ARCHIVED -  Public Notice CRTC 1996-60

Public Notice

Ottawa, 26 April 1996

Public Notice CRTC 1996-60

ACCESS RULES FOR BROADCASTING DISTRIBUTION UNDERTAKINGS

I. INTRODUCTION

In Public Notice CRTC 1995-128 dated 28 July 1995, the Commission announced a public process to develop access rules applicable to the carriage of programming services by all broadcasting distribution undertakings. In order to have the fullest possible public consultation on this important matter, the Commission established a two-stage written comment process, followed by an oral public hearing in the National Capital Region commencing 5 February 1996.

This public process followed upon initiatives commenced by the Canadian Cable Television Association (CCTA), at the Commission's request, to develop access guidelines applicable to the carriage, by cable distribution undertakings, of both licensed and exempt programming undertakings (see Public Notice CRTC 1993-74). In May of 1994, the Commission accepted the CCTA's Access Commitment for the services of pay and specialty programming undertakings. Subsequently, the CCTA launched an internal process to examine the issue of access for services of exempt programming undertakings.

In its 1995 public notice, the Commission described its existing regulatory framework for cable distribution undertakings, outlined the objectives and scope of the proceeding, and invited interested parties to provide their views on a number of issues. These included: the development and implementation of access rules for the carriage of programming services; the establishment of a mechanism for mediation and dispute resolution relating to access having application to all programming and distribution undertakings; the applicability of access rules to digital transmission; and the possible need for grandfathering the carriage of programming services provided by exempt undertakings.

The Commission also requested the CCTA to file a revised access policy for the programming services of exempt undertakings, taking into account the Commission's comments in the public notice, as well as the submissions received in the proceeding's first stage.

The Commission notes that the public process announced in Public Notice CRTC 1995-128, and the determinations reached herein, are consistent with the request by the Governor in Council, contained in Order-in-Council P.C. 1995-398 dated 14 March 1995, that the Commission report:

 ...on the rules, including related dispute resolution mechanism(s), to be established to ensure that broadcasting distribution undertakings provide fair and equitable access to authorized television programming services, whether licensed or exempt by the Commission, as well as on the process, the mechanism and the timetable the Commission proposes for the finalization and proper implementation of these rules.

The Commission received written comments from 55 interested parties, including representatives of the cable industry; direct-to-home (DTH) distributors; the Canadian Association of Broadcasters (CAB); licensees of conventional, specialty and pay television programming undertakings; telephone and newspaper associations; individual newspaper companies; prospective third-party (arm's length) providers of exempt programming services; representatives of the music, film and marketing industries; public interest groups; an applied negotiation research group; and, a U.S. programming service provider. Most of those who filed comments appeared at the oral public hearing to expand on their written submissions.

The Commission wishes to thank all those who took part in this proceeding. Their submissions have greatly assisted the Commission in developing its access policies set out later in this public notice.

II.  THE CCTA'S ACCESS PROPOSALS

On 1 November 1995, the CCTA, on behalf of its members, submitted a proposed revised Access Commitment for Licensed Programming Services and a new proposed Access Policy for Exempt Programming Services. The former contains minor revisions to the existing CCTA Access Commitment for licensed specialty and pay television services that was accepted by the Commission on 16 May 1994 (Public Notice CRTC 1994-55). For example, Part III cable distribution undertakings with 6,000 or more subscribers would now also be subject to the commitment, whereas the existing Access Commitment applies only to those CCTA members who are licensees of Class 1 cable distribution undertakings. The revised Access Commitment also proposes changes to the definition of "available channel capacity" and to the provisions governing the distribution of pay-per-view (PPV) services. With these revisions, it retains the central commitment that a cable distribution undertaking will distribute, on a discretionary basis and subject to available channel capacity, all programming services of licensed specialty and pay television programming undertakings operating in the language (either English or French) predominating in the market served by the distribution undertaking.

With respect to access for licensed pay audio programming undertakings, the CCTA stated in a letter dated 8 January 1996 that its proposed Access Commitment for Licensed Programming Services "...is not intended to apply to licensed pay audio services". However, it stated that it would support a policy that would require a cable licensee electing to distribute a pay audio service in which it has an ownership interest exceeding 30% to distribute at least one other pay audio service in which it does not have an ownership interest. It opposed extending a "tied carriage" policy to cable licensees who have no ownership interest in a pay audio service.

