ARCHIVED -  Decision CRTC 95-330

Decision

Ottawa, 15 June 1995

Decision CRTC 95-330

Fundy Cable Ltd./Ltée on behalf of Cable 2000 Inc.

Allardville, Bathurst, Blue Mountain Settlement, Campbellton, Canterbury, Caraquet, Centre Napan, Centreville, Dalhousie, Durham Bridge, Florenceville, Hartland/Somerville, Holtville, Jacquet River, Juniper, Kedgwick, Lakeville, Ludford Subdivision, Ludlow, Miscou Centre, Nackawic, Perth-Andover, Plaster Rock, Salmon Beach, Shediac, Shippegan, St-Paul/Val Richard, Temperance Vale, Tracadie/Neguac, Woodstock, New Brunswick and Carleton, Québec - 941525800

Cable 2000 Inc.
Bathurst, Campbellton, Dalhousie and Jacquet River, New Brunswick - 930927900 - 930928700 - 930929500 - 930936000

Transfer of control and renewal of licences

Following a Public Hearing in Halifax beginning on 4 April 1995, the Commission approves the application for authority to transfer effective control of Cable 2000 Inc., licensee of the cable distribution undertakings serving the 31 communities noted above, through the transfer of all of the issued and outstanding Class B voting shares of Cable 2000 Inc. from Mr. Phillip J. Keeping (99.99%) and minority shareholders to Fundy Cable Ltd./Ltée (Fundy).

Following its consideration of other applications on the agenda of the same hearing, the Commission also renews, from 1 July 1995 to 31 August 1998, the licences held by Cable 2000 Inc. for the cable distribution undertakings serving Bathurst, Campbellton, Dalhousie and Jacquet River.

The licence terms granted herein, while less than the maximum of seven years permitted by the Broadcasting Act, will enable the Commission to consider the renewal of these four licences in accordance with the Commission's regional plan. This term will also enable the Commission to monitor the progress of the licensee in responding to concerns raised by interveners. These concerns are discussed below.

Transfer of control

Fundy is a company ultimately controlled by Mr. C. William Stanley of Saint John, New Brunswick. Fundy is also the licensee of CFBC and CJYC-FM Saint John, as well as of cable distribution undertakings serving Fredericton, Saint John, Edmundston, Chatham/Newcastle, Moncton and 79 other locations in New Brunswick.

The purchase price is approximately $75 million, which includes the assumption by Fundy of Cable 2000 Inc.'s existing debt of $25 million. Based on the evidence filed with the application, the Commission has no concerns with respect to the availability or the adequacy of the required financing.

Because the Commission does not solicit competing applications for authority to transfer effective control of broadcasting undertakings, 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. As a first test, the applicant must demonstrate that the proposed transfer will yield significant and unequivocal benefits to the community served by the broadcasting undertaking and to the Canadian broadcasting system as a whole, and that it is in the public interest.

In particular, the Commission must be satisfied that the benefits, both those that can be quantified in monetary terms and others that may not easily be measured in terms of dollar value, are commensurate with the size of the transaction and take into account the responsibilities to be assumed, the characteristics and viability of the broadcasting undertakings in question, and the scale of the management, financial and technical resources available to the purchaser.

The Commission has assessed the benefits package identified by the applicant as flowing from this transaction and, in general, is satisfied that it is significant and unequivocal, and that approval of this application is in the public interest.

Fundy proposed a benefits package representing direct incremental expenditures of $7.5 million over five years. Among the proposed tangible benefits, the Commission notes in particular the commitment to upgrade all Cable 2000 Inc. undertakings to a capacity of 77 channels. The projected cost for this upgrade is $6.9 million.

The Commission expects the applicant to ensure that all of the $7.5 million in proposed expenditures included in the benefits package are made in accordance with the schedule outlined in the application.

The Commission considers Fundy's undertaking that the costs associated with the commitments outlined in this decision will not form part of any fee filing under subsections 18(6) and 18(8) of the Cable Television Regulations, 1986 (the regulations) to be an important element of this application.

The Commission has also taken into account the applicant's statement that the cost of this transaction will not be passed along to subscribers, regardless of whether the particular system is subject to rate regulation.

Interventions:

An intervention to the renewal applications of Cable 2000 Inc. was submitted by the Société des Acadiens et Acadiennes du Nouveau-Brunswick (SAANB), expressing the concern that communities in the Acadian Peninsula with predominantly Francophone populations often do not have adequate access to cable channels providing French-language programming and about the high costs of cable service in certain cable systems. In its intervention, the SAANB proposed a plan for more equitable distribution of French-language programming on cable undertakings, based upon the percentage of Francophones in the general population of any given service area. The SAANB, in its written submission to the Commission, also requested that the licences of the Bathurst, Campbellton, Dalhousie and Jacquet River systems be renewed for no more than one year, in order to ensure that improvements in these areas are made in a timely fashion.

While the Commission generally is of the opinion that improvements in these areas could be effected, it is concerned that a one-year term would not afford the licensee enough time to implement meaningful improvements. For this and for the other reasons noted above, the Commission has renewed the licences for the Bathurst, Campbellton, Dalhousie and Jacquet River undertakings for three-year terms.

In response to the concerns raised in the SAANB intervention, Fundy's President Mr. Stanley made several commitments at the public hearing, and these are quoted below. The Commission expects Fundy to adhere to these important commitments, and requires it to submit an annual report on or before 1 December of each year detailing the progress made towards their implementation:

 ... I would like to take the opportunity to respond to the intervention by SAANB and, in particular, that of Ms. Lise Ouellette yesterday...

