Saturday, September 16, 2006

Canadian Satellite Radio (XM Canada) Proposes Changes to How They Pay the Canadian Talent Development Contributions

On September 13, the CRTC issued a Public Notice on behalf of Canadian Satellite Radio that proposes a change to how the Canadian Talent Development (CTD) contributions are paid. By law, Canadian Satellite Radio and Sirius Canada are required to contribute a minimum of 5% of the gross revenue to CTD. XM Canada proposed the changes back on March 21, 2006.

The intended recipients of the contributions requested that Canadian Satelllite Radio propose these changes. The way the rules are written, they would not get credit it they pay more in the early years. Here is the public notice:

Application No. 2006-0300-5

Application by Canadian Satellite Radio Inc. relating to its satellite subscription radio service operating under the name XM Radio Canada.

The licensee proposes to amend its condition of licence relating to Canadian Talent Development which reads:

7. (a) During each broadcast year, the licensee shall contribute a minimum of 5% of gross revenues from its satellite subscription radio undertaking to eligible third parties directly connected to the development of Canadian musical and other artistic talent or other initiatives approved by the Commission. For purposes of this condition of licence, "eligible third parties" shall have the definition set out in Contributions by radio stations to Canadian talent development – A new approach, Public Notice CRTC 1995-196, 17 November 1995, as amended from time to time by the Commission.


with the following condition:


7. (a) The licensee shall contribute a minimum of 5% of gross revenues from its satellite subscription radio undertaking to eligible third parties directly connected to the development of Canadian musical and other artistic talent or other initiatives approved by the Commission. For purposes of this condition of licence, "eligible third parties" shall have the definition set out in Contributions by radio stations to Canadian talent development – A new approach, Public Notice CRTC 1995-196, 17 November 1995, as amended from time to time by the Commission.

Furthermore, the licensee has requested the following conditions of licence:

1. In each year, Canadian Satellite Radio be permitted to contribute more than 5% of gross subscription revenues towards its Canadian Talent Development as approved by the Commission.

2. Any overpayment (i.e. Payment of more than 5% of gross subscription revenues in a given year) of Canadian Talent Development funds in a given year shall be applied towards the entire CTD contribution over the license term so that by the end of that term, Canadian Satellite Radio shall have to contribute no more than 5% of gross subscription revenue towards Canadian Talent Development.

3. That "a given year" reflect the August 31 year end and not the service’s launch date, to prevent further confusion.

The applicant has stated that it wishes to make contributions to Canadian Talent Development (CTD) earlier in the six-year licence term. The applicant also states that it is not seeking a reduction in the total amount to be contributed to CTD but would like to be eligible to make overpayments earlier in the licence term that would be considered as part of the 5% overall gross revenue/contribution. The applicant argues that this flexibility will allow it to "enhance (its) ability to support Canadian artists."

The applicant contends that "in the first 1-3 years as (they) build (their) revenues, the amount of (their) contributions" will be small and the intended recipients may not receive financial support for several years. The applicant says that the intended recipients have applied to the applicant to request an amended condition of licence to permit the above.

The deadline for submission of interventions/comments is 18 October 2006.

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