GATINEAU – The Canadian Cable Systems Alliance (CCSA) and Rogers Communications have told the CRTC that they are prepared to accept an extension of the Local Programming Improvement Fund (LPIF) as long as the program is only available to independent broadcasters.
In addition to excluding the vertically integrated companies and CBC/Radio-Canada, (which has campaigned hard to keep it) the CCSA said that LPIF monies should only be made available for new, incremental local programming. Despite this slight change of heart, the small BDUs would prefer a complete and immediate elimination of the fund.
According to Access Communications, the cable co-operative which serves Regina and other surrounding communities, it has suffered significant financial harm as a result of the program with almost half of its net income last year being siphoned off to LPIF since the company decided not to pass through the 1.5% LPIF charge to customers.
“In actual dollars, we contributed close to $450,000 to the LPIF last year alone. Our net income for that year was only $974,000,” Access president and CEO Jim Deane said during his opening remarks. “Our decision to absorb the cost of LPIF had a significant impact on our bottom line and has materially affected our ability to rebuild our cable system in Regina.”
In calling for the elimination of the LPIF, the CCSA argued that its customers shouldn’t be forced to subsidize broadcasters.
Harris Boyd, president of Solaracom Inc. and regulatory consultant to the CCSA, acknowledged that some independent broadcasters appear to be doing good things with LPIF money. But “if they incur losses, we don’t see any reason why our customers should cover them… and we certainly don’t believe we should be covering the losses and increasing the profits of 19 stations owned by Bell Canada,” he said (something others said last week, too.)
Asked how the LPIF money should be allocated, Boyd noted that it shouldn’t be based on expenditures. Rather, he added, tying it to results such as what Bell Media proposed could work. “I think Bell’s proposal was probably self-serving but if you combine it with ours and kick them out of the fund, then we could live with it,” said Boyd.
The CCSA’s proposal to make CBC/Radio-Canada ineligible was questioned by commissioner Suzanne Lamarre, particularly as it relates to minority language programming. Boyd said CBC already has a mandate to serve those communities and shouldn’t require additional funds to do so.
“If minority language groups both English and French across the country are deprived of local service because LPIF is terminated or the CBC is no longer eligible, it seems to me that there is something wrong with the priority setting within the corporation,” he argued. “If they can’t fulfill the mandate that Parliament has given them, that should be between them and Parliament and not BDU customers.”
While Rogers still argued that the LPIF should be eliminated this year, it said that it now sees merit in extending the program for another three years, but limiting it to independent broadcasters.
“We now propose that if the Commission does not eliminate the fund, it should amend the LPIF’s eligibility requirements so that only independent small market stations would be eligible,” said Phil Lind, executive vice-president of regulatory and vice-chair, at Rogers. “It should also reduce annual contributions BDUs are required to make to the fund to 0.4%, which would be phased out over three years. This means that next year close to $30 million would continue to be made available to independent stations in small markets.”
Rogers argued that the three-year, phase-out period is sufficient time for the independent broadcasters to prepare for an existence without LPIF funding. “Our phase-out provide will provide them with ample time to prepare for life without the LPIF. If OTA broadcasters – small and large – need further assistance, the best thing you could do would be to require DTH providers to carry them in HD. This would be a permanent improvement in their economic model rather than a subsidy,” said Lind.
ZoomerMedia Ltd., an operator of religious and cultural stations JoyTV and VisionTV, argued in its presentation that it should be eligible for LPIF funding. It claims to be at a competitive disadvantage because it spent money to go digital yet has been denied access to LPIF funding.
Moses Znaimer, founder of ZoomerMedia, said LPIF should only be open to independent broadcasters who are willing to create more local programming than they are today. Indie broadcasters should get money for five years with the amount declining each year and have to report on the actions they’ve taken.
“As the vertically integrated privateers and the CBC are both to be excluded, it is now possible, indeed easy, to conceive a new system in which the independent broadcasters can get even more than what they’re receiving today, while the BDUs pay less,” he said.
The LPIF hearing wraps up today with a decision on the policy expected in the third quarter of the calendar year.
