Conventional broadcasters have requested a basket of financial support initiatives, but we will focus on three: the local programming improvement fund, fee-for-carriage, and increasing the number of local stations carried by satellite TV.
With respect to the local programming fund, the LPF, although it has not yet been implemented, the 1% tax rate has already been deemed by the broadcasters as insufficient. If their requests for a 3% tax rate are implemented, the LPF will grow to more than $200 million annually. We support leaving the LPF as originally designed, a 1% tax for local programming.
With respect to fee-for-carriage, Bell has long opposed the concept for several reasons. Under the current television framework, BDUs provide the broadcasters with, among other benefits, a distribution capability at no charge. In return, BDUs are given the right to carry broadcasters' signals at no charge. This arrangement benefits both parties, as well as consumers.
The CRTC has estimated that fee-for-carriage will cost $450 million annually. This will in effect be a transfer from consumers to broadcasters, with no new benefits for consumers and no guarantee that the money will be used for local programming. To fund the transfer, BDUs would need to raise subscriber rates by about 50¢ per channel. As figure 2 in our opening statement shows, this translates into a new monthly tax of $3 to $6 for most subscribers, depending on where they live.
In passing, I would note that the broadcasters have stated that fee-for-carriage would cost half that much. In fact, there was an article this week indicating that in Winnipeg the fee would only be $1.50. Their calculations are mistaken, by the way, and I'd be pleased to answer and explain why in the question and answer period, if you like.
Another broadcaster request is for satellite providers to make available every local television signal in every local market in Canada. Bell TV already carries over 70 local stations, including for markets like Kenora, Ontario, and Terrace-Kitimat, B.C., which is more than any cable company. The CRTC has developed its policies for local station carriage by satellite TV in consideration of our capacity limitations, and Bell TV exceeds the CRTC's standards. Given our capacity constraints, adding the remaining local channels is not viable without dropping dozens of existing channels from our lineup, which would fundamentally alter our competitiveness in the marketplace.
In conclusion, we feel that this committee should not be constrained to considering the narrow set of regulatory fixes advocated by the broadcasters, because there are in fact many public policy tools available to assist local programming without disadvantaging consumers.
Thank you for the opportunity to appear today. We welcome your questions.