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Decision
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Ottawa, 14 September 1989
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Decision CRTC 89-693
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Clear Crest Cable TV Limited
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Belle Vallée, Charlton, Cobalt, Elk Lake, Latchford, New Liskeard, Temagami North, Temagami South and Englehart, Ontario - 883589400 - 883590200 - 883591000 - 883592800 - 883593600 - 883594400 - 883595100 - 883596900 - 890915200
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Pursuant to Public Notice CRTC 1989-84 dated 21 July 1989, the Commission approves the applications for authority to transfer effective control of Clear Crest Cable TV Limited (Clear Crest), as well as its wholly-owned subsidiary Nor Co-Ax Ltd., licensee of the broadcasting receiving undertakings serving the communities noted above, through the transfer of all common voting shares of Clear Crest (100%) from Eric C. Campsall (50%), William L. Brown (47.5%), Joan E. Brown, (2.39%) and John A. Brown (0.08%) to Northern Cable Services Limited (Northern).
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Pursuant to Decision CRTC 89-640 dated 30 August 1989, Northern is effectively controlled by its Board of Directors which is represented proportionately by Sudbury Broadcasting Company Limited (38.7%), by Radio & TV Distribution Ltd. (33.7%) and by various minority shareholders holding the remaining 27.6%. Northern holds directly and indirectly extensive interests in radio, television and cable undertakings in northern Ontario.
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The purchase price for the shares is $2,810,000. Based on the evidence filed with the applications, the Commission has no concerns with respect to the availability or adequacy of the required financing.
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As stated in a number of decisions relating to applications for authority to transfer ownership or effective control of broadcasting undertakings, and because the Commission does not solicit applications for such transfers, the onus is on the applicant to demonstrate to the Commission that the application filed is the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature.
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In assessing the intangible benefits relating to these applications, the Commission has taken into account the extensive experience as well as the technical resources and expertise upon which the purchaser may draw in its efforts to maintain and improve services to subscribers. Specifically, the Commission notes that the purchaser has committed to provide training to upgrade the technical skills of staff servicing the Clear Crest cable systems. Northern has also indicated that it will provide subscribers with toll-free access to its dispatch center for after-hours service calls.
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With respect to community programming, the purchaser has undertaken to upgrade the present bulletin/ message service on the community channel and to promote locally-originated programming by providing access to a mobile production unit and by assisting in the editing, taping and broadcasting of local programs. The Commission also notes that Northern has indicated that it will retain the present local manager and will appoint him as Regional Manager to ensure continuity and community representation.
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Northern has also committed $100,000 for a system rebuild, to increase the channel capacity to 36 and to add the following Canadian specialty programming services as part of the system's basic service: Vision TV, Newsworld, Weather Now, The Sports Network and MuchMusic. It will also add the programming service of the Quatre-Saisons television network and the CBC Parliamentary Television Network. In view of the fact that the capital expenditures for the system rebuild will be subject to a submission for a fee increase under subsection 18(6) of the Cable Television Regulations, 1986 (the regulations) and that the operating cost of the specialty services will be recoverable on a "pass-through basis", the Commission is not prepared to accept the above-noted improvements as tangible benefits. It nevertheless acknowledges that these changes will enhance the service currently provided to subscribers.
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With regard to those benefits which are quantifiable in terms of their dollar value, the Commission has accepted capital and operating expenditures totalling $300,000 which the purchaser has committed in order to provide local programming services to New Liskeard, Haileybury and Cobalt over the next five years. The purchaser has allocated $25,000 to construct and equip a community programming studio and office at the main customer service center. It has also allocated $10,000 for a return feed from the studio to the head end which would allow live programming to be distributed and $45,000 for production equipment. In addition, Northern has committed $140,000 over five years in operating costs for a full-time community programmer as well as $80,000 over five years for additional local programming operating expenses.
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In approving these applications, the Commission has also considered Northern's statement that the cost of this transaction will not be passed on to subscribers in Belle Vallée, Charlton, Elk Lake, Temagami North and Temagami South. Further, with regard to subscribers in New Liskeard, Cobalt and Englehart, Northern has assured the Commission that any capital expenditures incurred with respect to the proposed benefit package would not be recovered through future rate increases pursuant to subsection 18(6) of the regulations. The Commission reiterates its long-standing policy that subscribers should not be required to pay higher fees merely because the ownership or control of a cable television system has changed hands and, as such, the Commission views Northern's assurances in this regard as being particularly important.
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Based on the quantifiable and non-quantifiable benefits it has accepted as accruing from this transaction, the Commission is satisfied that the benefits are commensurate with the size of the transaction and the viability of the undertakings. Accordingly, the Commission is satisfied that the proposed transfer will yield benefits for the residents of the areas noted above, and that approval of these applications is in the public interest.
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Fernand Bélisle
Secretary General
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