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CAB proposes 10-point BDU audit framework
10/14/2003

OTTAWA - In its interventions to the CRTC on the license renewals of both Star Choice and Bell ExpressVu, the Canadian Association of Broadcasters says it wants to ensure an accurate count of subscribers (and therefore broadcast, specialty and pay revenue).

To that end, the CAB has proposed a 10-point framework for affiliate BDU audits (which means they would apply to cable companies, too). Here it is, from the CAB web site:

(i) Intervals: programmers will have the right to audit Affiliates once per year.

(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)

(iii) Choice of Auditor: programmers will have the right to send either staff or third-party auditors to conduct audits.

(iv) Confidentiality: programme 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.

(v) Interest on shortfall: affiliates will be assessed an interest charge where the audit uncovers a shortfall in remittances.

(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.

(vii) Resolution: discrepancies will be resolved and settled within 30 days of receipt by the affiliate of the auditor's report.

(viii) Scope: the audit will establish whether affiliation payments were made in conformity to 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.

(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.

(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.

The Commission will visit this issue during the license hearings, beginning Monday, October 20th.

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