CRTC simultaneously renews and suspends Super Channel’s licence

The CRTC has renewed the broadcasting licence of Allarco Entertainment 2008 Inc.’s Super Channel for four years, while simultaneously suspending it for a “very serious” failure to comply with licence conditions relating to script and concept development expenditures. Allarco failed to meet its licence requirements by listing loans it gave to independent producers as part of its script and concept development expenditures, leading to a shortfall of just over $5 million, the regulator said in a Monday decision. The majority of those loans have already been repaid to Allarco, according to the CRTC’s decision. The suspension will only take place if Allarco fails to make six-monthly payments, beginning in February 2021, of some $630,000 to the Canadian Media Fund for the next four years, or if it fails to pay any further reimbursements it receives to the CMF. Allarco representatives told the CRTC on multiple occasions during the licence renewal process that it had no intention of repaying arrears if the CRTC found the loans could not be classified as Canadian programming expenditures (CPE), arguing it would be impossible for Super Channel to be fully self-sufficient if repayments were proposed. As well as the licence suspension, the CRTC handed down a mandatory order requiring Allarco to devote at least 30 per cent of the previous year’s gross revenues to CPE, stating it was necessary given “Allarco’s history in respect of its CPE requirements and the Commission’s concerns with its willingness and ability to comply going forward.” The regulator also made filing an annual production report a condition of Allarco retaining its licence. In its decision, the CRTC said it had ongoing “concerns” about Allarco, despite deciding to renew its licence. “In particular, the licensee was found to be in serious non-compliance during its first licence term, and is now again being found in multiple instances of non-compliance during its second term,” the CRTC said in its decision. “Further, the manner in which the licensee has interpreted and implemented some of its conditions of licence reveals a blatant disregard for its regulatory obligations. There is also a lack of a firm commitment to correct the situation and… the Commission is particularly concerned with Allarco’s stated intention not to fulfill the repayment of arrears.” Although stating that Allarco’s failure to comply with its CPE obligations would normally prompt the CRTC to re-impose them as a condition of licence, the regulator declined to do so, stating the conditions were imposed “as a result of a competitive process, at a time when genre protection was still in effect,” and that Super Channel was now considered a discretionary service, rather than a Category A broadcaster. Several organizations representing content producers filed interventions requesting Allarco only receive a three-year licence extension, but the CRTC said the $5 million CPE shortfall could be reasonably repaid over four years, and the longer term would give Allarco “a degree of stability it will need in order to continue operating Super Channel and give it sufficient opportunity to demonstrate its willingness and ability to comply with its regulatory obligations.” Allarco spokesperson Kimberley Ball said in an email that the company did not have any comment about the licence renewal decision or whether it would comply with its new licence conditions at this time. “We just received the report ourselves this morning and it is being reviewed internally to determine our next steps,” Ball said. In September, the company filed a lawsuit against four Canadian retailers — Best Buy Canada Ltd., Staples Canada ULC, Canada Computers Inc., and London Drugs Ltd. — for selling what the company says are media boxes that feature pirated content. It has since dropped that Federal Court case and filed a similar action seeking $50 million of damages in the Court of Queen’s Bench of Alberta. — With reporting by Adam Langenberg at alangenberg@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

CRTC simultaneously renews and suspends Super Channel’s licence

Broadcast | June 29, 2020

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CRTC simultaneously renews and suspends Super Channel’s licence

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