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Decision
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Ottawa, 21 September 1995
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Saint-Joseph-de-Madawaska/
Moulin-Morneault/Rang-des-Couturier,
Rang-des-Bassé/Roussel and Martin Roads/
Bosse Road/Toussaint Road/Morin and
Lagassé Roads, New Brunswick - 941143000
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Deletion of local head end and interconnection to the Edmundston undertaking; licence amendment
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Following Public Notice CRTC 1995-83 dated 23 May 1995, the Commission approves the application by Fundy Cable Ltd./Ltée (Fundy) for authority to delete the local head end at Saint-Joseph-de-Madawaska, to add a distant head end at Edmundston and to interconnect this undertaking, via optical fibre, with the undertaking serving Edmundston.
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The Commission notes that the Edmundston 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 proposed change will increase the number of programming services provided to the smaller cable system from a 16-channel basic service package to a 23-channel basic service package.
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The Commission also approves the licensee's request with respect to section 23 of the regulations. Accordingly, 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.
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In the context of the authority granted above, the Commission notes that the licensee will cease distribution of CHCH-TV Hamilton, CITV-TV Edmonton, WXYZ-TV (ABC) and WDIV (NBC), Detroit, Michigan, received via satellite from CANCOM, as well as the CBS affiliate distributed by CANCOM (formerly WJBK-TV Detroit).
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Further, the licensee is authorized to distribute, at its option, CKLT-TV-1 Florenceville, as well as WLBZ-TV (NBC) and WVII-TV (ABC) Bangor, Maine, received via microwave, as part of the basic service.
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In assessing this application, the Commission has taken into consideration the fact that subscribers of the Part III system will receive, at no additional cost, the same programming services as do subscribers of the Edmundston Class 1 system. The Commission notes, however, that the programming service of The Sports Network (TSN) which was available to Saint-Joseph-de- Madawaska subscribers as part of the basic service will be available on a discretionary basis only.
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According to the information provided by Fundy, the difference between the cost of signals currently delivered via CANCOM as part of the basic service, plus the cost of the TSN signal, which will be moved from basic service to a discretionary tier, ($3.20 + $1.07 = $4.27), on the one hand, and the cost of new services provided to the Saint-Joseph-de-Madawaska subscribers as part of the basic service ($2.88) on the other hand, would result in net savings equivalent to $1.39 per subscriber. The licensee stated that this added revenue will be used to help pay the construction costs of the interconnection which are estimated to be in excess of $25,000.
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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 Saint-Joseph-de-Madawaska subscribers should be compensated for the removal of TSN from basic to discretionary service.
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Consequently, the Commission strongly expects Fundy to reduce the current basic monthly subscriber rate of $22.25 for its Saint-Joseph-de-Madawaska undertaking by $1.39.
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In this respect, the Commission notes that it 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.
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In its intervention, CANCOM also pointed out that according to its records, Fundy has not been distributing the CANCOM signals since 1994 and that any reduction in subscriber fees should be retroactive to December 1994. The Commission notes the licensee's confirmation that it ceased the distribution of CANCOM signals in December 1994 and that subscribers have been reimbursed accordingly.
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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.
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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 Edmundston undertaking.
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Allan J. Darling
Secretary General
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