The CCTA's proposed Access Policy for Exempt Programming Services outlined provisions for the allocation of channel capacity for such services, the method of selecting which services are distributed (a "consumer vote"), the grandfathering of the services of existing exempt undertakings, and a rate proposal for the use of channel capacity by third-party providers of such services, based on a monthly or annual subscriber charge for distribution on an analog channel. For digital access, in a submission filed on 1 December 1995, the CCTA proposed to establish a maximum per channel rate by dividing the cost of providing services in a digital format by the projected digital channel capacity of the relevant system.

III. PRINCIPAL ISSUES

The principal issues discussed in this proceeding are: the applicability and implementation of access rules; dispute resolution mechanisms; the selection of exempt services by distribution undertakings; grandfathering; the reservation of channel capacity for exempt services; treatment of PPV, multiplexed, pay audio, and two-way interactive services; access rates; and channel placement.

Many of these issues are complex, inter-related and difficult to resolve. The Commission's task in coming to such a resolution is complicated by the uncertainty surrounding the timeframe for the rollout by the cable industry of digital video compression (DVC) technology, and its impact on channel capacity and on access rules in general.

IV. THE COMMISSION'S FINDINGS

1. Applicability of Rules

In Public Notice CRTC 1995-128, the Commission proposed to develop access rules that would be applicable to all cable distribution undertakings, as well as to other types of broadcasting distribution undertakings such as DTH distribution undertakings and broadband radiocommunication distribution undertakings. At the hearing, discussion concerning the applicability of access rules centred on the extent to which such rules should be applied to all broadcasting distribution undertakings, of whatever type, and whether special consideration should be given to smaller sized undertakings, particularly in light of their relatively large numbers, and generally more limited channel capacity and financial resources.

The Commission has determined that the access rules should apply to DTH distribution undertakings, to Class 1 cable distribution undertakings, and to radiocommunication distribution undertakings having the size and operating under circumstances comparable to those of Class 1 cable distribution undertakings, and using broadband technologies such as multipoint distribution systems (MDS) and local multipoint communications systems (LMCS).

The Commission considers, however, that the application of these rules to smaller distribution undertakings, such as Part III and Class 2 cable undertakings, would create an unreasonable burden for licensees, given their smaller subscriber bases and, frequently, more limited channel capacity and financial resources.

For similar reasons, the access rules should not apply to the following types of distribution undertakings: single-channel TV and radio rebroadcasting stations, multiple-channel television (MTV) rebroadcasting systems, subscription television (STV) systems, relay distribution undertakings, and exempt distribution undertakings.

Nevertheless, the Commission encourages operators of those broadcasting distribution undertakings not subject to these access rules, and particularly those for whom some of the limitations noted above do not exist, to provide comparable access to that required of the larger distribution undertakings. In this regard, the Commission notes that the CCTA's proposed access commitment also encourages its members with less than 6000 subscribers to apply its access commitment where possible.

2. Approach to Carriage Issues

2.1 Guiding Principles

There was a consensus among participants at the public hearing that, as a fundamental principle, distribution undertakings must give priority to the distribution of the services of licensed Canadian programming undertakings. Accordingly, the Commission considers that the access rules should include a general requirement that a broadcasting distribution undertaking distribute the services of all licensed Canadian programming undertakings appropriate for its market. In this context, the services of licensed programming undertakings should be given priority over the services of exempt programming undertakings.

With regard to the distribution of the services of exempt programming undertakings, the Commission notes that there is little capacity at present that could appropriately be devoted to the distribution of such services by cable distribution undertakings, particularly given the priority that should be accorded to licensed Canadian programming undertakings. However, with the rollout of DVC technology by these and other competitive broadcasting distribution undertakings, many of the concerns about access that are raised by limited capacity will be alleviated.

Accordingly, the Commission considers that the guiding principle for the distribution of services of exempt programming undertakings in a DVC environment, where capacity is no longer a concern, is that such services should not unreasonably be denied access. However, taking into account the capacity limitations that exist where distribution undertakings employ analog technology, the Commission considers that the appropriate principle in such circumstances should be the more limited one of precluding any preferential treatment being given to the exempt services in which distribution undertakings have an ownership interest above a certain level. This matter is discussed further in sections 2.3 and 2.4 below.

