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Ottawa, 4 April 1985
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Notice of Public Hearing CRTC 1985-27
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NATIONAL CAPITAL REGION
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30 April 1985, 09:30 A.M
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The Canadian Radio-television and Telecommunications Commission announces that it will hold a public hearing beginning 30 April 1985 at the Conference Centre, Place du Portage, Phase IV, Hull, Quebec, to consider comments received in response to Public Notice CRTC 1984-305 dated 12 December 1984 (the December notice) on proposed New Regulations Respecting Cable and Subscription Television Broadcasting Receiving Undertakings (the proposed Regulations).
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TABLE OF CONTENTS Pages
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1. COMMENTS RECEIVED IN RESPONSE TO 3 THE DECEMBER NOTICE
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A. ISSUES OF MAJOR CONCERN 4
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(i) Fees for Service (Section 18) 4 (ii) Installation of Service 4 (Section 17) (iii) Television Service Priorities 5 (Sections 6, 7 and 8) (iv) Service Tiers (Sections 9 5 and 10) (v) Audio Services (Section 16) 6
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TABLE OF CONTENTS Pages
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(vi) Substitution of Identical 6 Signals (Section 20) (vii) Classes of Licence 7 (Section 3) (viii) Subscription Television (STV) 7
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B. CLARIFICATION OF OTHER ISSUES 7 RAISED IN THE COMMENTS
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(i) Canadian Programming Service 8 (Section 2) (ii) Community Channel (Sections 2 9 and 12) (iii) Local Headend (Section 2) 9 (iv) Restricted Channel 10 (Section 2) (v) Scrambled Radiocommunication 10 (Section 2) (vi) Signal (Section 2) 10 (vii) Educational Programming Car 11 riage Priority (Section 6) (viii) Previews (Section 10) 12 (ix) Converter Equipment (Sections 12 and 18) (x) Alteration or Curtailment of 12 Signal (Section 19)
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2. EFFECT ON THE REGULATIONS OF THE 13 REPORT OF THE TASK FORCE ON ACCESS TO TELEVISION IN UNDERSERVED COMMUNITIES
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3. FALL POLICY HEARING 14
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4. CONCLUSION 15
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APPENDIX I APPENDIX II
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For background reference material: see Appendix I to this notice.
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In response to its December notice, the Commission received 230 written briefs covering a wide variety of views from representatives of the broadcasting, cable and pay television industries as well as consumer groups, cable subscribers, federal and provincial governments and others. In view of the considerable interest shown in the proposed new Regulations and the major policy issues identified and commented upon in the briefs received, the Commission has decided to hold a public hearing in the National Capital Region beginning 30 April 1985. The hearing will provide an opportunity to those who have already submitted written briefs, as well as other interested parties, to discuss issues of major concern, particularly those identified below.
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1. COMMENTS RECEIVED IN RESPONSE TO THE DECEMBER NOTICE
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A broad overview of the comments submitted indicates that cable subscribers and consumer associations are generally concerned about what they perceive as a deregulatory approach by the Commission. The cable industry, on the other hand, generally views the proposed Regulations as too restrictive in many areas, and questions whether the burden of regulation with respect to the operation of cable and STV would be lightened under the proposed scheme. The comments of these groups on specific areas of the Regulations, and the comments of other individuals and groups, are highlighted below.
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A. ISSUES OF MAJOR CONCERN
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(i) Fees for Service (Section 18)
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An area of recurring concern in many of the comments received was the change in the existing system of regulation of monthly subscriber fees for service proposed in section 18. Consumer associations, cable television subscribers and others were opposed to the provision for annual adjustments to monthly rates of up to 80% of the increase in the Consumer Price Index (CPI) without the need for regulatory approval. They submitted that an indexing scheme would not be in the public interest given the monopoly position of cable television licensees. The cable industry generally supported an indexed rate adjustment formula in principle, but raised a number of issues about the mechanics of such a scheme. They questioned whether there would be any adjustment to rates before the introduction of indexing; whether the 30 June CPI figure was appropriate; whether annual increases could be banked; whether a national, provincial or regional CPI would be used; whether specific costs could be passed through automatically; and whether the proposed advance notice requirement by means of a form to be approved by the Commission was appropriate. Other comments stated that the simplified procedure for rate increases beyond indexing applicable to Class B and C cable or STV systems should be extended to Class A systems as well.
