NZ has even fewer cable systems on a per capita basis than Australia coupled with a similar dearth of local media. It can be safely assumed that any NZ cable system would carry all available terrestrial TV stations that can be received at its various head ends.
CITY-TV of Toronto (according to its own website and annual reports) owes its financial success as an independent TV station to this CRTC must-carry rule. It is assumed that this must-carry rule was aimed at small TV stations in Ontario and Quebec, many of which are not carried by satellite television providers.
The Canadian must-carry rules have so far created very little friction between terrestrial broadcasters and cable systems, as cable systems are allowed to more aggressively implement other digital telecommunications services (like cable internet services and IP telephony) with less overall regulation than their US counterparts.
Although cable service providers routinely carried local affiliates of the major broadcast networks, independent stations and affiliates of minor networks were sometimes not carried, on the premise it would allow cable providers to instead carry non-local programming which they felt would attract more customers to their service.
Many cable operators were also equity owners in these cable channels, especially TCI, then the nation's largest multiple system operator (MSO), and had moved to replace local channels with equity-owned programming. This pressure was especially strong on cable systems with limited bandwidth for channels.
The smaller local broadcasters argued that by hampering their access to this increasing segment of the local television audience, this posed a threat to the viability of free-to-view broadcast television, which they argued was a worthy public good.
Local broadcast stations also argued cable systems were attempting to serve as a "gatekeeper" in competing unfairly for advertising revenue. Some affiliates of major networks also feared that non-local affiliates might negotiate to provide programming to local cable services to expand their advertising market, taking away this audience from local stations, with similar negative impact on free broadcast television.
Although cable providers argued that such regulation would impose an undue burden on their flexibility in selecting which services would be most appealing to their customers, the current "must-carry" rules were enacted by the U.S. Congress in 1992, and the U.S. Supreme Court upheld the rules in rejecting the arguments of the cable industry and programmers in the majority decision authored by Justice Anthony Kennedy. That decision also held that MSO's were functioning as a vertically integrated monopoly.
A side effect of the must-carry rules is that broadcast networks cannot charge the cable-TV companies license fees for the program content retransmitted on the cable network, except potentially as a part of retransmission consent agreements in lieu of must-carry.
In September, 2007, the Commission approved a regulation that requires cable systems to carry both analog and digital signals if the cable system uses both types of transmission. Small cable operators were allowed to request a waiver. The regulation will end three years after the digital TV transition date, and applies only to stations not opting for retransmission consent.
In the U.S. retransmission consent has often been chosen over must-carry by the major commercial television networks and PBS. Under the present rules, a new agreement is negotiated every three years, and stations must choose must-carry or retransmission consent for each cable system they wish their signal to be carried on.
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