2.2 Ca rriage of Services of Licensed Undertakings

The Commission has determined that, in addition to the priority television signals identified in the Cable Television Regulations, 1986 (the regulations) or by way of specific condition of licence, a broadcasting distribution undertaking to which the access rules apply should distribute, as a general rule, the services of all licensed specialty and pay television undertakings appropriate for its market, to the extent of available channel capacity.

At the time it first licences a programming undertaking, however, the Commission may specify, by condition of licence, the circumstances that must be present in order to make carriage of the undertaking's service a requirement. Such circumstances might be tied to the availability of DVC capacity within a distribution undertaking reaching a specified penetration level.

For cable and broadband radiocommuni-cation distribution undertakings, "services appropriate for the market", means those specialty and pay television services operating in the official language predominating in the market, the originators of which are licensed to provide the service to all or part of the area served by the distribution undertaking, but does not include any single or limited-point-of-view religious specialty or pay television service. Nor does the term include more than one general interest PPV service operating in the pertinent official language.

"Services appropriate for the market" would, however, include ethnic programming services of undertakings that are licensed to provide service to all or part of the area served by the distribution undertaking, where the distributor was carrying the service on 16 May 1994, or where the distributor is operating in a market in which 10% or more of the total population is of one or any combination of the ethnic origins to which the programming service is intended to appeal.

For DTH distribution undertakings, "services appropriate for the market" means all specialty and pay television services, as well as at least one English-language and one French-language general interest DTH PPV service, but does not include ethnic programming services or any single or limited-point-of-view religious specialty or pay television service.

For the purpose of these access rules, "available channel capacity" means any unrestricted video channel of a distribution undertaking other than a channel on which is distributed: a) the programming service of a licensed programming undertaking; b) community programming on the community channel; and, c) a programming service comprising the proceedings of the House of Commons or of the legislature of the province or territory in which the undertaking is located.

At the public hearing, the Commission also discussed with representatives of the cable industry and other participants, including the two existing cable-delivered PPV service providers, the portion of a distribution undertaking's available channel capacity that they consider should be reasonably allocated to the carriage of PPV services.

One of the two existing PPV service providers proposed that its treatment under any access rules should not differ from the treatment it currently receives, while the other proposed that the carriage of conventional PPV services should consist of what it called "the core pay-per-view service", which would include a minimum of nine analog channels plus a barker channel.

The Commission has decided that, where a claim of insufficient channel capacity by a broadcasting distribution undertaking has been given as justification for not distributing any service of a licensed programming undertaking, in determining the undertaking's available channel capacity for the purpose of the access rules, it will be guided by, among other things, whether a PPV service is being distributed on more than ten analog channels.

2.3 C arriage of Services of Exempt Undertakings

As noted above, the Commission has determined that those broadcasting distribution undertakings to which the access rules apply should not unreasonably deny access to the operators of exempt programming undertakings where the distribution undertaking is operating in a digital mode. In determining whether a distribution undertaking has complied with this access rule, the Commission will take into account, among other things, whether the distribution undertaking has given itself, or another person, any undue preference.

With respect to access in an analog environment, where a distributor elects to carry, on one or more analog channels, the service of an exempt programming undertaking in which the total ownership interest of the distributor and its affiliates, as well as that of any other similar type of distribution undertaking, exceeds 15%, the distributor must provide an equal number of channels for the distribution of services of third-party exempt programming undertakings. By "third-party exempt programming undertaking", the Commission means an undertaking in which the total ownership interest of the distributor and its affiliates, as well as of any other similar type of distribution undertaking, is 15% or less. The Commission will consider a parent or a subsidiary of the distributor to be an affiliate. Further, with respect to the term "similar type of distribution undertaking", the Commission will consider, for example, two cable companies, or two telephone companies, to be of similar type.

2.4 O ther Matters Relating to the Distribution of the Services of Exempt Undertakings

a)  Selection of Services by Distribution Undertakings

In its proposed Access Policy for Exempt Programming Services, and again at the hearing, the CCTA indicated that it would follow a "consumer vote" approach, whereby subscribers would determine which services of exempt programming undertakings are distributed on a cable system. While it recognized that there were difficulties with the consumer vote approach, the CCTA stated that it was not convinced that any other suggested approach was superior.

