ARCHIVED -  Decision CRTC 97-84

Decision

Ottawa, 27 February 1997

Decision CRTC 97-84

Le Groupe Vidéotron ltée

Montréal, Québec, Terrebonne, Hull, Maniwaki, Thurso, Lachute, Quebec; Rockland, Sudbury, Timmins, Kapuskasing, Hearst, Cochrane, Iroquois Falls, Smooth Rock Falls, Blind River, Sturgeon Falls, Elliot Lake, Espanola and New Liskeard, Ontario - 199609319 - 199609377 - 199609401 - 199609393 - 199609385 - 199609418

Approval of the application (199609377) by Le Groupe Vidéotron ltée (GVL) for authority to transfer effective control of CF Cable TV Inc. and its subsidiaries to Vidéotron ltée - subject to a condition precedent relating to the sale of Télévision Quatre Saisons and the English-language station CFCF-TV Montréal to third parties not related to GVL - Denial of other GVL applications

At a Public Hearing held in Montréal beginning on 2 December 1996, the Commission considered applications by GVL for authority to acquire effective control of CFCF inc. (CFCF) through the purchase of all issued and outstanding shares of CFCF, and to effect, following Commission approval, a corporate restructuring with a view to continuing the operation of CFCF. In the context of a take-over bid by GVL for the shares of CFCF, the Commission approved a draft voting trust agreement entered into by GVL and its subsidiaries, and the appointment of an arm's length trustee, André H. Caron.

More specifically, the Commission considered the following applications:

·  Application (199609319) by 3242722 Canada inc. for authority to acquire control of CFCF. 3242722 Canada inc. is a wholly-owned subsidiary of 3233006 Canada inc., which is itself a wholly-owned subsidiary of GVL. CFCF is the licensee of CFCF-TV; and of the French-language television stations CFJP-TV Montréal, CFAP-TV Québec and CJPC-TV Rimouski and the television network Quatre Saisons (hereinafter referred to collectively as "TQS").

·  Application (199609377) filed by GVL on behalf of CF Cable TV Inc. (CF Cable) for authority to transfer effective control of CF Cable and its subsidiaries to Vidéotron ltée (Vidéotron). This transfer of control is part of the proposed corporate restructuring leading to the amalgamation of all cable operations into a single corporate entity.

·  Applications (199609401, 199609393 and 199609385) filed by GVL on behalf of Réseau de télévision Quatre Saisons inc. (Quatre Saisons) for authority to transfer the assets of TQS from CFCF to Quatre Saisons, and for broadcasting licences to continue to carry on these undertakings in accordance with the terms and conditions contained in the existing licences, upon surrender of the existing licences issued to CFCF.

·  Application (199609418) by Quatre Saisons to transfer its effective control from CFCF to Télé-Métropole inc. (Télé-Métropole), a subsidiary of GVL, through the transfer of all issued and outstanding shares. Quatre Saisons holds a 20% interest in "Canal Indigo", a pay-per-view service authorized for distribution by terrestrial distributors and direct-to-home satellite undertakings.

For the reasons set out below, the Commission has decided to approve the application (199609377) filed by GVL, on behalf of CF Cable, for authority to transfer effective control of CF Cable and its cable subsidiaries to Vidéotron. This approval, however, is subject to the condition precedent set out in the appendix to this decision. Essentially, the condition precedent stipulates that this approval will not come into effect unless an application by a third party for authority, among other things, to acquire TQS has been filed with the Commission no later than 29 April 1997 and has received its approval. Specific procedures related to the hearing of the application in question are set out in section IV of this decision. The Commission notes than an approval that has been made subject to a condition precedent lapses if the terms of the condition are not fulfilled in their entirety. The current approval would thus become void if applications for authority to acquire TQS and CFCF-TV are not filed with the Commission by 29 April 1997.

