Surcharges, blocks are proposed

by Debbie Lawes

Canadian broadcasters are lobbying to end what they see as a free ride American television gets on Canadian cable TV.

   In a few weeks the Canadian Radio-Television Telecommunications Commission (CRTC) will release a new TV policy that could include a plan to block out certain U.S. commercials, introduce a surcharge on American TV networks, and forbid any new foreign networks from coming into Canada. The rules could take place by January 2000.

   The campaign against US. television is being spearheaded by the powerful Canadian Association of Broadcasters (CAB). Topping its wish list is a recommendation that all American broadcast and cable networks be required to pay into a fund to subsidize the development of Canadian programming.

   Under the proposal, the American contribution would amount to 30 percent of the value of total network affiliate payments for U.S. cable services and 30 percent of advertising revenues generated in Canada by American broadcasters. American cable networks like CNN, A&E, The Learning Channel and Speedvision reportedly earn nearly $80 million Canadian in subscriber fees from Canadians.

   Bill Roberts, secretary general of the North American Broadcasters Association, which represents broadcasters in Canada, the U.S. and Mexico, worries that adopting such a rule could trigger a trade dispute. "It would be challenged, and probably successfully challenged in North American Free Trade Agreement or World Trade Organization forum," says Roberts.

   The attack on American broadcasters and cable networks doesn't end there. The CRTC is also considering a proposal that would allow Canadian broadcasters to zap U.S. commercials and replace them with local commercials on shows where they own the Canadian program rights. This practice is already commonplace in Canada but only when the same show is aired at the same time on both an American and a Canadian channel. The CAB says the rule should also apply when the same show is aired at different times on the TV schedule.

   The CAB claims tougher substitution rules would help its members repatriate about $35 Canadian million of the $75 million Canadian a year in advertising revenues it says flow to U.S. border stations.

   The practice is called non-simultaneous substitution, and while Americans may not like it, Canadian broadcasters say the letter of international trade law is on their side. Roberts says that may be the case, but the U.S. could still build a case for discrimination under free trade law. He suggests that broadcasters would be better off focusing on the real issue of program rights within international trade negotiations.

   Both private broadcasters and cable TV networks are also pushing the CRTC to block the entry of new foreign television services into Canada. They say foreign TV interests wanting access should have to partner with a Canadian business. The end result would be an American-like TV channel that included Canadian content and was majority-owned by Canadians.

   If there's a champion for American TV, it's Canadian cable operators. Canada's largest cable operator, Rogers Communications, has been among those lobbying hard to convince the CRTC that taking a hard line on U.S. services would anger cable subscribers and cause political friction between our two countries.

   "Given that the CRTC does not regulate U.S. cable services," Rogers argued in written testimony, ``it is questionable as to whether it could require them to directly contribute to Canadian programming production.''