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New affiliation audit provisions possible

Articles in related categories
Association News
CRTC/Regulatory - TV
Cable companies
OTTAWA - While the CRTC set aside nearly all of the complaints made during October's DTH license renewal hearings (see related story in this site), it did take the broadcasters up on its complaint over affiliate payments applicable to all BDUs, not just the satellite companies.

During the Bell ExpressVu and Star Choice license renewal, the Canadian Association of Broadcasters submitted a new 10-point proposal for new specialty service affiliate payment audits and the Commission issued a call for comments on the request yesterday.

The broadcasters say that with the sheer number of specialty services now available, as well as the various packaging options for consumers - which are different at each cable or satellite company - the system is rife with errors, resulting in the underpayment by BDUs to broadcasters.

Independent audits are already a part of the BDU regs and provided for in the contracts between broadcasters and cable companies but, as a CAB letter sent to the Commission in December asking for a public process on the matter it raised two months prior says, the specialty service owners are having an increasingly hard time getting those audits done - and that every audit that has been completed has turned up underpayments.

"As you know, in Public Notice CRTC 2001-66, section 3 paragraph 4, the Commission outlines the principles that apply to the relationship between programmers and distributors," reads that CAB letter. "Among those principles is an assurance that: 'a programming service is entitled to obtain, at its own expense and on an annual basis, independently verified subscriber numbers for the service in question to validate the basis for programmer compensation.'

"Notwithstanding this principle, programmers continue to be frequently frustrated in their attempts to obtain independent verification of subscriber numbers, a situation evident in the growing number of disputes currently before the Commission," adds the letter.

"Our members are at the mercy of the BDUs here," the CAB's specialty and pay senior vice-president Wayne Charman told www.broadcastermagazine.com in December. "We'd like to resolve these as quickly as possible� members feel they're to get paid what they're owed." The CAB letter didn't identify any cable company culprits specifically and Charman didn't elaborate on how widespread the problem is.

Click here for the CAB's proposed audit framework.

The Commission, in its call yesterday, urged the broadcasters and BDUs to work out their audit issues, saying: "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."

However, it still wants comment, by May 17th, 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."

For the call - and its own 10 questions it wants answered, click here.
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