ARCHIVED -  Public Notice CRTC 1995-29

Public Notice

Ottawa, 22 February 1995

Public Notice CRTC 1995-29

EXTENSION OF THE DEADLINE FOR SUBMISSION OF APPLICATIONS FOR LICENCES TO CARRY ON NEW CANADIAN SPECIALTY AND PAY TELEVISION PROGRAMMING UNDERTAKINGS

Introduction

In the 6 June 1994 Introductory Statement accompanying its decisions licensing a number of new specialty and pay television programming undertakings (Public Notice CRTC 1994-59), the Commission announced that it would be prepared to consider applications for new services and that proposals should be filed with the Commission by 30 June 1995.

In that Public Notice, however, the Commission also noted the following:

 The Commission considers that the issues of affordability and channel capacity pose significant constraints on the number of services the market can accommodate at this time. Moreover, the Commission will wish to re-assess the channel capacity of the cable industry following the launch of the new services in January 1995 as well as consumer reaction to the new services. The Commission will also closely monitor the developments and implementation schedules relating to digital video compression.

 The Commission considers that the Canadian broadcasting system will require a period of time to adjust to these developments, and that no new services could therefore be accommodated before January 1997.

With regard to the recent launch of the new English-language services licensed in 1994, the Commission notes that it is taking longer than initially forecast to determine the degree of consumer acceptance of these services. In many instances, cable licensees have extended the duration of the free preview period. In addition, many cable operators in Anglophone markets have decided to place the majority of the new services on a separate tier.

In view of these developments, and in light of delays encountered by the cable industry with respect to increasing channel capacity through the planned introduction of digital video compression and addressable decoders, the Commission has determined that it is in the public interest, and in the interest of potential applicants as well, to postpone the deadline for the filing of new submissions for a period of approximately six months, to 11 January 1996.

This additional time will enable potential applicants to take into account the ramifications of the new tiering structure in the preparation of their applications.

French-language Pay-per-view

This delay will not apply to applications for licences to provide fully discretionary French-language pay-per-view services, since the introduction of such a service, at this time, would have no impact on the pricing or packaging of existing specialty or pay television services. Furthermore, such a service could readily be introduced in Francophone markets where available channel capacity exists. Accordingly, the deadline of 30 June 1995 for the filing of any applications for licences to provide French-language pay-per-view services will remain unchanged.

Carriage Arrangements

Regarding applications that may be filed by 11 January 1996, and consistent with its ongoing concern with respect to the affordability of the basic service, the Commission advises that it has a predisposition in favour of proposals based exclusively on discretionary
carriage.

Further, applicants are advised that they should not assume that their proposed services will be distributed as part of the highest penetration discretionary tier. With the widespread implementation of a second tier, and with the possibility of a variety of packaging options becoming available in the future, applicants should assess their projected subscriber levels realistically, with careful attention to the level of acceptance their services are projected to achieve with consumers and distributors alike.

Licensing Criteria

The Commission will continue to take into consideration the following general criteria it has employed in assessing applications proposing new specialty, pay television and pay-per-view services, namely that they should:

* contribute to the realization of the objectives set out in the Broadcasting Act and strengthen the Canadian broadcasting system; and

* increase the diversity of high quality programming available to Canadians and provide new opportunities and revenue sources for Canadian program producers and creative talent.

In addition, and in keeping with past practice, the Commission wishes to emphasize that it will consider applications to be incomplete unless they include all of the following:

* A detailed business plan, including financial projections of revenues, expenses, capital costs and all underlying assumptions used to prepare the projections. Specifically, there should be the identification of sufficient funding within the business plan to finance both the start-up and on-going costs of operations until such time as the proposed undertaking becomes profitable. There should also be documented evidence demonstrating that all of the proposed funding within the business plan will be unequivocally available on or before the date the Commission renders its decision on the application (detailed guidelines regarding adequate financing requirements are available from the Commission);

* Documentation providing full and complete details regarding the proposed ownership and control of the undertaking;

* A proposed marketing strategy that clearly demonstrates that there is a strong interest in the proposed service - including its programming concepts, packaging scenarios and retail costs. The marketing strategy should also include the area(s) to be served by the proposed service, target audience, commercial inventory, advertising and sell-out rates; and

* A completed Part II, outlining programming plans and commitments that are commensurate with revenues attained.

Applicants are hereby put on notice that applications that do not contain all of the required information by the filing date will be deemed incomplete and will be returned by the Commission.

Applications for new discretionary pay and specialty services, other than those proposing French-language pay-per-view services, must be filed with the Secretary General of the Commission on or before 11 January 1996. As noted earlier in this document, applications proposing new French-language pay-per-view services must be filed by 30 June 1995. At a later date, the Commission will announce details of the public hearings at which these applications will be heard.

Allan J. Darling
Secretary General