Monday, August 24, 2009


The Local Programming Improvement Fund kicks off September 1, 2009...I know most of you really don't want to but go read all about it HERE. The CRTC put this fund into place in response to a number of issues like the economic downturn and the Save Local TV campaign, but the bottom line was the cable and satellite companies (BDU's) were asked to contribute a tiny percentage of their gross revenues in order to cash flow a fund intended to help smaller market TV stations maintain their current level of service. Well, actually it was to improve and even increase local programming, but now seems to be just about achieving status quo.

Nevertheless, the money had to come from somewhere and that was outlined in the above-linked CRTC policy determination document:

The Commission has considered whether the 1% of gross revenues of licensed BDUs to be contributed to the LPIF would provide sufficient support for local programming in non-metropolitan markets, either on a short-term or longer-term basis. In light of the evidence presented during the course of the Hearing, the Commission determines that it would be appropriate to increase the LPIF contribution by licensed BDUs from 1.0% to 1.5% of gross revenues for the 2009-2010 broadcast year.

The Commission is of the view that, based on evidence on the public record of the proceeding, the figure of 1.5% – estimated to be approximately $102 million – will provide sufficient support to ensure that Canadians in non-metropolitan markets will continue to receive local programming in the 2009-2010 broadcast year.

Okay. Pretty straightforward...BDU's kick in some dough to help out, with no mention of 'a tax', no mention of 'fees', and certainly no mention of it coming out of the consumers pocket.

And yet a letter is being sent out to Rogers TV customers informing them that the CRTC (Canadian Radio-television and Telecommunications Commission) requires a new 1.5% service fee for "The Local Programming Improvement Fund (LPIF)".

Starting on your first bill after August 31, 2009, you will see a new line on your invoice called CRTC LPIF fee, and a corresponding charge of 1.5% of your recurring TV monthly service fee. The 1.5% that is collected goes directly to the CRTC's Local Programming Improvement Fund (LPIF). Rogers Cable receives no financial benefit from the LPIF fee. All other aspects of your service will remain the same.

Bell TV also released a similar statement:

Bell is extremely disappointed by the CRTC's latest decisions regarding this TV tax and, in order to meet the CRTC's orders without impacting the current and future quality of its products and services, Bell will apply a monthly fee to customer billing which will not exceed 1.5% of Bell TV charges incurred on and after September 1, 2009.

I've not seen any others yet but I've read that Shaw cable and other cable companies and satellite companies are following suit.


So I wrote the CRTC asking whether this so-called 'fee' should be charged back to the customer. And the reply:

"Thank you for your message.

The CRTC established a Local Programming Improvement Fund (LPIF) to conserve and improve local television programming. In establishing the appropriate level of contributions to be paid by cable/satellite companies to broadcast local programming, the CRTC considered a number of factors including the ability by cable/satellite companies to contribute to the Canadian broadcasting system. Given their reported profits, the CRTC is of the view that there is no justification to pass the cost on to consumers. If your cable/satellite company has decided to increase the fees for your service, it is a business decision that is not regulated or mandated by the CRTC.

Thank you for bringing this matter to our attention and allowing us to clarify the issue" justification to pass the cost on to consumers....gotcha. But they are. So, um, what are you going to do about that, CRTC?


Talk about passing the buck (after somebody takes it first, of course). And talk about tired of trying to think about and deal with and write something remotely positive about all this stuff without resorting to a big WTF...I know I am.


Peter said...

"If your cable/satellite company has decided to increase the fees for your service, it is a business decision that is not regulated or mandated by the CRTC.

Thank you for bringing this matter to our attention and allowing us to clarify the issue"

I love the above - Just pay for it, we don't care where it comes from. Like you said, WTF??!!

Ian said...

Makes you wonder, doesn't it?

I mean, why would the cable / satellite companies be "disappointed" or "opposed" to the LPIF? They're not paying any of it. Not one cent. In fact, they're benefitting (at their subscribers' expense, of course), because they're increasing their revenues by 1.5%, but they can claim the 1.5% fee they pay to the CRTC as an operating expense, which decreases their taxable income.

That's right, folks. Their net income goes up, because their taxes go down. And we, the tiny and unimportant little consumers, get to pay the entire bill.

And let's think, for a moment, about what we're paying for: By virtue of the fact that we pay for cable or satellite, we're supposed to ensure people who only have free over-the-air signals will always enjoy plenty of choice and quality... kinda like how, whenever somebody takes a cab, the taxi company has to give 1.5% of the fare to a consortium of bicycle manufacturers... oh, wait, that would just be ridiculous. Right? Right?!?

So the CRTC has decided to help broadcasters, which is fine as a concept, but in the process, they're rewarding the very system that threatens broadcasters in the first place (satellite/cable companies), AND they're holding the heads of us (sat/cab consumers) under water while we pay for something we're not consuming. While we're at it, why don't we pay for the Americans' health care?

Guess I'm showing my age here a little bit, but in the Canada I grew up in, we had a social safety net (which is now all but gone), but not a media company safety net (which is ridiculous).

Oh, Canada.

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