ARCHIVED -  Public Notice CRTC 1995-217

Public Notice

Ottawa, 20 December 1995

Public Notice CRTC 1995-217

INTRODUCTORY STATEMENT - LICENSING OF NEW DIRECT-TO-HOME (DTH) SATELLITE DISTRIBUTION UNDERTAKINGS, and NEW DTH PAY-PER-VIEW (PPV) TELEVISION PROGRAMMING UNDERTAKINGS

Following a Public Hearing commencing 30 October 1995 in the National Capital Region, the Commission today announces its decisions on a number of applications for licences to carry on new DTH satellite distribution undertakings, and new DTH PPV television programming undertakings. In Decisions CRTC 95-901 and 95-902, the Commission has licensed ExpressVu Inc. and Joel Bell, representing a company to be incorporated (Power DirecTv) to carry on new DTH satellite distribution undertakings. In Decision CRTC 95-903, the Commission has denied the application by Shaw Communications Inc. et al (on behalf of a company to be incorporated for a DTH satellite distribution undertaking licence (Homestar).

In Decisions CRTC 95-904 to 95-908 the Commission has licensed the following five applicants to carry on new DTH PPV television programming undertakings:

The partners of Viewer's Choice Canada;

Allarcom Pay Television Limited;

Joel Bell, representing a company to be incorporated (Power DirecTicket);

Gary Maavara, representing a company to be incorporated (Sports/Specials Pay Per View); and

The partners of Canal Première.

In Decision CRTC 95-909 the Commission has denied the application for the "Cinema Direct" French-language DTH PPV programming undertaking proposed by Joel Bell, representing a company to be incorporated.

I. Background

In Public Notice CRTC 1993-74 issued following the Structural Public Hearing on broadcasting, the Commission indicated that digital DTH delivery of programming services via satellite will play a significant role in helping to achieve the objectives for the Canadian broadcasting system set out in the Broadcasting Act (the Act). To this end, the Commission encouraged interested parties to develop Canadian DTH services as a means to extend delivery of broadcasting services to Canadians in underserved areas, to provide competition to cable undertakings, and to act as a made-in- Canada solution to the threat of unauthorized DTH services in the Canadian market.

In the fall of 1994, the government established a three-member panel to undertake a review of DTH policy. In April 1995, the panel issued a report to the government, recommending, among other things, that the Commission's DTH Exemption Order be revoked and that the licensing of DTH satellite distribution undertakings be required. Proposed Directions to the CRTC were included in the report. On 6 July 1995, the government released Orders-in-Council P.C. 1995-1105 and 1995-1106 (DTH and DTH PPV Orders) which provided directions to the CRTC on policies to govern the licensing of DTH satellite distribution undertakings and DTH PPV television programming undertakings, respectively.

II. The Public Hearing

On 11 July 1995, the Commission issued a call for applications for licences to carry on new DTH satellite distribution undertakings and new DTH PPV television programming undertakings. In response, the Commission received three applications for licences to carry on national DTH satellite distribution undertakings, and six applications for licences to carry on DTH PPV television programming undertakings. In addition, three applications for licences to carry on regional multipoint distribution systems (MDS) in Manitoba were received. The Commission's determinations respecting these MDS applications are set out in Decision CRTC 95-910.

The DTH, DTH PPV and MDS applications were considered at a public hearing that took place in the National Capital Region between 30 October and 9 November 1995. The decisions related to DTH distribution and DTH PPV undertakings were arrived at in light of the DTH Orders and the Commission's public process. A broad range of public comments and interventions were received in response to these applications. The Commission wishes to thank all those who took part in this proceeding. Their written and oral submissions have greatly assisted the Commission in its deliberations with respect to licensing the new DTH and DTH PPV undertakings and establishing the appropriate policy framework for these undertakings.

The Order respecting DTH satellite distribution undertakings stipulates that no person or class of persons be authorized to carry on a DTH satellite distribution undertaking other than by means of a licence.

Further, the DTH Order requires the Commission, following the conclusion of the licensing process, to take all necessary and appropriate steps to ensure that no person is authorized to carry on a DTH satellite distribution undertaking by any means other than a licence. Accordingly, the Commission has today, in the appendix to Public Notice CRTC 1995-219, revoked the Exemption Order Respecting Direct-to-home Satellite Distribution Undertakings set out in Public Notice CRTC 1994-111.

