ARCHIVED -  Notice of Public Hearing CRTC 1995-15

Notice of Public Hearing

Ottawa, 1 November 1995

Notice of Public Hearing CRTC 1995-15

CRITERIA FOR DETERMINING THE CLASSES OF UNDERTAKINGS WHOSE OPERATORS SHOULD BE EXEMPTED FROM LICENSING REQUIREMENTS

The Commission will hold a Public Hearing commencing the week of 12 February 1996, at the Conference Centre, Phase IV, 140 Promenade du Portage, Hull, Quebec, to consider the policy issues described below. The exact time and date of the hearing will be announced in a future notice.

1. BACKGROUND

In its report issued 19 May 1995 and entitled "Competition and Culture on Canada's Information Highway: Managing the Realities of Transition", the Commission stated that it would undertake a public process to explore further the matter of exemptions and to determine whether certain categories of services can be dealt with in a more expeditious fashion. Accordingly, in this notice of public hearing, the Commission raises questions and seeks public comment on the procedures it should follow when considering the matter of exemptions. For this proceeding, the Commission will hold a two-stage written comment process to ensure that issues to be discussed at the public hearing will have been canvassed as fully as possible in advance of the oral phase of the proceeding. Details concerning public participation in this proceeding are provided at the end of this notice.

2. EXISTING REGULATORY FRAMEWORK

Subsection 9(4) of the Broadcasting Act (the Act) states that the Commission shall exempt from any or all requirements of Part II of the Act or of a regulation made thereunder, persons carrying on a broadcasting undertaking of any class, whenever it is satisfied that compliance with such requirements "will not contribute in a material manner to the implementation of the broadcasting policy set out in subsection 3(1)" of the Act. The test established by the Act is whether and to what extent the regulation of that particular class of undertaking will contribute materially to the realization of the Act's objectives. The prescriptive wording obliges the Commission to consider this question whenever it examines new classes of network, programming or distribution undertakings and, where appropriate, existing classes of such undertakings.

The Commission may, of course, revoke or amend an exemption order when circumstances warrant.

It is important to note that a decision to exempt those carrying on undertakings of a particular class does not necessarily suggest that the class is of little or no importance to the broadcasting system, or that its presence as a component of the system is a matter of indifference to the public interest.

For example, a class of undertaking such as that providing coverage of the proceedings of the House of Commons or of a provincial or territorial legislature offers a clearly important service operating in the public interest. However, the Commission has concluded that the licensing of these services will not further implementation of the Act's objectives. In accordance with subsection 9(4) of the Act, operators of undertakings in this class have thus been exempted from the requirements of Part II of the Act, provided they operate according to appropriate, enunciated terms and conditions. They must, for example, provide 100% Canadian content and have all their programming under the control of the Speaker of the legislature in question.

In some cases, the Commission has decided that the operators of certain classes of undertakings need not be subjected to the full requirements of the Act and regulations precisely because they have minimal impact on the broadcasting system or are of limited relevance to the public interest.

Attached as an appendix to this notice is a brief description of all the current classes of broadcasting undertakings whose operators have been exempted by the Commission. In all cases, the Commission issued exemption orders because it was satisfied that subjecting such undertakings to extensive regulatory requirements would not contribute in a material manner to the implementation of the broadcasting policy set out in the Act. In arriving at this conclusion, the Commission considered a variety of factors, including the temporary nature of certain services, and the desirability of allowing for maximum flexibility and creativity to encourage the introduction of new types of Canadian services.

3. ISSUES FOR DISCUSSION

Some assessments of the future communications environment suggest that the use of exemption orders may be increasingly appropriate. In order to ensure with the greatest possible certainty that the issuance of such orders is in the public interest, the Commission seeks comment from interested parties on matters related to the use of exemption orders. Without limiting the scope of the issues on which comments may be submitted, the Commission invites interested parties to provide their views on the following issues:

a) Broad Policy Approach

The Commission has exempted from licensing requirements the operators of almost 20 classes of programming, distribution and network undertakings. Some parties have suggested that the Commission's perception of the need for regulation has been too conservative and that many more classes should be exempted. Other parties consider that the Commission's approach has been too liberal and that exemption should only be granted in narrowly-defined and exceptional cases.

i) As a matter of general policy, what approach should the Commission take in determining the specific classes of undertakings that need to be regulated pursuant to the full requirements of Part II of the Act?

