Canadian Cholito

Scene from 30 Rock:

Liz Lemon: I really enjoyed watching MTV Canada with you.

Gavin Volure (played by Steve Martin): They can’t seem to get anything right up there, can they?

By now I think most people have heard of the Stop the TV Tax movement. We have seen the corny TV ads. Here’s the set-up:It’s in typical man-on-the-street fashion where the interviewer approaches people randomly.  The interviewer asks if they have heard about the new TV tax that the “big networks” are trying to impose on the public. The reaction is shock and outrage. The interviewer then looks into the camera and announces a call to action: visit stopthetvtax.ca.

Well, it turns out that the Stop the TV Tax movement is actually a joint effort by Bell, Bell Aliant, Cogeco, EastLink, Rogers and Telus. Wow. I guess it’s pretty noble that a group of media giants would join together to inform Canadians of a possible television tax.  According to the website:

“The Coalition takes aim at a new tax being proposed by the broadcasters to fund television networks, which could amount for consumers to up to $10 more per month on their cable or satellite bill. The campaign marks an extraordinary union of competitors and consumers who are united in their opposition to the TV Tax.”

So basically, the website claims that the cable and satellite companies are teaming with consumers to try and stop a proposed TV tax. According to them, this tax is being proposed by Canadian broadcasters in order to fund local programming, despite the fact that broadcasters have already received government funding via the Local Programming Improvement Fund (LPIF).

Simple, no?

Define “tax”…

This is where it starts getting a little tricky.

The stopthetvtax.ca site was actually created in response to the Local TV Matters campaign (localtvmatters.ca), whose members include CTV, ‘A’, Global, CBC and CHEK News. According to the information on their site, what they are proposing is that the CRTC allow them to “negotiate with Rogers and other cable and satellite companies a fair value for providing access to local television programming”. They are basically asking for the right to impose a fee-for-carriage, a cost that the cable and satellite companies would have to pay for retransmission of their local signals and programming. However, Local TV Matters prefers call it a “Negotiation for Value”, because it is free of the regulated rate that usually comes with a fee-for-carriage.

Think of it this way: you know how if you don’t have a cable connection you can still pick up certain channels on your TV? Here in Vancouver, for example, channels 3 (CBC), 6 (CHEK), 9 (CTV) and 12 (A) are all available on your TV set even without a cable subscription. This is called over-the-air (OTA) television services. Free TV right? If this is free, why do we as consumers still have to pay for it when we subscribe to cable?

The broadcasters argue that if the cable and satellite companies are going to charge consumers to receive a signal that belongs to the local broadcasters, then they should have to pay a fee to re-transmit the signal, especially if they’re going to profit from it. In other words – “hey, we want our cut”.

So then  who’s taxing the consumer?

There is no “tax”.

The threat of consumers having to pay an additional $5-10 a month for their cable subscription is real, but ironically, it’s a fee that would come from the same cable and satellite companies that are behind the Stop the TV Tax movement. They are not required to pass the fee onto cable subscribers, but they would anyway to offset the cost of a fee-for-carriage. In fact, at this point, how can they even know the cost of the “tax” if negotiations between the broadcasters and the cable and satellite companies have yet to take place?

The Stop the TV Tax coalition are relying on semantics to scare the public into supporting their cause.

When the CRTC created the LPIF back in 2008, they declared “that there is no justification…to pass along any increased costs relating to the LPIF… to their subscribers”. But the cable and satellite companies did it anyway.

So let’s be clear. The only consumer “tax” is the fee that the cable and satellite companies would charge their subscribers. However, without the broadcasters pushing to receive a payment from the cable and satellite companies, there would be no potential charge for consumers in the first place.

So now what?

I become a little annoyed when I see big companies trying to pass themselves off as an advocacy group working with the best interests of the consumer in mind. Right now, both the broadcasters and the cable and satellite companies are guilty of putting the consumer in the middle of their fight. Both sides are pitting the consumer against their foe in order to advance their own agenda.

So before you join a Facebook group, or Tweet your support for either side, take the time to do a little research and make an informed decision.

I can tell you right now – if you’re taking a stance based solely on the TV ads, you’re letting the big companies make the decision for you.

The CRTC is seeking submissions from the public and will hold a public hearing commencing on 7 December 2009 at the Conference Centre, Phase IV, 140 Promenade du Portage, Gatineau, Quebec. The deadline for submissions is 2 November 2009. If you’d like to become involved in the debate, feel free to visit the CRTC website for more info.