ARCHIVED -  Decision CRTC 95-902

Decision

See also: 95-902-1

Ottawa, 20 December 1995

Decision CRTC 95-902

Joel Bell, on behalf of a company to be incorporated (Power DirecTV)

Across Canada - 952060200

New, national, direct-to-home satellite distribution undertaking - Approved

Following a Public Hearing held in the National Capital Region commencing 30 October 1995, and in accordance with Public Notice CRTC 1995-217 which accompanies this and other related decisions published today, the Commission approves the application for a broadcasting licence to carry on a new, national direct-to-home (DTH) satellite distribution undertaking. The proposed service, to be known as Power DirecTv, will derive its revenues entirely from subscription revenues, and will provide programming services exclusively to individual subscribers in all parts of Canada on a DTH basis.

The applicant proposed to make a variety of licensed Canadian and authorized non-Canadian programming services available by satellite for direct reception by individuals. Canadian programming services would be distributed using a Canadian satellite, specifically the Anik E-2 satellite operated by Telesat. The non-Canadian programming services to be distributed on the proposed service would be delivered using high-powered U.S. satellites owned and operated by DirecTv Inc. (DirecTv), pursuant to a service agreement between Power DirecTv and DirecTv (the agreement). DirecTv is a non-Canadian corporation active in the delivery of programming in the U.S. market. It should be noted that Power DirecTv requires the use of the Anik E-2 Canadian satellite in order for subscribers to simultaneously receive the Canadian signals as well as the U.S. signals received from the DirecTv satellites.

The Commission will issue a licence to carry on a national DTH satellite distribution undertaking, expiring 31 August 2002. The licence will be subject to the conditions specified in the appendix to this decision and in the licence to be issued. This authority will only be effective, and the licence will only be issued, at such time as the Commission receives documentation establishing that the company has been incorporated in accordance with the application in all material respects, and that it is an eligible Canadian corporation.

Ownership and Control of the undertaking

The licensee will be effectively owned and controlled by Power Broadcasting Inc. (Power) through its ownership of 80.01% of the company's issued voting shares. The remaining shares will be owned by DirecTv.

As noted earlier, the applicant proposed that authorized non-Canadian programming services to be distributed on the service be delivered using high-powered U.S. satellites owned and operated by DirecTv. At the public hearing, the Commission questioned the applicant on whether it would be in a position to exercise control over all components of its distribution undertaking. The applicant noted that it would have complete control, under the terms of the agreement, over the packaging of programming services made available on its service, including the ability to authorize or de-authorize any programming service or part of a programming service distributed over the portion of the signal stream it makes available for reception by subscribers within Canada from the U.S. satellites. Having carefully reviewed the agreement with DirecTv, and having considered the submissions made by all parties, the Commission has determined that the applicant has demonstrated and committed to a sufficient level of control to satisfy the requirements of paragraph 3(1)(a) of the Broadcasting Act.

DTH distribution regulatory framework

In Public Notice CRTC 1995-217, the Commission has provided details regarding the regulatory framework that will apply to all DTH satellite distribution undertakings. DTH satellite distribution undertakings represent a new class of undertakings for which, at present, there are no applicable regulations. As such, the licensee is required, by condition of licence, to adhere to sections 5, 6(1) and (2), 19 and Part IV of the Cable Television Regulations, 1986 respecting transfers of control and ownership, annual returns, the alteration and curtailment of programming services, and the mediation and resolution of disputes.

Authorized programming services

The licensee is authorized, by condition of licence, to distribute the signals of the programming services listed in the appendix to this decision.

Carriage of TRIO and Newsworld International

In its application, Power DirecTv requested authority to distribute TRIO and Newsworld International. The Commission notes that these two services, although primarily Canadian in content and Canadian-owned, are not licensed by the Commission and are produced by the CBC and Power Corporation principally for the U.S. market. Although the applicant proposed that these services be considered as having no nationality, the Commission is not prepared at this time, to consider the distribution of these services until it completes its next round of licensing action with respect to applications proposing new Canadian specialty and pay television programming services in 1996. The originators of these two programming services could, if they so choose, apply to obtain licences or request that the services be added to the Commission's lists of authorized non-Canadian programming services, following the specialty and pay television licensing process in 1996.

