OTTAWA — The CRTC stood by one of the most controversial suggestions of its Canadian Television Fund task force on Thursday, calling for the fund to be split into one ratings-driven stream and another for the public sector.

The regulator rejected the suggestion that CTF funding should be extended to 8-out-of-10 Canadian productions, however, and called for keeping the 10-out-of-10 CAVCO points requirement. The report also recommends that producer representation on the CTF board be retained, while the task force suggested it represented a conflict of interest.

The report also supports the establishment of a funding stream for new media that would come entirely from new sources, such as benefits packages, equity investments or use of the flexible part of broadcasting envelopes.

Splitting the fund was one of the recommendations made last year by the CRTC’s task force on the CTF, creating a rift in the industry.

The CFTPA opposed the split and continued to criticize this latest recommendation.

‘It’s a bad solution in search of a problem. We’ve been down the two-stream road before and it did not work,’ says CFTPA president and CEO Guy Mayson, adding the two-stream approach would cause more money to be spent on administration rather than actual production.

The CTF itself has also opposed the split, but fund administrators on Thursday declined comment on the latest CRTC report until they had a chance to examine it in more detail.

It is now up to the government to decide if it will act on the recommendations.

The CRTC says it will regulate monthly contributions to the fund once the government has resolved the CTF’s issues. The regulator also states it will start a public process by July 1 to amend the benefits policy, so that this money can be directed to the CTF. The commission even laid out a timeframe and is asking the CTF to provide detailed plans by November for the earliest possible creation of the private-sector funding stream.

The market-oriented stream, to support programming of broader appeal, would be for private broadcasters and be supported by TV distributor contributions to the fund, under the CRTC’s recommendation.

The public-sector stream would be funded by the Department of Canadian Heritage and would concentrate on cultural programming. It would be available to the CBC, educational broadcasters and other not-for-profit broadcasters.

The government contributed $120 million to the fund in 2006/07, while distributors put in $150.6 million. The CRTC report notes an imbalance could be created over time if the government financing to the public side remains flat, while the distributors’ contributions continue to go up because they are calculated on a percentage of revenue.

To address this concern, the CRTC suggests that the Aboriginal Peoples Television Network should be permitted to obtain one-third of its funding from the public-sector side for programming in aboriginal languages, and two-thirds (about $2.4 million) from the private side for its English- and French-language shows. TV5 and VisionTV would be allowed to choose a stream.

Separate boards would be established to oversee the two streams, but the day-to-day administration would be done by the CTF to reduce operating costs. The government would be responsible for the makeup of the public-sector board, while the CRTC recommends the CTF create a nominating committee to appoint representatives on the 11-member private-sector board.

Upset that the CRTC rejected Quebecor Media’s call that it be allowed to opt out of its CTF payments in favor of a fund it would run itself, commissioner Michel Morin dissented from the report.

‘What is the rationale for the commission’s decision to prevent one of the best players in the industry from using for a three-year trial period a new formula that could enhance the Canadian broadcasting system as a whole?’ asks Morin in his dissenting opinion. ‘According to the model proposed by [Quebecor], it was clear that there might be more Canadian programming in VOD, digital IP, Internet, DVD and mobile platforms, live and pre-recorded.’

The CTF file is now in the hands of Canadian Heritage.