With respect to new types of services, it could be argued that the Commission's general approach should be to exempt from licensing requirements the operators of as many such classes of undertakings as possible in order to encourage the introduction of new products and services to the Canadian broadcasting system as quickly and creatively as possible. If, after several years of operation, such services prove to have a significant impact on the system, the Commission could then determine whether to make them subject to licensing requirements and more rigourous regulation as a means to enhance their contribution to realizing the objectives of the Act.

On the other hand, an alternative approach might be to license the operators of broadcasting undertakings in most new classes of services at the outset, and to consider exemptions only when the passage of time has demonstrated that their respective impact on the system has proven negligible and that continued application of all of the requirements of Part II of the Act will not contribute materially to implementation of the broadcasting policy contained in subsection 3(1) of the Act.

ii) What general approach should the Commission take with regard to the exemption of those operating new, untried, classes of broadcasting undertakings where the impact of the services is uncertain?

Questions have also been raised regarding: whether persons who have been granted exemptions by the Commission should nonetheless be required to make appropriate contributions to the objectives of the Act; and how such contributions could be monitored and enforced.

For example, in the exemption order respecting Video Games Programming Service Undertakings (Public Notice CRTC 1995-5), one of the terms and conditions for exemption was that the undertaking must make the greatest practicable use of Canadian creative and other resources in the creation and presentation of programming. Similarly, the exemption granted the operators of Teleshopping Programming Service Undertakings (Public Notice CRTC 1995-14) specifies that they must make predominant use of Canadian creative and other resources in the creation and presentation of their programming.

iii) Should all exempt operators of programming undertakings be required to make a contribution towards implementing the cultural objectives of the Act?

If not, what criteria should be used in determining which operators should do so?

If contributions are required, what might be the nature of such contributions and how could the Commission monitor and enforce any such requirements?

b) Exemptions in Respect of Programming Undertakings

Since promulgation of the Broadcasting Act in 1991, the Commission has exempted those operating programming undertakings in a number of classes. In some cases, such as Ultra Low-Power Announcement Service Undertakings and Low-Power Radio - Limited Duration Special Event Facilitating Undertakings, exemption orders were drafted on the Commission's initiative following a review of the specific classes of licensed undertakings whose operators might qualify for exemption. In the case of other undertakings, such as those providing coverage of the House of Commons and Provincial or Territorial Legislature Proceedings and Experimental Video-on-Demand (VOD) Programming Undertakings, exemption orders were drafted following suggestions or requests by interested outside parties.

The Commission must consider exemption when faced with any new class of programming undertaking. The test for exemption set out in subsection 9(4) of the Act is broadly stated. In order to determine whether some regulation of an undertaking will contribute in a material manner to implementation of the broadcasting policy set out in the Act, it may be necessary to establish certain criteria. These could serve as guidelines for the Commission in determining how to approach new programming services as they arise. The Commission, however, would continue to consider proposed exemption orders on a case-by-case-basis.

With that in mind, the Commission seeks comments on what criteria or guidelines it should use in identifying the classes of programming undertakings whose operators would qualify for exemption. Comments could address the following questions in particular:

iv) Cultural Impact - How should the Commission assess the impact of a class of programming undertaking and its regulation on Canadian culture? How should the Commission determine the potential contribution of the services provided by a class of undertakings to cultural objectives?

v) Economic Impact - How should the Commission assess the economic impact of a class of programming undertakings and its regulation on existing licensed undertakings? Is it possible, or desirable, to develop objective measures relating to advertising and subscription revenues, or profitability?

vi) Other Criteria - Are there other criteria, such as interactivity or the proportion of alphanumeric material within a service, that should be used in assessing whether to exempt the operators of programming undertakings in certain classes?

c) Exemptions in Respect of Distribution and Network Undertakings

In exempting the operators of certain classes of distribution undertakings, particularly those of a temporary nature, undertakings of very low-power and limited reach, and distribution undertakings that are likely to have little or no impact on the Canadian broadcasting system as a whole, the Commission has determined that the licensing of such undertakings would not contribute materially to the objectives of the Act. These exemption orders, which cover undertakings such as Low Power Radio Temporary Resource Development Distribution Undertakings and certain Temporary or Special Event Networks, have not prompted any controversy.

