Canada broadcasters reach fee deal with government

Wed Oct 7, 2009 4:28pm EDT
 
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TORONTO (Reuters) - Canada will forgive C$450 million ($424.5 million) in regulatory fees owed by private broadcasters after the two sides settled a long-standing dispute over the legitimacy of the charges.

As part of the deal, the government said on Wednesday it will recommend that the country's broadcast regulator, the Canadian Radio-television and Telecommunications Commission, develop a new fee structure that would be capped at C$100 million a year.

In exchange, the broadcasters will drop their legal action challenging the fees.

"The new fee regime is intended to provide stability and predictability for the industry and protect the interests of Canadians," Heritage Minister James Moore said in a statement.

The C$450 million is the amount owed by the broadcasters for the years 2006 to 2008. The fees were not paid while litigation continued.

The dispute over payments known as Part II license fees dates back to 2003, when broadcasters first challenged their validity.

"The agreement represents a reasonable compromise for both sides," said Charlotte Bell, chairwoman of the Canadian Association of Broadcasters. "It resolves treatment of contested fees and reflects a fair fee regime going forward."

Since 1997, broadcasters and cable and satellite companies have paid about C$910 million in Part II license fees, the association said.

($1=$1.06 Canadian)

(Reporting by Wojtek Dabrowski; editing by Peter Galloway)