OTTAWA - Television producers and broadcasters would be devastated under a Conservative Party plan to radically reduce the role of the federal communications regulator and allow U.S. satellite services into the country, the head of the Canadian Film and Television Production Association says.
The Conservative Party's candidate handbook says the regulator should be reduced to registering channels and a Conservative government would negotiate an agreement with the United States to allow DirectTV and other U.S. satellite TV services into Canada.
Consumers who want access to HBO, Fox News and other popular U.S. or foreign-language channels would applaud such a change.
But the move would pull the legs out from under Canadian production houses and broadcasters who depend on revenue from top-rated U.S. shows. Broadcasters are required by the regulator, the Canadian Radio-television and Telecommunications Commission, to divert a percentage of revenue to Canadian production and to air at least 50% Canadian content, providing a guaranteed market for Canadian producers.
The Conservative ideas "would be an assault on the system," said Guy Mayson, chief executive and president of the Canadian Film and Television Production Association. "It would be devastating in that a lot of our industry has been built on contributions from Canadian broadcasters and the requirement for Canadian content."
Carl Bayard, media analyst with Desjardins Securities in Montreal, agreed both broadcasters and production companies depend on the current rules for survival.
"The entire edifice the industry is built on would probably come crashing down," Mr. Bayard said. "You'd be throwing some companies' business models out the window."
Direct competition from U.S. channels would dilute what Canadian broadcasters such as CanWest Global Communications Corp., owner of National Post, could charge for advertising.
"It would be huge," Mr. Bayard said. "It wouldn't be good news for anyone in the industry."
The cable industry supports the Conservative call to deregulate but sees no need to blow up the CRTC to do it.
Michael Hennessy, president of the Canadian Cable Television Association, said Canada should allow into the country all foreign signals unless someone can prove to the CRTC that a channel would cause harm. That is the opposite of the current system, in which each channel needs the approval of the regulator. But neither Tory proposal is practical, he said.
Allowing in more channels can be done without chopping the CRTC, a move that would spark a massive political battle with well-funded broadcasters and artists' unions, all of whom have their problems with the CRTC but all of whom, in the end, depend on it to some degree.
"I have no objection to a reduced role for the CRTC. But I don't want to spend the next two years focused on that," Mr. Hennessy said.
And negotiating a reciprocal agreement with the Americans on satellite services would also "bog down very quickly," he said.
"It's a lot easier to allow the Canadian satellite distributors and Canadian cable and phone companies to bring in the channels than to do a reciprocal agreement."
The cable industry wants to be the one to carry those U.S. and foreign signals. It also wants a strong telecom regulator to help it break into the local phone market, which it is planning to enter via Voice over the Internet services.
The Tory policy was leaked to some reporters by the Liberal Party, which hoped it would stir arts groups to campaign more vigorously against the Conservatives. While the language in the candidates' handbook does not appear in the party platform it is Conservative policy, a party spokesman confirmed yesterday.
The Canadian Association of Broadcasters declined comment on the Conservative policy. Meanwhile, a coalition of arts unions called on the Liberal and Conservative parties to make clear their cultural policies.
Mr. Mayson said the current system has been cost-effective public policy, since the government pays only part of the cost of maintaining Canadian content.
The cable association warned consumers are already getting ahead of regulators, by watching pirated U.S. signals, and will soon be able to watch high-quality Internet copies of shows as well.
"If we fail to promote competition and choice, consumers will use technology to bypass Canadian systems to get what they want," the cable association said in a release.