In written comments and at the hearing, a number of parties argued that the consumer vote approach was unworkable and unfair since it would be difficult, if not impossible, to ensure that consumers would be able to cast an informed vote. This approach was also seen by parties as discriminatory toward new third-party exempt programming service undertakings. The majority of participants were in favor of the "first-come, first-served approach".

The Commission agrees with the views expressed by the majority of participants, and has thus determined that distributors should select the services of exempt programming undertakings using the first-come, first-served approach.

b) Grandfathering and Tenure

At the present time, broadcasting distribution undertakings typically distribute a limited number of services of exempt programming undertakings, such as homeshopping services, and services devoted to real estate and classified advertising. For the most part, existing exempt programming undertakings offering programming services such as these are either fully or partly owned by cable licensees.

All participants at the hearing, other than those involved in the cable industry, opposed the wholesale grandfathering of the cable carriage of services provided by existing cable-owned exempt programming undertakings.

As stated above, the Commission has determined it to be a fundamental principle that distribution undertakings must give priority to the carriage of the services of licensed Canadian programming undertakings on unrestricted channels over all other services, including those provided by exempt programming undertakings.

Accordingly, grandfathering the use of analog channels to distribute the services of exempt programming undertakings will be permitted only where the service of the exempt programming undertaking is distributed on a restricted channel. The Commission will also permit the continued distribution of the services of exempt programming undertakings on unrestricted channels, but only so long as the distributor complies with the access rules respecting the distribution of the services of licensed programming undertakings. In either case, distributors will be required to comply with the 1:1 requirement described in section 2.3 above.

c)  Reservation of Channel Capacity

The CCTA proposed that cable licensees be permitted to set aside a maximum of 20% of their total analog or digital channel capacity for the distribution of the services of exempt programming undertakings, such as teleshopping and real estate services. At the hearing, the CCTA reiterated that the proposed 20% allocation was a maximum, but clarified that "there is no requirement to supply a minimum", whether in an analog or digital mode.

Comments from interested parties respecting the number of channels to be allocated to services of exempt programming undertakings varied, depending upon whether a party's interest was primarily related to the programming services of licensed programming undertakings or to the provision of services of new exempt programming undertakings.

As stated earlier, a large number of cable licensees are currently faced with limited analog channel capacity, and this situation will exist for the foreseeable future. In 1993, when the Commission issued Public Notice CRTC 1993-74, the cable industry was forecasting a rapid rollout of DVC technology, which would bring about an increase in channel capacity and a reduction in per-channel transmission costs. However, a number of factors have prevented the cable industry from achieving this objective. At the hearing, the CCTA stated that, although the "cable industry is still committed to going digital", it could not "predict with any confidence when DVC boxes will be available or what the economics will be".

The Commission does not intend to permit the reservation of any amount of available channel capacity for the services of exempt programming undertakings, in either the existing analog world or future DVC world, on the grounds that such reservation would be inconsistent with its policy determina-tion that the services of licensed undertakings should have priority over services of exempt programming undertakings.

  d) Access Rates

With regard to an appropriate methodolo-gy for determining the access rates to be charged the operators of exempt programming undertakings, a number of parties, including the CCTA, Stentor Resource Centre Inc. (Stentor), QVC Inc., Torstar Corporation (Torstar), Telus Corporation (Telus), Northern Response (Canada) Ltd. (Northern Response), Southam Inc. (Southam), Thomson Newspapers Company Limited (Thomson), and Shaw Communications Inc., made both written submissions and oral comments in this proceeding.

In response to a Commission request at the hearing, the CCTA filed a cost-based proposal for setting analog access rates. Specifically, the CCTA's analog access rate would be determined by taking a system's total basic service operating expenses net of affiliation payments, community programming costs and copyright payments, and then adding in basic service depreciation plus an amount equal to 23% of the basic service net fixed assets (to allow a return to equity capital, interest expense and income tax). The resultant amount would then be divided by the system's maximum analog channel capacity, including capacity expansion plans already underway, and then further divided by 12 to yield the monthly analog access rate per channel.