All of the remaining applications are denied, namely those requesting authority to transfer control of CFCF, the assets of TQS and the 20% interest held by Quatre Saisons in "Canal Indigo". With regard to CFCF-TV, the Commission notes that, as part of its proposal, GVL committed to sell this CTV-affiliated station to a third party, and to dispose of CFCF's interest in CTV. Thus, while a request for authority to transfer effective control of CFCF-TV is technically before the Commission in the context of the current proposal, this decision deals principally with the other aspects of these applications.

I The parties

GVL is effectively controlled by André Chagnon of Montréal. It is one of the largest corporations in the Canadian communications industry, and is very active in the cable and private television broadcasting sectors, as well as in interactive multimedia and on-line services. GVL is a leading player in cable and private French-language television in the province of Quebec through its two major licensed broadcasting subsidiaries, Vidéotron and Télé-Métropole. Vidéotron serves the two most heavily populated areas of the province, Montréal and Québec, as well as other areas of the province, and has over a million subscribers in all. Taken together with those of its subsidiary in Alberta, Vidéotron now serves over 1.4 million subscribers, and ranks third among Canadian cable companies by both subscribers and total cable revenues.

For its part, Télé-Métropole is the largest private French-language broadcaster in the country by audience and revenues. It operates several television stations in Quebec, including its flagship CFTM-TV Montréal, CFCM-TV Québec, and the TVA network. The CFTM-TV signal is also available via satellite throughout Canada. In addition, Télé-Métropole is the licensee of the recently licensed news headline specialty television service "Le Canal Nouvelles", and holds a 20% interest in "Canal Indigo".

CFCF Inc. is a public company that, until early in 1996, was controlled by members of the J.A. Pouliot family of Montréal. Following a take-over bid launched on 21 April 1996 and completed on 14 June 1996, GVL acquired all outstanding multiple voting shares and 99.75% of the outstanding subordinate voting shares of CFCF, excluding convertible debentures. CFCF is the licensee of CFJP-TV Montréal, CFAP-TV Québec and CJPC-TV Rimouski, as well as of the independent French-language television network Quatre Saisons, with which other French-language television stations in Quebec are affiliated. CFCF also holds an interest in CTV Television Network Ltd. In addition, CFCF holds sole, indirect ownership of CF Cable, licensee of the cable distribution undertaking serving parts of Montréal and Laval; Laurentien Câble TV inc., serving Hull, Aylmer, Gatineau, Buckingham, Masson and Angers, Quebec, and Rockland, Ontario; TDM Newco inc., serving Terrebonne, Mascouche and Lachenais, Quebec; Communi-câble inc., serving Lachute and Brownsburg, Quebec; Sudbury Cable Services Limited, serving Sudbury, Ontario; and Northern Cable Holdings Limited, which serves Timmins and several smaller communities in Ontario. The cable undertakings owned by CFCF have over 430,000 subscribers and are all included in this transaction.

II Impact of proposed transaction

In its deliberations concerning the GVL applications, the Commission took due consideration of the major impact their approval would have on cable distribution and television broadcasting in Quebec and across Canada. As a result of the transaction, GVL will serve over 75% of all cable subscribers in Quebec and, with 24% of all subscribers will be the second largest cable operator in Canada, surpassed only by Rogers Communications Inc. (Rogers). With regard to television broadcasting, approval of these applications would have allowed GVL to firmly consolidate its position in Quebec, giving it almost 50% of the total audience, and control of private conventional television stations representing 72% of the total revenues and over 76% of the total viewership of private television broadcasters in that province.

As the proposed transaction is comprised of two separate components, cable distribution and television broadcasting, the Commission asked GVL at the hearing whether it believed that one component could be disposed of separately; GVL responded in the affirmative. The Commission also notes that over 60 interested parties filed interventions in respect of this transaction, 17 of whom appeared at the Public Hearing. Although no intervener opposed approval of the cable component, and most were also in favour of the television component, several were opposed to, or expressed serious concerns regarding, the television component. These concerns related particularly to the issues of concentration of ownership and common ownership in media, the establishment of a single window for negotiations with independent producers, and the -adequacy of measures proposed to ensure that a diversity of voices is provided and, in particular, that Télé-Métropole and TQS newsrooms function independently. These concerns were discussed in detail at the Public Hearing.

