Source : Globe & Mail

Cable companies steadfast in their refusal to pay into Canadian Television Fund

The head of CBC Television has accused two of Canada's biggest cable companies of lawlessness for refusing to pay millions into the Canadian Television Fund, saying their actions could unravel the broadcasting system.

CBC executive vice-president Richard Stursberg criticized Shaw Communications Inc. and Vidéotron Ltée yesterday, saying the cable giants should not be able to "pick and choose" which government regulations they follow.

Shaw and Vidéotron pulled their support of the $2.5-billion CTF two weeks ago, saying the money could be better spent with more oversight from the cable and satellite companies that contribute the bulk of the dollars.

The CTF is the primary source of financing for Canadian TV shows and draws upon $1.5-billion in contributions from the cable and satellite sector, while the other $1-billion comes from Ottawa.

"It's the law. They must do it. It's not like they have a choice about this," Mr. Stursberg said. "Whether they pay now or whether they pay in six months -- whenever the bill is due -- is not a terribly big issue. The issue is they must pay."

The payments from Shaw and Vidéotron total more than $6-million a month. Both companies dislike that 37 per cent of the fund's budget goes toward independent productions destined for the CBC. The public broadcaster already receives more than $1-billion in federal funding each year, they argue.

Vidéotron spokesman Luc Lavoie called the CTF "a machine to distribute candy" to the production industry. The cable firms want more say in what shows are produced. The fund has helped create Canadian hits such as CBC's Da Vinci's Inquest and Showcase's Trailer Park Boys.

The monthly payments are required by the Canadian Radio-television and Telecommunications Commission, but there are different opinions on whether stopping them flouts the law. However, broadcasting rules require cable and satellite companies to make annual contributions by the end of August.

"We don't believe that we are breaking any law," Mr. Lavoie said. Vidéotron is owned by publishing and media giant Quebecor, which also operates the TVA network in Quebec.

If the companies haven't paid by August, they will be breaking federal regulations, Mr. Stursberg said in a telephone interview from Miami. If that is allowed to happen, he added, it would unravel the Canadian broadcast sector.

"It would be a very strange circumstance where people could say, 'I'm going to pick and choose those regulations that I'm going to abide by,' " he said. "You wouldn't have a regulatory system at all. People would say 'I don't like that one, so I won't abide by that one.' And then the entire broadcasting system would collapse."

Shaw CEO Jim Shaw has mused about refunding the money to consumers -- worth about $15 a year for each customer -- while Vidéotron wants to operate a new fund.

The controversy has prompted a parliamentary committee to investigate the funding debate. Heritage Minister Bev Oda is holding emergency meetings with the industry. CBC executives will speak with her this week.

© Globe and Mail