The key bargaining chip the CRTC throws in to give the broadcasters an edge in the negotiation process is the ability to force cable and satellite companies to block out U.S. programming they own exclusive rights to.

So, for example, if Global Montreal (CKMI) decides that Videotron isn’t paying enough, it can demand not only that Videotron not allow its subscribers to watch Global, but it can demand that Videotron black out House, Heroes, 24, Family Guy and a bunch of other shows on U.S. stations. Ditto CFCF for Grey’s Anatomy or CSI.

Ever try to watch a hockey game on Rogers Sportsnet and get a black screen? Expect to see a lot of that if there’s a fee dispute.

This kind of thing happens in the U.S., though usually it doesn’t last that long as consumers raise bloody hell once their stations go black. Expect no difference here.

As for how much it will cost, that’s up to the broadcasters and cable companies. Some have said $1 a month per station. But it could be anything. It might not even be a fee, but some other form of non-monetary compensation. In the end, assuming the TV networks decide to go the fee route, it will be whatever the market decides.

One thing to note is that another right the broadcasters lose if they decide to demand a fee is the right to mandatory carriage. Ideally, that could mean that individual consumers would be given the right to choose whether or not they want to pay for a certain station. But the requirement to block out U.S. programming probably means that won’t be an option – or at least would make it impractical.

So, instead of being a truly market-based solution (and one which would favour original programming over the import and resale of U.S. shows), the price for local TV will be whatever your cable or satellite company think you’d be willing to pay for hit U.S. shows. And you’ll probably be forced to pay every penny of it, tacked on to your television service bill in big red letters.

What about free TV?

If the broadcasters decide to go the blockout-and-blackout method, the question will inevitably come up: Won’t people just go to their website and stream the videos online, or hook up a pair of rabbit ears and watch their station for free over the airwaves?

Here, my mistrust of the big broadcasters leads to some speculative theories. For one thing, since most people with both cable TV and Internet get the two from the same company, the broadcasters could choose to restrict online access. If Videotron won’t pay the fee for CFCF, then CTV.ca could refuse to stream shows to Videotron Internet customers. Or, they could do what Rogers is doing with its on-demand website, and force people to authenticate subscriptions before they have access to online programming.

The CRTC has been hands-off on the Internet (and for good reason), so there’s nothing preventing the broadcasters from doing this.

As for getting programming over the air, a fee dispute would provide ample incentive for broadcasters to cripple or disable their transmitters. CFCF could find itself having sudden “technical difficulties” at its transmitter in the event of a dispute. Global’s CKMI is already putting out so little power as to be difficult to receive even in the Montreal area.

What this could do, though, is boost over-the-air reception for U.S. border stations. If enough Canadians get fed up of their broadcasters trying to bleed them dry, they could install an antenna big (or high) enough to capture U.S. stations.

But, of course, it’s unlikely to get that far. Because, as we all know, television providers and television broadcasters work together for the common good.

More awards shows, by decree

Another aspect of the CRTC decision concerns what’s called “priority programming”. This was a provision that required the big broadcasters to devote eight hours a week to expensive dramas, comedies and other scripted programs instead of wasting it on celebrity gossip shows and cheap news.

The CRTC has replaced that with a provision for “programs of national interest”, which include dramas and scripted comedies, but also documentaries and Canadian awards shows.

Yes, awards shows. The CRTC apparently believes that this is a type of programming so in danger that it requires a special status.

The other important part of this change is that instead of being time-based, it’s now revenue-based. They’ll be required to spend 30% of revenues on Canadian programming, and 5% on “programs of national interest”. Because this will be a percentage of revenues instead of a percentage of airtime (though Canadian content in general still has time-based minimums), hopefully this will mean more effort producing better-quality Canadian programming instead of just putting together the cheapest hour of television they can.

On the other hand, it might mean pooling all their money into whatever Toronto-based cop drama they can most easily sell to CBS.

Digital TV continues, mostly

Finally, the CRTC has decreed (with one notable dissenting opinion) that the digital TV transition should continue as scheduled, at least in all major markets. So analog television transmitters in markets of over 300,000 people and provincial and territorial capitals and any market with more than one television station will all have to transition to digital by Aug. 31, 2011.

In its call for comments, the CRTC acknowledged that many Canadians would be adversely affected by this and would need to buy digital converter boxes. But they don’t seem to really care.

I’ve already argued that this is an unnecessary move and will be unnecessarily expensive for both broadcasters and consumers. The reason is simple: The reason for doing this is to liberate TV channels above 52, and conversion to digital is unnecessary to accomplish this goal, because no Canadian market has more than two dozen television stations (including U.S. border stations), which could be reassigned to a lower channel if they’re currently above 52.

But instead of acknowledging that there’s nothing wrong with the way we’ve been broadcasting television since the 1950s, we’re willing to ditch a half-century-old technology and make a lot of people buy a lot of expensive equipment because some regulators think it looks cool.

As we all know, CTV – and its growing “Local TV Matters” coalition of conventional television broadcasters not owned by telecom companies – doesn’t want the CRTC to impose fees on cable and satellite companies, but wants the power to negotiate fair rates for their signals. In a new TV ad (yes, they made even more of them), CTV literally brings out a table and two chairs and says “we just want to talk”.

In my last blog post on the subject, I was a bit skeptical of this idea. Cable companies have little incentive to carry local stations, and aren’t about to pay for them. Consumers also wouldn’t miss much if those stations disappeared. Most of their programming comes from the United States, and nothing outside of the newscasts is locally produced. And even then, local news and crappy Canadian programming are increasingly available online, where CTV doesn’t charge Canadians directly to watch. (I can only assume from the “Local TV Matters” logic that I am stealing CTV’s programming from its own website).

I pointed out why I don’t think local stations would have much of a bargaining chip at this table, even with the right to pull their signals:

Unless blocking U.S. channels is part of this plan, Canadians could tune into stations from Burlington, and all we’d miss aside from local news are shows like So You Think You Can Dance Canada.

Well, it turns out that’s exactly what CTV has in mind. This is what they told the Calgary Herald:

“We need a hammer,” says Sparkes.

For instance, broadcasters say they should have the right, as a negotiating ploy, to pull their signals from cable along with the rights to shows they own in their local markets, such as the popular series House — without cable simply importing the show from an American broadcaster.

In other words, if Videotron and CKMI can’t agree on a fee, CKMI would have the right to demand that Videotron not only be barred from distributing CKMI’s feed, but be forced to black out U.S. stations that carry programming CKMI has rights to, like House, Entertainment Tonight, The Office, 90210 and Family Guy.

This proposition is a scary one for consumers. Canadian broadcasters want the right to block out U.S. broadcasters from cable.

Blackouts are common in cable these days, but they’re never imposed by the CRTC. Instead, they’re usually done because of demands from major sporting leagues who have broadcast agreements with different broadcasters in different markets. In each case, it’s the broadcaster that wants to be blacked out to comply with that agreement.

But this is different. And aside from the unbelievable public outrage CTV’s idea would cause if it was ever invoked, and the dangerous precedent it would set, here’s why I think the CRTC should turn them down on this point:

Canadian rights to U.S. shows are set by contract between the Canadian networks and U.S. networks. The CRTC is in no way involved in these deals, nor should they be. But giving Canadian networks the power to block U.S. stations based on these private contracts means that the CRTC (and cable and satellite companies) would be bound by agreements made between private commercial companies. That’s simply unreasonable.

But then, reason wasn’t a part of this from the beginning, was it?