OTTAWA – Following applications from Bell Media and Rogers to end the 5% cap on Canadian programming expenditure (CPE) over-spending, the CRTC is calling for comments on its policy regarding CPE over-expenditures for conventional television and specialty services from large broadcast groups. It is also seeking input on the impact that approval of those applications would have on the commission’s CPE policy. The deadline for the filing of comments is August 7, 2012.
In its submission, Bell Media contends that the current 5% cap on CPE over-expenditures and the obligation to use that over-expenditure in the subsequent broadcast year limits its ability to commission the best projects as they become available, which it argued is necessary for the program commissioning cycle.
Rogers submitted that the 5% cap will limit its ability to operate its Citytv conventional television stations since the cap it contends does not offer sufficient flexibility, and given that some of its expenditures were already committed to large budget productions during the first broadcast year of the licence term. Moreover, Rogers stated that the commission’s rationale for the 5% cap does not apply to it, given that it was not one of the designated groups identified during the group-based license renewal process, and given that, unlike the designated groups, it is not able to allocate CPE and programs of national interest (PNI) expenditures between services.
The applications follow the CRTC’s decision last July to set out a new model for CPE that provides a much greater level of flexibility in the manner in which television services make and account for Canadian programming expenditures. Large ownership groups now have the flexibly to allocate the total of their required CPE across individual programming undertakings, while ensuring that the total amount is spent. In addition to encouraging effective business judgments, the CRTC maintains that this ensures that there is no reduction in overall spending on Canadian programming.
In light of these developments, the commission seeks comments on the following questions:
• Are the proposals regarding the elimination of the 5% cap on CPE over-expenditures and of the obligation to expend that over-expenditure in the subsequent broadcast year, as set out in the applications by Bell Media and Rogers, necessary in order to allow services to benefit from the CPE flexibility granted in the group-based licensing policy?
• What are the impact/benefits of the current policy regarding CPE on the Canadian broadcasting industry?
• Does the over-expenditure cap limit the ability of broadcasters to expend capital on large-scale programs and events?
• What is most appropriate way to monitor compliance as it relates to CPE over-expenditures?
• What impact would the above-noted proposal by Bell Media and Rogers, as set out in their applications, have on the program commissioning cycle, and on the production sector in general?
• In the event the commission does not approve Bell Media’s and/or Rogers’ applications, how should the commission address the implementation of its policy regarding a cap on CPE over-expenditures?
Submissions must be filed by sending them to the Secretary General of the commission by only one of the following means: by using the Intervention/comment/answer form or mail to: CRTC, Ottawa, Ontario K1A 0N2, or by fax at 819-994-0218.
