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Ottawa, 30 August 1994
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Public Notice CRTC 1994-111
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Victory Christian Fellowship of Lethbridge (1983) Inc.
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Background
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In Public Notice CRTC 1993-74 issued following the Structural Hearing, the Commission noted that direct-to-home (DTH) delivery via satellite will play a greater role in the Canadian broadcasting system, and may provide a degree of competition to services delivered by other distribution technologies. The Commission also stated that it strongly supports the industry-wide adoption of a digital video compression (DVC) standard that would include a conditional access standard for authorizing reception by individual subscribers, thus facilitating the widest availability of Canadian programming to Canadian households.
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In October 1993, the Commission received separate submissions from Electronics Inc. (Tee-Comm) and Telesat Canada (Telesat) proposing that the Commission exempt Canadian DTH satellite distribution undertakings from the requirement to hold a licence. Subsequently, the Commission published a proposed exemption order for Canadian DTH distribution undertakings (Public Notice CRTC 1994-19 dated 2 March 1994).
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In addition to requesting comments on the specific criteria contained in the proposed exemption order, the Commission sought the views of interested parties on certain other policy issues elated to the packaging of programming services and the ownership of exempt DTH undertakings, in particular:
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* Should an exempt DTH undertaking be required to adhere to the distribution and linkage requirements established for cable television distribution undertakings?
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* Should there be any restrictions on the ownership of an exempt DTH distribution undertaking? For example, the Commission noted that Tee-Comm proposed that a Canadian carrier, within the meaning of the Telecommunications Act, or the licensee of a Class 1 cable television system in Canada, or an affiliate of either, should be prohibited from owning exempt DTH distribution undertakings.
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The Commission also noted that the proposed exemption order, as drafted, would permit exempted DTH distribution undertaking operators to distribute certain signals to viewers, indirectly, through cable or radiocommunication distribution undertakings, or through Satellite Master Antenna Television (SMATV) undertakings.
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A total of 60 responses were received, including those by industry and other associations, broadcasters, cable companies, program suppliers, DTH dish dealers or DTH sales agents, existing and prospective DTH dish users, telecommunications companies, one provincial government, a satellite programming marketing agent, a network operator, and a satellite operator (Telesat). The Commission appreciates the valuable contributions and concrete suggestions made by interveners.
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The Commission has carefully reviewed all of the comments submitted with respect to the proposed DTH exemption order, and has given consideration to the various points and issues raised in arriving at the final exemption order, which is attached as an appendix to this notice.
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The Commission wishes to highlight a number of issues related to the order.
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Concerning the issue of ownership, except as may be restricted by existing regulations or statutory requirements, the Commission has decided that Class 1 cable companies will not be prohibited from owning an exempt DTH undertaking, nor will there be any restrictions on ownership by Canadian common carriers.
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Criterion 2 has been updated to reference the Department of Industry, Science and Technology.
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Criterion 3 has been clarified to ensure that an exempt DTH undertaking makes use of Canadian satellite facilities to distribute all of its programming services, except during periods of emergency, such as the failure of one or more transponders used to distribute the services of an exempt DTH undertaking.
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Criterion 5 and Criterion 6 have been revised slightly in order to more accurately reflect the intentions of the Commission. Criterion 5 now permits an exempt undertaking to distribute the services of an exempt programming undertaking in addition to a licensed programming undertaking. Furthermore, any such licensed or exempt programming service may be distributed to DTH subscribers outside the authorized service area of the programming service only if it is specified in the Lists of Part II or Part III Eligible Satellite Services. Criterion 6 now states that "The undertaking does not originate any programming as defined in the Broadcasting Act."
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Criterion 7 has been revised to reflect the Commission's determination with respect to the imposition of linkage requirements on an exempt DTH undertaking. After consideration of the views expressed by interveners on this issue, the Commission has conluded that, when providing service to customers residing in areas served by Class 1 cable licensees, or by Class 2 licensees having between 2,000 and 6,000 subscribers, an exempt DTH undertaking must abide by the same linkage rules as apply to cable undertakings in the same areas.
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Although Criterion 8 remains unchanged, the Commission wishes to clarify that the requirement for a preponderance of Canadian signals applies only to the overall DTH package, and not to each individual component or group of services within the package. With regard to multiplexed pay television channels, they will not be counted for purposes of determining the "predominance" of Canadian services within the package (i.e. any multiplexed service, either Canadian or foreign, will be counted as only one service).
