ARCHIVED -  Decision CRTC 97-573

Decision

Ottawa, 2 October 1997

Decision CRTC 97-573

The Ontario Educational Communications Authority (TVOntario)

- 199617916

Licence amendment

1. In Public Notice CRTC 1997-61 dated 16 May 1997, the Commission announced the receipt of an application from The Ontario Educational Communications Authority (TVOntario) for authority, by condition of licence, to charge a wholesale rate of $0.17 per subscriber per month for the distribution of the French-language service of TVOntario (TFO), received via satellite, on the basic service of the cable distribution undertakings licensed to Fundy Cable Ltd./Ltée (Fundy) in New Brunswick. The Commission approves in part TVOntario's application.

2. The licensee submitted that the proposed wholesale rate would allow it to recover the costs associated with the distribution of its service in New Brunswick, namely, licence and copyright fees, marketing costs (for the distribution of instructional materials and for teacher training), and expenses related to independent productions in New Brunswick.

3. It is not the Commission's policy to authorize wholesale rates for basic carriage or fees for discretionary carriage of conventional broadcast services or provincial educational services. Nevertheless, the Commission considers that the particular circumstances of this case justify permitting the licensee to recover certain of its costs. Accordingly, for the reasons discussed below, the Commission authorizes the licensee, by condition of licence, to collect from the undertakings currently licensed to Fundy that distribute its service on the basic service, the equivalent of $0.13 per subscriber per month over TVOntario's current licence term; this will permit TVOntario to recover the costs related to licence fees for the Atlantic region and copyright fees in respect of TFO productions. In the Commission's view, the costs associated with marketing the TFO service and creating a fund for independent productions are discretionary in nature, and it is not prepared to authorize recovery of these costs.

4. The Commission considered a number of factors in arriving at this decision. First, the Commission notes that it has consistently encouraged the licensee to distribute its TFO service outside Ontario, and that the service is already available in New Brunswick. The Commission is also cognizant of the interest in this French-language educational service, as expressed by the Province of New Brunswick and its Francophone population, which constitutes a sizeable minority in the province. Further, the Commission notes that the distribution of TFO was in response to a request by the Société des Acadiens et des Acadiennes du Nouveau-Brunswick (SAANB), who wished to have more choice in French-language television services in the province, and in response to a request by Fundy. The Commission also considered the fact that educational programming is not supported by advertising and that, when an educational service is distributed outside its province of origin, it must pay considerably more for broadcast rights.

5. The Commission notes that this approval applies only to the distribution of TFO in New Brunswick, and the licensee should not expect that similar authorities would necessarily be granted in respect of the distribution of TVOntario educational services on the basic service of undertakings in other provinces. The Commission notes in this regard the following statement by the licensee in its application: [TRANSLATION] "... we have no intention of being distributed on the basic service anywhere in Canada except Ontario and New Brunswick. Our distribution plan is based on distribution of the TFO signal on discretionary services where the demand exists and where it is applicable".

6. The Canadian Broadcasting Corporation, Télé-Métropole, Télévision Quatre-Saisons, Télé-Québec, Le Canal D, Canal Famille, Canal Vie, Musimax, MusiquePlus, Réseau des sports, and TV5 Québec Canada (the signing parties) filed a joint submission opposing the TVOntario application. The signing parties raised several concerns in their submission, including the possibility that other services, which, like TVOntario, are listed as eligible Canadian satellite services, would be authorized to collect subscriber fees without being subject to the same conditions as specialty services. The signing parties also questioned whether a subscriber fee ought to be collected in addition to the royalties received from the Canadian Retransmission Collective as compensation for the use and retransmission of distant Canadian signals. Last, the interveners were concerned that TFO would be given preferential treatment or undue competitive advantages over other French-language television broadcasters with regard to the distribution of their services outside their province of origin, and that the greater part of the fee charged could ultimately be used to reduce the cost of distributing TFO nationally, via direct-to-home (DTH) satellite.

7. In its reply, the licensee argued that it cannot collect revenue from the Canadian Retransmission Collective because its compensation regime applies only to distant over-the-air signals, whereas TFO is not originally transmitted over-the-air and is not considered a distant television signal within the meaning of the Copyright Act. It added that it cannot rely on advertising revenue because TFO is a non-commercial broadcaster.

8. The Commission is satisfied with the licensee's reply to the above intervention. It notes that TFO's status as an eligible Canadian satellite service was not a factor in its decision to approve this application. The Commission considers that approval of this application is in the interest of New Brunswick's large Francophone community, particularly since the province does not have its own educational television service, and that the benefits of approval for this minority community outweigh all the concerns raised by the signing parties in their joint submission.

9. The Commission acknowledges the numerous interventions filed in support of this application.

This decision is to be appended to the licence.

Laura M. Talbot-Allan
Secretary General

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