton’s did not become part of that change.

CTV is a big national network with stations in major markets. It is a big aggregator of everyone else’s product and only owns its news…

Large aggregators of other people’s products never dominate for long. That’s a good lesson from a founding shareholder.

Once my father would only listen to hockey on the radio; today he watches the games online. Media and consumers are both going through a major shift and, in the television sector, it is only beginning.

Fee-for-carriage will be seen as a direct tax on cable and satellite consumers and a very strange precedent for government – especially given that these broadcast channels are licensed as free, over-the-air TV. *

Kevin Shea has held senior executive positions at Bell Globemedia, Global Television and Rogers Communications. He was the founding president of YTV Canada (1988 to 1995), and has sat on the boards of the CCTA, the CAB and the CFTPA. Shea is now a communications consultant (at his own SheaChez Communications), and sits on numerous boards of both private and public entertainment companies in Canada and the U.S.