The seeds of the fee-for-carriage debate at the upcoming CRTC BDU hearings were planted at the Canadian Association of Broadcasters conference back in November.

Attendees at an early session called TV.2011 would have noted conventional broadcast players referring to the fee-for-carriage issue as though the CRTC might yet approve their demand of charging cable and satellite providers for the pleasure of their signal. I, for one, scratched my head.

‘Wait a sec,’ thought I, ‘didn’t the commission already kibosh this request earlier this year, deciding that the over-the-air networks had not made a financial case that BDUs – in essence, their customers – should pay for these stations that had hitherto been available gratis?’

Well, apparently the casters had the inside track, because, later at the same conference, CRTC chair Konrad von Finckenstein got up in front of a packed hall and announced that the scope of the BDU hearings would address fee-for-carriage, which ‘must be resolved.’ Even though it had already been resolved.

AT TV.2011, reps from the big two privates, CTVglobemedia and Canwest, spoke of the precariousness of the business, and how the over-the-air TV review – the same one that shut ’em down on fee-for-carriage – did not go far enough in addressing the new business model in network TV, one that has seen growing competition from burgeoning specialty channels and any form of digital delivery device you could wave an iPod at.

You may recall that, in said review, the CRTC did unveil a plan to lift advertising time restrictions on the conventionals, opting to let viewers decide how many spots they will tolerate. But apparently this was not enough to assist the ailing casters.

And just how badly are they ailing? Recent data from the regulator provides clarity.

Although not on par with numbers from earlier in the decade, profits before interest and taxes for the private conventionals last year climbed to $113 million, up 24% over the previous cycle. Meanwhile, spending on U.S. programming climbed 5% to $722 million, while dollars towards domestic shows dipped a percentage point to $616 million. None of this is likely to persuade CRTC decision-makers that these nets are in dire straits.

The privates complain that the OTA TV review did not go far enough in addressing the new business model in network TV, one that has seen growing competition from specialties and any form of digital delivery device you could wave an iPod at

This is not to say that every player is keeping him or herself warm at night with a cash-stuffed quilt. At the same panel, René Guimond, president and CEO of TQS, warned that, in Quebec, the private conventional business was doing well in terms of market share, but that his channel was under tremendous pressure to generate revenues. ‘We are doing everything we can to manage,’ he said.

One potential solution TQS envisioned was the valuable subscriber fee that specialty channels collect.

Well, I guess he wasn’t kidding, because the very next month TQS filed for bankruptcy protection. Just this month, film distributor and producer Remstar Corporation rode in on a white horse with plans to take the channel off the hands of owners Cogeco (60%) and CTVgm (40%).

Of course, the business model for a Quebec station is entirely different from that of an English-Canadian network. The size of the market is smaller, and comparatively more must be invested in original programming – the price of which, TQS argues, is rising – as foreign imports hold precious little interest for their viewers. An argument could therefore be made to approve fee-for-carriage on a case-by-case basis.

Meanwhile, CTVgm and Canwest teamed up in January to file a joint submission to the CRTC asking again for fee-for-carriage, ahead of the marathon BDU hearings (April 8-28). And for some reason they’re feeling cocky, looking for more than they asked the first time, when they were rejected. Back then, CTVgm wanted a monthly dime per subscriber per local channel, while Canwest wanted $0.50 per subscriber. Now, they are both asking for $0.50 to $0.70 per subscriber per channel. At least give ’em credit for having cojones.

Essentially, the conventionals argue that they want the same benefits awarded the specialties. These subscriber fees made sense when they were introduced to help the viability of fledgling specialties owned by the likes of Alliance Atlantis and CHUM. Today, those same fees are collected by the guys who are complaining, since Canwest bought AA and CTVgm scooped the CHUM specialties. They just want all the breaks.

At the Banff World Television Festival last June, von Finckenstein told the crowd ‘There simply was not sufficient evidence to prove the need [for fee-for-carriage]. In the absence of such evidence, it would not be fair to make such a major decision. However, we explicitly left open the possibility of reviewing the issue if such evidence should emerge.’

Well, he has let the casters bend his ear yet again on this matter. But the facts are out there, so the outcome should be clear.