With respect to DTH PPV television programming undertakings, the DTH PPV Order directs the Commission to "establish a class of licences in respect of the carrying on of DTH
pay-per-view television programming undertakings". In accordance with this direction, the Commission has established a new class of licence, to be known as DTH PPV television programming undertakings. This new class of licence is separate and apart from the existing class of pay television programming undertakings that provide a PPV service already licensed by the Commission.

The existing class of licence is subject to the Pay Television Regulations, 1990 (the pay television regulations). The Commission has decided that licensees falling into the new class of licence will be required to adhere, by condition of licence, to the provisions of the pay television regulations set out in the respective decisions. In certain circumstances, this will allow the new class of licence to have more flexibility in the programming that may be offered than is available to existing pay television licensees, for example, with respect to the distribution of programming produced by themselves or by others to whom they are related, and the inclusion of commercial messages in certain programming in the category of sports.

In this regard, the Commission notes that it is currently seeking public comment on a proposed amendment to the pay television regulations that would permit pay television licensees, by condition of licence, in certain circumstances, to include some programming in their services that is either produced by themselves or by others with whom they are related. The Commission hereby announces that it will, as soon as practicable, also propose an amendment to the pay television regulations that will authorize the distribution, in limited circumstances, of programming containing commercial messages.

The Commission notes that it is also licensing today four new pay audio programming undertakings whose services are authorized for distribution by DTH, cable and MDS distribution undertakings.

III. Regulatory Framework for DTH Satellite Distribution Undertakings

In its report to the government dated 19 May 1995, entitled Competition and Culture on Canada's Information Highway: Managing the Realities of Transition, the Commission stated that:

 ...all distributors should be subject to similar rules and obligations with respect to predominance of Canadian programming, priority carriage, linkage, and fair and equitable access for programming sources. However, it recognizes that, as the broadcasting system evolves, carriage policies to support the distribution of Canadian services will also change.

Similarly, the DTH Order directs the Commission to ensure that "substantially the same rules that are in effect for other distribution undertakings govern the selection of particular Canadian and foreign programming services that are offered by the undertaking to its subscribers".

In establishing the policy framework for DTH satellite distribution undertakings, the Commission has considered a number of technological and competitive factors associated with satellite delivery. Firstly, the Commission has taken into account certain characteristics associated with digital DTH satellite technology, including: the inherent addressability of subscriber receiving equipment, the incompatibility of the transmission systems chosen by competing DTH distribution undertakings, and the cross-Canada reach of national DTH services. Secondly, the Commission has considered the need to provide flexibility to new distribution competitors. The Commission has also been mindful of the requirements of the Act, and the need to establish a competitive balance among new and existing distribution undertakings. Indeed, a key challenge for the Commission in this proceeding has been to implement a policy framework for DTH satellite distribution undertakings that maximizes contributions to the Canadian broadcasting system, while encompassing sufficient flexibility to support the competitive entry of a new satellite digital distribution technology.

The following section sets out the Commission's determination with regard to a number of specific issues related to the distribution of programming services, linkage rules, financial contributions and other matters affecting the operation of licensed DTH satellite distribution undertakings. The Commission notes that many of these requirements have been applied to the SkyCable MDS service also licensed today in Decision CRTC 95-910 to serve various communities in Manitoba, given that SkyCable will also employ addressable technology, and the competitive potential of DTH services in uncabled areas.

 a) Basic Service Requirements

Taking into account the fact that the new DTH distribution services are national services, and the expense to the DTH operator of uplinking local and regional conventional broadcast services, the Commission has determined that basic service programming priorities shall be limited to the three national Canadian television networks, namely the CBC English- and French-language network signals, and a CTV network signal. In addition, the Commission has encouraged the licensees of the two new DTH distribution undertakings to make the CPAC service, provincial legislative services, and provincial educational programming services available on the basic service. In this regard, the Commission notes the variety of programming services proposed for distribution on the basic service by the DTH distribution applicants. The Commission also notes the potential ability of DTH operators to distribute other broadcast signals of interest to subscribers on a local and regional basis, and to provide a seamless connection to broadcast signals that may be receivable at the premises of a subscriber through cable, antennae or other means.

