| |
Broadcasting Public Notice CRTC 2005-42
|
| |
Ottawa, 29 April 2005 |
| |
Call for comments on a proposal to accord confidentiality to the detailed
financial information provided to the Commission in the annual returns of pay
and specialty programming services
|
| |
The Commission invites comments with respect
to a proposal to accord confidentiality to the detailed financial information
provided to the Commission in the annual returns of pay and specialty
programming services. Comments must be submitted on or before 30 May 2005. |
| |
Introduction
|
|
1. |
In Call for comments on possible requirements
for the provision of notice to programming services by distributors of their
plans to change packages, Broadcasting Public Notice CRTC
2004-64, 25 August 2004 (Public Notice
2004-64), the Commission invited comments
regarding possible measures to ensure that negotiations between broadcasting
distribution undertakings (BDUs) and programming undertakings (programmers)
are conducted in accordance with good commercial practices. The Commission
recently announced its determinations with respect to those matters in
Good commercial practices, Broadcasting Public Notice CRTC
2005-35, 18 April 2005. |
|
2. |
One of the measures proposed in the comments
filed in response to Public Notice 2004-64
was that the Commission accord confidentiality to the detailed financial
information contained in the annual returns of pay and specialty programming
services as a way to reduce a perceived imbalance in bargaining power in
favour of BDUs vis à vis programmers. It was suggested that this disparity
does not promote the conduct of negotiations between the parties in
accordance with good commercial practices. |
|
3. |
More specifically, CTV Inc. (CTV) submitted that
the Commission’s treatment of the financial and operating data contained in
the annual returns of BDUs varies considerably from its treatment of such
data contained in the annual returns of specialty services. It noted in this
regard that the financial and operating data of BDUs, whose rates are now
largely deregulated, are granted confidential treatment, while the financial
and operating data of analog specialty services, almost all of which have
regulated wholesale fees, are available on the public file. According to CTV,
this puts a specialty service programmer at a competitive disadvantage in its
negotiations with a BDU concerning the rates for the discretionary carriage
of the service, as the financial status of the service is available for
public scrutiny, while the financial status of the BDU is largely obscured.
CTV maintained that this disparity in negotiating power between distributors
and programmers is not conducive to effective commercial negotiations. The
Canadian Association of Broadcasters (CAB), in its submission, supported the
views of CTV, as described above. |
|
4. |
Accordingly, both the CAB and CTV requested that
the Commission ensure that its requirements for financial disclosure are
applied equitably to both BDUs and programmers. Specifically, they submitted
that confidentiality should generally be accorded to the detailed financial
information in the annual returns of specialty and pay programming services,
and that, if such information is publicly disclosed, this should only be done
in a manner that would ensure that another party to commercial negotiations
remains unable to determine the revenue and expense patterns of individual
programming services. |
|
5. |
In order to ensure that all interested parties
have an opportunity to comment on the proposal by CTV and the CAB, and given
the importance of this issue to programmers, distributors and other parties,
the Commission has decided to issue a call for comments on the questions set
out below. Pending the outcome of this process, the individual financial
results of pay and specialty services licensees for 2004 will be kept
confidential. Only the aggregate financial data has been published. |
| |
Context
|
|
6. |
CRTC Circular No. 429 of 19 August 1998 sets out
the Commission’s Guidelines respecting the confidential treatment of annual
returns and material or information filed in support of a broadcasting
application before the Commission. |
|
7. |
In that circular, the Commission stated, in
part, that: |
| |
- All broadcasting undertakings are required to file annual returns (as
set out in Circular No. 404
dated 23 August 1994), including financial statements, on or before
30 November of each year for the broadcast year ending on the previous
31 August.
|
| |
- The annual returns and financial statements for an individual
broadcasting distribution undertaking whose basic monthly subscriber fee is
not regulated under the Broadcasting Distribution Regulations will
be treated as confidential. Consistent with past practice, however, the
annual returns and financial statements for a broadcasting distribution
undertaking whose basic monthly subscriber fee is regulated will continue
to be made available on the public file and will only be treated as
confidential commencing with the broadcast year during which the
undertaking’s basic monthly subscriber fee is no longer regulated. As in
the past, aggregate industry statistics will continue to be released.
|
| |
- In cases where the annual return and financial statements include both
rate regulated and non-rate regulated broadcasting undertakings (e.g.
multi-system operators), the financial statements and only that portion of
the annual return that relates to the non-rate regulated undertaking will
be kept confidential.
|
| |
- Consistent with current Commission practice, the annual returns and
financial statements for those specialty services that have a monthly
subscriber fee set by the Commission or that are carried as part of
the basic service package will continue to be placed on the public file.
