CRTC clears way for small broadcasters to begin receiving LPIF funds this month

Almost a year after it was first broached, the CRTC has officially authorized the operations of the Local Programming Improvement Fund (LPIF), paving the way for private and public over-the-air broadcasters in small markets to benefit from the $100 million subsidy starting Sept. 1. The authorization comes in a series of regulatory decisions released this week. It compels broadcast distribution undertakings (BDUs) to contribute 1.5% of their gross revenues to the LPIF, a figure which has increased from the 1% earlier suggested by the commission. The decision also mandates the Canadian Association of Broadcasters (CAB) to manage the fund. Stakeholders in the broadcast sector, who have long championed a subsidy to help broadcasters in small markets, especially in the area of news production, welcomed the move. Stephen Waddell, executive director of the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) says any action that funnels more cash into the production of Canadian programming is good news. “The BDUs are doing extremely well—they can well afford to invest back into the system. We hope that in addition to supporting local news, the LPIF will help create local dramatic programming,” Waddell said in a statement sent to Tech Media Reports. The CAB has already identified a five-person board representing English, French and independent stations in smaller markets, as well as the CBC/Radio Canada and cablecos, to oversee the administration of the LPIF. “This new fund will mean more local, high-quality programming, while building a stronger financial foundation for smaller market stations that have been hit hard by the economic recession,” says Rick Arnish, one of the board members, in a statement. In the decision, the CRTC also agreed to an earlier recommendation from CAB that the fund be managed by an independent administrator whose activities will be overseen by the five-member board. McCay, Duff & Company LPP, an Ottawa-based chartered accounting firm, will administer the fund. Payments to broadcasters in small markets—identified as having a population of less than one million—will be disbursed this September. However, the CRTC says it will provide further information in the future regarding the dispensation of payments. The mandatory 1.5% contribution of gross revenues from BDUs has met with stiff resistance from BDUs. In August, BDUs launched a media campaign seeking to inform consumers that the move will result in a hike in their cable bills. The CRTC has said the 1.5% is based on revenues earned by BDUs, which increased 10.2% from $6.3 billion in 2007 to $7.0 billion in 2008. The CRTC also says BDU revenues “represent approximately 50% of total broadcasting revenues in 2008.” “Given their reported profits, the CRTC is of the view that there is no justification to pass the cost to consumers,” says the CRTC in a statement. However, in the decision, the CRTC says it intends to review whether the 1.5% contribution is “appropriate” in the long term or whether the commission should revert to the 1% rate set earlier. As it takes on the task of administering the fund, McCay, Duff & Company LLP’s challenge lies in making it easy to access, simple to implement and accountable. “It’s a sizeable task, but the benefits for Canadians will be significant,” noted Jason Howarth, partner at the firm. LPIF board members Rich Arnish, president, The Jim Pattison Broadcast Group Pierre Brosseau, executive chairman, RNC Media Inc. Kevin Goldstein, VP, regulatory affairs, CTVglobemedia Bev Kirshenblatt, senior director, regulatory affairs, CBC/Radio-Canada Cable/satellite nominee, to be announced later.

CRTC clears way for small broadcasters to begin receiving LPIF funds this month

Broadcast | September 2, 2009

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