ARCHIVED -  Decision CRTC 95-63

Decision

Ottawa, 24 February 1995

Decision CRTC 95-63

Temsat Inc., representing a company to be incorporated

Covey Hill and surrounding areas, Quebec - 932207400Mont-Saint-Grégoire, Contrecoeur and surrounding areas, Quebec - 940443500

Competing applications for new MDS radiocommunication distribution undertakings

At a Public Hearing in Montréal beginning on 11 October 1994, the Commission examined competing applications filed by Temsat Inc., representing a company to be incorporated (Temsat), and by Vidéotron Ltée (Vidéotron) for licences to carry on radiocommunica- tion distribution undertakings to serve the above-mentioned communities. The applications were considered by the Commission as competing because the coverage areas proposed by the applicants overlap.

Having considered these applications, the Commission approves that filed by Temsat, and will issue a licence to this applicant expiring 31 August 1997, subject to the conditions specified in this decision and in the licence to be issued. This term is consistent with the Commission's practice regarding the licensing of new undertakings of this type.

The authority granted herein will only be effective and the licence will only be issued at such time as the Commission receives documentation establishing that an eligible Canadian corporation has been incorporated in accordance with the application in all material respects and that it may be issued a licence.

The competing application filed by Vidéotron is denied.

The Commission assessed the Temsat and Vidéotron applications on the basis of the criteria set out in Public Notice CRTC 1993-76 dated 3 June 1993 and entitled "Regulatory Policy for Multipoint Distribution Systems (MDS)". The factors considered by the Commission included: efficiency of frequency utilization in relation to local topography; the viability of the proposals; the range of services to be offered; and the impact of the proposed MDS operations on other broadcasting undertakings in the area.

In approving the Temsat application, the Commission took into account the fact that it is based on a comprehensive plan for the eventual use of MDS technology to serve all non-cabled areas on the outskirts of Greater Montréal, that the proposed technical parameters respect regional boundaries, and that the signals can be distributed without creating interference to other services. In this regard, the Temsat application represents more efficient frequency utilization than the competing application. As noted in Cogeco Câble Canada inc.'s intervention, the Vidéotron application, if approved, would likely render use of MDS technology to serve other surrounding communities impracticable.

The Commission emphasizes that, in assessing any MDS application to serve communities on the outskirts of a large city, it takes into consideration the theoretical coverage of the proposed service. Applicants should be mindful, among other things, of the geographical constraints that their proposed contours may be imposing upon any future undertaking proposing to serve adjacent communities, all with a view to ensuring efficient and complementary planning in the use of MDS technology.

The Commission notes that the undertaking will serve several rural communities representing a combined total of 3,000 households, and that the applicant proposes to charge a basic monthly fee of $24.95.

The undertaking will distribute the following programming services, by means of a multipoint distribution system (MDS), with an effective isotropic radiated power (EIRP) of 48.8 watts:

SOURCE

CBFT (SRC) Montréal
CBMT (CBC) Montréal
CIVM-TV (RQ) Montréal
CFTU-TV (IND) Montréal
CFJP-TV (TQS) Montréal
WCAX-TV (CBS) Burlington
WPTZ-TV (NBC) Plattsburgh
Super Écran
First Choice
Musique Plus
The Nashville Network (TNN)
Le Réseau des sports
The Family Channel
WTBS (IND) Atlanta
Community programming/programmation communautaire
(babillard électronique)

The Commission notes that the community programming proposed by the applicant will consist of information displayed on an electronic bulletin board and video productions of regional interest.

While the MDS policy does not contain provisions regarding the carriage of community programming, it states that the regulation of MDS should parallel that of cable systems. Accordingly, the applicant is required, by condition of licence, to satisfy the requirement of subsection 24(2) of the Cable television Regulations, 1986 (the regulations) as long as it chooses to distribute community programming services.

