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Public Notice
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Ottawa, 2 August 1985
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Public Notice CRTC 1985-174
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Cable Carriage of Specialty Services
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In Decisions CRTC 84-338 and 84-339 of 2 April 1984, the Commission authorized CHUM Limited (CHUM/CITY-TV) and Action Canada Sports Network respectively to provide the MuchMusic Network and The Sports Network specialty programming services.
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Subsequently, in Decisions CRTC 84-444 and 84-445 of 24 May 1984, the Commission licensed the Tele-latino Network Inc. (Tele-latino) and Chinavision Canada Corporation (Chinavision) specialty services, offering programming in the Italian and Spanish, and Chinese languages respectively. Tele-latino and Chinavision commenced service in late November 1984 but have experienced considerable difficulty in arriving at affiliation agreements with cable systems, including systems in those areas with large populations for which the services were designed.
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In addition, The Life Channel Inc. was licensed as an English-language network to provide a Canadian health and lifestyle specialty programming service (Decision CRTC 85-141 of 14 March 1985). The Life Channel Inc. has not yet commenced service but expects to be available for distribution by cable exhibitors at the beginning of September 1985. However, The Life Channel Inc. is also experiencing difficulty in arriving at signed affiliation agreements with cable systems. This, together with the problems experienced by Tele-latino and Chinavision, is viewed with concern by the Commission.
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Furthermore, the Commission is in receipt of requests from cable licensees to expand the list of U.S. programming services eligible for carriage on all systems, to include, for example, U.S. superstations, and to increase the overall number of non-Canadian specialty programming services authorized for distribution to more than five on any given tier.
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The Commission has already indicated its intention to review, with all the parties involved, the measures taken to ensure that Canadian pay television and specialty services effectively contribute to the objectives noted in Public Notice CRTC 1983-93. It was originally intended that this review occur two years after the commencement of Canadian specialty services, and it is still the Commission's intention to conduct this review. In the context of the current requests of licensees noted above, the Commission will not consider changes to the regulatory framework for Canadian specialty services unless it is satisfied that such changes would further the Commission's objectives in respect of these services.
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Existing Cable Carriage Policy
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In Public Notice CRTC 1983-245 of 26 October 1983, entitled "Cable Television Service Tiering and Universal Pay Television Service", the Commission established the regulatory framework for the introduction of Canadian and U.S. specialty services on a discretionary user pay basis. In the Notice, the Commission noted that Canadian specialty services would enable cable television to enhance the presence of Canadian programming on the Canadian broadcasting system, to increase the number and range of television services available to Canadians, and to contribute to the financing of Canadian programming. While allowing for an expansion in services available to cable undertakings, the Commission stated that this expansion should not threaten the viability of local broadcasting services so that all Canadians could continue to receive the widest possible range of Canadian programs.
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In Public Notice CRTC 1984-81, issued 2 April 1984, entitled "Specialty Programming Services", the Commission stated:
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In this context, the Commission has decided that, as a matter of policy, the overall number of television channels allocated to the distribution of Canadian services on any cable undertaking, excluding the community channel and the Canadian alpha-numeric services channel, must be greater than the number of channels allocated to the distribution of non-Canadian services. In cases of limited channel capacity, priority must be given to the distribution of Canadian discretionary services.
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In this regard, it also established linkage requirements for the tiering of pay TV and specialty programming services as follows:
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1) a Canadian pay television service may be packaged with up to five channels containing a variety of non-Canadian specialty services
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2) each Canadian specialty service may be packaged with up to two channels containing a variety of non-Canadian specialty services;
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3) cable licensees will have the option to use any of the above-noted channels for the carriage of duplicate network and independent television signals already authorized for over-the-air reception;
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4) cable licensees will not be permitted to offer a tier containing only non-Canadian services;
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5) in no case can a single discretionary tier contain more than five channels of non-Canadian services, regardless of the number or nature of Canadian services included in that tier.
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The Commission also stated that, with respect to its selection of non-Canadian services eligible for distribution by cable systems, it would not:
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... allow the carriage, at this time, of non-Canadian specialty programming services which, in the Commission's opinion, could be considered either totally or partially competitive with Canadian discretionary services ...
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Moreover, should the Commission license, in the future, a Canadian service in a format competitive to an authorized non-Canadian service, the latter will be replaced by the Canadian service. If a non-Canadian service becomes competitive, by virtue of a change in its own format or by a change in format of a Canadian specialty service, the authority for its cable carriage will be terminated.
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The Commission also stated the following with respect to the role of cable companies in providing pay and specialty television services:
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The Commission, however, does acknowledge the on-going concerns of the pay television licensees with respect to pricing, packaging and marketings, and expects the cable television licensees to take all necessary measures to ensure that pay television services are marketed vigorously and effectively and that all Canadian discretionary services are given the maximum opportunity to succeed. The Commission will follow the situation closely to ensure that these concerns are adequately met.
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Further, in Decision CRTC 85-141 which licensed The Life Channel Inc., the Commission's concerns with regard to carriage arrangements were again expressed:
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The Commission ... will wish to be satisfied that pay television services are given the maximum opportunity to succeed and that the development of all Canadian discretionary services not be hindered by unrealistic or discriminatory retail rate structures.
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Comments on the Existing Policy
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The Commission is herein requesting comments from specialty, pay and cable television licensees, other members of the broadcasting industry, and also the public, on the subject of the cable carriage of pay television and specialty services, in the following context:
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1. Existing limitations on the channel capacity available for the distribution of pay television and specialty services (Canadian and non-Canadian) and expectations of the extent to which this capacity may be altered in the near future.
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2. Commitments that cable licensees would undertake concerning the carriage of existing Canadian specialty services (i.e. Tele-latino, Chinavision, The Life Channel, The Sports Network and The MuchMusic Network) if the list of U.S. programming services eligible for cable carriage were to be expanded, and/or the linkage arrangements adjusted.
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3. Commitments that cable licensees would undertake concerning the carriage of potential new Canadian specialty or pay services, such as a children's, youth or family oriented service or services, or a multi-faith religious service if the list of U.S. programming services eligible for cable carriage were to be expanded.
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4. In terms of potential future services, including children's, youth or family-oriented service, the carriage allocation commitments that cable exhibitors are prepared to undertake.
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5. Evidence to demonstrate how any amendment to the list of authorized non-Canadian programming services can benefit the development of Canadian pay television and specialty services, thereby strengthening the overall Canadian broadcasting system.
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In calling for comments on these issues, the Commission wishes to establish clearly that it is not favourably disposed to consider any change in its existing policy unless it is convinced of the associated benefits for the Canadian broadcasting system as a whole.
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Written comments on the issues identified in this Notice should be submitted not later than 13 September 1985. All comments should be addressed to the Secretary General, CRTC, Ottawa, Ontario, K1A 0N2.
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Fernand Bélisle Secretary General
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