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Lindsay CATV System Limited
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Lindsay, Ontario - 199712360
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Request for an exemption from the distribution and linkage requirements - Denied
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1. Following Public Notice CRTC 1998-10 dated 10 February 1998, the Commission denies the application by Lindsay CATV System Limited (Lindsay CATV) for a condition of licence relieving it of the distribution and linkage requirements imposed under section 20(1) of the Broadcasting Distribution Regulations (the regulations).
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2. Lindsay CATV requested authorization to link Canadian and foreign services across tiers. Approval of Lindsay CATV's application would have allowed the licensee to offer discretionary tiers containing only foreign services.
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3. In support of its request, Lindsay CATV argued that its application responds to subscribers' demands for greater choice in determining the services they receive. It also stated that its proposal would: allow it to use less costly and more flexible decoders to tier programming services, rather than the currently used technology of "negative traps"; give it more flexibility to negotiate better contract terms with programming service providers; and enable it to distribute as many authorized services as possible.
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4. A key objective of the distribution and linkage requirements is the promotion of Canadian pay and specialty services. Among other things, these requirements prescribe that non-Canadian programming services be distributed solely within discretionary service packages containing Canadian programming services. This helps to ensure the maximum access and exposure for the Canadian services.
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5. The Canadian Association of Broadcasters (CAB), Global Television Network and the Specialty and Premium Television Association (SPTA) submitted interventions opposing this application. All the interveners argued that the objectives behind the distribution and linkage requirements remain valid.
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6. The CAB stated that prohibiting cross-tier linkage ensures that Canadian specialty services receive direct support within a discretionary tier of non-Canadian services. Further, the CAB argued that non-Canadian services complement the Canadian broadcasting system by providing diversity in the program choices available to Canadians and that authorizing the offering of non-Canadian tiers or non-Canadian services, at a subscribers' choice, would not be in the interest of that system.
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7. The SPTV stated that the distribution and linkage requirements ensure that the popularity of U.S. services contributes to, rather than diminishes, distribution opportunities for Canadian pay and specialty services. In addition, the SPTV noted that the only contribution that foreign services make to the Canadian broadcasting system is their role as attractive packaging partners for Canadian services.
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8. The Commission has noted the applicant's responses to these interventions.
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9. The only case where the Commission has permitted a licensee to be exempted from the distribution and linkage requirements is that of TELUS Cable Holdings Inc. (TELUS). In Decision CRTC 97-193 dated 8 May 1997, the Commission licensed TELUS to carry on broadcasting distribution undertakings in subdivisions of Calgary and Edmonton to conduct limited duration technical and market trials. The Commission also approved TELUS's request to be relieved of the distribution and linkage requirements contained in section 10(2) of the then-in-force Cable Television Regulations, 1986.
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10. In relieving TELUS of the regulatory requirements regarding distribution and linkage of programming services, the Commission specifically noted the "limited scale and duration of the TELUS trial". The Commission stated that its "decision to relieve the applicant from these requirements should not be interpreted as a policy precedent having any broader application beyond these trials".
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11. In the present case, the Commission finds that Lindsay CATV did not present compelling arguments to warrant an exemption from the regulatory requirements regarding distribution and linkage of programming services. Accordingly, the Commission has denied Lindsay CATV's application.
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Laura M. Talbot-Allan
Secretary General
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This document is available in alternative format upon request.
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