In light of the inherent addressability of DTH technology, the Commission also encourages the licensees of DTH distribution undertakings to make available basic service options that reflect the preferred language of the subscriber, as well as a bilingual basic service package.

Recognizing again both the inherent addressability of the DTH service and the nature of PPV programming services, the Commission will not require a buy-through of the basic service for a subscriber to purchase DTH PPV programming. The Commission considers that this policy will help to promote the DTH PPV programming services, thereby increasing revenues accruing to the Canadian broadcasting system and to the production of Canadian programming. However, the Commission will require that the basic service be purchased by a subscriber before any other discretionary programming services are purchased.

With respect to the distribution of U.S. television signals, the Commission has authorized the DTH licensees to distribute U.S. network signals, as part of the basic service or as part of a discretionary tier. U.S. superstations and U.S. specialty services, however, may only be distributed on a discretionary basis, in accordance with the requirements discussed in following sections of this notice.

 b) Program Substitution and Deletion

The Commission considers that the protection of program rights purchased by Canadian television programming undertakings is fundamental to maintaining the integrity of the Canadian rights market, and to protecting the advertising base of local and regional television stations so that they may meet their commitments to Canadian programming. To this end, consistent with the commitments of the DTH distribution applicants, the Commission will require the licensees, upon receipt of a request by the licensee of a programming undertaking, to delete the programming of a non-Canadian television service distributed by the DTH undertaking, and to substitute therefor the programming of the Canadian programming undertaking distributed as part of the DTH service, when the programming is iden-tical.

The Commission will also require DTH licensees to delete programming received by subscribers who reside within the grade B contour of any Canadian television programming undertaking where the programming distributed as part of DTH undertaking is identical to, and transmitted at the same time as, the programming broadcast by the Canadian programming undertaking.

Similarly, DTH distribution licensees will be required to delete programming to those DTH subscribers residing within the grade B contour of any Canadian television programming undertaking, where the programming distributed as part of the DTH undertaking is identical to the programming broadcast by the Canadian programming undertaking, and is distributed within the same broadcast week.

The above requirements for program deletion or substitution must be implemented when the licensee of an affected Canadian programming undertaking provides its written request, at least seven days in advance, pertaining to the deletion or substitution.

The Commission considers that the above measures will act to support the distribution by DTH undertakings of more Canadian programming services.

The Commission notes that discussions have taken place between certain DTH distribution applicants and the Canadian Association of Broadcasters (CAB) respecting alternative measures or initiatives, other than deletions, as may be mutually agreed upon between the parties, to compensate or protect local and regional program rights, and local and regional advertising revenues. The Commission will accept such alternatives to the above requirements, as may be mutually agreed upon by the parties concerned.

 c) Preponderance

The Commission will require adherence to the commitments made by the DTH distribution applicants at the public hearing respecting the distribution of a preponderance of Canadian programming services. Accordingly, DTH distribution licensees will be required to ensure that no subscriber may ultimately receive a total number of programming services that contains less than a preponderance of Canadian programming services. For this purpose, 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.

 d) Linkage

As stated by the Commission in Public Notice CRTC 1993-74 following its Structural Public Hearing:

 Addressable technology will provide greater choice and customization of services to subscribers.... The Commission has determined that the implementation of addressability on a universal basis for the provision of broadcasting services to Canadians is a significant policy objective.... The Commission expects that universal addressability will make possible the wider exposure of discretionary programming services at lower prices, and will also provide opportunities for new niche services to develop and become financially successful.

The Commission recognizes that universal addressability provides a technological basis and opportunity to provide subscribers with a greater degree of programming choice in a manner that is nevertheless consistent with the objective of promoting Canadian programming services. The Commission also recognizes that the deployment of digital technology and addressability is much further advanced in the DTH industry than in the cable industry.

Accordingly, the Commission is prepared to provide DTH operators a greater degree of flexibility in packaging programming services. For example, as described earlier in this notice, the Commission will not require a buy-through of the basic service for a subscriber to purchase DTH PPV programming.

DTH distribution licensees will be required to adhere to a 1:1 linkage ratio between Canadian specialty services and certain non-Canadian services. The Commission will apply a 1:5 linkage ratio between Canadian pay television services (excluding DTH PPV services) and authorized non-Canadian services.