Virtually all major classes of broadcasting distribution undertakings are licensed. These include cable distribution undertakings and radio communication distribution undertakings. Canadian Satellite Communications Inc. (CANCOM) is also licensed; currently, CANCOM is the only operator of a multiple-channel television and radio broadcasting relay distribution undertaking utilizing satellite delivery. Master Antenna Television Services (MATVs) are the most notable example of a significant class of distribution undertaking that has been exempted, and is thus an exception.

vii) In a competitive distribution environment, should all new major distribution undertakings be licensed by the Commission? If not, what specific criteria should be used in determining what classes of distribution undertakings should be covered by exemption orders?

viii) With regard to low impact radiocommunication distribution undertakings operating on a temporary basis or at low power, what specific and objective criteria might be used in determining which of such services should be exempted?

d) Public Consultation Regarding Exemption Orders

When considering exemptions, it is the Commission's normal practice to issue a draft exemption order for public comment prior to making its final determination. Such a process ensures that interested parties have an opportunity to comment on the proposed exemption of those operating undertakings of a particular class, on the detailed description of the undertaking covered by the draft order and on the proposed terms and conditions for exemption. This public process also provides an opportunity for interested parties to comment on any contributions that may be expected of the operators of exempt undertakings.

It has been suggested that a distinction should be made between classes of undertakings whose operators the Commission could exempt without the need for a public process and those who would be exempted only after the usual public process.

ix) What are the circumstances, if any, in which the Commission might issue exemption orders without an opportunity for public comment?

x) Would it be reasonable for the Commission to institute a "fast-track" process for considering the exemption of those operating undertakings in certain classes? If so, what should such a process involve, and to what classes of undertakings should it apply?

4. PROCESS

Interested persons and parties wishing to comment on any issues relating to the use of exemption orders are invited to do so. The first deadline for submission of written comments is 4 January 1996. In addition, interested persons or parties will then have an opportunity to submit written comments, on or before 26 January 1996, regarding any issues raised during the first stage of the written proceeding. Persons and parties may participate in either the first or second stage of the written process, or both stages.

All information submitted as part of this process will form part of the public record of the proceeding without further notification to those filing comments.

Interested persons or parties wishing to appear at the public hearing must first have participated in the "intervention" phase of this proceeding, and must present the Commission with their request to appear, in writing, on or before 26 January 1996.

Comments filed in response to this notice must be addressed to the Secretary General, CRTC, Ottawa, K1A 0N2, and must be filed in hard copy form. Comments must be received by the CRTC ON or BEFORE the deadline dates indicated above. The Commission will not take into consideration comments received after these dates, nor can it be held responsible for postal delays. Parties are also encouraged to provide the Commission with a copy of all text material contained in their submissions on IBM-compatible floppy diskettes, either in WordPerfect 5.1 or MS Word 6.0 format, or as an ASCII text file. The Commission also requests that, where applicable, copies of spread sheets be provided as Lotus 1-2-3 WK1 or Microsoft Excel files. Electronic copies of graphs and diagrams should be provided in the default format of the software used to create them.

Comments received in response to this notice may be examined at the following Commission offices during normal office hours:

Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage, Room 201
Hull, Quebec K1A 0N2
Tel.: (819) 997-2429
TDD : (819) 994-0423
Telecopier (819) 994-0218;

Bank of Commerce Building
Suite 1007
1809 Barrington Street
Halifax, Nova Scotia B3J 3K8
Tel.: (902) 426-7997
TDD : (902) 426-6997
Telecopier (902) 426-2721

Place Montréal Trust
1800 McGill College Avenue
Suite 1920
Montréal, Quebec H3A 3J6
Tel.: (514) 283-6607
TDD : (514) 283-8316
Telecopier (514) 283-3689;

Kensington Building
Suite 1810
275 Portage Avenue
Winnipeg, Manitoba R3B 2B3
Tel.: (204) 983-6306
TDD : (204) 983-8274
Telecopier (204) 983-6317

Suite 1380
800 Burrard Street
Vancouver, British Columbia
V6Z 2G7
Tel.: (604) 666-2111
TDD : (604) 666-0778
Telecopier (604) 666-8322

Allan J. Darling
Secretary General

APPENDIX 

CLASSES OF UNDERTAKINGS COVERED BY EXISTING EXEMPTION ORDERS

Programming Undertakings:

Closed Circuit Video Programming Undertakings: provide programming services, whether for a separate fee or not, only to temporary residents of hotels, motels and hospitals or to the inmates of prisons, and not to residents of permanent dwelling places (Public Notice CRTC 1995-166).