For access to digital capacity, the CCTA proposed that the maximum per channel access rate be established by dividing the costs of providing digital services, including a reasonable mark-up, by the projected digital channel capacity of the licensee's system, all expressed on a monthly or annual basis.

Stentor proposed that, because cable operators currently effectively control a bottleneck for the delivery of entertainment services to the home, the access rate should be based on the telecommunications principle of incremental costing plus a reasonable mark-up for profit. QVC Inc. proposed that the maximum rate for both analog and digital access be based on a percentage of the revenues earned by the exempt undertaking from the distribution of its service, eg 5% of the exempt programming service's revenues earned in the service area of the cable operator would be remitted to the cable operator. Southam proposed that the maximum rate be established by way of an auction and that, in order to avoid self-dealing by cable companies in respect of their own services, a minimum access rate would be established based on a tariff; any bid in excess of this amount would go to an independent production fund. Torstar, Telus, Northern Response and Thomson suggested that some form of tariff be established and regulated by the Commission until such time as cable distributors are in a fully competitive market.

After a detailed examination of these submissions and comments, the Commission has concluded that the appropriate methodology to use in establishing an access rate or rates is to base any such rate(s) on those costs, operating and capital, that are attri-butable to providing channel capacity. Although the Commission is satisfied that a simple formula can be developed, it has also concluded that there is, as yet, insufficient evidence before it to permit any determination of whether there should be a single access rate for the entire cable industry or a number of different rates for different groups of cable undertakings.

Accordingly, the Commission intends to carry out its own detailed study to identify those costs, operating and capital, that are attributable to the provision of channel capacity and to determine if there is a relationship between the level of these costs, the number of subscribers of a particular system and the system's channel capacity. Based on the results of this study, the Commission will then make a preliminary determination whether a single access rate is appropriate for the entire existing cable industry or if different access rates are justified for systems of different sizes, to take into account differences in their cost structures.

The results of the Commission's study, including the specific cost categories that the Commission would consider applicable to the cost of channel capacity, together with the calculations and rationale employed to establish the appropriate access rate for the one or more groups of cable undertakings, will be made available for public comment, after which the Commission will make its final determination on access rates for the existing cable industry.

A determination regarding access rates for new entrants and for other distribution undertakings will be determined when and as required.

2.5  Channel Placement and Realignment of Services

A large number of interested parties commented on the fact that channel placement and realignment of services were among the most important ancillary access issues and that they should be addressed by the access rules. Most programming service providers were of the view that, at a minimum, service realignment should not take place without adequate prior notice. Many argued that service realignment should not occur unless the affected service provider consents to the change, or prior Commission approval is received.

Parties also raised such related access matters as common channel placement on all distribution undertakings, tier packaging strategies and the access to and/or use of restricted channels, promotional tools, default menus and navigational systems.

With regard to establishing what should constitute adequate notice, a variety of notification periods were suggested by programmers, ranging from 60 to 180 days.

With regard to service realignment, the CCTA's proposed revised Access Commitment includes a requirement whereby a cable licensee would provide at least 30 days notice to the operator of any licensed or exempt programming undertaking should the cable licensee intend to change the channel assigned to the programming service. At the hearing, the CCTA stated that 30 days would be the minimum notice period, and that it would commit to ensuring its member licensees undertake discussions with the operators of programming undertakings as far in advance of any realignment date as they possibly could.

The Commission agrees with interested parties that such ancillary issues as channel placement are important. However, due to the complexity of these issues, the number of parties involved, and the difficulty and regulatory burden associated with establishing rules applicable to a myriad of circumstances, yet that would be capable of accom-modating various necessary exceptions, the Commission has concluded that such matters should properly be the subject of negotiation between the parties concerned.

With respect to service realignment, however, the Commission considers that the access rules should include a requirement that distributors provide affected programming undertakings written notice at least 60 days in advance of the proposed date of a service realignment.

2.6 Two-way Services

In its proposed Access Policy for Exempt Programming Services and at the hearing, the CCTA stated that its policy would not apply to two-way services since it would be impractical and inappropriate to propose an access policy at this time that addresses services other than the type of broad-based, one-way advertiser-supported services that are currently familiar to the industry.

Some parties expressed concern regarding the CCTA's position on this matter. It was argued that the exclusion of two-way digital services from application of the access rules would allow two-way digital services owned by cable distributors to become firmly entrenched, with no assurance that access would be provided to other services on a non-preferential basis.

