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Will Bell Close CTV Sudbury if Local TV Fund is Dropped?

Craig Huckerby for local2 sault ste. marie
July 24th, 2012 at 2:45pm | Last Updated at 10:10pm

TV SET BARSIt appears BCE Inc. tells two different stories when it talks about its CTV network, depending on who they might be talking to.

If it is shareholders, the news is rosy with high profits, and that the company picked up control of Canada's largest over the air television network and is a prime piece of its synergy puzzle. However if it's the tv regulator, it's a different story altogether when it comes down to finances.

That was made perfectly clear last week when Bell Inc. told the CRTC (the Canadian Radio Telecommunications Commission) that plans to drop the Local TV Improvement Fund is a "major concern". Dropping the fund would mean cable and satellite customers will see a drop in their monthly bills of about 1.5 per cent.

The Local TV Improvement Fund was introduced in 2009 when broadcasters cried about how tough it is to be in the broadcasting industry. Without help, local TV would all but disappear in Canada's smallest and medium size markets.

At the time, cable and satellite companies didn't own the broadcasters. Three years later, most Canadian TV channels that we watch are now owned by Bell, Shaw and Rogers.

The cable and satellite companies collect the local TV fund and more or less pay themselves to keep their stations funded for local programming.

In 2010 BCE paid $1.3 billion to buy the rest of the network it didn't already own. That was followed by Shaw buying the bankrupt Canwest Global, and Rogers buying up the chain of CITY TV stations. These three companies also own all of the specialty tv channels such as Discovery, Showcase and The Food Network to name a few.

In 2008 the CRTC imposed a new fee on those companies. It meant customers would have to fork out more money - about 1.5 percent on their monthly tv bill that went directly to Canadian broadcasters to ensure local programming would remain. Last year alone the fund contributed about $106 million to Canadian broadcasters so they could fulfill their mandate of providing local programming. To broadcasters, it was free money from you the customer.

Today however, those TV channels with the exception of the CBC are all owned by Bell, Shaw and Rogers. The CRTC now says the Local TV Improvement Fund is no longer needed, and will stop the fee this September. That might be good news for consumers but for Bell, it means a red flag.

The CRTC says the advertising market has improved and the TV industry has rebounded. They say the broadcasters are cash rich and no longer need this helping hand to keep local news on the air.

Bell has a different story.

“We won’t continue to fund chronically unprofitable stations, tiny stations in tiny little towns,” said Mirko Bibic, senior vice-president of regulatory affairs for both the network and its telecommunications parent, BCE Inc. Bibic said that last April, when the CRTC was mulling the idea of dropping the fund reported by the Financial Post.

bell tvMost recently Bell has said that it may close 6 of its smallest stations if the fund is cut, with two of those stations located in Sudbury and Kitchener.

When Bell bought majority control of CTV for the first time in 2000, it cut hundreds of jobs by centralizing many of its stations into regional hubs. For example stations in Sault Ste. Marie, Timmins and North Bay saw massive cuts resulting in local newscast being dropped in favour of one regional newscast in Sudbury. Since then, CTV has lost its foothold of northern Ontario audiences to several upstarts servicing those markets, either by cable companies providing a local newscast or websites launched to fill the void of local news - such LOCAL2.ca.

Bell is currently the only telecom company saying it will close less profitable stations. Both Rogers and Shaw say they are committed to their local stations and local news. Bell is clearly not of that same opinion.

The CRTC said it is confident that small and midsized local stations will be able to maintain quality programming without the fund.


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