ARCHIVED -  Public Notice CRTC 1991-23

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Public Notice

Ottawa, 18 February 1991
Public Notice CRTC 1991-23
Cable Service Tiering and Linkage
For the reasons discussed below, the Commission announces that it has decided to postpone the tiering and linkage hearing which had been scheduled to commence on 23 July 1991.
The Commission had previously indicated its intention to undertake a review of the structure and cost of cable service, including tiering and linkage policies, in Public Notice CRTC 1990-53-1, Cable Television Regulations, 1986 - Changes to the Regulation of Subscriber Fees and Related Matters, issued on 15 May 1990. In that notice, the Commission addressed concerns related to cable industry profitability and the affordability of basic cable service, both of which had been the subject of considerable discussion during a public hearing held in February 1990.
At the same time, the Commission also recognized that there are other issues affecting the affordability of basic cable service, and these are related to the structure of the basic service. Specifically, the Commission noted that the possible restructuring of basic cable service could be a means of allowing subscribers greater ability to choose which services they want to receive and then to pay only for those services. Further, the Commission acknowledged that the cable industry's movement towards the use of addressable technology and concomitant new service options would also have implications for the cost and structure of basic cable service.
In light of these broader issues, the Commission tentatively scheduled a public hearing for mid-l99l to review its tiering and linkage policies. The Commission noted that this timeframe would allow it to develop specific proposals with regard to the possible restructuring of basic service and would also give the cable industry more time to develop strategies with respect to the issue of addressable technology.
Over the past several months, Commission staff have undertaken extensive consultations with the cable industry, consumer groups, conventional broadcasters, provincial governments, and pay television and specialty network licensees. NGL Consulting Ltd. was commissioned to prepare a report identifying possible tiering options and their implications. The Commission also hired Angus Reid Group Inc. to conduct a national consumer survey in order to assess subscriber attitudes towards the services available on cable television and to obtain their reaction to various tiering and pricing options. The results of this survey are being released today. The Commission has carefully reviewed the information and suggestions received during the consultative process, as well as the results of the Angus Reid survey, and has concluded that it would be premature to hold a public hearing to review the structure of cable service at this time. The Commission considers that a meaningful increase in subscriber choice requires the availability of addressable technology. In this regard, there are a number of unanswered questions surrounding the evolution towards universal addressability, including the cable industry's preferred form or forms of addressable technology and its associated cost, and the timeframe for implementation of addressability on a universal or nearly-universal basis.
Furthermore, the consultations revealed that a consensus has not yet developed amongst the various parties as to what alternative structural approach, if any, would be more appropriate than the status quo in the current broadcasting environment. Before considering the possibility of changes to the way in which cable television service is packaged and delivered, the Commission considers it esential that all affected parties work together to achieve an approach which takes into account the needs of all components of the Canadian broadcasting system, in furtherance of the objectives of the Broadcasting Act. The Commission encourages all parties, including subscribers, the cable industry, pay and specialty network licensees, and broadcasters, to cooperate in reaching an agreement, in consultation with the CRTC, as to the appropriate manner in which cable service should be packaged and delivered. The Commission has therefore decided to postpone the public hearing until addressable technology is more fully developed, in the hope that these questions can be answered and that a later hearing will be more meaningful for all parties.
Notwithstanding the postponement of the public hearing, the Commission recognizes that the licences of the existing specialty networks expire in August 1992 and 1993. The Commission will wish to examine carefully the wholesale fees of the specialty networks during the licence renewal process to ensure that these fees remain appropriate, taking into account the contributions by the specialty network licensees to the Canadian broadcasting system, and the Commission's concerns regarding the affordability of basic cable service.
The Commission had deferred consideration of a number of issues in anticipation of the hearing on tiering and linkage. In light of the decision to postpone the hearing, the Commission will issue a public notice on the outstanding matters in the near future.

Allan J. Darling
Secretary General

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