OTTAWA – Major broadcasters are opposing the budget increases being sought by the CRTC to deal with new regulatory challenges, according to the CRTC Budgetary Requirements and Fees Outcomes Report released Wednesday. More support came from the telecommunications community, although some telcos had concerns about the amount and duration of the proposed fee hikes.
This fall, the CRTC will ask the Treasury Board of Canada to up its operating budget by $8.3 million in 2007-08, $9.94 million in 2008-09 and $9.07 on an ongoing basis thereafter.
The CRTC contends its budget has been stable for over four years (with the exception of increases in salary levels as a result of new collective agreements). If the Treasury Board approves the request, the additional money would be recouped from the industry.
“Broadcasting fee stakeholders, in particular, had reservations about the amount of the proposed fee increase and, therefore, could not support a permanent fee increase,” states the report. “Some objected to the CRTC’s characterization of the budget as being ‘stable’. They argued that their fees had, in fact, gone up over the past several years. Several participants noted that both the broadcasting and telecommunications industries are going through a transition period and felt that, in this context, an 18%-19% increase was inappropriate.”
The telecommunications industry for the most part supports a short-term increase in the CRTC’s operating budget – if the money isn’t used to establish a Do Not Call List (DNCL) – and provided it is decreased again once telecom deregulation occurs. It is anticipated the CRTC regulatory burden will be reduced with deregulation.
On the other hand, major broadcasters reached no consensus on a 24-30 month transitional increase in the commission’s budget. Some cablecos support a short-term increase, provided a review occurs at the end of the transition period.
The cable industry though was quick to point out that “they are neither the cause nor the beneficiary of some of the CRTC’s key pressure points,” such as telecom deregulation and broadcaster mega mergers and shouldn’t have to pay for these elements.
One key objection of broadcast and telecom industry stakeholders to the proposed hikes stemmed not from the merit of the proposed initiatives that require the additional resources but from a sense the CRTC “had not demonstrated that the only way to meet its objectives was through increased funds.”
The industry suggested several other ways the CRTC could increase its budget, such as broadening the base of telecommunications fee payers, charging transaction fees to cover the costs of specific processes, e.g. sales of assets and applications for new licenses, amending the telecommunications fee regulations to create a new fee specific to the telemarketing industry for the DNCL, getting tougher on licence applicants so fewer public hearings are required and reforming the Broadcasting and Telecommunications Acts so public notification could be done via the CRTC’s website rather than through more costly newpaper advertising.
The comments were made during three roundtable consultations with industry stakeholders hosted in June by the Public Policy Forum on behalf of the CRTC as part of the process for seeking the increased budget.
The CRTC says it needs more resources to deal with such issues as more timely decisions, an increase in mega mergers, a transition to lighter regulation in the telecom industry, possibly the introduction of some new media obligations, new mandated responsibilities, such as the DNCL, IT infrastructure upgrades and inflationary and workload pressures.
The CRTC says the money would be used to reduce by 50% the time spend on public broadcasting hearings (from 12 months six months) to match the 50% improvement the commission has already made in other proceedings, and to bring in experts for advice when needed.
On the telecommunications side, the money would be used to bring in specialized expertise on certain issues and to establish and administer a DNCL.
The increased budget would also go toward upgraded IT infrastructure and information systems at the CRTC, and to cover general inflationary pressures connected to public consultations, such as the higher cost of travel, translation and court reporting.
The CRTC indicated it was committed to reviewing its resource requirements in two and a half years (2009-2010).
CRTC chair Konrad von Finckenstein brought up the CRTC’s need for more financial resources at this June at the Banff World Television Festival, as reported in cartt.ca.
The commission received approximately $25.1 million in Part I fees in the 2006 broadcast year.
“We need more resources… to finance how we deal with the issues that keep coming down the pipe, whether that be diversity of broadcasting, or new media etcetera,” von Finckenstein said at the time.