Teleshopping Programming Service Undertakings: provide services offering for sale, goods and services that are frequently purchased by those who may require or otherwise appreciate assistance in accessing the types of goods and services offered (Public Notice CRTC 1995-14).

Video Games Programming Service Undertakings: provide subscribers of cable distribution undertakings with discretionary programming consisting of video games software and related information (Public Notice CRTC 1995-5).

Experimental Video-on-Demand (VOD) Programming Undertakings: facilitate limited, short-term experiments with various VOD technologies (Public Notice CRTC 1994-118).

Still Image Programming Service Undertakings: provide distribution undertakings with programming consisting of still images, with or without an audio component, and with or without a fee (Public Notice CRTC 1993-51).

Carrier Current Undertakings: provide locally-originated programming services for the benefit of residents of such institutions as colleges and universities, and are only exempted when not distributed on cable systems (Public Notice CRTC 1993-47).

Ultra Low-Power Announcement Service (LPAS) Undertakings: enable those such as real estate agents, store owners and local authorities to broadcast public messages of an informative, sometimes commercial nature, regarding their activities by means of ultra low-power transmitters, e.g., "talking signs" (Public Notice CRTC 1993-46).

Low-Power Radio - Limited Duration Special Event Facilitating Undertakings: provide those attending special, generally recognized events with locally-originated informational programming related directly to these events (Public Notice CRTC 1993-45).

House of Commons and Provincial or Territorial Legislature Proceedings Undertakings: provide coverage of the proceedings of the House of Commons and provincial or territorial legislatures to distribution undertakings (Public Notice CRTC 1992-6).

Certain Short-wave Radio Broadcasting Undertakings: provide services that are intended only for reception outside Canada and that are receivable only outside Canada (Public Notice CRTC 1991-105).

Distribution Undertakings:

Master Antenna Television (MATV) systems: (including Satellite Master Antenna Television (SMATV) systems): have, as their general purpose, the distribution to the temporary or permanent residents of multiple unit dwellings such as hotels, apartment buildings, condominiums and row houses, of services generally accessible by residents of single unit dwellings (Public Notice CRTC 1994-133).

Direct-to-Home (DTH) Satellite Distribution Undertakings: distribute television programming signals via satellite directly to individual satellite receivers, but may also serve individuals, indirectly, through distribution undertakings (Public Notice CRTC 1994-111).

NOTE: The CRTC has been directed in Orders-in-Council P.C. 1995-1105 and 1995-1106 that, following the conclusion of the licensing process currently underway, it should take all necessary and appropriate steps to ensure that no person is authorized to carry on a DTH distribution undertaking by any means other than a licence.

Terrestrial Relay Distribution Network Undertakings: receive the programming services of radio or television stations, foreign or domestic, and distribute those programming services, unaltered, to affiliated distribution undertakings, with or without a fee, on a local or regional basis (Public Notice CRTC 1993-53).

Low-Power Radio - Temporary Resource Development Distribution Undertakings: make available to employees of temporary mining, logging and other such temporary installations, rebroadcasts of Canadian radio stations, for the duration of the use of the installation (Public Notice CRTC 1993-44).

Resource Development Installation Undertakings: distribute the signals of all local Canadian television stations (Public Notice CRTC 1981-79).

Networks

Community Programming Network Undertakings: distribute portions of one licensee's community programming to the licensees of other distribution undertakings serving a common urban area (Public Notice CRTC 1993-52).

Cable Temporary Network Special Event Type 2 Undertakings: supply cable systems with coverage of not-for-profit or charitable events, such as the Special Olympics or telethons raising money for certain charities (Public Notice CRTC 1993-49).

Radio and Television Temporary Network Special Event Type 1 Undertakings: supply radio and/or television stations licensed or exempted by the Commission with coverage of unexpected, non-recurring events, such as special concerts and commemorative programs, or of public emergencies such as natural disasters and major accidents (Public Notice CRTC 1993-48).

Partial Exemption

The Canadian Broadcasting Corporation, in respect of all of its AM and FM radio programming undertakings, is exempted from the application of subsection 14(1) of the Radio Regulations, 1986 (Public Notice CRTC 1991-93).