ARCHIVED -  Decision CRTC 95-898

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Decision

Ottawa, 15 December 1995
Decision CRTC 95-898
Kugluktuk Co-operative Limited
Coppermine, Northwest Territories - 950743500
Great Bear Co-operative Association Limited
Deline, Northwest Territories - 950744300
Grise Fiord Inuit Co-operative Limited
Grise Fiord, Northwest Territories - 950745000
Naujat Co-operative Limited
Repulse Bay, Northwest Territories - 950746800
Mitiq Co-operative Association Limited
Sanikiluaq, Northwest Territories - 950747600
Tulugak Co-operative Society Limited
Broughton Island, Northwest Territories - 950749200
Toonoonik-Sahoonik Co-operative Limited
Pond Inlet, Northwest Territories - 950748400
Applications for licences to carry on new cable distribution undertakings and for authority to acquire the assets of the cable distribution undertaking serving Pond Inlet
Following a Public Hearing held in Yellowknife on 18 September 1995, the Commission approves the applications for licences to carry on cable distribution undertakings to serve Coppermine, Deline, Grise Fiord, Repulse Bay and Sanikiluaq.2
These applications were submitted by Arctic Co-operatives Ltd. (ACL), on behalf of Newco Co-operative Limited (Newco), a company to be incorporated, which itself will represent the five individual local co-operatives operating in the communities in question. The applications filed by ACL contemplated that these five local co-operatives would become the actual licensees of the proposed undertakings.
The Commission also approves the application submitted by ACL on behalf of the Tulugak Co-operative Society Limited for a licence to carry on a cable distribution undertaking to serve Broughton Island.
Further, the Commission approves the application submitted by ACL on behalf of Toonoonik-Sahoonik Co-operative Limited for authority to acquire the assets of the cable distribution undertaking serving Pond Inlet from Simon Merkosak, and for a broadcasting licence to continue the operation of this undertaking.
The Commission will issue individual licences, expiring 31 August 1998, to Kugluktuk Co-operative Limited, Great Bear Co-operative Association Limited, Grise Fiord Inuit Co-operative Limited, Naujat Co-operative Limited, Mitiq Co-operative Association Limited, and Tulugak Co-operative Society Limited, for the Coppermine, Deline, Grise Fiord, Repulse Bay, Sanikiluaq and Broughton Island undertakings, respectively. The licences will be subject to the conditions specified in this decision and in the licences to be issued.
These licence terms are consistent with the Commission's practice regarding the licensing of new Part III cable distribution undertakings. The operation of these undertakings will be regulated pursuant to Parts I and III of the Cable Television Regulations, 1986 (the regulations).
Although the Commission does not regulate the rates of Part III cable distribution undertakings, it notes that the applicants have proposed a monthly subscriber fee of $50 for the Coppermine, Deline, Grise Fiord and Broughton Island undertakings, and of $55 for the Repulse Bay and Sanikiluaq undertakings.
It is a condition of each licence that construction of the undertaking in question be completed and that it be in operation within twelve months of the date of this decision or, where the applicant applies to the Commission within this period and satisfies the Commission that it cannot complete implementation before the expiry of this period and that an extension is in the public interest, within such further period of time as is approved in writing by the Commission.
In the case of the Pond Inlet undertaking, the Commission will issue a licence, upon surrender of the current licence, to Toonoonik-Sahoonik Co-operative Limited, expiring 31 August 1999, the current expiry date. The operation of this undertaking will be regulated pursuant to Parts I and III of the regulations. The authority granted herein is subject to the same conditions as those in effect under the current licence, as well as to any other condition specified in this decision and in the licence to be issued.
The purchase price for the cable distribution assets in Pond Inlet is $150,000. Based on the evidence filed with the application, the Commission has no concerns with respect to the availability or the adequacy of the required financing and is satisfied with the benefits flowing from this transaction. Moreover, the Commission is of the view that approval of this application is in the public interest.
The Commission reminds the purchaser of its longstanding policy that subscribers should not be required to pay higher fees merely because the ownership or control of a cable system has changed hands.
Background
ACL is a co-operative federation owned and controlled by approximately 40 co-operatives in the Northwest Territories and the Yukon Territory. Its goal is to provide goods and services to its member co-operatives.
The company to be incorporated, Newco, will be owned by those member co-operatives operating or intending to operate cable television and "other similar telecommunications" undertakings.
The current applications
 a) The agreement
Subsequent to the filing of the current applications, ACL filed a copy of an agreement between itself, Northwestel Inc. and Northwestel Cable Inc. (Northwestel Cable) setting forth the commitments of each party with respect to the provision of cable services to the Yukon Territory and the Northwest Territories. Northwestel Cable's commitments pursuant to the agreement are examined in Decision CRTC 95-897 of today's date, which approves applications to provide cable service to several northern communities.
Under the terms of the agreement, ACL has committed to provide cable service to 23 communities in the Northwest Territories that are not currently served by a cable distribution undertaking and that currently have a co-operative operating in them. These communities are listed in Appendix B to the agreement.