After having considered the arguments and concerns put forward by all parties, the Commission has determined that the distribution, including the cable distribution, of the services of all exempt programming undertakings, including those that may be described as two-way or interactive, whether distributed in analog or digital mode, will generally be considered to fall within the access rules described in this notice.

2.7 Audio Services

As noted earlier, the CCTA stated in its 8 January 1996 letter that its Access Commitment was not intended to apply to the pay audio services of licensed undertakings. It added that the choice of services to be distributed, if any, should generally be left to the distributor, that the terms of carriage should be negotiated between the parties, and that the pay audio programming undertakings should be responsible for paying the satellite uplink and transmission costs associated with the distribution of their services.

The CCTA further stated that it supported "a policy which would require a cable licensee electing to distribute a pay audio service in which it has an ownership interest exceeding 30% to distribute at least one other pay audio service in which it does not have an ownership interest, provided the other service is delivered to the cable licensee's head end in a compatible format".

The Commission has determined that, where the licensee of a distribution undertaking elects to distribute the service of a pay audio programming undertaking in which the total ownership interest of the distributor and its affiliates, as well as that of any other similar type of distribution undertaking, exceeds 30%, the distributor must provide access to at least one other Canadian pay audio service in which the total ownership interest of the distributor and its affiliates, as well as of any similar type of distribution undertaking, is 30% or less, provided that the service is delivered to the licensee's head end in a compatible format. "Affiliate" and "similar type of distribution undertaking" shall have the same meanings as set out in section 2.3.

4. Dispute Resolution Mechanism

In Public Notice CRTC 1995-128, the Commission invited comment on whether it should amend subsection 27(2) of the regulations, so that the provisions dealing with the resolution of disputes would apply not only to licensed programming undertakings, but also to exempt programming undertakings.

In addition, the Commission invited comments regarding the most appropriate means of establishing a mechanism for mediation and dispute resolution.

Parties who made submissions on the matter agreed that the Commission should extend the dispute resolution provisions to include disputes involving exempt programming undertakings. Accordingly, the Commission intends to extend the application of its dispute resolution provisions to exempt programming undertakings.

With respect to the most appropriate means of establishing a mechanism for mediation and dispute resolution, the Commission received a wide variety of comments. Some parties were of the view that the existing avenues for dispute resolution are satisfactory. However, several other parties expressed their dissatisfaction with the existing dispute resolution framework; they argued that, among other things, the framework provides insufficient clarity as to when the Commission would be prepared to become involved in the dispute resolution process. Further, some parties objected to the requirement that there be an attempt to have a dispute mediated prior to the Commission entertaining a request for dispute resolution. It was argued that such a requirement made the dispute resolution process cumbersome, lengthy and costly.

In Public Notice CRTC 1994-7, the Commission stated that the Cable Television Standards Council (CTSC) would be the first forum for the mediation of disputes between cable and licensed programming undertakings. The CTSC's mandate to mediate disputes stems from the CCTA's existing Access Commitment for licensed pay and specialty programming undertakings.

This Access Commitment provides that disputes "which cannot be resolved by the parties, are to be referred to the CTSC for mediation according to the terms of the CTSC by-laws. Once a dispute is referred to the CTSC, both parties must participate in the mediation process." The CTSC process for mediation provides that, where a dispute cannot be resolved after 45 days, the matter shall be immediately referred to the Commission for determination.

To date, few parties have made use of the CTSC mediation process in the context of their disputes, and the CTSC has referred only one such dispute to the Commission for resolution.

The Commission considers that, given the limited use of the dispute resolution process to date, and that, for the most part, disputes have not required regulatory intervention, there is insufficient evidence to support making any substantial changes to the dispute resolution provisions. However, the Commission is persuaded that all types of distribution undertakings should, in the context of their disputes with programming undertakings, be made subject to the Commission's dispute resolution process.

On the matter of establishing a mechanism for mediation and dispute resolution, it was apparent that some parties at the hearing did not have a clear understanding of the existing structure for the resolution of disputes and what is expected of parties during any dispute resolution process. The Commission considers that regulatory intervention in disputes should be viewed strictly as an option of last resort. Were the Commission to become immediately involved in all access disputes, parties might thereby be discouraged from doing their best to resolve any differences themselves, a primary objective of the Commission in this context.

