ACCORDING TO COGECO CABLE, CRTC MEASURES TO SUPPORT OVER-THE-AIR BROADCASTERS WILL COME AT A HIGHER COST TO CABLE AND SATELLITE CUSTOMERS
PRESS RELEASE
For immediate release
According to Cogeco Cable, CRTC measures to support
over-the-air broadcasters will come at a higher cost
to cable and satellite customers
Montreal, Canada. July 6, 2009. Following the release earlier today of public notices by the
Canadian Radio-television and Telecommunications Commission (CRTC), Cogeco Cable Inc. is
deeply concerned with the federal broadcasting regulator’s decision to impose substantial and
growing cross-subsidies for the benefit of Canadian over-the-air (OTA) television broadcasters
through a number of parallel regulatory measures.
Cogeco Cable already pays 5% of all its revenue derived from video distribution to fund
Canadian television programming initiatives, which include the independently-managed
Canadian Media Fund and Cogeco Program Development Fund. On October 30, 2008, the
CRTC decided to create a new local programming improvement fund (LPIF) of approximately
$68 million annually to provide further financial support for local programs of the Canadian OTA
television broadcasters. Canadian OTA television broadcasters are comprised essentially of the
large public and private commercial television networks. To finance this new fund, the CRTC
decided to impose an additional cross-subsidy of 1% of cable and satellite video distribution
revenue. This additional mandatory cross-subsidy has now been increased to 1.5% of video
distribution revenue to bring the LPIF at over $100 million annually. A 6.5% aggregate cross-
subsidy represents on average approximately $48 per year for the Cogeco cable video
consumer.
Of even greater concern is the fact that the CRTC has now reversed its position on fees for
carriage and also decided to require that Canadian cable and satellite distributors pay
substantial additional amounts to Canadian OTA television broadcasters for the distribution of
their signals, which are available over the air for free, while continuing to require the distribution
of these signals on cable and satellite. Based on publicly stated broadcaster expectation, this
may well have an additional average impact of up to $60 per year for Cogeco Cable video
customers.
Another source for concern is the threat by the CRTC to have US television network signals
removed from cable and satellite in Canada in order to further protect Canadian OTA television
broadcasters.
“The CRTC has embarked on a course of action that will inevitably cause cable and satellite
retail rates to rise significantly, and the choice of services presently available on Canadian cable
and satellite to be further constrained, through these regulatory measures. Sadly, Canadian
consumers have only until August 10, in the middle of summer vacations, to make their voice
heard on these measures by filing comments in writing. The logic of having Canadian cable and
satellite customers pay substantially more to support in fact the costly acquisition of prime time
American television programs and its aggregation with subsidized Canadian local programs by
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the Canadian OTA television broadcasters should be seriously challenged”, said Louis Audet,
President and CEO of Cogeco Cable.
ABOUT COGECO CABLE
Cogeco Cable (www.cogeco.ca) is a telecommunications company and is the second largest
cable operator in Ontario, Québec and Portugal, in terms of the number of Basic Cable service
customers served. Through its two-way broadband cable networks, Cogeco Cable provides its
residential customers with Audio, Analogue and Digital Television, as well as HSI and
Telephony services. Cogeco Cable also provides, to its commercial customers, data networking,
e-business applications, video conferencing, hosting services, Ethernet, private line, VoIP, HSI
access, dark fibre, data storage, data security and co-location services and other advanced
communication solutions. Cogeco Cable’s subordinate voting shares are listed on the Toronto
Stock Exchange (TSX: CCA).
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Information: Marie Carrier
Director, Corporate Communications
Tel.: (514) 764-4761