ARCHIVED -  Public Notice CRTC 1996-159

Public Notice

Ottawa, 20 December 1996

Public Notice CRTC 1996-159

TRANSFER OF OVERSIGHT OF THE CABLE PRODUCTION FUND (CPF)

I. Introduction

In Public Notice CRTC 1994-7 dated 3 February 1994, the Commission announced an amendment to subsection 18(6) of the Cable Television Regulations, 1986 (the regulations). The amendment suspended implementation of a reduction in the basic monthly fee otherwise required by the "sunset" provisions of paragraph 18(6.3) of the regulations. The amendment applies to those cable distribution licensees who contribute to a new fund for Canadian programming, one-half of the amount by which their basic monthly fee would otherwise be reduced under the provisions of paragraph 18(6.3).

This amendment had been proposed as part of a larger package of amendments to the regulations arising from the Commission's review of the structure of the Canadian broadcasting system (the Structural Hearing; Public Notice CRTC 1993-74).

Through a subsequent public process, the Commission developed the criteria that were to govern the administration of such a fund, now known as the Cable Production Fund (CPF). The criteria were published in Public Notice CRTC 1994-10 dated 10 February 1994. Amendments to these criteria were requested by the CPF and approved in Public Notices CRTC 1995-89 dated 2 June 1995 and CRTC 1996-51 dated 3 April 1996.

On 9 September 1996, the Minister of Canadian Heritage announced the creation of the Canada Television and Cable Production Fund (CTCPF/the Fund). The Fund will incorporate the existing CPF and Telefilm's Broadcast Fund, and will be supplemented by new government funding representing $250 million over a three-year period commencing in fiscal year 1996-97. The new government funding will be split between Telefilm's Equity Investment Program and the Licensee Fee Program, the latter of which has hitherto been administered by the CPF.

The CTCPF subsequently informed the Commission, in a letter dated 22 November 1996, that it had put into place a number of transitional measures to deal with the additional monies. In the letter, it also requested that the Commission transfer its oversight of the CPF to the Department of Canadian Heritage.

II. The CTCPF's Request

In its 22 November 1996 letter, the CTCPF explained that its "...agreement to administer the new monies has clearly created a need to reassess the relationship between the [CPF] and the Commission." It added that, "given the requirement that the new Board report directly to the Department of Canadian Heritage on the administration of the new funds, and in view of that Department's oversight/ consulting role in policy development as it relates to the expenditure of these funds, it believes it might be appropriate if the Commission's supervisory role in respect to the [CPF] were adjusted." The CTCPF added:

a)  we would continue to operate a licence fee top-up fund and will integrate monies received from the Department of Canadian Heritage and from all participating broadcasting distribution undertakings which are to be applied for this purpose;

b)  we will provide the Commission with copies of annual reports submitted by the Fund to the Department of Canadian Heritage.

The Board explained in its letter that it viewed the Licence Fee Program as continuing to be the appropriate recipient of the contributions made by cable television licensees who would otherwise be required to reduce their basic monthly fee under the sunset provisions of subsection 18(6) of the regulations.

III. The Commission's Determination

In coming to its determination in these matters, the Commission has taken a number of factors into consideration.

The first is the continued representation on the CTCPF Board of a wide range of cultural and financial interests. The existing Board of the CTCPF currently includes members from a broad cross-section of the industry, including producers, conventional broadcasters, cable distributors, the CBC, pay and specialty services, the Canadian government and Telefilm. The Commission, therefore, believes that a balance of views and a wide range of cultural interests and financial concerns will continue to be represented.

The second is that the Commission does not see the need for a duplication of supervisory roles. Further, by having one supervisory body, it would be easier to ensure that one set of guidelines is established in respect of both sources of funding for the Licence Fee Program.

The third consideration is the need to ensure that the interests of the public and of cable subscribers continue to be represented. The Commission is satisfied that these interests will be safeguarded through the presence of the Department of Canadian Heritage on the Board of the CTCPF and through the Department's involvement with the Contribution Agreement.

Accordingly, the Commission endorses the changes proposed by the CTCPF in its 22 November letter to the Commission, including the transfer of oversight of the CPF to the Department of Heritage.

IV. Other Matters

The CPF and Telefilm Canada's Broadcast Fund are Canada's two largest television program production funds. The Commission views their consolidation, and the infusion of $250 million of additional public monies over three years, as welcome developments. These developments represent clear progress by the Canadian government and the Canadian broadcasting, cable, film and television program production industries toward a sharing of expertise and optimization of financial and other resources.

In its recent decisions approving applications for broadcasting licences to carry on new direct-to-home (DTH) distribution undertakings and new DTH pay-per-view programming undertakings, the Commission has requested licensees to contribute Canadian program production monies to existing Canadian production funds rather than establish new funds.

In light of the recent consolidation of the CPF and Telefilm's Broadcast Fund, and with a view to maximizing the impact that the CTCPF will have on the Canadian film and television program production industries, the Commission encourages licensees who have yet to commit to a specific fund, to allocate their contribution to the CTCPF.

Allan J. Darling
Secretary General