Access requirements

The licensee is required to distribute, at its own cost, all licensed English- and French-language specialty and pay television programming services. In addition, the licensee is required to distribute, at its own cost, at least one English- and one French-language general interest DTH PPV television programming service.

Should the licensee elect to distribute a pay audio service in which it or another distribution undertaking has an ownership interest exceeding 30%, it must also distribute at least one other pay audio service whose ownership is independent of any distribution undertaking, with the terms of the discretionary carriage to be agreed upon by the DTH operator and the originator of the programming service. In order to qualify for such access, it would be the responsibility of the pay audio service to pay the satellite uplink and transmission costs associated with the distribution of the signal.

Distribution and linkage requirements

As stated in Public Notice CRTC 1995-217, the Commission has decided to require, by condition of licence, that a preponderance of Canadian programming services be received by a subscriber. In other licence conditions set out in the appendix to this decision, the Commission has required that the licensee adhere to specified linkage and distribution rules. The licensee is also required, by condition of licence, to adhere to the specified rules governing program substitution and deletion, and to offer a basic service that includes the CBC French- and English-language television network services, as well as a CTV television network signal.

Production fund

In its application, Power DirecTv proposed different alternatives under which it might meet the requirements of paragraph 4(c) of the DTH Satellite Distribution Undertakings Order in Council (P.C. 1995-1105) respecting financial contributions to the production of Canadian programming. One suggestion was that contributions be directed to a special fund that would be established with the primary objective of helping to finance the production of Canadian programming. The applicant indicated at the hearing that it would be open to suggestions as to how and by whom its contributions would be administered.

In the interest of cost effectiveness and efficiency, the Commission considers that such contributions should be made to an existing Canadian program production fund. As stated in Public Notice CRTC 1995-217, the Commission has decided to require the licensees of all DTH distribution undertakings and all DTH pay-per-view television programming undertakings to make contributions representing no less than 5% of their gross annual revenues to fund Canadian program production. Accordingly, by condition of licence, the licensee is required to contribute a minimum of 5% of the gross annual revenues earned by its DTH distribution undertaking to an existing, independently-administered, Canadian program production fund.

As part of this condition, the licensee is required to report to the Commission, within six months of the date of this decision, identifying the name of the existing fund to which it will make its contributions. The licensee is further required to remit its contributions in the form of monthly installments, the first to be made within 45 days of the end of the month in which it commences operation and, thereafter, within 45 days of month's end, and representing a minimum of 5% of that month's gross revenues.

Employment equity

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled "Implementation of an Employment Equity Policy", the Commission announced that the employment equity practices of broadcasters would be subject to examination by the Commission. In this regard, the Commission encourages the licensee to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources.

Closed captioning

The licensee should provide, 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 that were present with the programming service when it was received by the undertaking at the input to its system. The Commission expects the licensee to acquire and publicize the availability of a telecommunication device for the deaf (TDD).

Television violence

In Notice of Public Hearing CRTC 1995-5, the Commission sought comments on a number of issues relating to violence in television programming and, in particular, how to ensure that tools are available to enable individuals to make programming choices for themselves and for their families.

Also of particular concern to the Commission is the fact that programs found to have breached the Canadian Association of Broadcasters' "Voluntary Code Regarding Violence in Television Programming", and thus discontinued by Canadian broadcasters, may nonetheless be available on non-Canadian services distributed by distribution undertakings. To remedy this situation, the Commission suggested that it might be appropriate to require cable and other distribution undertakings to curtail or scramble any program distributed by such undertakings if the program was determined to contravene an approved violence code.