For all other specialty services, only that portion of the annual return
and financial statements, down to and including profit before interest and
taxes (PBIT), will be placed on the public file. Any portion of the annual
return or financial statements that would lead to the disclosure of an
undertaking’s net income or loss, such as information below PBIT, or
detailed information on shareholders’ equity, will be treated on a
confidential basis.
|
| |
- Consistent with current Commission practice, that portion of the annual
return and financial statements of pay television undertakings, down to and
including PBIT, will continue to be placed on the public file. As in the
case of specialty services, any portion of the annual return or financial
statements that would lead to the disclosure of an undertaking’s net income
or loss will be treated as confidential.
|
| |
- Notwithstanding the above, for a licensee that is a public company or
whose financial statements are otherwise publicly available, the Commission
will continue to place these statements on the licensee’s public file.
|
|
8. |
Further, section 20 of the CRTC Rules
of Procedure stipulates, among other things, that the financial
statements of an applicant who holds a licence may be treated as confidential
"if in the opinion of the Commission the public interest will best be served
by so doing." |
|
9. |
With this and the excerpts from CRTC Circular
No. 429 as context, the
Commission invites detailed comments with respect to the following questions: |
| |
- Would the public interest best be served by generally according
confidentiality to the annual returns of all pay and specialty services? If
so, why?
|
| |
- If the public interest would not best be served by generally according
such confidentiality, under what circumstances should an annual return be
made available to the public? In such circumstances, should the entire
annual return be placed on the public file or only certain information
within it? If only certain, specific information should be made public,
what information would that be, and why?
|
| |
Call for comments
|
|
10. |
The Commission invites comments that address the
issues and questions set out in this notice. The Commission will accept
comments that it receives on or before 30 May 2005. |
|
11. |
The Commission will not formally acknowledge
comments. It will, however, fully consider all comments and they will form
part of the public record of the proceeding, provided that the procedures for
filing set out below have been followed. |
| |
Procedures for filing comments
|
|
12. |
Interested parties can file their comments to
the Secretary General of the Commission: |
| |
- by using the
Broadcasting Intervention/Comments Form
|
| |
OR
|
| |
by mail to
CRTC, Ottawa, Ontario K1A 0N2
|
| |
OR
|
| |
by fax at
(819) 994-0218
|
|
13. |
Submissions longer than five pages should
include a summary. |
|
14. |
Please number each paragraph of your submission.
In addition, please enter the line ***End of document*** following the last
paragraph. This will help the Commission verify that the document has not
been damaged during transmission. |
|
15. |
The Commission will make comments filed in
electronic form available on its web site at
www.crtc.gc.ca but only in the
official language and format in which they are submitted. Such comments may
be accessed in the Public Proceedings section of the CRTC web site.
Copies of all comments, whether filed on paper or in electronic form, will
also be placed on the public examination file. |
|
16. |
The Commission encourages interested parties to
monitor the public examination file and the Commission’s web site for
additional information that they may find useful when preparing their
comments. |
| |
Examination of public comments and related documents at the following
Commission offices during normal business hours
|
| |
Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage, Room G-5
Gatineau, Quebec K1A 0N2
Tel: (819) 997-2429 - TDD: 994-0423
Fax: (819) 994-0218 |
| |
Metropolitan Place
99 Wyse Road
Suite 1410
Dartmouth, Nova Scotia B3A 4S5
Tel: (902) 426-7997 - TDD: 426-6997
Fax: (902) 426-2721 |
| |
205 Viger Avenue West
Suite 504
Montréal, Quebec H2Z 1G2
Tel: (514) 283-6607 |
| |
55 St. Clair Avenue East
Suite 624
Toronto, Ontario M4T 1M2
Tel: (416) 952-9096 |
| |
Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba R3B 2B3
Tel: (204) 983-6306 - TDD: 983-8274
Fax: (204) 983-6317 |
| |
Cornwall Professional Building
2125 - 11th Avenue
Room 103
Regina, Saskatchewan S4P 3X3
Tel: (306) 780-3422 |
| |
10405 Jasper Avenue
Suite 520
Edmonton, Alberta T5J 3N4
Tel: (780) 495-3224 |
| |
530-580 Hornby Street
Vancouver, British Columbia V6C 3B6
Tel: (604) 666-2111 - TDD: 666-0778
Fax: (604) 666-8322 |
