CRTC releases guidelines for subscriber audits, notification of channel changes

The CRTC has introduced guidelines for audits and other business practices that are designed to cut down on the number of disputes between programmers and distributors that the regulator must mediate (Broadcasting Public Notice 2005-35 and Broadcasting Public Notice 2005-34). The guidelines don’t go as far as the Canadian Association of Broadcasters (CAB)’s request to have audit provisions and good commercial practice guidelines enshrined in the Broadcast Distribution Regulations. Nonetheless, the CAB calls the CRTC’s measures a good first step. "I think the good thing is that the commission has acknowledged that it is important that programmers have the ability to verify their payments and they’ve indicated that their existing policy statements or procedures haven’t been as helpful as they could have been," CAB senior VP of television, specialty and pay services and new technologies Wayne Charman tells Canadian Communications Reports. "I think we welcome the fact that they have established guidelines that provide some guidance to both BDUs (broadcast distribution undertakings) and programmers that can be worked into affiliation agreements…I think it’s a step in the right direction. If it doesn’t work, the commission has left the door open to considering amendments to the regulations if they are required." The CRTC indicates in its public notice that if the audit guidelines prove ineffective in cutting down on the number of audit-related disputes that the regulator is asked to resolve, it would be prepared to incorporate the guidelines or other provisions into the regulations later. The CRTC guidelines state that the broadcaster should choose and pay for an auditor to go over distributors’ books to verify subscriber numbers. The CRTC also stipulated that the audits should be performed by external auditors who are chartered or certified public accountants licensed in one or more jurisdictions in Canada. The regulator also noted that it was the role of the auditor to determine what information is necessary to conduct the audit. The distributors had argued that the auditors should have access only to information necessary to verify the number of subscribers receiving the programming services for the period in question. The CRTC also stated that the audits should cover only a one-year period, and that the broadcaster and distributor should agree within 60 days of a request for an audit to a date upon which the audit would start. The CRTC also points out that the distributor, prior to the commencement of the audit, should be able to require the auditor to sign an agreement to maintain the confidentiality of any other information that may be examined by the auditor over the course of the audit. In a separate notice also issued on April 18, the CRTC spells out some good commercial practices with regard to the change in carriage and packaging of channels. Distributors are now required to provide broadcasters with the following information when they intend to change a channel’s distribution: the intended date of the change, the new channel number, the new channel package if there is one, the name of the package, the expected penetration rate, and the retail rate for the package, and any change in the wholesale rate or in the method used to calculate it. Distributors must provide broadcasters with at least a 60-day notification period prior to making any changes.

CRTC releases guidelines for subscriber audits, notification of channel changes

News | 04/22/2005 4:00 am EDT

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