As stated in a number of decisions relating to applications for authority to transfer the ownership or effective control of broadcasting undertakings, because the Commission does not solicit applications for such transfers, and because only one proposal was thus filed, the onus is on the applicant to demonstrate to the Commission that the applications filed constitute the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature, as well as the aforementioned concerns raised by the interveners.

(a) Cable distribution component

As a result of the transfer of control of CF Cable, GVL will have over 1.8 million subscribers, thus consolidating its position as a major industry player in Quebec and at the national level. In support of its application, GVL described the benefits to be derived from the amalgamation of Vidéotron and CF Cable, particularly those relating to the promotion of sustainable, equitable and dynamic competition between the different types of broadcast distribution undertakings in the country, and improvements to the delivery of services to all customers.

In recent years, the Commission has recognized the need for larger corporate entities possessing the resources and entrepreneurial skills necessary to lead the cable industry in such areas as research and development, enhancement of choice, service quality improvements, and in the extension of cable service to more Canadians. It has accordingly permitted the emergence of a number of large multi-system cable operators across Canada. For example, in Decision CRTC 94-923 authorizing Rogers to acquire control of Maclean Hunter Ltd., the Commission indicated that it:

 ... is satisfied that the public interest is served by allowing a significant expansion in the size of ... cable operations, so that [Rogers], along with Shaw [Communications Inc.] and other large players, may lead the industry more effectively towards meeting the challenges of the emerging competitive communications environment.

In this context, the Commission is satisfied that GVL's increased size and strength will help to ensure fair and sustainable competition in this sector, and will enable GVL to continue to make a valuable contribution to the Canadian broadcasting system. Accordingly, the Commission is of the view that conditional approval of the application to transfer control of CF Cable to Vidéotron is in the public interest and is consistent with the objectives of the Canadian broadcasting policy provided in subsection 3(i) of the Broadcasting Act.

The Commission notes the commitments given by GVL in its application and at the Public Hearing regarding the cable component. With regard to the concerns about cross-media ownership, GVL committed to maintain the existing structural separation between its cable operations and television undertakings, and expressed the view that the safeguards relating to access under the current regulatory framework are more than adequate to address any concerns in this regard. The Commission notes GVL's commitments relating to access and its current efforts to implement digital video compression in the near future to give subscribers universal access and greater choice.

The Commission also notes the measures that GVL has proposed to respond to the concerns and expectations of the two main official language communities, particularly in the greater Montréal area. GVL committed to define specifically how it intends to improve the situation within twelve months following approval of this transaction, notably by conducting a large-scale public consultation of its current and potential subscribers, and by introducing mechanisms designed to bring about a resolution within twenty-four months following approval of the transaction. More concretely, GVL indicated that improvements to its network architecture are already in progress, notably in the sections of its Montréal market containing high concentrations of Anglophone and Allophone subscribers; these improvements will increase signal distribution capacity and allow for new options in programming services. With regard to community programming, GVL committed to pool the technical resources of the community television services of the two undertakings to enhance programming quality and diversity. At the Public Hearing, GVL also undertook to maintain the two community channels now in operation in Montréal to ensure that the two major linguistic communities continue to be well served. It also gave its commitment to maintain the current levels of expenditure on community programming by each of the two undertakings.

(b) Television broadcasting component

Although the cable component of the proposed transaction was fully consistent with the policies pursued by the Commission in recent years and gave rise to no particular concerns, the television component was perceived by several interveners as representing a major upheaval in the private French-language television sector in Canada, particularly in Quebec, with unforeseable and potentially serious repercussions. The principal source of these concerns was the high degree of concentration of ownership that would result from approval, as GVL, acquiring effective control of TQS while already the owner of Télé-Métropole, would put itself in a dominant position in this sector, and would be in contravention of the Commission's longstanding policy on common ownership. This policy precludes the common ownership of two broadcasting undertakings of the same class serving the same market in the same language.

