Satellite users appeal to Cabinet to overturn contribution decision

A group of broadcasters is seeking to reopen the book on contribution by turning to the federal Cabinet to have broadcasters exempted from the telephone subsidy regime. While many had assumed the issue had finally been resolved, the Canadian Association of Broadcasters (CAB), the Canadian Satellite Users’ Association and Star Choice Television Network Inc have filed a petition to Cabinet against the CRTC ruling. Their focus is Order 2001-435, which dismissed an appeal by Telesat Canada and TMI Communications Inc (NL, June 4/01). The satellite companies had argued they have different financial requirements than telcos. It was unfair, they claimed, that they should be charged contribution fees when many of their clients are broadcasters, who already have financial commitments under the Broadcasting Act. That cut no ice with the regulator. "The commission views the conditions of licence obligations of Telesat in the same manner as the spectrum licence fees paid by the wireless service providers," the CRTC wrote in 2001-435. That has the CAB and its allies fighting mad. They are demanding that the Cabinet overturn the ruling. "There is no point in asking that the matter be referred back to the commission for reconsideration. In Order 2001-435, the CRTC has already rejected the fundamental premise of this petition." That premise is that broadcasters already make substantial financial commitments through the Broadcasting Act. Forcing them to make contribution payments subverts that idea. "In Decision 2000-745 , the CRTC has lumped broadcasters in with traditional telecommunications service providers, in order to broaden the base of support for the local residential telephone subsidy," the joint appeal states. "In so doing, the CRTC has in effect said that contributions towards the achievement of social goals under the Telecommunications Act should take precedence over, or ignore, contributions made towards the achievement of the cultural objectives of the Broadcasting Act. This is no more appropriate as a matter of regulatory policy than a tax on basic telephone service to support Broadcasting Act objectives." In its May 31 Order 2001-435, the commission said Telesat is not obliged to pass increased costs to its clientele. "Assuming Telesat chooses to pass along the revenue charge to its customers, and that the revenue charge is passed along to all of its customers and not only to broadcasters, broadcaster customers would not be subject to any discrimination, preference or disadvantage," the CRTC offered. The broadcast consortium is more than a little dubious about that notion. "As a Canadian carrier, with large multi-year contracts with most of its customers, Telesat cannot reasonably be expected simply to absorb this new and unexpected charge. Telesat will therefore pass it on to its customers, as indeed the CRTC has contemplated that the incumbent local telephone carriers will do." A Telesat executive told Network Letter that 90 per cent of its customers are paying the 4.5 per cent contribution levy. Ironically, one customer that has refused to pay is the Government Telecommunications and Informatics Services branch of Public Works and Government Services Canada. The branch buys bulk telecom services and resells them to government departments.A footnote attached to the appeal suggests Telesat’s contribution payments will skyrocket 174 per cent, from $50,000 annually to around $8.7 million. The contribution decision has been subject to appeals at the commission, Cabinet and Federal Court of Appeal. Bell Canada filed a review and vary with the CRTC, which was dismissed. Telus Corp was denied leave to appeal by the court. A Cabinet appeal by four independent telcos has yet to be ruled on (NL, April 23/01).

Satellite users appeal to Cabinet to overturn contribution decision

News | 10/10/2001 4:00 am EDT

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