When questioned on these issues at the hearing, Power DirecTv confirmed that it would at all times retain the technical and legal ability to curtail any signal or individual program distributed by the undertaking. With respect to the regulation currently being considered by the Commission in the context of the violence proceeding, the applicant indicated that it would comply with such a regulation if ultimately adopted by the Commission. The applicant also indicated that its affiliation and other agreements would always permit Power DirecTv to comply with Canadian laws and regulations, including any decision issued by the Commission or the Canadian Broadcast Standards Council (CBSC) in connection with violence issues. Finally, Power DirecTv agreed to cooperate with other members of the industry for the purpose of developing an appropriate program classification system that could be used in conjunction with consumer-controlled blocking technology. The Commission expects the licensee to adhere to each of these commitments.

The Commission acknowledges, and has considered, the interventions and comments submitted in respect of this application.

Allan J. Darling
Secretary General

APPENDIX TO DECISION CRTC 95-902

Conditions of Licence

1. The licensee shall adhere to the provisions contained in sections 5, 6(1) and (2), 19 and Part IV of the Cable Television Regulations, 1986 (the cable regulations).

2. a) Unless otherwise authorized by the Commission, the licensee is authorized to distribute the signal of any licensed television programming undertaking. The licensee is authorized to distribute such a service unless the licensee of that service objects in writing to its carriage, both to the Commission and to the distribution undertaking, within 90 days of the date of this decision. The licensee is also authorized to distribute the services of all other licensed or exempt programming undertakings (other than a pay television programming undertaking that provides a pay-per-view service). The licensee is also authorized to distribute an Electronic Program Guide, a PPV marketing channel, and a marketing channel for its service.

  b) Unless otherwise authorized by the Commission, the licensee is authorized to distribute the following non-Canadian programming services:

WXIA-TV Atlanta (NBC)
WABC-TV New York (ABC)
WRAL-TV Raleigh (CBS)
KRMA-TV Denver (PBS)
WFLD-TV Chicago (FOX)
Cable News Network (CNN)
CNN Headline News (CNN-2)
The Nashville Network (TNN)
The Arts and Entertainment Network (A&E)
CNBC/FNN*
The Weather Channel (TWC)
Cable Satellite Public Affairs Network (C-Span)
The Silent Network (Kaleidoscope)
The Learning Channel
WTBS Atlanta
WGN-TV Chicago
WWOR-TV New York City
WPIX New York City
WSBK-TV Boston
KTLA Los Angeles
Black Entertainment Television (BET)
Lifetime Television
Comedy Central

 *Pursuant to CRTC Circular Letter No. 377, dated 5 June 1991, licensees are authorized to distribute only the 6:00 a.m. to 7:00 p.m. (ET) Monday to Friday programming component of CNBC/FNN.

3. The licensee shall offer a basic service that includes at least one of each of the CBC English and French-language television network affiliates and at least one affiliate of the CTV English-language television network service. Every subscriber must subscribe to the basic service to receive any discretionary services, except the DTH pay-per-view services.

4. The licensee is required to adhere to the following unless otherwise authorized by the Commission:

 a) the licensee shall delete the programming of a non-Canadian television programming service distributed on the DTH undertaking, and substitute the identical programming of a Canadian television programming undertaking whose signal is also distributed on the DTH undertaking;

 b) The licensee shall delete programming received by subscribers located within the grade B contour of a licensed Canadian television programming undertaking, where the programming distributed as part of the DTH undertaking is identical to the programming broadcast by the Canadian television programming undertaking;

c) the licensee shall delete programming received by subscribers located within the grade B contour of licensed Canadian television programming undertakings where the programming distributed as part of its service is identical (i.e. in relation to the above-mentioned programming, not less than 95 per cent of the video and audio components of those programming services, exclusive of commercial messages and any part of the services carried on a subsidiary signal are the same) to the programming broadcast by the Canadian television programming undertaking and is distributed on a non-simultaneous basis within the same broadcast week;

d) the licensee shall delete and/or substitute programming of television programming services in the manner contemplated under paragraphs a), b) and c) above, where the DTH operator has received, at least seven days prior to the date on which the programming is broadcast, a written request for the deletion and/or substitution of the programming of the television programming service.

