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Broadcasting Public Notice CRTC 2004-20
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See also: 2004-20-1
Ottawa, 31 March 2004 |
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Call for comments on a request to amend the Broadcasting Distribution
Regulations to add provisions governing the audit of affiliation payments
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1. |
The Commission has received a request from the
Canadian Association of Broadcasters (CAB) to amend the Broadcasting
Distribution Regulations (the Regulations). The amendments would provide
for terms and conditions under which the licensees of programming
undertakings could audit the records of broadcasting distribution
undertakings (BDUs) for the purpose of verifying the accuracy of affiliation
payments, which are largely made by reference to the number of subscribers to
the programming service in question. |
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2. |
In its request, the CAB submitted that the
increasing number of programming services and the various ways in which they
are packaged and sold have increased the likelihood of reporting errors in
affiliation payments. The CAB indicated, among other things, that this
situation is compounded by the difficulties that the licensees of programming
undertakings have experienced in obtaining access to the information
necessary to verify the accuracy of affiliation payments. In light of these
concerns, the CAB provided a proposed "audit framework," which is set out in
the appendix to this notice, and suggested that this framework could serve as
a reference point for the Commission to consider possible amendments to the
Regulations. |
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3. |
The Commission notes that many of the issues
raised in the proposed audit framework are business-related issues that might
best be negotiated by affected parties on an individual basis. Accordingly,
the Commission encourages affected parties to discuss these issues with a
view to arriving at mutually acceptable solutions. |
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Call for comments
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4. |
The Commission requests comment on whether it
should amend the Regulations to provide for terms and conditions under which
affiliate audits should be conducted, and, if so, what those terms and
conditions should be. Interested parties are also invited to recommend
alternative mechanisms and/or an alternative framework, other than amendments
to the Regulations, which could be used to ensure that the licensees of
programming undertakings are able to verify the accuracy of affiliation
payments. The Commission also requests comment on the audit framework
submitted by the CAB and set out in the appendix to this notice. |
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5. |
In addition, the Commission requests comment on
the following questions: |
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a) If the Commission decided to include audit provisions in the
Regulations or otherwise impose requirements to provide audit access to BDU
records, what would be the most efficient and effective mechanisms for
conducting such audits?
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b) Who should select the auditor and what, if any, principles should
guide this selection? Who should pay for the auditor’s services?
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c) How often should the licensees of programming undertakings be
permitted to audit BDU records?
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d) What time period(s) should be examined in an audit (i.e., how far
back in time should the audit extend)?
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e) What types of information should an auditor have access to in the
course of performing an audit, and what records should BDUs be required to
maintain in order to facilitate audits by the licensees of programming
undertakings?
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f) What measures may be necessary to protect confidential information
obtained during an audit?
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g) What should be the minimum and/or maximum period allowable between
the request for an audit and its commencement?
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h) What should be the minimum and/or maximum period allowable for
resolution of any discrepancies following the receipt of the auditor’s
report?
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i) If the Regulations provide for audit rights, should terms and
conditions be set out in the Regulations, or in a document incorporated by
reference?
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j) If audit provisions are included in the Regulations, what would be
the status of any audit provisions included in current affiliation
agreements?
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6. |
Comments should be filed on or before 17 May
2004. |
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7. |
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. |
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Procedures for filing comments
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8. |
Interested parties can file their comments to
the Secretary General of the Commission by using ONE of the following
formats: |
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Intervention/Comments form
available from the Commission’s web site by indicating and selecting
the public notice number under the Decisions, Notices and Orders
section
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OR
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by electronic mail to
procedure@crtc.gc.ca
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OR
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by mail to
CRTC, Ottawa, Ontario K1A 0N2
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OR
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by fax at
(819) 994-0218
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9. |
Submissions longer than five pages should
include a summary. |
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10. |
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. |
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11. |
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. |
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12. |
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. |
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Examination of public comments and related documents at the following
Commission offices during normal business hours
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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 |
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Metropolitan Place
99 Wyse Road
Suite 1410
Dartmouth, Nova Scotia B3A 4S5
Tel: (902) 426-7997 - TDD: 426-6997
Fax: (902) 426-2721 |
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405 de Maisonneuve Blvd. East
2nd Floor, Suite B2300
Montréal, Quebec H2L 4J5
Tel: (514) 283-6607
Fax: (514) 283-3689 |
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55 St. Clair Avenue East
Suite 624
Toronto, Ontario M4T 1M2
Tel: (416) 952-9096
Fax: (416) 954-6343 |
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Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba R3B 2B3
Tel: (204) 983-6306 - TDD: 983-8274
Fax: (204) 983-6317 |
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Cornwall Professional Building
2125 - 11th Avenue
Room 103
Regina, Saskatchewan S4P 3X3
Tel: (306) 780-3422
Fax: (306) 780-3319 |
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10405 Jasper Avenue
Suite 520
Edmonton, Alberta T5J 3N4
Tel: (780) 495-3224
Fax: (780) 495-3214 |
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530-580 Hornby Street
Vancouver, British Columbia V6C 3B6
Tel: (604) 666-2111 - TDD: 666-0778
Fax: (604) 666-8322 |
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Secretary General |
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This document is available in alternate
format upon request and may also be examined at the following Internet site:
http://www.crtc.gc.ca |
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Appendix to Broadcasting Public Notice CRTC 2004-20
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The Canadian Association of Broadcaster’s framework for
affiliate broadcasting distribution undertaking audits
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(i) Intervals: programmers will have the right
to audit Affiliates once per year. |
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(ii) Range: programmers will have the right to
audit the Affiliate’s records for the preceding 3 year period, where
necessary, to verify that payments remitted accurately reflect subscriber
levels and contractual terms. (Note: a period previously audited should not
be re-audited unless new information has surfaced, or there are probable
grounds to re-audit.) |
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(iii) Choice of Auditor: programmers will have
the right to send either staff or third-party auditors to conduct audits. |
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(iv) Confidentiality: program providers
participating in a group audit agree to have the selected auditor sign a
confidentiality agreement ensuring that any and all information related to
unaffiliated programmer providers or distributors shall not be disclosed to
other parties. |
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(v) Interest on shortfall: affiliates will be
assessed an interest charge where the audit uncovers a shortfall in
remittances. |
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(vi) Notice period: within 60 days of
notification by a programming service of its intent to audit, the affiliate
must agree to a mutually acceptable date for the commencement of the audit. |
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(vii) Resolution: discrepancies will be resolved
and settled within 30 days of receipt by the affiliate of the auditor’s
report. |
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(viii) Scope: the audit will establish whether
affiliation payments were made in conformity with affiliation agreements. As
such, the scope of the audit might entail the reviewing and testing of any
documents, business processes or information systems involved in the
processing of affiliate payment information. |
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(ix) Administrative: programmers’ auditor will
have the right to retain copies of any documentation that directly serves to
substantiate the auditor’s conclusions. All relevant documentation, and the
main point of contact, will be made available to the auditor as of the
commencement of the audit. |
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(x) Pre-existing audit provisions: where audit
provisions exist within existing affiliation agreements, those pre-existing
provisions shall take precedence over the provisions contained within this
framework. |