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(ii) Installation of Service (Section 17)
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Consumer groups expressed general concern about the deregulation of installation rates included in the proposed Regulations. The cable industry maintained that the wording of the section was unduly restrictive. They noted that the obligation to provide service should take into account cases where a subscriber or applicant has failed to return equipment belonging to the licensee, has an account that is in arrears, and other similar cases.
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(iii)Television Service Priorities (Sections 6, 7 and 8)
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Television service priorities were also identified as an issue in the comments. Cable operators considered the proposed Regulations in this area to be overly restrictive and maintained that the balance guidelines contained in section 8 should only apply to the primary service tier. Pay television licensees commented that subsection 7(2) should be revised to require Commission authorization for the carriage of non-Canadian specialty services. Approximately 110 comments were received from cable television subscribers in Edmonton. These subscribers were dissatisfied that, of all options available, the PBS signal was chosen to be moved to an impaired channel to accommodate the priority carriage of the signal of the provincial educational authority, the Alberta Educational Communications Corporation ("ACCESS NETWORK"), on an unimpaired channel.
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(iv) Service Tiers (Sections 9 and 10)
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Representatives of the cable industry commented that the proposed tiering and linkage requirements were unduly restrictive. They also questioned whether it was appropriate for the Commission to entrench regulations imposing linkage requirements before the time period for review of these requirements set out in Public Notices CRTC 1983-244 and 1984-81 is up. Pay television licensees sublimitted that a discretionary service tier comprised exclusively of foreign programming services should continue to be prohibited.
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(v) Audio Services (Section 16)
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The possible effect of the proposed mandatory carriage requirements set out in section 16 was commented upon by the cable industry, most notably by the Ontario Cable Telecommunications Association (OCTA). The OCTA provided the Commission with a detailed description of the possible effects of such requirements in southern Ontario in terms of the number of presently carried optional services which could no longer be carried, or would have to be carried on restricted channels, if the proposed Regulations were enacted. Some of those who commented question ed whether existing services would be "grandfathered". Radio broadcasters, including the CBC, the Canadian Association of Broadcasters (CAB), and a large number of listeners of CFRO Co-op Radio, Vancouver, were opposed to the loss of priority status that could result to closed circuit audio services, and non-stereo and other FM services in some locations under the proposed Regulations.
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(vi) Substitution of Identical Signals (Section 20)
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A number of the comments addressed the proposed regulation dealing with substitution of identical signals. The cable industry was generally of the view that the broadcaster, not the cable operator, should be required to verify that signals are identical. The CAB disagreed with "a regulation which would give cable licensees discretionary authority to make on-the-spot assessment of whether signals are identical." The CAB also recommended that the proposed Regulations be amended to permit simultaneous substitution of non-identical episodes of strip programming.
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(vii) Classes of Licence (Section 3)
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Comments were also received maintaining that it was excessive to provide for three classes of licence in the Regulations and that a system of only two classes would be more appropriate.
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(viii) Subscription Television (STV)
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Several submissions maintained that it is premature to enact regulations for the technology of STV and other non-cable services, and that inclusion of regulations for such services in the Cable and Subscription Television Regulations makes these Regulations unnecessarily complex.
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B. CLARIFICATION OF OTHER ISSUES RAISED IN THE COMMENTS
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A number of other issues were raised in the comments received by the Commission. In many cases, the comments were prompted by a perceived lack of clarity in the proposed Regulations as originally set out in the December notice. These issues are discussed below along with descriptions of the Commission's proposals in regard to each, and any modifications necessary to better reflect its intention in the proposed Regulations. The Commission hopes that this will clarify these issues in advance of the hearing.
