Thursday, January 25, 2007
TV fund under attack by cablecos
Shaw and Videotron have both announced that they have stopped sending their contributions to the Canadian Television Fund until there is a review of its accountability, implicitly calling for an overhaul of the governance structure.While the direct target is CTF, this may be viewed as an indirect challenge to the CRTC. The CRTC's Broadcast Distribution Regulations require cable and direct-to-home satellite operators to contribute a portion of their gross annual revenues to the CTF. In Shaw's case, this amounts to $5M per month.
CTF's governance structure had 3 representatives from the CCTA, a cable industry association that dissolved last year. Videotron had not been a member of CCTA for a number of years and so it had no way to influence the direction of its contributions. CTF's January 12 news release says that it "has requested that the CCTA nominate a candidate to ensure proper representation from the BDU community on the CTF Board of Directors."
Did CTF miss the news of CCTA's demise last year? Exactly who at the non-existant CCTA did CTF approach "to ensure proper representation from the BDU community?"
Pierre Karl Péladeau, president and CEO of Videotron parent Quebecor said:
Fund managers pay little heed to the main private-sector contributors to the Fund and give little consideration to their point of view in decision-making.It seems that CTF has fallen out of touch with its funding community.
We fully intend to continue being a leading contributor to the financing of Canadian production but we have decided to withhold our monthly contributions to the Canadian Television Fund until significant changes are made to its management and direction.
Update: [January 25, 9:15 pm]
Heritage Minister Bev Oda has called a meeting of the funders of CTF.
Technorati Tags:
CTF, Shaw, Videotron, CCTA
Posted by Mark Goldberg @ 1/25/2007 07:26:00 AM 
Comments:
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While I don't disagree with you that the central issue in this matter seems to be about the governance of the CTF, I do disagree with your contention that Shaw’s and Videotron’s moves are an indirect challenge to the CRTC. As the Globe and Mail story rightly points out, the two companies are using the fact that making payments to the fund on a monthly basis (presumably to even out the fund’s cash flow) is the result of a CRTC circular to the cable that does not have the same legal status as the regulation requiring the industry to make payments annually at the end of August.
As I see it, by withholding their monthly payments for January, February and beyond till at least August 2007, the industry is only ignoring a “suggestion or recommendation” that it make such payments. If they don’t make their payments to the fund by the end of August, they will be in violation of a regulation that legally and absolutely requires them to make their required payments to the fund. Apparently, a federal judge either has been asked or will be asked at some point to decide on how much force the CRTC’s circular has vis-à-vis its regulation.
Given this and given that Shaw and Videotron are challenging the existence of or the need for (a) production fund, I don’t see their moves as challenging the CRTC in any way.
One of the other items the cable companies are pointing to as a basis of their withholding payments is the fact the CTF monies are flowing to the CBC. On this, I would agree with them because in my mind I see this as a form of double taxation. The CBC already gets $1 billion in funding from the federal government that comes from the taxes you and I and other Canadians and businesses (including the cablecos) pay every year. By allowing the CBC to also get monies from the CTF, the federal government is admitting that they aren’t giving enough funding to the CBC to do its job and are using the fund to avoid having to give the CBC more money and explain it to taxpayers.
The fact that the CTF’s management apparently isn’t aware of the demise of the CCTA seems to support the fact that this is about governance and control. What Shaw and Videotron seem to be saying is they don’t want ‘taxation’ without representation. Seems to me the people of Boston said something similar about 230 years ago. That's not challenging the CRTC, it's just saying we don't like the rules of the game.
As I see it, by withholding their monthly payments for January, February and beyond till at least August 2007, the industry is only ignoring a “suggestion or recommendation” that it make such payments. If they don’t make their payments to the fund by the end of August, they will be in violation of a regulation that legally and absolutely requires them to make their required payments to the fund. Apparently, a federal judge either has been asked or will be asked at some point to decide on how much force the CRTC’s circular has vis-à-vis its regulation.
Given this and given that Shaw and Videotron are challenging the existence of or the need for (a) production fund, I don’t see their moves as challenging the CRTC in any way.
One of the other items the cable companies are pointing to as a basis of their withholding payments is the fact the CTF monies are flowing to the CBC. On this, I would agree with them because in my mind I see this as a form of double taxation. The CBC already gets $1 billion in funding from the federal government that comes from the taxes you and I and other Canadians and businesses (including the cablecos) pay every year. By allowing the CBC to also get monies from the CTF, the federal government is admitting that they aren’t giving enough funding to the CBC to do its job and are using the fund to avoid having to give the CBC more money and explain it to taxpayers.
The fact that the CTF’s management apparently isn’t aware of the demise of the CCTA seems to support the fact that this is about governance and control. What Shaw and Videotron seem to be saying is they don’t want ‘taxation’ without representation. Seems to me the people of Boston said something similar about 230 years ago. That's not challenging the CRTC, it's just saying we don't like the rules of the game.
Posted by 
: 10:10 AM, January 25, 2007
: 10:10 AM, January 25, 2007
Just noticed an error in my ealier message - the third paragraph should have read:
"Given this and given that Shaw and Videotron are NOT challenging the existence of or the need for (a) production fund, I don’t see their moves as challenging the CRTC in any way.
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"Given this and given that Shaw and Videotron are NOT challenging the existence of or the need for (a) production fund, I don’t see their moves as challenging the CRTC in any way.
Posted by : 12:19 PM, January 25, 2007
: 12:19 PM, January 25, 2007 << Home
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