The Commission notes that, in the current cable environment, subscribers must be equipped with addressible decoders in order to receive pay television services. This has served as a technical barrier between pay television and other discretionary services. In order to provide pay services with a marketing lift in the cable market, the Commission has identified a number of U.S. services, including U.S. superstations, as exclusive packaging partners for Canadian pay television services.

Because addressability will be universal in the DTH market, there will be no technical barrier between pay television services and other discretionary services. However, the Commission considers that, to remove those exclusive packaging partners that have provided a significant marketing lift to pay television services in the cable environment, may produce an uncertain result in an addressable market. In order to permit DTH distributors to take advantage of the packaging flexibility that universal addressability allows, while at the same time respecting the importance of the superstation linkage to licensed pay television services, and pay television's contributions to Canadian program production and distribution, the Commission considers that a minor exception to the pay television linkage requirements is warranted in the case of DTH.

Accordingly, the Commission will require that the six U.S. superstations, Black Entertainment Television (BET), Comedy Central and Lifetime continue to be exclusively packaged with pay television services using a linkage ratio of 5:1, with the exception that a DTH distribution operator may designate one of the six authorized U.S. superstations and package the signal of that superstation with Canadian specialty services on a 1:1 linkage basis. This exception is intended to permit DTH distribution operators flexibility to create thematic programming tiers, while ensuring that pay services continue to enjoy a marketing lift, until such time as a more comprehensive review of distribution and linkage policies applicable to all digital distribution undertakings can be undertaken.

The Commission considers that this added packaging flexibility, together with the ability that DTH subscribers will have to purchase pay-per-view services only, is warranted, taking into account the commitments of DTH operators to ensure that each subscriber receives a preponderance of Canadian services.

 e) Cancom Signals

Canadian Satellite Communications Inc. (Cancom) is authorized to distribute Canadian and U.S. network signals to cable head ends via satellite. At the hearing, Cancom argued that it had the exclusive right to distribute authorized Canadian and non-Canadian programming services to both the cable and DTH markets. In Cancom's last licence renewal decision (Decision CRTC 95-20), the Commission authorized Cancom to distribute, by satellite, Canadian and U.S. network signals to the cable market until 31 August 1998.

The Commission will not require DTH distribution licensees to receive authorized Canadian and U.S. network signals from Cancom. In making this determination, the Commission notes that U.S. network signals are available to Power DirecTv directly from U.S. satellites in the transmission format to be utilized by Power DirecTv. To require that Cancom be the source of these signals for the DTH market could lead to increased demands for scarce Canadian satellite space segment, and increased costs to DTH subscribers. Moreover, the Commission notes that the reception of such U.S. programming services in this manner is consistent with the government's satellite usage policy. In the case of Canadian television network signals, the Commission notes that such signals must also be transmitted in the technical format to be utilized by the DTH licensee. As such, the Commission sees no direct benefit in requiring that Canadian network signals be received from Cancom in the DTH market.

 f) Access

Based on the record of this proceeding, the Commission has decided to establish the following access regime for the carriage of licensed Canadian programming undertakings by DTH distribution undertakings. Other DTH access issues, such as those relating to the carriage of exempt programming services and third-party access, may be considered in the context of the Commission's access policy proceeding announced in Public Notice CRTC 1995-128 or in subsequent proceedings.

As a general policy, the Commission considers that national DTH satellite distribution undertakings should be required to provide access to all licensed Canadian pay television and specialty programming undertakings, subject to the availability of satellite capacity, and other considerations discussed below. Also, DTH distribution services must give priority to the carriage of programming services over non-programming services.

In the case of DTH PPV television programming undertakings, the Commission will require DTH distribution undertakings to distribute at least one general interest English-language DTH PPV television programming undertaking, and at least one French-language general interest DTH PPV television programming undertaking. The Commission considers that to require DTH distribution undertakings to distribute all general interest DTH PPV undertakings would result in the duplication of PPV movie-based programming, with little value added to the subscriber or program rights holder. Such a requirement would also necessitate that these programming services be transmitted by DTH operators in their chosen format, at a significant incremental cost, and would represent undue consumption of scarce satellite capacity.