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(i) Canadian Programming Service (Section 2)
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A number of comments received by the Commission addressed the definition of "Canadian programming service" in section 2. The question whether such services include Canadian alphanumeric services was raised and the Commission wishes to clarify that this was indeed its intent. Alphanumeric services are included within the definition of "programming" in the existing Cable Television Regulations and would similarly fall within the scope of the proposed definition of "programming". To the extent that any such Canadian alphanumeric programming service does not fall squarely within the proposed definition of "Canadian programming service" merely because its method of delivery to the licensee's local headend is not listed in paragraph (c) of the proposed definition, consequential modifications will be made. On a second issue, the Commission wishes to clarify that it was not its intention to include within the definition of "Canadian programming service" any service originating outside Canada and simply retransmitted in its entirety from a point within Canada, such as any of the Detroit television stations currently uplinked in Canada and transmitted via satellite by CANCOM. The definition will be tightened, accordingly, wherever necessary.
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(ii)Community Channel (Sections 2 and 12)
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A number of those who filed comments were concerned that the proposed Regulations would result in a more restrictive approach to the operation of the community channel, particularly the absence of authority to distribute on the community channel announcements promoting a licensee's services and programming produced by a network operator licensed to provide community programming to the licensee. The Commission did not intend to restrict the definition of "community programming" in section 2 to exclude such network programming, as presently exists in Hamilton and Mississauga. The definition of "community programming" will therefore be modified to include explicitly such network programming. Furthermore, subsection 12(1) of the proposed Regulations will be revised to allow announcements promoting a licensee's services to be distributed on the community channel of its undertaking as is permitted under the existing Cable Television Regulations.
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(iii) Local Headend (Section 2)
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The Commission received comments concerning the wording of its proposed definition of "local headend" in section 2. The Commission intended to define local headend in terms of technical equipment used, excluding TVROs. The Commission did not intend to exclude the possibility of adjacent cable systems sharing a local head end or to otherwise change the concept of headend as it is presently understood in the existing Cable Television Regulations. The wording of the definition will be revised accordingly.
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(iv) Restricted Channel (Section 2)
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The definition of "restricted channel" in section 2 and the prohibitions on the use of restricted channels were also questioned. The Commission is of the view that the flexibility available by way of authorization pursuant to a condition of licence, provided in section 11 of the proposed Regulations, is sufficient to deal with any concerns on the use of restricted channels on a case-by-case basis. In the Commission's opinion, it would be inadvisable and burdensome to adopt a definition of "restricted channel" that would rely on technical measurements.
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(v) Scrambled Radiocommunication (Section 2)
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With reference to a comment received questioning whether the definition of "scrambled radiocommunication" requires both video and audio signals to be unintelligible for a radio incommunication to be considered scrambled, the Commission considers that the proposed definition is adequate in providing for the alteration of either video or audio signals, or both video and audio signals, to render a radiocommunication scrambled.
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(vi) Signal (Section 2)
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It was pointed out in the comments received on the proposed Regulations that the definition of "signal" in section 2 could be construed as including subsidiary carrier information pertaining to television and radio broadcasting signals. It was not the Commission's intention that the carriage requirements applicable to the content of conventional broadcast or satellite- or microwave-distributed radiocommunications extend to subsidiary carriers, such as information contained in the vertical blanking interval of a television signal or SCMO in relation to FM signals. The definition of signal will be modified accordingly to make these exclusions explicit.
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(vii)Educational Programming Carriage Priority (Section 6)
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Educational authorities who commented on the proposed Regulations noted that under section 6, educational programming distributed directly to cable headends by satellite or microwave would not benefit from the priority given to educational programming received directly over-the-air. In addition, satellite- or microwave-delivered educational programming could be distributed by a cable licensee on a midband channel requiring a converter for reception by subscribers.
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It is the intention of the Commission that an educational programming service of a provincial educational authority distributed directly to cable headends by means of satellite or microwave be given the same priority status as an educational programming service distributed by a provincial educational authority through local or regional broadcasting transmitters. Therefore, section 6 will be revised accordingly. This would ensure carriage of such services on the basic band of cable undertakings.
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(viii) Previews (Section 10)
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A comment addressing the issue of unscrambled previews of pay television and specialty services pointed out that subsection 10(3) of the proposed Regulations would preclude these previews on the primary service tier. The Commission proposes to clarify subsection 10(3) so that it will not exclude the occasional showing of previews of discretionary tier services (pay television and specialty services) on a licensee's primary service tier in accordance with the Commission's present policies on such previews.