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Finally, a ninth criterion has been added to ensure that closed captioning associated with any signal is provided, as part of that signal, to the undertaking's subscribers.
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Although a number of other matters were raised by interveners, the Commission has decided that additional criteria addressing them are either not necessary or are inappropriate. For example, a number of parties had proposed that the Commission establish a criterion for exemption that would require adherence to the use of a common Digital Video Compression and Conditional Access and Encryption interoperable technical standard. Although the Commission has decided that such adherence should not be a criterion for an exempt DTH undertaking, it recognizes the benefits of such a standard, and reconfirms its support of industry efforts to achieve this goal.
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The Commission also wishes to note that, in response to comments by Telesat, Cancom, Tee-Comm, Stentor, and Superchannel, it will expect program and/or network undertakings to make their services available to DTH undertakings at wholesale fees comparable to those offered to their cable affiliates.
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The exemption criteria contained in the appendix to this notice are effective immediately.
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Allan J. Darling
Secretary General
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Exemption Order Respecting Canadian Direct-to-Home Satellite Distribution Undertakings
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The Commission, pursuant to subsection 9(4) of the Broadcasting Act, by this order, exempts from the requirements of Part II of the Act and any regulations made there- under, those persons carrying on broadcasting undertakings of the class defined by the following criteria.
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Purpose
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Those broadcasting undertakings, commonly referred to as Direct-To-Home (DTH) systems, have as their general purpose the distribution of television programming signals via satellite directly to individual satellite receivers, but may also serve individuals, indirectly, through distribution undertakings.
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Description
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1. The Commission would not be prohibited from licensing the undertaking by virtue of any Act of Parliament, of the Direction to the CRTC (Eligible Canadian Corporations) or of any other direction to the Commission by the Governor in Council.
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2. The undertaking meets all technical requirements of the Department of Industry, Science and Technology and has acquired all authorizations or certificates prescribed by the Department.
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3. The undertaking uses Canadian satellite facilities to distribute all of its programming services, except during emergencies.
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4. Subject to criterion 5, the undertaking may distribute programming services indirectly to viewers through cable distribution undertakings, radiocommuni- cation distribution undertakings, or satellite master antenna television (SMATV) undertakings.
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5. The undertaking does not distribute any Canadian service except the service of a programming undertaking licensed or exempted by the Commission. With respect to any such licensed or exempt service, it is not distributed:
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(a) to any Canadian cable or radiocommunication distribution undertaking that is, itself, not permitted by regulation or otherwise authorized by the Commission to distribute that programming service,
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(b) to any SMATV undertaking located outside of the authorized service area established by the Commission for that programming undertaking, unless the SMATV undertaking is located inside the authorized service area of a cable or radiocommunica- tion distribution undertaking that is permitted by regulation, or otherwise authorized by the Commission, to distribute that programming service, or;
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(c) to any DTH subscribers situated outside of the programming undertaking's authorized service area unless that service is specified in the Lists of Part II or Part III Eligible Satellite Services, as amended from time to time, and which are incorporated by reference into the Cable Television Regulations, 1986.
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6. The undertaking does not originate any programming as defined in the Broadcasting Act.
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7. (a) Any non-Canadian programming services distributed by the undertaking to subscribers residing in areas served by Class 1 cable licensees, or in areas served by Class 2 cable licensees with more than 2,000 subscribers, are selected from the List of Part II Eligible Satellite Services, as amended from time to time. The undertaking adheres to the following linkage rules:
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(i) each Canadian pay television service (excluding a Canadian pay-per-view television service) may be linked with no more than five channels containing any of the foreign-originated services specified in either Section A or Section B of the List of Part II Eligible Satellite Services.
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(ii) each Canadian specialty service may be linked with no more than one channel containing any of the foreign-originated services specified in Section A of the List of Part II Eligible Satellite Services.
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(b) Any non-Canadian programming services distributed by the undertaking to subscribers residing in non-cabled areas, areas served by Part III cable licensees, or areas served by Class 2 cable licensees with fewer than 2000 subscribers, are selected from the List of Part III Eligible Satellite Services, as amended from time to time.
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8. The undertaking devotes a greater number of both video and audio channels to the distribution of programming services of undertakings licensed by the Commission than to the distribution of non-Canadian programming services.
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9. The undertaking provides, as a minimum, at the output of each set-top decoder, a National Television Systems Committee (NTSC) television signal complete with its associated standard monaural audio, and any closed captioning signals which were present with the programming service when it was received by the undertaking at the input to its system.
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