In the case of the Sports/Specials Pay Per View service approved today, the applicant did not propose that DTH distribution licensees be obliged to carry this service. Rather, the applicant considered that the market appeal of this unique niche programming service would create a market-driven incentive for carriage by DTH distribution undertakings. The Commission has thus licensed this service without consideration of any specific access policy framework. In this regard, the Commission notes the interest expressed by the DTH applicants in distributing the Sports/Specials Pay Per View service, and their broader commitment to distribute Canadian services.

With respect to distribution of pay audio programming services, the Commission considers that access should be primarily market-driven and negotiated between the DTH distributor and the programming undertaking. However, the Commission agrees with the CBC that DTH distributors who choose to carry pay audio services in which they have an ownership interest should also provide access to independent services, given the diversity in programming among the competing pay audio services, and the relatively small channel capacity demands of such audio services. However, the Commission does not consider that it is necessary or appropriate for DTH subscribers to be forced to subscribe to, or pay for, more than one pay audio service. The Commission will therefore require the licensees of DTH distribution undertakings that elect to distribute a pay audio service in which they or another distribution undertaking have an ownership interest exceeding 30%, also to 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 pay audio 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.

 g) Financial Contributions to the Production of Canadian Programming

The DTH and DTH PPV Orders direct the Commission to ensure that each DTH satellite distribution undertaking and each DTH PPV television programming undertaking is "subject to equitable obligations and makes maximum contributions to Canadian programming, including a significant financial contribution derived from a percentage of gross annual revenues to the production of Canadian programming, and that the financial contribution is administered independently of the undertaking".

Most DTH PPV applicants argued that the appropriate level of contribution should be in the range of 5% of gross annual revenues. However, ExpressVu and Power DirecTv argued that a lesser percentage of gross annual revenues should initially be required of DTH distribution undertakings, taking into account, among other factors, the start-up costs to be incurred by new DTH services and the relative direct financial contributions of the cable industry to Canadian production.

The Commission considers that the DTH and DTH PPV Orders are clear in their intent that licensees make maximum contributions to the production of Canadian programming, including a financial contribution based on a percentage of gross annual revenues. Further, the Commission considers that such contributions must be based on a percentage of actual gross revenues, and not gross revenues minus any pass-through portions or costs.

Accordingly, the Commission will require that DTH and DTH PPV undertakings contribute a minimum of 5% of their gross annual revenues to the production of Canadian programming, beginning in year one and continuing in each subsequent year of their operations.

  (h) Administration of Funding Contributions by DTH Distribution and DTH PPV Undertakings

The DTH and DTH PPV Orders require that the financial contributions made by DTH and DTH PPV undertakings be administered independently of the licensed undertakings. The DTH and DTH PPV applicants proposed various approaches as to how their contributions would be administered, although there was general agreement that the creation and administration of several new production funds would likely be inefficient and duplicative.

Accordingly, the Commission will require the licensees of all DTH distribution and DTH PPV undertakings licensed today, to direct their contributions to the existing Canadian production fund of their choice, provided that it is independent from their undertakings. Licensees must advise the Commission in writing, no later than six months from today's date, of the name of the production fund they have chosen to administer their contributions. Thereafter, contributions should be made on a monthly basis, and be remitted no later than 45 days after the month's end, and represent a minimum of 5% of that month's gross revenues.

 i) DTH Transponder Costs

Power DirecTv argued that, given the size of the existing cable subscriber base, Canadian programming services have an incentive to adopt the same digital transmission, compression and encryption standards as the cable industry. Any DTH undertaking utilizing different standards will be required to re-uplink these program services in its own unique technology. Because Homestar proposed to deploy the same digital technology currently employed by the cable industry, it would not incur this re-uplink cost. Power DirectTv argued, that both the cable industry and Homestar would therefore enjoy a significant competitive cost advantage over DTH distribution licensees who have chosen alternative digital standards, and who must absorb the full cost of distributing specialty and pay programming services to their DTH subscriber base in their chosen digital technical format.