At the hearing, Temsat proposed to amend the list of services it would distribute by replacing the signal of WTBS (IND) Atlanta, Georgia, with the Discovery Channel programming service, and by sharing its community programming channel between the electronic bulletin board and the all-news service Réseau de l'information (RDI). The Commission at the hearing did not accept these amendments because they were proposed well after the publication of Vidéotron's competing application. The Commission notes that, if the applicant wishes to change the list of services it distributes, it must file a licence amendment application.

The Commission notes that Temsat Inc. is also the owner of Câblevision Haut-St-Laurent Inc., a cable undertaking serving Huntingdon, Dewittville, Ormstown and Saint-Jean-Chrysostome. This undertaking is located within the coverage area of the proposed MDS.

In its policy, the Commission established certain criteria for the operation of joint MDS/cable undertakings, including the provision that these undertakings may share technical and other facilities, but that a licensee must ensure that neither operation directly subsidizes the other. At the hearing the Commission questioned the applicant regarding the operation of its cable undertaking and the proposed MDS. The Commission considers that the applicant demonstrated that its proposal satisfies the criteria contained in the Policy.

The Policy also states that, although the Commission expects most MDS operations to transmit exclusively in the encrypted mode, applications for non-encrypted transmission would "be considered on a case-by-case basis in rural and remote areas not served by a "local" commercial television station, taking into account, as well, the impact that the proposed MDS undertaking could have on other broadcasting undertakings in the area."

Câble Régional (du Centre) Inc., which serves municipalities in the MDS coverage area proposed by Temsat, intervened at the hearing to oppose the applicant's proposal to distribute some services in unencrypted mode. The intervener expressed concern about the negative impact of unencrypted distribution on its of subscribers and, consequently, on the viability of its cable service. Considering the discussion of this issue at the hearing and the evidence on file, the Commission finds that the applicant did not provide sufficient evidence to show that exempting it from the requirements of the MDS Policy would have no impact on other broadcasting undertakings in the area. Consequently, the Commission denies the request relating to the unencrypted distribution of CBFT (SRC), CBMT (CBC), CIVM-TV (SRTQ), CFJP-TV, (TQS), CFTU-TV (IND) (Montreal), and the community channel proposed by Temsat, and requires that these signals be distributed in encrypted mode.

The Commission's policy is that an MDS should not be permitted to jeopardize the financial viability of neighbouring subscription-based systems. Accordingly, it is a condition of licence that the applicant shall not solicit or accept a subscription from, or make available equipment to decode its signals for use by, any person resident inside or outside of the area encompassed by the contours approved for the applicant by the Commission, when that person is resident

a) within the authorized service area of any cable distribution undertaking licensed now or in the future, or

b) within the area encompassed by the contours approved by the Commission for any other subscription-based broadcasting undertaking licensed now or in the future,

unless the prior written consent of the applicant or licensee of the other undertaking or the prior approval of the Commission has been obtained or, in the case of a person residing inside the approved contours, that person had subscribed to the applicant's MDS service prior to the licensing of the other undertaking.

In accordance with subsection 22(1) of the Broadcasting Act, the Commission will issue a licence to the applicant if it is in receipt of written notification from the Department of Industry, Science and Technology (DIST), within twelve months of the date of this decision that it will issue a Broadcasting Certificate. No licence will be issued if the Commission does not receive this notification within said period or, where the applicant applies to the Commission before the expiry of this period and satisfies the Commission that it is unable to obtain said notification and that an extension is in the public interest, within such further period of time as is approved in writing by the Commission.

It is a condition of licence that the authority granted herein be implemented within twelve months of the date of receipt of the DIST notification referred to in the preceding paragraph or, where the applicant applies to the Commission within this period and satisfies the Commission that it cannot implement its authority before the expiry of this period and that an extension is in the public interest, within such further period of time as is approved in writing by the Commission.

The Commission acknowledges the interventions filed in relation to the applications and the applicants' replies thereto.

Allan J. Darling
Secretary General