In support of its applications, GVL stated that the proposed amalgamation of Télé-Métropole and TQS would give both private conventional networks the strength to face competition from increasingly numerous and diverse television services and would enhance the overall quality of French-language television product. In responding to the concerns raised by its proposal, GVL committed to a series of measures to reduce the major irritants with respect to concentration of ownership. GVL also proposed several tangible benefits directed in particular to the independent production sector, financial support for young talent, youth programming, and closed captioning.

The Commission considers that the measures proposed by GVL to attenuate the risks of such a degree of concentration are insufficient to allay the serious concerns that such concentration raises, and fail to warrant an exception to the Commission's policy on common ownership in media. In fact, the Commission's assessment of all aspects of the GVL proposal has led it to conclude that no benefit could offset the excessive degree of concentration that would result from the common ownership of Télé-Métropole and TQS - the only two, private, French-language, conventional television services currently licensed.

With regard to programming, GVL committed to make use of no shared programming or counter-programming in the schedules of Télé-Métropole/TQS, as a means to ensure that viewers of the two private networks have a more diverse selection of programs. The Commission notes, however, that Télé-Métropole and TQS currently make little use of counter-programming; GVL's commitment thus offers only a marginal incremental benefit in terms of diversity. Moreover, the single vice-president of programming proposed for the two networks would have decision-making powers with respect to the program content available on virtually all private French-language television in Quebec.

Altough a number of independent producers supported the applications, the Association des producteurs de films et de télévision du Québec, CINAR, and Groupe Coscient expressed concerns about a shift in the balance of power in negotiations between GVL and creators and independent producers that could occur if GVL were to gain control of the two largest, private, French-language television outlets in Quebec. As other interveners noted, this significant consequence of the amalgamation of Télé-Métropole and TQS would have repercussions in several other areas, particularly in negociations with artists, creators, advertisers and affiliated stations. Responding to these concerns, GVL stated its willingness to accept a condition of licence requiring that its oversight and equity committee, which was formed in 1987, file an annual report with the Commission on its relations with independent producers and program suppliers, and that the mandate of the committee be broadened to allow it to receive complaints from affiliated stations.

GVL acknowledged the significance of the concerns raised by its proposal with regard to editorial diversity and maintenance of a separation between the newsrooms of the two private networks. Accordingly, it proposed to put in place certain safeguards, namely the maintenance of separate management for news programming, including separate budgets, news staff and newsrooms for each network, as well as a committee to monitor the editorial independence of the two networks. These safeguards were viewed as inadequate by several interveners, including the Union des Artistes, the Fédération nationale des communications, the Conseil provincial du secteur des communications, the Syndicat de l'information de Télé-Métropole, and the TQS newsroom staff in Québec. Interveners emphasized the great risk of reducing the number of editorial voices and the lack of effective guarantees to ensure separation between newsrooms, both in practice and in public perception, as a consequence of having a single vice-president in charge of news for both systems. Questions were also asked regarding the value of the proposed monitoring committee, arguing that it would have no real power.

Having determined as inadequate the measures proposed by GVL to offset the negative effects of concentration, and having further decided that no benefit could compensate for the high degree of concentration proposed, it then remained for the Commission to examine whether GVL's proposal to acquire effective control of TQS was the best or, ultimately, the only proposal possible under the circumstances.

Specifically, GVL argued that its proposal to operate TQS in partnership with Télé-Métropole is the only proposal that could offer the synergies and all the expertise required to deal with the current and future competitive environment in private, French-language television. GVL added that the principal benefit resulting from its proposal would be the ability it would have to operate under optimal conditions, so as to enhance the quality and diversity of French-language content in television programming and, in time, to make it an exportable product; the benefit would not be the survival of the service as such.

