Does task force report move us closer to solving the CTF conundrum?

With the final report by the CRTC's task force on the Canadian Television Fund in, will the issue finally be put to rest? Given the feedback on the document filed with the commission by broadcast distribution undertakings, it's not likely.The report, delivered on June 29, suggested that contributions culled from broadcasting distribution undertakings - which make up more than half of the CTF's $275-million budget in the current year - be steered towards a more market-friendly programming funding stream. The task force also suggested that $25 million of the fund's capital be earmarked for fostering content production on emerging platforms and new media.Those measures seem to meet with the approval of some - but there's always more that the CTF could be doing. "There's nothing really broken with the CTF. We think it's been doing a good job and an improving job," Michael Hennessy, VP of broadband and video policy at Telus Corp., tells Canadian Communications Reports. "That said, for companies that are in the IPTV business, even if we're BDU licensed, there's an opportunity for both us and the commission's objectives to use what will be a growing contribution for us to develop new media applications."Telus' stance on the CTF and the task force's report centre on two points: an emphasis on digital content creation and a proposal to allow direct equity investment in a production to count toward BDUs' mandated contributions to the fund.With its heavy plays in IPTV, broadband Internet and mobile telephony, it's not surprising that Telus would be looking to parlay its CTF commitments into funding for productions on these new platforms. On the latter point, meanwhile, Hennessy says an equity investment scheme would encourage BDUs to look at their relationship with the fund as less of an obligation, and more an opportunity."We all know the CTF is oversubscribed...where do you get more money?" he asks. "One way is to turn what's now an obligation into an incentive to contribute even more, because if the project works then there's the possibility to get your money back, plus."However, Hennessy hastens to add that Telus' support for the fund doesn't necessarily mean it wouldn't like to have the freedom to divert its mandatory contributions elsewhere, if it so chooses.And Telus' BDU brethren were equally adamant that they have the same freedoms. Bell ExpressVu parent Bell Video Group hailed the proposal to create a market-oriented funding stream with BDUs' contributions, as well as the potential move to embrace new media.Said Paul Armstrong, director of regulatory affairs for Bell Video Group, in his July 30 submission: "Both initiatives reflect the Task Force's appreciation of the rapidly evolving nature of the broadcasting industry and the requirement to act on its new realities in a timely and practical manner."Bell and Armstrong went further, also suggesting the formation of two separate boards of directors at the CTF, one for each of the funding streams.The two BDUs that arguably provoked this latest CTF crisis, meanwhile, were less optimistic that the task force's report would cure what ails the fund.With little to say about either the proposal to create a separate stream for BDU money or the suggestion that a pool of funds be created for new media, Shaw Communications Inc. was largely dismissive of the task force's report. "Shaw does not believe that the task force's recommendations, if implemented, would ‘fix' the CTF, or that the CTF is even ‘fixable,'" wrote Shaw CEO Jim Shaw in his submission dated July 27.In its submission published on July 30, Québecor Media Inc. noted that with many broadcasting stakeholders differing on what constitutes new media and emerging platforms, the suggestion to create a $25-million new media stream is out of touch with market realities.Like Shaw Communications, Québecor Media has its own ideas about how best to spend the 5% of gross revenue that its Vidéotron ltée cable distribution unit must transfer to the CTF and independent production funds.Late last year, Québecor Media proposed that its mandatory contributions - currently around $19 million annually - be diverted to a new Québecor Production Fund. In return, it offered to top up the amount available by $11 million to $30 million in the first year. In all, Québecor Media told the CRTC, its plan would make $108 million in production funding available over three years.

Does task force report move us closer to solving the CTF conundrum?

Broadcast | August 21, 2007

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