ti not; it; - inc-or :15; ?ft "pp-:1 I Win-J? FACTSHEET A BRIEF W7 TH THE BBC Backggound - This factsheet compares and contrasts three aspects of CBCr?Radio-Canada with those of the British Broadcasting Corporation (BBC): mandate, funding and governance. 1) MANDATE - The mandate of CBCIRadio-Canada is contained within the 1991 Broadcasting Act. The mandate for the BBC is contained within the 2006 Royal Charter and the 2006 Framework Agreement. Mission and principles 9 Both mandates are bread. 0 CBC/Radio-Canacla is required to provide a wide range ofprogramming that ?informs, cnlightens and entertains.? The BBC serves six ?public pin-poses? that include themes such as citizenship, education, and stimulating creativity and cultural excellence. These purposes outline the values the BBC holds when striving to achieve its mission to inform, educate and entertain. 0 Both mandates require that they represent groups: 0 CBCr?Radio?Cansda programming must reflect Canada and its regions, provide programming in English and French, represent of?cial language minority groups and their Speci?c needs, and re?ect the multicultural and multiracial nature of'Canada. The public purposes include representing the United Kingdom (UK), the nations within the UK (England, Scotland, Wales and Northern Ireland), regions and communities. 0 Both mandates provide for independence: 0 The Broadcasting Act affirms that CBC/Radio~Caiiada shall, ?in the pursuit of its objects and exercise of its powers, enjoy freedom of expression and journalistic, creative and programming independence.? 0 The independence is re?ected in the BBC Royal Charter, which states that ?the BBC shall be independent in all matters concerning the content of its output, the times and manners in which it is supplied, and thelmanagement of its atTairs.? - While both mandates are broad, there are also key differences in their principles: 0 mandate is anchored more expiicitl),r in the idea of building a shared national consciousness and identity, while reflecting the diversity of groups [as noted shove). ?E?his is a mandate aimed at strangthening identity and its components. 0 The public purposes of the BBC focus less on identity, and more on sustaining citizenship and promoting cultural excellence. 050001 The BBC mandate is more outward?looking and CBC/?Radio?Cauada?s is more inward-looking: 0 One ofthe key public 13111130568 for the BBC is to "bring the UK to the World.? 0 International services for CBCiRadio~Canada are not laid out as a key part of the mandate. A later section of the Broadcasting Aer Specifies only that adio?Canada must offer an international service in line with any directions the Governor in Council may issue. its international mandate therefore functions as kind of an "add on? to its domestic mandate, rather than being one of the core public purposes, as it is for the BBC. 0 The BBC mandate is regularly reviewed, mandate is not: 0 The Royal Clzarier? for the BBC is reviewed by the Government every l0 years, following public consultations. Such a review is currently underway. CBCERadio-Canada?s mandate has no automatic review. The Broadcasting Act has not been reviewed since 2) FUNDING Carefurrding arrangements 0 The BBC receives its funding from a licence fee paid by every UK household: 0 Since l927, core funding for the BBC as a Crown Chartered non-pro?t corporation has come from a licence fee (that is, for televisions, tablets and so on). c- l55.very UK household, business and organization with a device that can access live BBC TV must pay the fee. The amount is set by Government alter a settlement negotiation with the BBC and is collected by an agent, TV Licensing, on behalf of the BBC. Most British adults make payments to the BBC every month or quarter for a lifespan. UK residents receive a notice each year reduin?ng them to pay a fee for public media services a Licence fee revenue is paid into the Treasury and the Government then pays an annual block grant back to the BBC to hind its core public services for UK audiences. The BBC is not permitted to carry advertising or sponsorship on its public services in the UK. However, it can carry out other conunercial activities, such as sales of products. it can also run additional commercial services2 around the world, such as ads on its BBC World Service Website accessible from outside the UK. By contrast. has a mixed funding model: 0 Unlike the UK, funding for the Corporation?s services is not collected speci?cally for from Canadian residents on an ongoing basis. Instead, the Corporation receives public funding voted by Parliament as part of the Federal budget process. 0 In addition to the public funds, CBC/Radio-Canada has been authorized to generate and retain revenue from its Operations through advertising on television and radio, subscription fees to specialty television services, retail sales. and sale or lease of assets. Unlike the BBC, CBC/Radio-Canada can therefore run ads for Canadian audiences. Whilst the Charter provides a guiding framework, the detail is set out in the Framework Agreement which can and has been revised. 3 The Minisrer can give prior written permission to allow ads, sponsorships and so on 000002 Jbiliry I tn the case public funding, is included in Parliamentary appropriations, which are voted on each year following the federal budget: 0 Bud el lannin is forecast out for four or live fiscal veers dc ending on the budget). is . 0 However, any individual budget includes the possibility that funding will be increased or decreased and the plans adjusted. In theory, the BBC has a more stable planning horizon for its public funding: 0 The Parliament does not directly vote money each year to the BBC The licence fee revenue collected is paid into the Treasury's Consolidated Fund and the Government then pays an annual block grant to the Department for Culture, Media and Sport which then pays the BBC to Fund its public scwiccs. Should licence fee collection rates fall short, the BBC bears the risk. 0 In theory, BBC licence fee settlements ostensibly guarantees a known annual core income at the set levels fee for 10 years. However, in practice the British Government is to pay the ?whole of the net Licence Revenue? or ?such lesser sums as the Secretary of State may. with the censent ofthc ?l?reasury, determine" as per the Franzen/wk Agreement. a This means for instance that the Government can freeze the licence fee actually paid out to the BBC, as it did in 2010 for the next six years. While the public funding may be more stable over a longer time horizon than that of anadn, there is still room for the amount to be reduced. Cbmmercial reventh Another differenco with respect to funding is that CBCI'RadioaCanada currently raises substantially more of its operating revenues from commercial activities than the BBC: 0 CBC/Rndio~Canada garnered about 38 percent from commercial activities some $600 million ofa $1.6 billion total budget), about 15 percent more than the BBC (whose commercial revenues represented 2.2 billion out of its 9.6 billiou total income). 