Creating the conditions necessary for the long-term operation of the second-largest, private, French-language television service was a major preoccupation of the Commission in assessing these applications. Its analysis of all the evidence on file in this proceeding has satisfied the Commission that the GVL proposal is not the best possible proposal under the circumstances. In addition to the resulting unacceptable degree of concentration and the inadequacy of the safeguards proposed, the Commission finds that the proposal did not provide sufficient guarantees that the operation of TQS would continue on a truly independent basis.

In this regard, the Commission notes that, as a result of the proposed overall transaction, the key component of which is CFCF's cable assets, GVL would also gain control of TQS, Télé-Métropole's principal competitor in the private, French-language, conventional television sector. The Commission further notes that, under the proposed alliance, the size and influence of one partner would be disproportionate to the other's. Indeed, Télé-Métropole now is in enviable financial health and easily dominates the French-language television market, having 37% of the audience according to one of the latest BBM surveys. For its part, TQS has been accumulating deficits since commencing operations ten years ago, with the exception of one year; its audience share is now at its lowest point in its history, or approximately 10%, no doubt owing in part to the lengthy period of uncertainty surrounding this transaction. Should GVL's projections not be realized and should it fail to restore TQS to financial health, the Commission has serious concerns that GVL would be tempted, within a few years, to neglect TQS or wind up the company in order to stem its losses.

When questioned on this issue at the Public Hearing, GVL stated that its plans for TQS are for the long term, and it committed to fulfil the obligations of any licence issued to it for the full licence term. It added that the Commission could always issue licences for TQS to another party should GVL decide to discontinue its operation in the future. Nervertheless, the Commission is very concerned that, following the proposed integration and consolidation, it would be very difficult for a new player to take over the operation of TQS on an independent basis, owing to the considerable investment that might then be required.

In view of the foregoing, the Commission has decided that it would not be in the public interest to allow GVL to acquire effective control of TQS. The Commission is satisfied that acquisition of TQS by a third party not related to GVL, one possessing the necessary financial strength and the required expertise, and who would operate TQS as a key component of its organization while maintaining a firm control on expenditures, would better ensure revival of the company and its long-term survival. The Commission expects that other buyers may be interested in operating TQS. For example, in this proceeding, Cogeco inc. expressed interest in acquiring TQS in its intervention opposing the television component of the transaction.

In this regard, GVL acknowledged at the Public Hearing that, if TQS were to be offered for resale, there would most certainly be several interested purchasers, and that the undertaking could survive under another owner. GVL also advised the Commission that it would be prepared to dispose of its interest in TQS if the Commission determined that this would serve the public interest.

In this regard, as noted earlier, the Commission is not prepared to grant GVL control of any greater portion of CFCF's holdings. It also considers any increase in GVL's participation in "Canal Indigo" would not be in the public interest.

III Voting Trust Agreement

In accordance with paragraph 14(4)(a) of the Television Broadcasting Regulations, 1987 and paragraph 5(4)(a) of the Cable Television Regulations, 1986, a licensee must obtain the prior approval of the Commission in respect of any act, agreement or transaction that directly or indirectly would result in a change by whatever means of the effective control of its undertaking. However, where a bid is made to take over a public company that controls licensed broadcasting undertakings, securities law generally requires that the offeror subscribe to, and pay for, the shares of that company before the offeror obtains the required Commission approvals. Consequently, the practice of the Commission is to approve the execution of voting trust agreements under which the shares are deposited with an arm's length trustee, who holds and exercises all voting rights in respect of those shares until the Commission has considered and reached a decision on the application or applications for authority to transfer control. This arrangement ensures that the offeror does not exercise control of the licensee undertakings until the Commission has approved the transfer.

As stated earlier, with regard to the GVL take-over bid for the CFCF shares, the Commission, on 13 May 1996, approved a draft voting trust agreement (the agreement) entered into by GVL and its subsidiaries, and the appointment of an arm's length trustee, André H. Caron. The Commission's approval was effective until 31 January 1997 and was renewed administratively until 28 February 1997. In accordance with the regulatory requirements referred to above, the purpose of the agreement is to ensure that GVL does not exercise effective control of the acquired undertakings until the Commission has approved the transaction. The agreement is also intended to ensure that, in the interim, the undertakings involved continue to be operated in such a manner as to maintain the normal course of business and that the trustee act in accordance with the laws, regulations and policies administered by the Commission.

