Sunday, February 28, 2010

Keep TV stations' hands out of our pockets

The Canadian Broadcasting Corporation is campaigning to force Canadian cable TV companies to pay TV stations for the privilege of carrying their signals. This seems entirely backward to me!

Cable TV started around 1950 and was then called Community Antenna TV (CATV). At that time all TV reception was through antennas. People who lived far from the transmitter needed a big antenna to get an acceptable picture. Because these antennas were very expensive, whole neighbourhoods agreed to share the cost and the signal, and CATV was born.

So cable TV subscribers pay the full cost of bringing TV signals into their home. Without cable TV, the TV stations would have a much smaller audience; in fact, it would make more sense for the TV stations to pay the cable companies for this service, then hit up their advertisers for more money for "delivering more eyeballs" (as they say in the trade).

All communications in Canada are regulated by the Canadian Radio and Telecommunications Commission (CRTC). Under CRTC rules, Canadian cable companies must carry local stations, and all cable customers must pay about $200 per year for those stations (this is called "basic cable"). Only then can customers add "specialty" channels like movies, sports, ethnic etc.

So customers are already forced to pay to receive stations they
can get for free by sticking a bent coathanger into their TV's antenna socket. Now, in addition, the cable companies will be forced to pay a new tax to subsidize local TV stations. The cable companies, quite understandably, intend to pass this tax on to their customers - and the CBC is even campaigning against that.

International comparisons show that Canadians pay more, for worse service, in all the fields the CRTC regulates - home phones, cell phones, cable and satellite TV, and Internet service.
We would be better off if the CRTC was scrapped and replaced by a body that put customer needs first, permitted more competition, and allowed unpopular services to go out of business.

The CBC website wants me to urge my government to both support this new tax AND prevent cable companies from passing it on to their customers. Instead, I urged my government to end the free ride for local TV stations by allowing cable subscribers to opt out of "basic cable". If half of us did that, together we would save almost a billion dollars per year.

Monday, February 01, 2010

Carbon tax weeds out everyone who isn't rich

From the National Post, February 01, 2010 (summarized)

The Pembina Institute, a left-wing think tank, says the current 3.33¢ per litre carbon tax in British Columbia needs to increase to 50¢ per litre - and that's in addition to federal and provincial sales taxes, plus other taxes that subsidize public transit.

British Columbia already has the highest gasoline prices in Canada because of these taxes, and raising them will make commuting even more expensive. But Vancouver also has the most expensive housing in Canada, so people are forced to commute to work from cities 30 km to 60 km away. Since the high speed public transit system doesn't reach the places where most commuters live, commuters have no choice but to pay the high gas prices.

Carbon taxes, in effect, are a way of rooting out middle and lower income workers who can't afford to live in Vancouver, and soon won't be able to afford to commute to Vancouver either.

My comment:

For those who do have access to transit, the fares are so high that two people travelling together spend almost as much commuting by transit as they would commuting by car - and even more if they have to drive to the transit station and pay to park there (especially with our new 21% tax on parking fees, plus federal and provincial taxes on top of that).

I've always thought that increased taxation is the worst way to try to fix environmental and other problems. Higher taxes hit the poor hardest. Taxes that hit working families hurt children twice: they have less money today, and their parents are forced to forgo saving for their retirement, so their children will have to care for them then and won't see much of an inheritance.

My parents lived through World War II and the postwar era when goods of all kinds were scarce. The government issued ration coupons to make sure everyone, rich or poor, got their fair share. There is no reason why environmental resources, such as the right to emit a certain amount of carbon, can't be shared equitably through rationing.

A common objection to rationing is that it creates a "black market" in the scarce goods. But there is really no moral objection to people trading their share for something they need more. And if the rationing is done through a secure network like the ones that support credit and debit cards, not only can the scarce goods be traded freely, but these transactions can even be taxed!

A rationing system would be better for the environment because it would directly limit the consumption of the scarce goods, instead of trying to influence consumption by overpricing them. And a free market in "ration rights" would produce a fairer distribution of consumption at a lower overall cost to consumers.

So why don't we do it that way? Two reasons: it's hard for any politician to admit that the real goal of punitive taxation is to create a de facto rationing system. And it's also hard for any government to resist an opportunity to collect taxes. When our governments are willing to level with us about the former and forgo the latter, we will start making progress on this issue.