|
Decision
|
|
Ottawa, 10 January 1985
|
|
Decision CRTC 85-14
|
|
Canadian Satellite Communications Inc.
|
|
Toronto, Ontario - 842162000
|
|
For related documents: see Decision CRTC 81-252 dated 14 April 1981, Decision CRTC 83-126 dated 8 March 1983 and Public Notice CRTC 1983-86 dated 27 April 1983.
|
|
Pursuant to Public Notice CRTC 1984-250, the Commission approves the application by Canadian Satellite Communications Inc. (CANCOM) to amend its network broadcasting licence by increasing the maximum total monthly fee for its eight television signal-package (4 Canadian and 4 U.S.) from $6.80 to $7.00. This proposal is predicated on the implementation of an unbundled fee structure which will allow parity between the monthly fees applicable to individual Canadian and U.S. signals.
|
|
CANCOM is currently authorized to charge a maximum monthly fee of $4.00 for the four Canadian television signals provided as a package and a maximum of $2.81 for the four U.S. signals distributed on an unbundled basis.
|
|
In its current proposal CANCOM proposes to introduce an unbundled fee structure "which would not differentiate between the monthly fees applicable to individual Canadian and U.S. signals, and would provide affiliates with the flexibility to choose among the signals CANCOM provides in keeping with the CRTC's balance guidelines, without the imposition of the package price now charged for the Canadian signals."
|
|
The Commission is satisfied that the proposed increase of 20¢ in the overall maximum total monthly fee for CANCOM's eight television signal-package is justified on economic grounds. It further notes that, in accordance with CANCOM's initial commitment, it will continue to distribute its authorized Canadian radio signals to its affiliates free of charge.
|
|
The Commission considers that the unbundling of the fees for the distribution of Canadian signals is in keeping with the concern expressed by the Commission in earlier decisions and notices. In the original CANCOM decision (CRTC 81-252), the Commission stressed the need for CANCOM to ensure that in communities "where the complete package of (Canadian) signals is not taken, the full monthly fee not be imposed" and required CANCOM to submit, within two years, a report on the feasibility of unbundling its services. Furthermore, in Decision CRTC 83-126 and Public Notice CRTC 1983-86, the Commission requested CANCOM to continue to submit progress reports to the Commission with a view to reviewing its rate structure to ensure greater price equalization between CANCOM's Canadian and U.S. services.
|
|
In this regard, the Commission again emphasizes that CANCOM's primary responsibility remains the extension of Canadian broadcasting services to the more remote and underserved communities.
|
|
A large number of interventions were received with respect to the current application, most of which were from CANCOM cable television affiliates and their subscribers. Submissions were also received from the Association des Câblodistributeurs du Québec Inc., the British Columbia Telephone Company (B.C. Tel), the Canadian Cable Television Association, the Cable Television Association of Alberta, the New Brunswick Cable Television Association, the Nova Scotia Department of Transportation, the Ontario Cable Television Association, the Ontario Ministry of Transportation and Communications and the Peace River-Liard Regional District.
|
|
While interveners were generally in favour of the principle of unbundling and did not object to the proposed 20¢ increase in the maximum total monthly fee, in varying degrees, they opposed the pricing methodology proposed by CANCOM with respect to the restructuring of its fees. Some interveners, particularly cable licensees serving "extra cable" markets, objected to the size of the effective rate increase as it relates to their individual systems. Several expressed concern about the continuing high cost of extending CANCOM services to "core market" communities which, they stressed, it is CANCOM's primary responsibility to serve.
|
|
The Commission has carefully considered the views contained in the interventions and CANCOM's reply thereto dated 17 December 1984.
|
|
The basic elements of CANCOM's matrix pricing structure, as initially proposed by the applicant, were outlined in Public Notice CRTC 1984-250. Subsequently, in response to the concerns raised by interveners CANCOM undertook further consultations with its affiliates and other parties concerned in order to review its proposed pricing structure taking into account affiliates' concerns.
|
|
CANCOM also stated that as a result of these extensive discussions, it "is developing a three-pronged approach which it believes will make the rate proposal far more acceptable to its affiliates and their subscribers."
|
|
The Commission has taken note of CANCOM's responses to the concerns expressed by interveners. At the same time, it does not wish to intervene at the level of the rate pricing structure which is being negotiated between CANCOM and its affiliates. The Commission will continue, however, to regulate the maximum total monthly fee for the overall CANCOM service and expects CANCOM to arrive at a fair pricing structure that takes into account the market's capacity to pay. In doing so the Commission reiterates that it expects CANCOM to establish a pricing approach that will not discriminate against the "core market" communities, in accordance with its primary responsibility to foster the extension of its services to the residents of the more remote and underserved communities.
|
|
Fernand Bélisle Secretary General
|
|
|