ARCHIVED -  Decision CRTC 95-901

Decision

See also: 95-901-1

Ottawa, 20 December 1995

Decision CRTC 95-901

ExpressVu Inc.

Across Canada - 952064400

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 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. All licensed and authorized programming services will be distributed using Telesat's Anik E-1 satellite.

The Commission will issue a licence to carry on a national DTH satellite distribution undertaking expiring 31 August 2002. The license will be subject to the conditions specified in the appendix to this decision and in the licence to be issued.

Ownership

ExpressVu Inc. (ExpressVu) is a new company incorporated under the Canada Business Corporations Act. ExpressVu has four shareholders, none of whom has sufficient votes to control the corporation. The four shareholders are: BCE Inc. (33 1/3%), Tee-Comm Electronics Inc. (33 1/3%), Canadian Satellite Communications Inc. (19%) and WIC Western International Communications Ltd. (14 1/3%).

DTH distribution regulatory framework

In Public Notice CRTC 1995-217, the Commission has provided details regarding the general regulatory framework that will apply to all DTH satellite distribution undertakings. DTH satellite distribution undertakings represent a new class of distribution undertaking 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, alteration and curtailment of programming services and 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.

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-language and one French-language general interest DTH pay-per-view 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, ExpressVu proposed to meet paragraph 4(c) of the DTH Satellite Distribution Undertakings Order (P.C. 1995-1105) respecting financial contributions to the production of Canadian programming by making annual contributions potentially increasing from 2.5% in year one, to 5.5% in year 7, depending on the average number of subscribers in the previous year.

ExpressVu also proposed that DTH distribution undertakings might direct their annual Canadian programming contributions towards a variety of targets, including an omnibus distribution fund contributed to by all distribution undertakings and a separate fund contributed to only by DTH distribution undertakings.

In the interest of cost effectiveness and efficiency, the Commission considers that such contributions should be made to an existing Canadian program production fund. More specifically, and 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 the 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.

In its application and at the hearing, ExpressVu made a number of commitments with respect to the issues raised in the violence proceeding. These issues are currently the subject of deliberation by the Commission. Firstly, ExpressVu indicated that the addressable decoders it will place in subscribers' homes would incorporate blocking technology. This technology, when used in conjunction with a program classification system, would enable parents to screen out and prevent violent programs from entering the home. ExpressVu also indicated its willingness to work with the Canadian Broadcast Standards Council (CBSC), the Action Group on Violence in Television (AGVOT) and the broadcasting industry generally for the purposes of developing an appropriate classification system and viewer advisories. Pending the development of a classification system that would allow parents to make effective use of blocking technology, ExpressVu also committed, within six months of the date of this decision, to curtail on a cross-Canada basis any programming that was deemed by the Commission or the CBSC to breach an approved code on violence. Finally, ExpressVu indicated that it would comply with any other measure that the Commission might ultimately adopt as a result of its proceeding on television violence.

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 95-901

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:

WDIV Detroit (NBC)
WTVS Detroit (PBS)
WTOL-TV Toledo (CBS)
WXYZ-TV Detroit (ABC)
WUHF-TV Rochester (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 percent 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 (Kaleiscope)
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, thereafter, 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 12 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.