ARCHIVED - Broadcasting Commission Letter addressed to Natalie MacDonald (Bragg Communications Incorporated)
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Ottawa, 14 January 2015
Ms. Natalie MacDonald
Bragg Communications Incorporated
801 – 6080 Young Street
Halifax, Nova Scotia B3K 5M3
Subject: Shortfalls relating to Canadian programming contributions
Dear Ms. MacDonald:
As you are aware, the Commission recently conducted an audit of Persona Communications Inc and K-Right Communications Limited’s (collectively Eastlink) annual returns for the broadcast years 2009-2010 to 2012-2013. During that audit, Commission staff identified an area of apparent non-compliance with the contribution requirements under sections 34 and 35 of the Broadcasting Distribution Regulations (the Regulations) due to issues with your calculation of your broadcasting revenues. You were notified of this apparent non-compliance by letter dated 26 June 2014 and responded by letter dated 16 July 2014.
This letter is to inform you that following a Commission determination, the Commission finds Eastlink in non-compliance with the contribution requirements under sections 34 and 35 of the Regulations.
The non-compliance stems from the fact that Eastlink did not include the ‘LPIF fee’ charged to customers in the gross revenues derived from broadcasting activities used to calculate its contribution requirements under the Regulationsfor the 2009-2010, 2010-2011, 2011-2012 and 2012-2013 broadcast years. The related shortfalls are $303,407 for Canadian programming and $86,779 for the Local Programming Improvement Fund (LPIF) for a total shortfall of $390,186. Additionally, since the LPIF ended on 31 August 2014, the LPIF shortfall will be made payable to the Canada Media Fund (CMF) and independent funds.
The Commission directs Eastlink to pay the shortfalls as follows:
- The total Canadian programming & LPIF shortfalls ($390,186) must be paid within 90 days of the date of this letter.
- A minimum of 80% ($312,149) of the total shortfall must be paid to the CMF; and
- the remaining 20% of the shortfall ($78,037) may be paid to an independent production fund.
Proof of payment must be filed with the Commission within 120 days of the date of this letter.
The Commission further notes that the contributions to Canadian programming and the LPIF for the 2013-2014 broadcast year ended 31 August 2014, must reflect the inclusion of the ‘LPIF fee’ collected from subscribers in the gross revenues derived from broadcasting activities used to calculate the contribution requirements. This determination does not address Eastlink’s compliance for the 2013-2014 broadcast year.
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