Broadcasting - Commission Letter addressed to John Lawford (Public Interest Advocacy Centre) and Monica Auer (Forum for Research and Policy in Communications (FRPC)
Ottawa, 6 August 2021
Mr. John Lawford
Public Interest Advocacy Centre (PIAC)
(613) 562-4002, ext. 125
Ms. Monica Auer
Forum for Research and Policy in Communications (FRPC)
Subject: Part 1 application asking the CRTC to stabilize the funding of the Broadcasting Participation Fund
Dear John Lawford and Monica Auer,
This letter is in response to the above-noted application, dated 21 April 2021, in which the Public Interest Advocacy Centre (PIAC) and the Forum for Research and Policy in Communications (FRPC) (collectively referred to as the applicants), requested that the CRTC initiate public proceedings with the purpose of stabilizing the funding for the Broadcasting Participation Fund (BPF) under subsections 5(1) and 5(3) of the Broadcasting Act and Part 1 and section 3 of the Canadian Radio-television and Telecommunications Rules of Practice and Procedure.
Specifically, the applicants proposed that:
- Amendments are made to the Radio Regulations, 1986 and Broadcasting Distribution Regulations to annually allocate a percentage of funding earmarked for Canadian Content Development (CCD) and for the Canada Media Fund (CMF), respectively, to the BPF;
- Amendments be made to the 2014 Tangible Benefits PolicyFootnote1 such that
- it would apply to transactions involving major broadcasting distribution undertakings (BDUs); and
- allow for ½ of 1% (i.e., 0.5%) of all tangible benefits to be paid to the BPF and the Broadcasting Accessibility Fund (BAF) respectively (for a total of 1% of tangible benefits of all of these transactions);
- These amendments to the 2014 Tangible Benefits Policy apply in respect of Rogers Communications Inc.’s acquisition of all of the issued and outstanding shares of Shaw Communications Inc. and all future transfers of ownership of broadcasters, including BDUs.
The applicants have also suggested that the CRTC question Sirius XM Canada about its tangible benefits payments for 2020 and 2021, which were set out in Broadcasting Decision 2017-114 and approved by the CRTC in Broadcasting Decision 2018-91, and call Sirius XM Canada to a public hearing if it does not confirm the 2020 and 2021 payments to the BPF.
The CRTC recognizes the important role played by Canadian public interest and consumer organizations and the needs of these organizations for resources to support their participation in CRTC broadcasting proceedings. However, the Broadcasting Act, unlike the Telecommunications Act, does not allow the CRTC to award costs in relation to a CRTC broadcasting proceeding. It was for that reason that the CRTC approved the proposal for the establishment and operation of the BPF in 2012Footnote2 and amended the CRTC Tangible Benefits Policy in 2014 to, among other things, explicitly identify the BPF and the BAF in its list of eligible discretionary initiatives.
The CRTC is also aware that “supporting participation by persons, groups of persons or organizations representing the public interest in proceedings before the Commission” under the Broadcasting Act is currently a proposed amendment set out in Bill C-10, An Act to amend the Broadcasting Act and to make related and consequential amendments to other Acts (Bill C-10).
With this as the context, the CRTC addresses the proposals to initiate certain proceedings put forward by the applicants:
- In order to change the Radio Regulations, 1986 and the Broadcasting Distribution Regulations to provide that certain funding is earmarked or reallocated to the BPF or the BAF, the CRTC would be required to launch a series of proceedings, including at least an initial proceeding calling for comments on such a proposal, as well as a subsequent proceeding calling for comments on the regulations to implement the CRTC’s ultimate determinations on this issue. The CRTC notes that the outcome of these proceedings would be uncertain, in part due to a lack of clear authority to create regulations to this effect under the current Act, and, even if successful, the BPF would not be provided with any meaningful measure of stable funding in the short to medium term.
- The CRTC will be examining Rogers Communications Inc.’s application to acquire all of the issued and outstanding shares of Shaw Communications Inc. (Rogers/Shaw transaction) in the context of a future proceeding. This application will be filed and considered based on the CRTC’s existing policies and regulatory requirements and all interested stakeholders will be able to comment on the application and the proposed tangible benefits package. However, the CRTC does not consider that a review of the 2014 Tangible Benefits Policy, concurrent with the consideration of the Rogers/Shaw transaction, would be in keeping with the principles of regulatory certainty and predictability upon which the agreement between Shaw Communications Inc. and Rogers Communications Inc. was negotiated and concluded.
With respect to tangible benefits, the CRTC recognizes that the nature of funding through tangible benefits already results in unstable and unpredictable ongoing support for the BPF and that when licensees do not make their scheduled tangible benefits payments that exacerbates the instability and unpredictability. In January 2021, CRTC staff were made aware by the BPF Cost Officer that there may be issues related to Sirius XM Canada making its full tangible benefit payments to the BPF. Though the CRTC acknowledges that some broadcasting undertakings may have been and continue to be negatively impacted by the COVID-19 Pandemic, Sirius XM Canada has been reminded of its existing and ongoing obligations with respect to the payment of tangible benefits and that a failure to remit required payments would be taken into account by the CRTC at licence renewal.
The CRTC expects all licensees to abide by their regulatory obligations and make their required contributions consistent with those obligations. Sirius XM Canada has assured CRTC staff that despite delays related to the COVID-19 Pandemic, full payments of tangible benefit obligations have and are being made. The BPF has further confirmed that the Sirius XM Canada tangible benefits payments are now up to date.
In light of the above, the CRTC, by majority decision, is declining to launch the proceedings requested by the applicants.
However, as previously mentioned, Bill C-10 proposes to provide the CRTC with the explicit authority “to make regulations respecting expenditures to be made by persons carrying on broadcasting undertakings for the purposes of supporting participation by persons, groups of persons or organizations representing the public interest in proceedings” before the CRTC under the Broadcasting Act.
If the Act is amended in this way or in another way that would provide a similar authority, the CRTC would be able to develop new regulations that could represent a more stable source of funding for an organization like the BPF, or another fund that would support public interest participation. That being said, the Commission recognizes the issue of support for Canadian public interest and consumer organizations to participate in CRTC broadcasting proceedings is both broader and more immediate than Bill C-10, which itself is currently only draft legislation that is before Parliament. Accordingly, the Commission wishes to inform you that we have directed staff to organize a virtual meeting in the coming months in order to engage with Canadian public interest and consumer organizations.
This meeting will serve to enhance understanding of the challenges and barriers facing these organizations when they intervene in Commission proceedings and begin the process of identifying the most appropriate and effective model(s) of funding to provide support for such organizations in the future.
The CRTC, by majority decision, considers this application closed and deems this application to be returned.
- Date modified: