ARCHIVED -  Decision CRTC 97-550

Decision

Ottawa, 24 September 1997

Decision CRTC 97-550

Regina Cablevision Co-operative

Licence amendment - approved

1. In Public Notice CRTC 1997-64 dated 23 May 1997, the Commission announced the receipt of an application by Regina Cablevision Co-operative (Regina Cablevision) to amend the broadcasting licence for the cable distribution undertaking serving Regina by adding a condition of licence that would allow the licensee to distribute a U.S. superstation in a discretionary package that could include one or more Canadian specialty and/or pay television services.

2. The Commission's current policy with regard to cable carriage of U.S. superstations is to allow their carriage, but only in discretionary packages that must contain at least one Canadian pay television service. In recent decisions approving new digital MDS distribution undertakings, including one licensed to serve Saskatchewan, the Commission has authorized licensees to include a U.S. superstation in a discretionary tier package that may include one or more Canadian specialty and/or pay services. The rationale for permitting this flexibility for distribution undertakings other than cable was primarily to enhance subscriber choice (i.e. through addressable digital technology used by such undertakings).

3. In Public Notice CRTC 1997-25, dated 11 March 1997, announcing the new regulatory framework for all broadcasting distribution undertakings, the Commission stated its intention to amend its Distribution and Linkage Requirements to permit all distribution undertakings, including cable, to distribute a U.S. superstation within a discretionary package that contains one or more Canadian specialty and/or pay services, provided that this superstation is distributed in a tier that is receivable by subscribers only by using an addressable digital decoder. Such flexibility serves as an added incentive to the cable industry to implement addressable digital technology as quickly as possible, thus providing subscribers with greater choice.

4. In support of its application, the licensee stated that it wished to have the same packaging flexibility that was afforded to the recently-licensed MDS service now competing directly with Regina Cablevision. The licensee further stated that 60% of its subscribers are equipped with analog addressable decoders, and that that percentage of addressability is the highest of any cable undertaking in Canada. Regina Cablevision noted that in the near future, the Commission intends to allow superstation packaging flexibility for cable operators with digital addressability, but that it will not be able to receive delivery of digital units in sufficient quantities to replace all of its analog equipment for a period of between one and two years. In the interim period, the licensee contends that the high level of addressability enjoyed by its subscribers should allow it to compete fairly with other digital distribution undertakings.

5. Interventions in opposition to this application were submitted by Allarcom Pay Television Limited (Allarcom), The Family Channel Inc. (Family Channel) and the Specialty and Premium Television Association (SPTV). Allarcom is the licensee of the pay television services Superchannel and MovieMax! and the pay-per-view service Viewer's Choice in western Canada. Family Channel is the licensee of an English-language general interest pay television service, and SPTV is an industry organisation representing 80% of the specialty and premium television industry (by revenue), as well as the majority of the unlaunched specialty channels.

6. All three of the interveners opposed Regina Cablevision's application, based on the importance of superstations as packaging partners for the pay industry exclusively. The interveners stated that this linkage rule has been critical to the growth, success and marketing of the premium tiers, enhancing the viability of the Canadian pay television industry, adding value, and promoting consumer interest. The interveners opposed any relaxation of the distribution and linkage rules until cable operators can provide addressable digital decoders, as anticipated in Public Notice CRTC 1997-25.

7. The interveners also stated their position that Regina Cablevision has not provided justification for a departure from the Commission's recently announced policy position. They noted that the strategy set out in Public Notice CRTC 1997-25 is designed to act as an incentive for cable operators to deploy digital technology, and that the objective will be undermined if the same flexibility is granted to cable operators competing with addressable analog decoders.

8. In response to the interveners' concerns, the licensee stated that its situation is unique and will not set a precedent. It stated that it is committed to providing universal addressability as soon as the decoders can be made available, but that in the meantime, the 60% of its subscribers who have addressable analog decoders will be subject to more onerous linkage requirements than the subscribers of the competing MDS undertaking with digital decoders.

9. The Commission has carefully considered the views of the applicant and of the interveners. It is satisfied that, taking into account the current high level of addressability achieved by Regina Cablevision in its authorized service area through the deployment of analog decoders, and its commitments to providing universal addressability, an exception to the Commission's policy is warranted in these circumstances.

10. For all the reasons noted above, the Commission approves the application by Regina Cablevision. By condition of licence, the licensee may, at its option, designate one of the U.S. superstations specified in Section B of the list of Part II Eligible Satellite Services and distribute the signal of that superstation within a discretionary package that may include one or more Canadian specialty and/or pay television services.

This decision is to be appended to the licence.

Laura M. Talbot-Allan
Secretary General

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