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(ix)Converter Equipment (Sections 17 and 18)
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A number of comments suggested that the wording of subsections 17(1) and 18(1) would seem to include converters as part of the equipment by means of which the primary service tier is provided in cases where the primary service tier includes services distributed on midband or superband cable channels. As this was not the Commission's intention, subsections 17(1) and 18(1) will be revised to clarify this.
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(x) Alteration or Curtailment of (Section 19)
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A comment received from the Commissioner of Canada Elections pointed out the dichotomy between subsection 19(1) of the proposed Regulations which prohibits a licensee from altering or curtailing a signal, except in certain specified cases, and subsection 105(1) of the Canada Elections Act which prohibits the publication of the result of polling for any electoral district in Canada in can electoral district where the polls are still open. Western Canadian cable licensees carrying signals from the United States, or Eastern Canada after the polls have closed there, would be unable to observe the requirements of both the Canada Elections Act and the proposed Regulations. Therefore, the Commission proposes to revise subsection 19(1) to permit a licensee to alter or curtail a signal for the purposes of complying with subsection 105(1) of the Canada Elections Act
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2. EFFECT ON THE REGULATIONS OF THE REPORT OF THE TASK FORCE ON ACCESS TO TELEVISION IN UNDERSERVED COMMUNITIES
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The Report of the above-noted Task Force which was submitted to the Commision on 25 February 1985 contained 34 recommendations which were subsequently endorsed by the Commission subject to certain provisions (Public Notice CRTC 1985-60 dated 22 March 1985). In accepting the recommendations related to Class B systems, the Commission determined that they will only apply to licensees currently using 12 channels or less to distribute authorized services to their subscribers.
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Recommendations 7, 9, 10, 12, 14, 15, 16, 17, 18 and 19, which are reproduced in Appendix II to this notice, will be incorporated, as necessary, into the proposed Regulations. The Commission intends to give effect to these recommendations by the creation of a Part II to the Regulations which will apply to core market and certain Class B licensees.
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3. FALL POLICY HEARING
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Several major policy issues relating to cable will not be dealt with at the 30 April 1985 public hearing which will focus on the proposed new regulations and comments received thereon.
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In Public Notice CRTC 1983-232 dated 3 October 1983, the Commission announced its intention to examine the role of cable in the provision of non-programming services at a public hearing to be held in late 1985. Although a number of licensees have been granted authority to distribute various non-programming services, several licensees have postponed or cancelled their implementation. Due to the lack of empirical data flowing from these experimental non-programming services, the Commission has determined that, rather than review the results of the few, and in some cases, incomplete experimental projects, it would be better at this time to have a general discussion of the problems and issues to determine the framework which will best allow for the development of these services. In this regard, the Commission has been advised by many operators that the costs associated with the provision of these services have been a significant impediment to the development of these experiments. The method most frequently suggested to help recover these costs is to permit cable advertising on channels distributing non-programming services.
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Advertising on cable has been an issue of some concern to the cable industry for many years. The Commission has received and heard a variety of proposals for the distribution of cable advertising over the years, ranging from sponsorship and contra advertising on the community channel to a dedicated channel for the provision of alphanumeric classified ads. The Commission has consistently denied all such proposals on the basis that a general policy review would first be necessary and appropriate. The Commission will undertake a review of both the non-programming and cable advertising issues at the public hearing to be held in the fall of 1985.
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A public notice will be issued early this summer, announcing the date of the hearing. The notice will outline more detail these and other cable-related policy issues to be discussed at the fall hearing.
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4. CONCLUSION
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The Commission expects the April 30th hearing to focus upon the issues of major concern raised in the comments received and generally identified under section 1A of this notice. Persons wishing to appear at the 30 April 1985 public hearing should notify in writing the Secretary General of the Commission (CRTC, Ottawa, Ontario KlA ON2) NOT LATER THAN FRIDAY, 19 APRIL 1985.
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When the Commission has completed its public hearing proceeding, it will issue a Public Notice setting out revised, proposed new Cable and Subscription Television Regulations for public comment.
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Fernand Bélisle Secretary General
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