The said agreement is irrevocable until all Commission approvals are obtained or, if they are not obtained, until consummation of the sale of the CFCF assets in accordance with the provisions of articles 4(d) and (e) of the agreement. Article 4(d) deals with the trustee's power of sale in the event that "all CRTC approvals" are not obtained and "will not ... be obtained thereafter"; it states however, that GVL, "may withdraw the Request Sale Notice at any time prior to the consummation of any such sale, subject to the independent concurrence by the Trustee based on Advice as to such withdrawal." Article 4(d) also states that "the Trustee, acting on behalf [of GVL, must sell] as soon as practicable" when GVL issues a Request Sale Notice, and that the Trustee shall "have discretion in determining the sale procedure, in selecting the purchasing party or parties and in determining the terms of such sales with a view to obtaining the best value reasonably obtainable." Article 4(e) authorizes GVL to seek "at any time" all required permission from the Commission to dispose of the assets of CFCF. However, the second sentence of this article states "upon any such approval being given ... the Trustee shall take all action requested by [GVL] by notice in writing to the Trustee ... to give effect to such disposition."

The nature and scope of the powers of the trustee and GVL under article 4(d) of the agreement were discussed at the Public Hearing, and gave rise to different legal opinions on the part of GVL and some interveners. It is GVL's position that, because it is the sole beneficiary, and still the owner, of the CFCF shares pursuant to its take-over bid, it assigned control to the trustee only with respect to the operation of the undertakings and not with respect to the sale of the assets in question. Accordingly, GVL considers in this case that it, alone, can determine where its best interests lie, and have "the final word" as to whether or not an offer to purchase is to be accepted and as to the terms of sale. GVL also considers that the trustee could not decline to concur with a notice of withdrawal given by GVL unless it is bound by prior contractual obligations.

In the Commission's view, the position adopted by GVL raises serious concerns. The Commission's denial of authority for GVL to take control of TQS and CFCF-TV creates an exceptional situation owing to the fact that GVL holds the shares of CFCF and could be in a position to decide ultimately who will be the principal competitor of Télé-Métropole in the private conventional television sector; in these circumstances, it would thereby be acting as the judge in its own case.

The Commission is of the view that the terms of the agreement must be interpreted in such a manner as to ensure that the above-noted regulatory objectives are achieved. The Commission considers that article 4(d) of the agreement is the relevant provision in this instance, as it concerns a sale of shares or assets for which Commission approval has not or will not be obtained, such as is the case with respect to TQS and CFCF-TV. As for the second sentence of article 4(e), it is applicable only if the Commission approvals are obtained. It is apparent from the wording of these two articles that the parties intended to limit the role of GVL in situations where article 4(d) would apply, but under article 4(e) the powers of GVL are less restricted. It was on the basis of this interpretation that the Commission approved the agreement on 13 May 1996.

Accordingly, the Commission has determined that, under the terms of the agreement, after GVL gives a request sale notice to the trustee, the trustee alone has power of sale with respect to TQS and is not bound by the will of GVL. The Commission notes that the mandate given under article 4(d) is special, with power of disposition. This power is discretionary, as the trustee has the authority, at its option, to select the buyer or buyers and to determine the sale procedure and the terms of sale, subject to the general obligation of a trustee to act as a prudent administrator, in the best interests of, in this case, GVL, and in accordance with the express provisions of the agreement.

The Commission expects the powers of the trustee to be interpreted and executed having regard to the primary purpose of the agreement, namely to ensure that GVL exercises no control of the broadcasting undertakings involved without prior Commission approval. In the opinion of the Commission, participation by GVL in the TQS sale procedure or in the selection of the buyer would constitute, under the circumstances, an exercise of control of the undertaking.

