CRTC orders Sogetel, Comwave to pay Cancon shortfalls

The CRTC is ordering two telecommunications companies to cough up Canadian programming contribution payments after both companies’ broadcasting distribution undertakings (BDUs) were found to be in non-compliance with commission regulations for the past several years. In two seperate letters dated Oct. 27 the commission notified Comwave Networks Inc. president Yuval Barzakay that the company is required to pay $561,800 to make up its contribution shortfalls, and Sogetel Inc. vice-president of Business Development, Richard Biron, that the company owes $758,386 to the Canada Media Fund (CMF). According to the CRTC’s Broadcasting Distribution Regulations licensed BDUs are required to file annual returns for the previous broadcast year by Nov. 30 of each year. According to the letter addressed to Comwave, the company acknowledged that it neither filed its returns since the 2016-2017 broadcast years, nor did it make the contribution payments required. However, according to the letter Comwave argued “it had no previous communication from commission staff indicating that there may be potential issues relating to compliance or contribution shortfalls until just recently in 2021.” The commission noted to Comwave in its letter, that the company has been operating a BDU since 2017 and therefore, the commission found that it is “incumbent on Comwave to be aware of its regulatory obligations and to operate in accordance with the regulations at all times.” Comwave also requested to operate as if they were exempt from the contribution like terrestrial BDUs serving fewer than 20,000 subscribers because “it is a small service provider competing against larger players … and does not have the margins to make the required Canadian programming contributions,” according to the letter. However, the CRTC denied the request, noting that Canadian programming contributions is a requirement applicable to all licensed BDUs “and is a cost of providing BDU services, similar to Canadian content development payments required for licensees of radio stations.” As a result Comwave has to pay a total of $561,800 in contribution payments -- $528,092 to the CMF and $33,708 to the Independent Local News Fund (ILNF). The company has 90 days to pay 20 per cent of the total shortfall amount to each fund ($105,618.40 to the CMF and $6,741.60 to the ILNF) and the the remaining amount to will be paid to each fund in equal monthly instalments over the course of two years starting from the date the letter was issued. Meanwhile, Sogetel was found to owe $911,688 to the CMF after “self-identifying several instances of apparent non-compliance,” after it did not make the required contributions for four of its exempt BDUs serving more than 2,000 subscribers, according to the letter. The commission did find that Sogetel over-contributed for some of its BDUs serving more than 2,000 subscribers and for its video-on-demand undertaking for the broadcast years between 2010 to 2019. As a result, it must now only pay $758,386 for its shortfalls, 20 per cent of which must be paid within 90 days and the rest monthly over the course of two years. -- Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

CRTC orders Sogetel, Comwave to pay Cancon shortfalls

Broadcast | November 2, 2021

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CRTC orders Sogetel, Comwave to pay Cancon shortfalls

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