3) GOVERNANCE Independence - As noted earlier, both the 2006 BBC. Royal Charter and the 199] Broadcasting Ac: pmvide for the independence of the BBC and (IBCfRadioaCTana-da. Howcvm', there are other measures which also affect their independence. - in the case of status as a nomdirected Crown corporation also stems from being excluded from the majority of Port X3 ofthe Financial Administration Act which governs Crown corporations. 0 Due to this independence, our Government cannot order CBCiRadio-Canada to direct funding to particular purposes. 3 CBCIRadio-Canada remains subject to sectiOns 39.8 to 39.92. subsection 105(2). sections I I3 l. 119, 131 to I48 and 154.0l of the Financial Administration Act. 000003 In the- casc of the BBC: .0 The 20063 Framework Agreement clients the paying minister (DCMS) with the consent of the Treasury or Parliament to attach terms and conditions to the spending of the BBC license fee revenues. For example, the British Government cannarketl licence Fee sums coileeted for the BBC and assigned them to other public policy priorities, such as developing hi gh speed broadband across the 51' starting in 2010, and required the BBC to administer the funds and to carryout those projects. mode! and appointments 0 in both cases, senior management, which is responsible for operations. reports to ?1 governing body. CB it?Radio?C?anada uses a onewtier corporate govemance model with a l2-pcrson Board or" Directors. Directors are appointed by the (33C for a term of?ve years, renewable. The management team of the Corporation reports to the President and CEO. who is also part of the Board of Directors. The BBC currently employs a two-tier approach to corporate governance consisting of the l2?person BBC Trust, which is the governing body, plus a 13?mcmber Executive Board, which is t'eSponsible for operations. The terms are likewise for ?ve years, renewable. Regarding how appointments are made to their govemancc bodies, CBCr?Radio-Canada?s mode] is somewhat unlike that of the BBC: 0 Appointments to CBCi?Rndio-Canada?s Board of Directors are Founall made by the and directors may be removed at anytime by the ('jiC only for cause. The appointments are currently the prerogative of the Prime Minister, although a new public appointments process is currently being created. 0 in the case of the BBC, appointments of the BBCs Trustees are similarly made by the Queen in Council, and all appointees must be chosen through it publicly advertised process and in an arm?s length manner orchestrated by the UK Of?ce of the Commissiomr of Public Appointments. The appointment of the President and CEO is 6in appointment, currently selected by the Prime Minister (pending creation of a new public appointments process), and as with the rest of the Board may only be removed for cause. The CEO (Director?General of the Executive Board) is not chosen by the British Prime Minister. Rather, the CEO is chosen by the body, the BBC Trust. The CEO can only be terminated after both the gmeming body and its executive management body have separately approved such a motion. Role of regulators The BBC Trust and the independent communications and broadcasting public authority, Ofcom4. have ?overlappingjurisdiction? in several areas of BBC content regulation, with the exception of impartiality and accuracy, for which the BBC Trust has sole responsibility. The Trust also regulates BBC service For the launch ofncw services, both the Trust and Ofcom have complementary roles to play. "t'il?com" short form for ?Oilice for Communications." 000004 .5. In Canada, the Broadcasting Act provides that only the RT can regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy contained in the Act. Like Ofcom, the CRTC is an independent public authority regulating communications and breadcastiug. As such. the CRTC has the duty to issue licences for television and radio services and also regulates their content. The CRTC cannot revoke a licenSe to the core services of but can deny a license for one of the Corporation?s specialty services. Current BBC renewal process The BBC is currently undergoing a renewal process for its constitutional documents. This provides an opportunity for the UK Government, Parliament, the BBC and the UK public to influence future BBC ?nances and public service operations. Tendencies emerging at present from the ongoing BBC Charter Review include: The UK Government being inclined to narrow the 8305 public purposes and to te?focus the remaining public purposes, reducing the scope; to The UK Government being inclined to require the BBC to make fewer popular entertainment programs, to show its entertainments at off-peak hours, to privilege audiences affected by market failure, and to require the BBC to deliver more pro?tability to commercial TV operators across the supply chains: 0 The UK Government possibly assigning all BBC regulatory duties to Ofcom and setting up anew BBC Board ot?Governors; and The UK Government not appearing to be inclined to allow BBC license fees to rise with the consumer price index over the next Charter period to 2026; however, there is a possibility that the license fee settlement process could become more regularized and more public. 0 A new Royal Charter must be in effect by December 31, 2016. Prepared by: Catherine Beck, Broadcasting and Digital Communications Branch, 319- 953-4689 2016i04/27 5 For example, how to require the BBC to deliver positive economic impacts to its rivals which could be negatively affected by larger trends such as increased competition from Google, Apple. and Net?ix among others over the next decade. 0091105