The Commission is of the further view that unregulated exercise by GVL of the power of withdrawal would give GVL absolute power to control the ultimate outcome of the sale, including the choice of buyer and the selling price, and that this could, in certain circumstances, constitute an exercise of control of the undertaking. Taking into consideration the obligations of the trustee, the Commission can conceive of only extremely rare and exceptional circumstances in which the power of withdrawal could be properly exercised. The Commission notes in this regard that the agreement states that the trustee must comply with all rules, regulations and policies of the Commission, which includes the rules of the Commission relating to the exercise of control of a broadcasting undertaking. In addition, as stated in the following section, it is in the public interest that the sale of TQS to a new purchaser be effected promptly, and withdrawal would likely impede achievement of that objective.

On the basis of its interpretation of the agreement, the Commission hereby renews the approval of the agreement until 14 March 1997. The Commission expects the trustee to continue managing TQS and CFCF-TV in such a manner as to maintain the normal course of business as required by the agreement. The Commission also expects the trustee to inform it in writing, without delay, if and when GVL gives it a request sale notice with respect to TQS, and to proceed promptly with the sale upon receiving such notice. The Commission understands that an agreement relating to the sale of CFCF-TV has already been signed. The Commission further expects the trustee to inform it in writing, without delay, should GVL attempt to withdraw its sale notice or to terminate the sale procedure.

As the Commission's practice is to not consider competing applications to transfer the ownership or control of broadcasting undertakings, the Commission reiterates that the onus is on the trustee to ensure that any application for authority to transfer TQS submitted pursuant to the requirements of this decision is the best possible proposal under the circumstances, taking into account the Commission's general concerns regarding transactions of this nature and the concerns discussed in this decision. In this regard, the Commission reiterates its policy, designed to preserve the integrity of the broadcast licensing process, that an interim purchaser of a broadcasting undertaking, who is not subsequently authorized by the Commission to carry on that undertaking, must not profit from its resale to a third party.

IV  Expedited processing of coming applications

The Commission notes that the negotiations leading up to this transaction began in 1995; the lengthy period of uncertainty regarding the future of TQS and CFCF-TV has surely not served to strengthen their position in the market. The Commission is fully aware that this denial will prolong this uncertainty and consequently, it has decided to put in place an expedited procedure for processing the pending applications in order to limit as much as possible any adverse impact on TQS and CFCF-TV, and to preserve the resale value of TQS.

As stated at the beginning of this decision, the approval of the application for authority to transfer effective control of CF Cable and its subsidiaries to Vidéotron is subject to the condition precedent whereby the said approval will not come into effect until applications by third parties not related to GVL for authority to acquire TQS and for authority to acquire the English-language television station CFCF-TV Montréal have been filed with the Commission, no later than 29 April 1997, and received its approval. To better inform interested parties and to expedite matters, the Commission has decided to announce immediately its timetable for processing the relevant applications. This timetable is designed to ensure that such processing is completed within six months of the date of this decision.

Proposed timetable

 29 April 1997: deadline for filing complete applications, i.e., 60 days from the date of this decision;

 2 May 1997: release of Notice of Public Hearing;

 7 July 1997: Public Hearing;

 22 August 1997: release of Commission decisions.

To allow prompt processing, the Commission expects all applications to be complete when filed, particularly with respect to programming, ownership, and financing.

This decision is to be appended to the licence of each cable distribution undertaking that is the subject of this approval.

Allan J. Darling
Secretary General

Appendix to Decision CRTC 97-84

CONDITION PRECEDENT

Approval of the application by GVL, on behalf of CF Cable, for authority to transfer effective control of CF Cable and its cable subsidiaries to Vidéotron will not come into effect unless applications by third parties unrelated to GVL requesting authority to acquire TQS, and to acquire the English-language television undertaking CFCF-TV Montréal, are filed with the Commission by no later than 29 April 1997 and receive its approval. The Commission may extend the filing deadline where GVL applies to it in writing before 29 April 1997, and satisfies the Commission that it is unable to submit an application within the deadline and that such an extension is in the public interest.