You’ll recall that in my post, “Clueless about cable,” I wondered if Rogers was pulling a fast one. They’ve been paying 1% of their gross broadcasting revenues to the LPIF since the fund was created in October 2008. The CRTC has increased the mandatory contribution to 1.5% for the 2009 – 2010 broadcast year and Rogers has announced they’re increasing their subscription rates by 1.5%. I wrote to ask them why they are increasing the rate by 1.5% when the CRTC increased the LPIF contribution by only 0.5%.
Frankly, I didn’t expect them to respond. Happily, they did because they had interesting things to tell me:
LPIF was introduced by the CRTC on October 30, 2008. At that time it was set at 1%, but even then it was not meant to be implemented until September 1, 2009. No cable or satellite company has paid this fee yet since it begins on September 1, 2009. On July 6, 2009 the CRTC increased the original 1% to 1.5% — before any payments to the fund even began. Rogers is passing through the full LPIF amount from day one.
So there you go. The mistake was mine. When I read “The fund was created in October 2008…” in the CRTC’s press release, I assumed that this was when the contributions began. I was wrong. You could argue semantics over Rogers calling the fund new, but the contributions they’re required to pay into the fund certainly are new.