In the Commission's view, the mediation of disputes between distribution and programming undertakings is an essential component of the dispute resolution process. Parties should view mediation as the best opportunity to communicate openly, in good faith, and to resolve their differences in a mutually satisfactory manner.

Therefore, in keeping with its objective of encouraging parties to resolve access disputes among themselves, and given its limited resources, the Commission is not prepared to involve itself automatically in all disputes referred to it for resolution, as was suggested by certain parties in this proceeding. The Commission will therefore continue to require all distribution and programming undertakings to have matters in dispute mediated for at least 45 days prior to referring these matters to the Commission for resolution. Parties would, of course, be at liberty to either make use of the CTSC to mediate or appoint any other independent mediator during this phase of the dispute resolution process.

Furthermore, the Commission has determined that, in general, it will not be disposed to entertain dispute resolution applications that deal with matters such as channel placement and the packaging and marketing of programming services. The Commission considers that these issues are essentially of a commercial nature and are best addressed without regulatory intervention.

The Commission is mindful, however, of the need for a speedy resolution of disputes. Accordingly, the Commission will endeavor to render a determination on disputes properly before it, within 45 days of receipt of requests for dispute resolution, where parties have met the procedural requirements set out below. Unless parties have fully met all of these procedural requirements, the general 45-day deadline would not be triggered. In addition, where a particular dispute does not, in the Commission's view, lend itself to resolution within 45 days, the matter would be dealt with using a process determined at that time. In such circumstances, the Commission would nonetheless endeavour to render a determination as expeditiously as possible.

The Commission intends to deal with disputes by way of final offer selection in those cases where the expedited 45-day process is being followed. Prior to referring a dispute to the Commission for resolution, parties must agree on the disputed matters that are to be put forth for resolution. Further, each party will be required to provide its final offer regarding each of the issues in dispute, keeping in mind that any final offer must be framed in a similar fashion. For example, if the issue in dispute is the wholesale rate for discretionary carriage of a programming service, both final offers would have to be for a similar time-period, and would have to deal concurrently and in a similar fashion with any collateral matters in dispute.

The Commission's objective in establishing a 45-day process for determining disputed matters is to provide parties with a resolution of their differences in a quick and efficient manner. The Commission also considers that its use of the final offer selection process in such circumstances will provide added incentive to parties to resolve matters in dispute among themselves.

V.  PROPER IMPLEMENTATION OF ACCESS RULES

The majority of participants were of the view that all access rules determined by the Commission to be necessary should be enshrined in regulations where it is reasonable to do so. Generally, the Commission's view is that it is appropriate to make regulations for all access matters discussed in this notice.

The Commission notes that it will soon issue a public notice calling for comment on proposals for developing a comprehensive set of regulations reflecting the new competitive regime for broadcasting distribution undertakings. It is the Commission's intention to include the access rules in this new set of regulations. The Commission expects all distribution undertakings to adhere to the determinations set out in this public notice pending the introduction of the access rules in the new distribution regulations.

Related Documents

Public Notice CRTC 1993-74 (Structural Public Notice); CCTA's 2 May 1994 Access Commitment regarding licensed specialty, pay television and pay-per-view services; Public Notice CRTC 1994-55 accepting this Access Commitment; Public Notice CRTC 1994-7 (introducing mediation and dispute resolution mechanisms under sections 27 to 30 of the regulations); Decision CRTC 94-923 (approving transfer of control of MHL to RCI); Order-in-Council P.C. 1995-398; Telecom Public Notices CRTC 95-22 and 95-34; CRTC letter of 27 April 1995 to Mr. Marc Rochon, Deputy Minister of Canadian Heritage; CCTA's "Access Policy for Analog Exempt Programming and Alphanumeric Non-Programming Services" dated 14 June 1995 and all related documents submitted therewith; and all correspondence related to Rogers' proposed Access Policy for licensed programming services, exempt programming services and non-programming services for its licensed undertakings; Public Notice CRTC 1995-128 (Call for Comments concerning Order-in-Council P.C. 1995-398); and Public Notice CRTC 1995-174 (Request for information from cable licensees).

Allan J. Darling
Secretary General