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Feds eye move into battle over TV-cable fees

The federal government is positioning itself to wade into the all-out battle raging between Canada's big television networks and the country's cable and satellite carriers.

At regulatory hearings this week where CTV, Global and CBC are pushing for the right to charge the distributors for their signals, officials with Heritage Canada have cast a watchful eye over the proceedings. They are trying to gauge whether the government would move to overrule the CRTC if it decides to approve fees for the broadcasters.

It would be the second key CRTC decision the government has reconsidered recently. Industry Canada decided last month to review the decision to block a new cellphone firm, Globalive Wireless Management Corp., from launching. The Canadian Radio-television and Telecommunications Commission said the firm violated foreign ownership rules because it was backed almost entirely by foreign investors.

In the TV debate, the government is opposed to letting the broadcasters charge cable and satellite companies for their signals, since the distributors vow to pass those fees directly onto consumer bills. Fearing a consumer and voter backlash, the government quietly fired a warning shot at the CRTC in September by suggesting it would intervene.

At the hearings this week, CRTC chairman Konrad von Finckenstein clashed with cable industry executives who have steadfastly refused to negotiate with the broadcasters. The networks have proposed a 50-cent monthly fee per consumer in the past, which is worth about $70-million a year in new revenue to the broadcasters, if it is approved.

However, an industry source speaking on condition of anonymity said the cable executives know they don't have to bend to the CRTC this week since the argument will likely be pushed to a higher power if they lose, in the form of Heritage Canada.

Though it is not uncommon for government to sit in on hearings held by the Canadian Radio-television and Telecommunications Commission, sources in Ottawa say staff with Heritage Minister James Moore's office are not merely passive observers.

The first sign that Ottawa was considering intervention came in September, after the CRTC opened the door in the spring to allowing the fees by permitting the broadcasters to go to arbitration if the cable companies could not agree on compensation.

An order-in-council sent by Heritage Canada to the CRTC in late September said the fees


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