 I have six points here which I think summarizes our feelings on it.

 She indicated that SAANB would like to see a balance of services on the Basic service which reflected the community's language groups. We agree.

 Secondly, she said that she felt that SAANB could work in partnership with Fundy to develop solutions. Again, we agree. She noted competition and how we might work together and I think the sense of that was, if we could, we can probably help to ensure that as many Canadian eyes see Canadian services and Francophone eyes see Francophone services as possible without restricting choice. Again, we agree.

 I was very pleased to hear that there is on the part of SAANB -- and of course there is on our part - a sensitivity to customers. We cannot ignore customers' wishes. Market studies are warranted, they are helpful and may be used, and this is what we intend to do.

 We will not engage in anything that is going to cause us a customer revolt or customer dissatisfaction. We will do that, the best we can. We cannot obviously please everyone all the time but you can certainly please most of the people most of the time.

 Fifth, she noted that Grand Falls and Edmundston were good models for balance along Francophone-Anglophone lines. Again, we agree.....

 Lastly, she said really it comes down to common sense and I think it does. I think we approved with SAANB, and they with us, that if we sit down and just talk what is common sense we are going to work it through. I think we both think now that we will be able to find the solutions for all of New Brunswick communities that we seek. It will mean some repackaging going forward, take some time, lay the groundwork and do it carefully. And that is what we intend to do...

 We would offer to submit any reports that you might desire on an annual, or otherwise, basis if you see the need for it. I must say I do not see that there is a need but we do not have a problem with it because we are going to do it anyway.

 That is our position, Mr. Chairman.

The renewal applications for the licences of the Cable 2000 Inc. undertakings serving Bathurst, Campbellton, Dalhousie and Jacquet River were originally announced in CRTC Public Notice 1994-65 dated 10 June 1994. In interventions submitted in response to those applications, concerns were expressed that community programming studios in Campbellton and Dalhousie had been closed.

In response to those concerns, Cable 2000 Inc. stated that its current community programming operations include three separate facilities serving, respectively, Bathurst and area, the Restigouche area and the Acadian Peninsula. It stated that all three of these community programming facilities are now operational, with staff and mobile units in each area. Studios are located at Bathurst and in the Acadian Peninsula.

In the application for transfer of control, Fundy indicated that it has committed to purchase additional community programming equipment for seven additional locations, namely Caraquet, Tracadie, Shippegan, Campbellton, Dalhousie, Kedgwick/ St. Quentin and Carleton.

The Commission reaffirms the particular importance it attaches to the development of community programming and has taken note of the annual budgets that Fundy has stated will be allocated for this purpose. The Commission encourages Fundy to pursue these efforts to develop community programs that reflect subscriber interests and concerns.

Renewal of licences and authorizations

The operation of the undertakings serving Bathurst, Campbellton and Dalhousie is regulated pursuant to Parts I and II of the regulations and the licences will be subject to the conditions in effect under the current licence, as well as to those conditions specified in this decision and in the licences to be issued.

The operation of the undertaking serving Jacquet River is regulated pursuant to Parts I and III of the regulations and the licence will be subject to the conditions in effect under the current licence, as well as to those conditions specified in this decision and in the licence to be issued.

In addition to the services required or authorized to be distributed pursuant to the applicable sections of the regulations, the licensee is authorized to continue to distribute WVII-TV (ABC), WABI-TV (CBS), WLBZ-TV (NBC) Bangor and WMEM-TV (PBS) Presque Isle, Maine as part of the basic service of the undertakings serving Bathurst, Campbellton, Dalhousie and Jacquet River.

The licensee is also authorized, by condition of licence, to distribute the Atlantic Satellite Network (ASN), received via satellite, provided that it is distributed on an unrestricted channel of the basic service of the undertakings serving Bathurst, Campbellton, Dalhousie and Jacquet River.

With respect to the Dalhousie system, consistent with Decision CRTC 90-657 dated 13 July 1990, and pursuant to section 12 of the regulations, the licensee is relieved, by condition of licence, of the requirement that it distribute the signals of CHCR-TV Campbellton, and the Cable Parliamentary Channel Inc. (CPAC) on unrestricted channels. Should the quality of any of the signals deteriorate significantly, the Commission expects the licensee to undertake immediate corrective action including, if necessary, the distribution of the service on another channel.

In the case of the Jacquet River system, and consistent with Decision CRTC 93-669, dated 8 November 1993, it is a condition of licence that the licensee be relieved of the requirement that it distribute at least four television programming services as provided for in section 23 of the regulations, so long as it distributes only those U.S. television services listed in the current application or as may be authorized by the Commission.

Also with respect to the undertaking serving Jacquet River, and also consistent with Decision CRTC 93-669, the licensee is relieved, by condition of licence, of the requirement that it not alter or curtail any programming service or radiocommunication in the course of its distribution.

Employment equity:

In Public Notice CRTC 1992-59 the Commission announced implementation of its employment equity policy. It advised licensees that, at the time of licence renewal or upon considering applications for authority to transfer ownership or control, it would review with applicants their practices and plans to ensure equitable employment. In keeping with the Commission's policy, it encourages Fundy to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources.

The Commission acknowledges and has considered the interventions submitted in support of the applications herein approved.

Allan J. Darling
Secretary General