While applications were submitted by Northwestel Cable to serve Tuktoyaktuk and Aklavik, ACL indicated at the hearing that it intends to provide service to these communities in 1996. The Commission understands that in the agreement between Northwestel Cable, Northwestel Inc. and ACL, Northwestel Cable agreed not to proceed with implementation of any authority granted with respect to these communities before 1 February 1996. Upon receipt of a written request by ACL before that date, Northwestel Cable will surrender its licences for these two locations and support ACL's applications for licences to serve these communities, provided that ACL agrees to build the undertakings in 1996. The Commission reminds ACL that it will have to apply for, and receive licences from, the Commission before assuming control of these undertakings.
 b) Ownership
Under the current applications, while the local co-operative in each community will hold the licence and operate the undertaking, Newco will build and own all of the new systems to be constructed. Consequently, ACL has requested, in these instances, that each local co-operative be relieved from the requirement, in Section 4 of the regulations, that a licensee own and operate its own local head end, amplifiers and subscriber service drops. The Commission notes that ACL has not made this request on behalf of the Broughton Island and the Pond Inlet undertakings which will be owned and operated by the local co-operative.
The Commission approves these requests. Therefore, with the exception of the licences issued for the Broughton Island and the Pond Inlet undertakings, it is a condition of each of the other licences that the licensee be relieved of the requirement to own and operate its own local head end, amplifiers and subscriber service drops.
In approving these requests, the Commission has taken into account the fact that the member co-operatives will be shareholders of Newco.
 c) Access
In an intervention to these applications, Television Northern Canada (TVNC) requested that the Commission impose a condition of licence obliging the applicant to provide TVNC with access to its cable facilities for the distribution of future services. In this regard, TVNC outlined its plans to develop and deliver information highway services in the North through a joint aboriginal and northern telecommunications entity.
In reply to this intervention, ACL indicated that it considered that the imposition of such a condition would limit the options of its membership with respect to future participation by co-operatives in the information highway.
The Commission emphasizes the importance it attaches to access issues relating to both programming and non-programming services, and notes that they are being addressed in proceedings initiated pursuant to the Broadcasting Act and the Telecommunications Act.
 d) Continued reception of TVNC and CBC Northern Service (CBC North)
In a number of the communities that will be served by ACL, there are licensed radiocommunication distribution undertakings currently distributing TVNC and CBC North. At the hearing, ACL indicated that discussions are under way with TVNC and CBC North to close down their broadcast transmitters in those communities, and incorporate their satellite reception facilities with the local cable head ends. ACL added that residents would still receive TVNC and CBC North, since the licensee would wire all homes and distribute these services on cable channels below channel 6. For those residents who choose not to subscribe to cable, the licensee would trap out all other programming.
ACL further indicated that, if there were instances of communities with residents in outlying areas who now receive TVNC and CBC North off-air, but would otherwise no longer be able to do so, "the transmitters would have to be kept on air".
Should ACL arrive at an agreement with TVNC and CBC North with respect to the closing of their local transmitters, the Commission expects ACL to continue to distribute the services of TVNC and CBC North as part of the basic service of each undertaking. The Commission further notes the commitment made by ACL at the hearing that TVNC and CBC North will continue to be available to all residents, including those who choose not to become cable subscribers and those residing in outlying areas where cable service will not be available.
 e) Establishment of a Broadcast Production Fund
The Native Communications Society (NCS), Inuit Broadcasting Corporation (IBC) and TVNC each submitted interventions requesting that ACL be required to contribute between 5% and 10% of its gross revenues to the establishment of an Aboriginal Production Fund, which would be administered by TVNC and used to support the development and distribution of northern aboriginal programming.
At the hearing, ACL responded to this request by indicating that it would prefer to contribute to the existing Cable Production Fund, along with other Canadian cable companies. As another alternative to the establishment of an Aboriginal Production Fund, ACL suggested that it would be willing to pay a tariff to TVNC for the right to carry its signal; TVNC could then use this tariff to maintain such a fund.
The Commission is of the view that the establishment of a fund to promote the development of aboriginal programming is a worthwhile initiative and, accordingly, the Commission encourages ACL to contribute to such a fund an amount of $0.55 per subscriber per month. It requests that ACL confirm, within three months of the date of this decision, the basis of how these contributions will be remitted. The Commission notes that these contributions would not constitute a tariff paid to TVNC, but would be a contribution to a fund administered by TVNC.
The Commission will request TVNC to file within three months of the date of this decision, a report providing details concerning the structure and administration of the fund including such matters as program eligibility, access and funding.
Interventions
The Commission also acknowledges the comments contained in the intervention submitted by the Government of the Northwest Territories in con-nection with these applications, and notes that it is satisfied with the applicant's reply thereto.
Allan J. Darling
Secretary General

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