To address this situation, Power DirecTv proposed that all costs incurred to uplink and transmit Canadian programming undertakings in all technological formats chosen by DTH and cable distribution undertakings be borne by the specialty and pay programming undertakings, and that these costs be recovered through a uniform affiliation fee charged to all distribution undertakings, including cable distribution undertakings and, potentially, their subscribers. Power DirecTv argued that such a proposal would facilitate fair competition among competing distribution technologies. Power DirecTv indicated, however, that it would support any alternative proposal that would address the issue of uplinking and transmission costs.

The Commission considers that a number of technological and competitive factors must be considered in assessing the Power DirecTv proposal. Firstly, the Commission considers that the DTH distribution services have intrinsic competitive advantages and disadvantages relative to each other and to the cable industry. For example, DTH distribution undertakings will commence their operations using a digital platform that provides, among other things, universal addressability, and multichannel video and audio programming services. Moreover, the service offered by DTH distribution undertakings will feature sophisticated, but user-friendly menu systems, and the satellite equipment subscribers will use to receive the service will be portable. In the Commission's view, the ultimate impact of any competitive advantages or disadvantages of one means of distribution over another are best determined in and by the marketplace.

In considering this matter further, the Commission notes that the other DTH distribution service licensed today, namely ExpressVu Inc., has acknowledged that it faces higher costs for transmitting services than those facing the cable industry. Nevertheless, ExpressVu Inc. indicated at the hearing that it is confident that it can successfully compete in the market and has, accordingly, committed to paying the costs to distribute programming services in its chosen digital transmission format throughout its licence term. The Commission also notes that, while the standard chosen by the cable industry is also available for use within the DTH industry, the DTH distribution applicants have chosen other digital transmission systems for their own business reasons.

The Commission also notes that this cost disparity between DTH and cable would be irrelevant in non-cabled areas, and would be largely mitigated in cabled areas where cable licensees will incur a significant expense to deploy digital decoders to all subscribers in order to achieve technical competitive parity with DTH services. The Commission notes that the allocation of uplinking and transmission costs through a uniform affiliation fee charged to all distribution undertakings would shift the burden of a considerable portion of these costs to cable undertakings and, potentially, to their subscribers, resulting in a subsidy to the DTH distribution industry.

The Commission also notes that the chosen technical configuration of the Power DirecTv service requiring it to use the Anik E2 Telesat satellite would inevitably require Power DirecTv to re-uplink existing Canadian programming services currently being distributed on Anik E1 to Anik E2 even if it were using a compression standard similar to that used by cable. The Commission further notes that Telesat's DTH discount tariff will remain in effect until the end of 1997.

Based on all of the foregoing, the Commission considers that it is unnecessary to implement further measures to address the competitive landscape between the DTH and cable industries at this time.

 j) Rate Regulation

The Commission considers that the degree of competition that two new DTH distribution undertakings will face from each other, the cable industry and other distribution technologies will create sufficient market pressure to discipline the rates charged DTH subscribers. Accordingly, the Commission does not intend to regulate the rates of DTH distribution undertakings.

 k) Television Violence

In Notice of Public Hearing CRTC 1995-5, the Commission sought comment 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 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.

As noted by the Commission in its decisions approving the applications by ExpressVu Inc. and Power DirecTv, both applicants made a number of commitments with respect to the issues raised in the violence proceeding. Each party confirmed its ability to curtail any signal or individual program distributed by its undertaking. Both applicants also agreed to comply with the proposed regulatory amendments currently being considered in the context of the violence proceeding, if ultimately adopted by the Commission. ExpressVu Inc. and Power DirecTv also 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 DTH licensees to adhere to these commitments.

 l) Licensing of Additional DTH Satellite Distribution Undertakings

Since 1993, at least two non-Canadian digital DTH distribution services have emerged that are entering the Canadian market through the so-called "grey market", without CRTC authority and without making contributions to the Canadian broadcasting system.

In light of the importance of enabling attractive Canadian DTH distribution services to establish themselves, both as competitors to cable and as strong Canadian alternatives to unauthorized direct broadcast satellite services entering the Canadian market, the Commission will generally not be disposed to begin to process further applications for new Canadian DTH distribution services until six months after the ExpressVu and Power DirecTv DTH distribution undertakings licensed in Decision CRTC 95-901 and 95-902, issued today, have commenced delivery of services to subscribers. The Commission considers that this determination should permit both ExpressVu and Power DirecTv to enter the market successfully.

Allan J. Darling
Secretary General