CRTC upping Independent Local News Fund limit

The CRTC has approved an application from the Canadian Association of Broadcasters (CAB) to increase the amount of proceeds from the “Independent Local News Fund” (ILNF) that can be given to any one station or group operated by the same licensee in a given market. In its decision Tuesday, the CRTC said it will increase the maximum amount of distributable proceeds from the fund to 12 per cent in any given year, up from the 10 per cent cap set when the fund was established a few years ago. The change will be effective Sept. 1, 2021 -- the beginning of the 2021-2022 broadcast year. The commission said the fund’s money comes from licensed broadcast distribution undertakings (BDUs), which are required to contribute 0.3 per cent of their gross revenues from broadcasting activities in the previous broadcast year to the fund. It said all private conventional television stations that provide locally reflective news and information, and that do not belong to a vertically-integrated group, are eligible for funding. “The CAB submitted that the policy rationale for the current 10% cap was to ensure that smaller independent television stations would receive a reasonable level of funding and that a disproportionate amount of funding would not go to larger independent stations,” the CRTC said in its decision. Following BCE Inc.’s acquisition of the over-the-air stations owned by Groupe V Media Inc, those stations are no longer eligible for the fund, CAB submitted. Therefore, it claimed any funding that could have been allocated to those stations is now available for redistribution. “The CAB submitted that maintaining the existing 10% cap now that the former V Média stations are ineligible would mean that a majority of ILNF recipients would be subject to the funding cap in at least one market,” the CRTC said. “It therefore proposed a 12% cap to ensure an equitable redistribution of the newly available funds while not increasing the number of stations whose funding was capped under the 10% guideline.” The commission said it believes the association’s proposal would allow for all recipients of the fund to see increased funding and that the expected increase would be reasonably distributed. “The Commission further notes that a 12% cap would affect the same three stations that are affected by the current 10% cap,” it said. “This means that the remaining six groups of stations, by virtue of remaining under the cap, would still have an incentive to receive additional funding by increasing the production and broadcast of locally reflective news in order to potentially receive additional funding from the ILNF.” According to the commission, CAB held consultations with currently-eligible fund recipients to review its proposed approach and found that eight of those nine groups were prepared to endorse it, with RNC Media Inc. dissenting. In its intervention, RNC proposed that the CRTC launch a public review process of the fund, which would include a re-evaluation of the criteria used to determine the allocation of funds, “taking into account the different linguistic considerations of the Canadian broadcasting system,” its decision said. In another intervention, Quebecor Inc., on behalf of its Videotron Ltd., said the sale of the V Media stations has reduced the number of French conventional TV stations in the private sector that can benefit from the fund, and argued BDUs have to deal with reduced revenues due to the pandemic. So, it called for a public consult examining their ability to contribute to the fund, the CRTC said. Quebecor had previously opposed Bell's acquisition of V Media stations, both before the CRTC and in Federal Court. In addition, the Telile: Isle Madame Community Television Association, the Canadian Association of Community Television Users and Stations, and St. Andrews Community Television Inc. said the CRTC should reassess the eligibility criteria to include low-power television and community stations. Though the CRTC noted it intended to conduct a review of the fund in 2022, local news producers and broadcasters could be affected by the potential passage of Bill C-10, the amended broadcasting act, it said. Because of this, “conducting a review of the ILNF before there is certainty about the future regulatory framework could lead to incomplete results.” As well, “conducting a full review at this time would delay dealing with the concerns raised by the CAB in the current application as the ILNF would continue to be allocated in accordance with the current 10% cap,” the CRTC said. RNC submitted that if the CRTC does not conduct a broad review at this time, it would be happy with a cap of 11 per cent, which it claimed would “maintain the relative equitability of disbursed funds, assuming that BDU contributions to the fund would consistently decrease.” However, while an 11 per cent cap would “partially mitigate” RNC’s own concerns about equitable distribution, it would increase the number of stations at the funding cap from three to eight, the commission said. Though the increase is effective Sept. 1, 2021, CAB had proposed that it be effective retroactive to Sept. 1, 2020, so it could adjust payments made during the 2020-2021 broadcast year. “Given that we are now in the final quarter of the 2020-2021 broadcast year, implementing the change as proposed by the CAB raises the possibility of retroactive payments or stations having to return funds already received,” the CRTC said. -- Reporting by Hannah Daley at hdaley@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

CRTC upping Independent Local News Fund limit

Broadcast | June 15, 2021

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