Canada Ups Local TV Fund

Increased Funding for Local Programming Improvement

On July 6, 2009, The Canadian Radio-television and Telecommunications Commission (CRTC) announced that it has raised the funding for local television, and allowed one-year license renewals for English-language TV stations. The CRTC has proposed that the future license renewal will be based on the ownership groups instead of categories, which splits specialty cable stations from the main network stations.

The total funds available under the Local Programming Improvement Fund will increase to $102 million for the 2009-2010 broadcasting year from $68 million. The cable and satellite companies will now have to contribute 1.5% of gross broadcasting revenue to the fund, up from 0.5%. The Fund was created in October 2008 for stations in markets with less than a million people.

The new ruling will adversely impact the companies who are already facing significant revenue decline due to falling advertising dollars triggered by the recession. However, the CRTC has declared that the contribution is a temporary measure. The fund will be utilized by television stations in smaller markets to maintain spending on local news and programming.

The CRTC is also ensuring that broadcasters keep specific Canadian needs and interests in mind when catering to a smaller market. The ruling says that local television stations will have to air at least seven hours of programming that is locally produced.

Rogers Communications (RCI - Analyst Report) has expressed concern that the increase in contribution to the Local Programming Improvement Fund to 1.5% from 0.5% will increase subscriber bills by $0.90 per month. Subscribers already pay 5% tax on cable and satellite service to fund Canadian programming.