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Broadcasting - Staff Letter addressed to Bev Kirshenblatt (CBC/Radio-Canada)

Ottawa, 9 February 2024

BY EMAIL

Bev Kirshenblatt
Executive Director, Corporate and Regulatory Affairs
CBC/Radio-Canada
bev.kirshenblatt@cbc.ca

Subject: Part 1 Application to amend the conditions of service relating to the calculation of Canadian programming expenditures and programs of national interest (2023-0391-5)

Ms. Kirshenblatt,

In relation to the above application submitted on 20 June 2023, to amend the conditions of service relating to the calculation of Canadian programming expenditures and programs of national interest, Commission staff will require you to answer the following questions in order to complete the record of the application.

The Commission requires that you submit your documents electronically using the secured service “My CRTC Account” (Partner Log In or GCKey) and fill in the “Broadcasting and Telecom Cover page” located on this web page. On this web page, you will also find a link to information on the submission of applications to the Commission “Submitting applications and other documents to the CRTC using My CRTC Account.” 

Your answers to the questions in the attached document should be received by no later than 21 Feburary 2024. In your response, please repeat the questions before answering them.

Please note that a copy of this letter and all related correspondence will be added to the public record of the proceeding.

Further, given that additional information will be added to the public record of the application, interested parties will be given an opportunity to comment on this new information.

Confidential information

As set out in sections 30 to 34 of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure and in Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, parties may designate certain information as confidential. A party designating information as confidential must provide a detailed explanation on why the designated information is confidential and why its disclosure would not be in the public interest, including why the specific direct harm that would be likely to result from the disclosure would outweigh the public interest in disclosure. Furthermore, a party designating information as confidential must either file an abridged version of the document omitting only the information designated as confidential or provide reasons why an abridged version cannot be filed.

Should you need further information concerning this request, please do not hesitate to contact me by telephone at 873-354-1280, or email at saba.ali@crtc.gc.ca.

Sincerely,

Saba Ali
Senior Analyst, English and Third-language Television

Cc: danielle.brunet@cbc.ca

CBC/Radio-Canada application – 2023-0391-5

According to the Corporation’s conditions of service Footnote1 (COS) relating to Canadian programming expenditures (CPE) and programs of national interest (PNI) (Appendix 3 to Broadcasting Decision CRTC 2022-165), the Corporation shall devote:

In its application, CBC/SRC is requesting to exclude programming expenditures from the coverage of Olympic and Paralympic Games in the calculation of the above-mentioned requirements, beginning in the second year of the licence term (the 2023-2024 broadcast year) for the affected services.

  1. Reporting
    • Given the Corporation’s condition of service related to over-and under-expenditures and eligibility for Canadian programming and programs of national interest (Appendix 3 to Broadcasting Decision CRTC 2022-165):
      1. The Corporation may expend an amount on CPE that is up to 10% less than the minimum required expenditure for that year calculated in accordance with each of conditions of licence 20, 23, 26 and 29, respectively. In such case, the Corporation shall ensure that it expends in the next broadcast year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year’s under-expenditure.
      2. Where the Corporation expends an amount for a year of the licence term on Canadian programming that is greater than the minimum required expenditure calculated in accordance with each of conditions of licence 20, 23, 26 and 29, respectively, the Corporation may deduct that amount from the total minimum required expenditure in one or more of the remaining years of the licence term.
      3. Notwithstanding conditions of licence 32.a) and 32.b), over the course of the licence term, the Corporation shall expend on Canadian programming and programs of national interest (PNI), at a minimum, the total of the minimum required expenditures calculated in accordance with conditions of licence 20, 23, 26 and 29.
      4. In the two years following the end of the previous licence term commencing 1 September 2022, the Corporation shall report and respond to any Commission enquiries relating to expenditures on Canadian programming, including PNI, made by the licensee.
      5. The Corporation shall be responsible for any failure to comply with requirements relating to expenditures on Canadian programming, including PNI, that occurred during the licence term commencing 1 September 2022, that is identified in that two-year period.
    • The Corporation is currently required to report to the Commission its total programming expenditures for each broadcast year.
      In its supplementary brief (para. 39), the Corporation stated that CBC/R-C will continue to report all of its programming expenditures, including those for the Olympic and Paralympic Games in its broadcasting annual returns and in the new DMBU statement of accounts:
      1. In regards to the 10% underspend flexibility mentioned in bullet 1a) above, please explain why this optional underspend would not permit the necessary flexibility to account for Olympic and Paralympic spending, and enable the Corporation to shift required PNI expenses to the following year?
      2. If the Commission modified the CBC/Radio-Canada COS related to CPE and PNI obligations to exclude Olympic and Paralympic programming expenditures, as requested, would the Corporation commit to report those excluded expenditures separately and publicly?
      3. Please explain the Corporation’s proposed methodology to determine which expenditures are determined to count as an “Olympic/Paralympic programming expenditure”?
      4. If the Commission were to approve the application, please describe the approach and/or tools the Corporation will use to ensure that the Commission and interested parties would be able to verify the Corporation’s compliance with its conditions of service relating to CPE and PNI (including but not limited to over- and under expenditures)?
  1. Rights fees
    • In the Supplementary Brief, the Corporation indicated that “The rights fees for the Olympic Games are confidential with the IOC.” The Corporation also mentioned that there was a 16% increase in the costs of the rights between the 2024 Paris and the 2026 Milan Olympic Games (para. 27).
    • Can you provide the Commission – confidentially or otherwise – what percentage of the projected Olympic and Paralympic programming costs CBC/SRC is proposing to exclude from CPE consisted of:
      1. rights fees paid to the OIC for the Olympics
      2. sub-licence fees paid to the CPC for the Paralympics
  1. Conditions of service (COS)
    1. In its intervention, l’Association québécoise de la production médiatique (AQPM) highlighted that the Corporation has a certain level of flexibility in its conditions of service to help with these types of atypical years. COS 32 in appendix 3 (2022-165) states that the Corporation may expend an amount on CPE that is up to 10% less than the minimum required expenditure for that year calculated in accordance with each of conditions of licence 20, 23, 26 and 29, respectively (as detailed above).
      • AQPM also indicates that the level of PNI that the Corporation is projected to spend on its French-language services (as set out in the tables provided in its supplementary brief) is relatively close to its PNI requirements.
      • Finally, AQPM highlights that the Corporation may count expenditures for PNI on its French and English language audiovisual digital media broadcasting undertakings that it operates towards fulfilling these requirements.
        1. Please comment on the Corporations ability to meet its English and French-language CPE and PNI requirements through its digital media broadcasting undertakings, if the Commission were to maintain the current COS.
        2. According to the Corporation’s historical total programming expenditures provided in the supplementary brief, the only condition of service where requirement is higher than historical spending is the PNI requirement for the English-language programming services Footnote2 . What is the Corporation’s position should the Commission amend the Corporation’s conditions of service solely for the aforementioned affected services.
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