Cabinet rejects broadcasters’ appeal on contribution regime

The federal government has rejected an appeal by broadcasting interests of the CRTC’s contribution regime, a move that will result in broadcasters indirectly paying millions of dollars to subsidize the cost of providing telephone service to rural and remote areas of Canada. "Having considered the petition, the Government of Canada is of the opinion that it is not in the public’s interest to vary, rescind or refer Order 2001-435 back to the CRTC for reconsideration," the government stated today, noting the order is consistent with government policies to make telecommunications affordable and available throughout Canada. The appeal to the Governor in Council was filed last August by the Canadian Association of Broadcasters (CAB), the Canadian Satellite Users’ Association (CSUA), and Star Choice Television Network Inc., with the support of Telesat Canada (CCR, Sept. 27/01). The groups had asked the federal Cabinet to overturn a May 2001 CRTC decision that denied a Telesat Review and Vary application under the Telecommunications Act – Order 2001-435. The dismissal by the government is not surprising, as there isn’t a very high success rate with such appeals. Representatives from the CAB and Star Choice were unavailable to comment on the government’s decision at press time. The CSUA’s Don Braden was unaware of the decision when contacted by CCR this afternoon and reserved comment until he has a chance to review the decision. The broadcasters argued that they should not be hampered in their efforts to meet the cultural objectives of the Broadcasting Act by having to make financial contributions in support of the social goals of the Telecommunications Act. Telesat had indicated that it would pass its share of the contribution charge – estimated at about $8.3 million in 2001 – on to its customers, including broadcasters, which contribute approximately half of its revenues (CCR, March 29/01 and April 11/01). The CRTC has set the 2002 contribution rate at 1.4 per cent of telecom revenues, a significant decrease over the 4.5 per cent interim rate applied in 2001. Satellite TV distributors Star Choice and Bell ExpressVu LP fear that the new charge puts them at a disadvantage to cable systems, which do not rely solely on satellite facilities to distribute programming. However, cable operators, particularly smaller ones, do rely on satellites to receive distant Canadian signals, U.S. network signals, and specialty channels for distribution to their customers. Telcos Telus Communications Inc. and SaskTel strongly opposed the appeal. (For more on their arguments, see the October 15/01 and June 11/01 editions of CCR affiliate publication Report on Wireless.)

Cabinet rejects broadcasters’ appeal on contribution regime

News | 05/28/2002 4:00 am EDT

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