ARCHIVED -  Decision CRTC 95-332

Decision

Ottawa, 21 June 1995

Decision CRTC 95-332

Fundy Cable Ltd./Ltée

Burtts Corner, Zealand, and surrounding areas, New Brunswick - 940085400 - 940037500

Deletion of local head end and interconnection to the Fredericton undertaking

Pursuant to Public Notice CRTC 1995-30 dated 23 February 1995, the Commission approves the application by Fundy Cable Ltd./Ltée (Fundy) for authority to delete the local head end at Burtts Corner, to add a distant head end at Fredericton and to interconnect this undertaking with the undertaking serving Fredericton.

The Commission notes that the Fredericton undertaking is a Class 1 system (6,000 or more subscribers) and that the undertaking serving the above-noted localities is regulated pursuant to Parts I and III of the Cable Television Regulations, 1986 (the regulations). The Commission notes that the proposed change will increase the number of programming services provided to the smaller cable system from a 15-channel basic service package to a 22-channel basic service package.

The Commission also notes that the licensee will cease distribution of the signals of WDIV (NBC) Detroit, Michigan, as well as those of CHCH-TV Hamilton and CITV-TV Edmonton, received via satellite from the Canadian Satellite Communications Inc. (CANCOM) network. However, subscribers will continue to receive WXYZ-TV (ABC) Detroit, Michigan and the CBS affiliate distributed by CANCOM. In that respect, the Commission notes that WJBK-TV Detroit, Michigan appears on the list of services distributed by the Fredericton undertaking. This station, however, is no longer a CBS affiliate, and is no longer distributed by CANCOM. Instead, CANCOM has been authorized to carry WTOL-TV (CBS) Toledo, Ohio (Decision CRTC 94-897 dated 28 November 1994). In Public Notice CRTC 1995-33 dated 1 March 1995, the Commission announced an application by CANCOM, acting as an agent for the licensee, to amend its licence by deleting the condition of licence authorizing the distribution of WJBK-TV, and adding a condition of licence authorizing the distribution of WTOL-TV, received via satellite from the CANCOM network, as part of the basic service.

In addition, the licensee will distribute, as part of the basic service, CFTM-TV Montréal and, on a discretionary basis, WTVS (PBS) Detroit, Michigan, received via satellite from the CANCOM network.

Further, the licensee is authorized to distribute WLBZ-TV (NBC) Bangor, Maine, received via microwave, as part of the basic service.

In assessing this application, the Commission has taken into consideration the fact that subscribers of the Burtts Corner Part III system will receive, at no additional cost, the same programming services as do subscribers of the Fredericton Class 1 system. The Commission notes, however, that the programming services of The Sports Network (TSN), The Nashville Network (TNN) and MuchMusic, which are now available to Burtts Corner subscribers as part of the basic service, will only be available on a discretionary basis.

According to the information provided by Fundy, the difference between the cost of signals currently delivered via the CANCOM network as part of the basic service, plus the cost of signals being moved from basic to the extended basic service ($3.20 + $1.49 = $4.69), on the one hand, and the cost of new services provided to the Burtts Corner subscribers as part of the basic service ($1.52) on the other hand, would result in net savings equivalent to $3.17 per subscriber. The licensee states that this added revenue will be used to help pay the construction costs of the interconnection which are estimated to be in excess of $125,000, and proposes to reduce the existing monthly basic rate for the Burtts Corner undertaking by $0.15.

In that respect, the Commission received an intervention from CANCOM supporting the application for interconnection, but submitting that the total savings in CANCOM fees should be passed on to the subscribers.

After reviewing the information provided by the licensee, the Commission is of the view that the licensee should offset only the cost of the additional services against its CANCOM savings and, consistent with the approach it has taken with applications of this nature, the Commission considers that the capital costs of the interconnection should be borne by the licensee, not by subscribers. Moreover, the Commission considers that Burtts Corner subscribers should be compensated for the loss of services being moved from basic to discretionary service.

Consequently, the Commission strongly expects Fundy to reduce the basic monthly subscriber rate of $23.10 in its Burtts Corner undertaking by $3.17.

The Commission notes that the licensee has included, in its costs for existing and proposed service packages, an amount of $0.04 for the Cable Parliamentary Channel Inc. (CPAC). The Commission draws the licensee's attention to the decision renewing the licence for CPAC (Decision CRTC 95-22 dated 20 January 1995) which states that the CPAC service is distributed free to cable subscribers. Accordingly, if the cost of CPAC is currently being passed on to subscribers, the Commission expects the licensee to further reduce the basic monthly rate by $0.04, which will result in a total reduction of $3.21.

The Commission requests that the licensee submit, within sixty days following completion of the interconnection project, a report outlining how it has met the Commission's expectation.

In addition, the Commission points out that the cost of the interconnection approved herein should not be the subject of any future application by the licensee for a fee increase under subsections 18(6) and 18(8) of the regulations with respect to its Fredericton undertaking.

The Commission has noted the comments expressed in CANCOM's intervention and it is satisfied that approval of this application is in the public interest.

Allan J. Darling
Secretary General