 The licensee may discontinue the deletion and/or substitution of programming of a television programming service where the licensee verifies that the programming of the television programming service in respect of which the deletion is made, is not, or is no longer identical.

 For the purposes of paragraphs a) and b) of this condition, the term "identical" shall have the same meaning as that contained in Subsection 2(1) of the cable regulations, the term "commercial message" shall have the same meaning as that contained in the cable regulations and  the term "broadcast week" shall mean a period of seven consecutive days, beginning on Sunday.

5. The licensee shall ensure that no subscriber receives a total number of programming services that contains less than a preponderance of Canadian programming services.

 For the purpose of this condition, multiplex programming channels, repeat channels and non-programming channels will be disregarded and each licensed DTH PPV service distributed will be counted as a single channel.

6. The non-Canadian programming services listed below may only be offered in a discretionary package with Canadian pay television and/or Canadian specialty services, and are subject to the following linkage requirements:

a) each Canadian pay television service (excluding a Canadian DTH PPV television service) may be linked in a single discretionary package with no more than five channels of the following authorized non-Canadian programming services:

Cable News Network (CNN)
CNN Headline News (CNN-2)
The Nashville Network (TNN)
The Arts and Entertainment Network (A&E)
CNBC/FNN
The Weather Channel (TWC)
Cable Satellite Public Affairs Network (C-Span)
The Silent Network (Kaleidoscope)
The Learning Channel
WTBS Atlanta*
WGN-TV Chicago*
WWOR-TV New York City*
WPIX New York City*
WSBK-TV Boston*
KTLA Los Angeles*
Black Entertainment Television (BET)
Lifetime Television
Comedy Central

*U.S. Superstations/
*Superstations américaines

 but in no case can a single discretionary package, whose Canadian component includes more than one pay television service, contain more than five channels of non-Canadian programming services, linked with those Canadian pay television services included in that package;

b) each Canadian specialty service, distributed within a discretionary package that may include one or more Canadian specialty and/or pay television services, may be linked with no more than one channel of the following authorized non-Canadian programming services:

Cable News Network (CNN)
CNN Headline News (CNN-2)
The Nashville Network (TNN)
The Arts and Entertainment Network (A&E)
CNBC/FNN
The Weather Channel (TWC)
Cable Satellite Public Affairs Network (C-Span)
The Silent Network (Kaleidoscope)
The Learning Channel
Black Entertainment Television (BET)*
Lifetime Television*
Comedy Central*

 c) the licensee may designate one of the U.S. superstations authorized in paragraph a) above, and distribute the signal of that superstation within discretionary packages that may include one or more Canadian specialty and/or pay television service.

 d) the licensee is not permitted to offer a package of services containing only non-Canadian programming services; and

e) the licensee is not permitted to link authorized non-Canadian programming services with a Canadian specialty service distributed on the basic service.

7. The licensee, in each broadcast year (i.e. the period from 1 September to the following 31 August), shall contribute a minimum of 5% of the gross annual revenues, earned by its DTH satellite distribution undertaking to an existing, independently-administered, Canadian program production fund. The licensee is also required to report to the Commission, within six months of the date of this decision, identifying the name of the existing fund to which it will make its contributions. The licensee shall remit its contributions in the form of monthly installments, the first to be made within 45 days of the end of the month in which it commences operations and, therafter, within 45 days of month's end and representing a minimum of 5% of that month's gross revenues.

8. The licensee is prohibited from distributing any pay-per-view service other than that of a licensed DTH PPV television programming undertaking.

9. The licensee must distribute at least one French-language DTH PPV service where it distributes one or more English-language DTH PPV service.

10. This undertaking shall be in operation within twelve months of the date of this decision, or, where the licensee applies to the Commission within this period and satisfies the Commission that it cannot complete implementation 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.