ARCHIVED - Broadcasting Public Notice CRTC 2004-20

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Broadcasting Public Notice CRTC 2004-20


See also:  2004-20-1

Ottawa, 31 March 2004


Call for comments on a request to amend the Broadcasting Distribution Regulations to add provisions governing the audit of affiliation payments


The Commission has received a request from the Canadian Association of Broadcasters (CAB) to amend the Broadcasting Distribution Regulations (the Regulations). The amendments would provide for terms and conditions under which the licensees of programming undertakings could audit the records of broadcasting distribution undertakings (BDUs) for the purpose of verifying the accuracy of affiliation payments, which are largely made by reference to the number of subscribers to the programming service in question.


In its request, the CAB submitted that the increasing number of programming services and the various ways in which they are packaged and sold have increased the likelihood of reporting errors in affiliation payments. The CAB indicated, among other things, that this situation is compounded by the difficulties that the licensees of programming undertakings have experienced in obtaining access to the information necessary to verify the accuracy of affiliation payments. In light of these concerns, the CAB provided a proposed "audit framework," which is set out in the appendix to this notice, and suggested that this framework could serve as a reference point for the Commission to consider possible amendments to the Regulations.


The Commission notes that many of the issues raised in the proposed audit framework are business-related issues that might best be negotiated by affected parties on an individual basis. Accordingly, the Commission encourages affected parties to discuss these issues with a view to arriving at mutually acceptable solutions.

Call for comments


The Commission requests comment on whether it should amend the Regulations to provide for terms and conditions under which affiliate audits should be conducted, and, if so, what those terms and conditions should be. Interested parties are also invited to recommend alternative mechanisms and/or an alternative framework, other than amendments to the Regulations, which could be used to ensure that the licensees of programming undertakings are able to verify the accuracy of affiliation payments. The Commission also requests comment on the audit framework submitted by the CAB and set out in the appendix to this notice.


In addition, the Commission requests comment on the following questions:

a) If the Commission decided to include audit provisions in the Regulations or otherwise impose requirements to provide audit access to BDU records, what would be the most efficient and effective mechanisms for conducting such audits?


b) Who should select the auditor and what, if any, principles should guide this selection? Who should pay for the auditor's services?


c) How often should the licensees of programming undertakings be permitted to audit BDU records?


d) What time period(s) should be examined in an audit (i.e., how far back in time should the audit extend)?


e) What types of information should an auditor have access to in the course of performing an audit, and what records should BDUs be required to maintain in order to facilitate audits by the licensees of programming undertakings?


f) What measures may be necessary to protect confidential information obtained during an audit?


g) What should be the minimum and/or maximum period allowable between the request for an audit and its commencement?


h) What should be the minimum and/or maximum period allowable for resolution of any discrepancies following the receipt of the auditor's report?


i) If the Regulations provide for audit rights, should terms and conditions be set out in the Regulations, or in a document incorporated by reference?


j) If audit provisions are included in the Regulations, what would be the status of any audit provisions included in current affiliation agreements?


Comments should be filed on or before 17 May 2004.


The Commission will not formally acknowledge comments. It will, however, fully consider all comments and they will form part of the public record of the proceeding, provided that the procedures for filing set out below have been followed.

Procedures for filing comments


Interested parties can file their comments to the Secretary General of the Commission by using ONE of the following formats:
  • Intervention/Comments form
    available from the Commission's web site by indicating and selecting the public notice number under the Decisions, Notices and Orders section


  • by electronic mail to


  • by mail to
    CRTC, Ottawa, Ontario K1A 0N2


  • by fax at
    (819) 994-0218


Submissions longer than five pages should include a summary.


Please number each paragraph of your submission. In addition, please enter the line ***End of document*** following the last paragraph. This will help the Commission verify that the document has not been damaged during transmission.


The Commission will make comments filed in electronic form available on its web site at but only in the official language and format in which they are submitted. Such comments may be accessed in the Public Proceedings section of the CRTC web site. Copies of all comments, whether filed on paper or in electronic form, will also be placed on the public examination file.


The Commission encourages interested parties to monitor the public examination file and the Commission's web site for additional information that they may find useful when preparing their comments.

Examination of public comments and related documents at the following Commission offices during normal business hours

  Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage, Room G-5
Gatineau, Quebec K1A 0N2
Tel: (819) 997-2429 - TDD: 994-0423
Fax: (819) 994-0218
  Metropolitan Place
99 Wyse Road
Suite 1410
Dartmouth, Nova Scotia B3A 4S5
Tel: (902) 426-7997 - TDD: 426-6997
Fax: (902) 426-2721
  405 de Maisonneuve Blvd. East
2nd Floor, Suite B2300
Montréal, Quebec H2L 4J5
Tel: (514) 283-6607
Fax: (514) 283-3689
  55 St. Clair Avenue East
Suite 624
Toronto, Ontario M4T 1M2
Tel: (416) 952-9096
Fax: (416) 954-6343
  Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba R3B 2B3
Tel: (204) 983-6306 - TDD: 983-8274
Fax: (204) 983-6317
  Cornwall Professional Building
2125 - 11th Avenue
Room 103
Regina, Saskatchewan S4P 3X3
Tel: (306) 780-3422
Fax: (306) 780-3319
  10405 Jasper Avenue
Suite 520
Edmonton, Alberta T5J 3N4
Tel: (780) 495-3224
Fax: (780) 495-3214
  530-580 Hornby Street
Vancouver, British Columbia V6C 3B6
Tel: (604) 666-2111 - TDD: 666-0778
Fax: (604) 666-8322
  Secretary General
  This document is available in alternate format upon request and may also be examined at the following Internet site:

Appendix to Broadcasting Public Notice CRTC 2004-20


The Canadian Association of Broadcaster's framework for affiliate broadcasting distribution undertaking audits

  (i) Intervals: programmers will have the right to audit Affiliates once per year.
  (ii) Range: programmers will have the right to audit the Affiliate's records for the preceding 3 year period, where necessary, to verify that payments remitted accurately reflect subscriber levels and contractual terms. (Note: a period previously audited should not be re-audited unless new information has surfaced, or there are probable grounds to re-audit.)
  (iii) Choice of Auditor: programmers will have the right to send either staff or third-party auditors to conduct audits.
  (iv) Confidentiality: program providers participating in a group audit agree to have the selected auditor sign a confidentiality agreement ensuring that any and all information related to unaffiliated programmer providers or distributors shall not be disclosed to other parties.
  (v) Interest on shortfall: affiliates will be assessed an interest charge where the audit uncovers a shortfall in remittances.
  (vi) Notice period: within 60 days of notification by a programming service of its intent to audit, the affiliate must agree to a mutually acceptable date for the commencement of the audit.
  (vii) Resolution: discrepancies will be resolved and settled within 30 days of receipt by the affiliate of the auditor's report.
  (viii) Scope: the audit will establish whether affiliation payments were made in conformity with affiliation agreements. As such, the scope of the audit might entail the reviewing and testing of any documents, business processes or information systems involved in the processing of affiliate payment information.
  (ix) Administrative: programmers' auditor will have the right to retain copies of any documentation that directly serves to substantiate the auditor's conclusions. All relevant documentation, and the main point of contact, will be made available to the auditor as of the commencement of the audit.
  (x) Pre-existing audit provisions: where audit provisions exist within existing affiliation agreements, those pre-existing provisions shall take precedence over the provisions contained within this framework.

Date Modified: 2004-03-31

Date modified: