ARCHIVED - Public Notice CRTC 1997-84

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Public Notice

Ottawa, 2 July 1997

Public Notice CRTC 1997-84

Proposed Broadcasting Distribution Regulations

1. The Commission proposes to make new regulations relating to broadcasting distribution undertakings (BDUs). A copy of the proposed Broadcasting Distribution Regulations (the proposed regulations) is appended to this public notice. The proposed regulations are intended to replace in full the existing Cable Television Regulations, 1986 (the existing regulations), and would apply to three distinct types of BDUs, namely, all cable distribution undertakings, all direct-to-home satellite distribution undertakings and those radiocommunication distribution undertakings (also referred to as wireless undertakings) that provide a broadband, subscription-based service comparable to that provided by cable distribution undertakings.

2. The proposed regulations are the result of a process initiated by the Commission in Public Notice CRTC 1996-69 to review the regulatory framework for BDUs in light of the competitive environment that is rapidly emerging with respect to the distribution of broadcasting services in Canada. Following a two-stage written comment process and an oral public hearing that took place in October of 1996, the Commission issued Public Notice CRTC 1997-25, entitled New Regulatory Framework for Broadcasting Distribution Undertakings, in which the Commission established a comprehensive policy framework for BDUs that will further the objectives of the Broadcasting Act in a competitive environment. The proposed regulations reflect the policies as expressed in that public notice.

3. In addition to the policies set out in Public Notice CRTC 1997-25, the Commission has incorporated into the proposed regulations several provisions that address issues that were not expressly addressed by the Commission in Public Notice CRTC 1997-25. These proposals are highlighted below.

CARRIAGE OF IDENTICAL PRIORITY PROGRAMMING SERVICES

4. Under paragraph 9(1)(b) of the existing regulations, Class 1 licensees, and Class 2 licensees with more than 2,000 subscribers, are required to distribute the educational programming services of the province in which the licensees are located. Under subsection 9(2) of the existing regulations, if a licensee receives educational programming services that are identical, the licensee is required to distribute only one such service.

5. Under the existing regulations, the flexibility to choose from among identical programming services extends only to provincial educational services. The Commission considers, however, that BDU licensees generally should be able to choose to carry only one of any identical priority programming services. Accordingly, subsection 17(3) of the proposed regulations would expressly allow a Class 1 or Class 2 licensee that receives identical priority programming services to choose to carry only one of them. A similar provision is set out in subsection 31(3) of the proposed regulations to provide the same flexibility for Class 3 licensees.

TIE-BREAKER PROVISIONS

6. Subsections 9(5), (6) and (7) of the existing regulations set out the rules for determining the priority of programming services where the services of two or more stations rank equally in priority carriage under subsection 9(1). Generally, priority is given to the programming service of the station whose studio is located in the same province as the BDU or, where the studios of two or more such stations are located in the same province as the BDU, to the programming service of the station whose studio is located closest to the local head end of the BDU.

7. Under subsection 17(6) of the proposed regulations, the tie-breaker provisions are collapsed into one subsection, and would not apply if the operators of the stations affected agree otherwise.

8. In addition, the Commission also proposes to expand the tie-breaker provisions to address the particular situation where the studios of two or more stations, whose programming services rank equally in priority, are located in the National Capital Region. The existing regulations give priority in such instances to the station whose studio is located in the same province as the BDU. Under the proposed regulations, priority in these circumstances would be given to the programming services of the stations in the order of the proximity of their main studios to the local head end of the BDU.

CARRIAGE OF LOCAL DIGITAL RADIO STATIONS

9. In Public Notice CRTC 1996-69, the Commission proposed that Class 1 cable distribution undertakings (but not wireless undertakings) be required to carry the signals of all local digital radio stations that may be licensed for a regular term. Transitional digital radio undertakings, on the other hand, would not have to be distributed as a priority, in view of the large amount of programming that would be simulcast by such stations. Although the Commission, in Public Notice CRTC 1997-25, decided to extend the priority radio requirements to all wireless distributors, the Commission did not expressly state that Class 1 licensees would not be required to carry local digital radio stations licensed on a transitional basis.

10. The Commission confirms that, under subsection 22(2) of the proposed regulations, Class 1 licensees would not be required to distribute the programming service of a local digital radio undertaking that is licensed on a transitional basis.

ACCESS AND VIDEO-ON-DEMAND PROGRAMMING UNDERTAKINGS

11. In Decisions CRTC 97-283 to 97-287, also released today, the Commission has licensed five new video-on-demand (VOD) programming undertakings. In Public Notice CRTC 1996-60, the Commission established comprehensive rules for the provision of access by BDUs to Canadian pay and specialty programming services. The Commission indicated that these rules would be incorporated into the proposed regulations. The Commission was silent, however, with respect to the application of its access policy in the context of the distribution of VOD services.

12. As noted in Public Notice CRTC 1997-83, most of the recent applicants for VOD licences assumed that, if licensed, they would not have the benefit of the Commission's access policy. The cable distribution undertakings who participated in that proceeding also submitted that there should be no obligation to carry VOD services.

13. While none of the VOD applicants requested mandatory access to BDUs, several of them proposed that a BDU licensee that elects to distribute a VOD service in which it has an ownership interest be required to carry another third-party VOD service.

14. The Commission considers that it would be inappropriate to require any BDU to carry one or more VOD services. VOD services require a great deal of distribution capacity, and, for most VOD services, program storage and interactive capability as well. There will be a significant cost associated with the upgrades necessary to meet these requirements. Moreover, the VOD undertakings licensed today are likely to provide services that are largely duplicative of each other. For these reasons, the Commission does not intend to impose on BDUs any specific access obligations relating to the distribution of VOD services.

15. The Commission also notes that the proposed definition of "available channel", as set out in Public Notice CRTC 1996-60, excludes, among other things, any channel used by a distributor to carry the service of a licensed programming undertaking; this would include channels used for the distribution of a VOD service. In effect, this would allow a BDU to claim large amounts of channel capacity devoted to a VOD service as "unavailable" for the purposes of providing access to pay and specialty services.

16. In light of the capacity required to distribute VOD services, and given that BDUs would not be required to carry such services, the Commission considers that channels used to distribute VOD services should be "available channels" for the purposes of the access provisions contained in the proposed regulations. Accordingly, the definition of "available channel" in the proposed regulations includes any unrestricted channel used to distribute a VOD service.

OTHER MATTERS

17. In addition to the proposals discussed above, the Commission wishes to draw to the attention of interested parties some issues that relate to the policies discussed in Public Notice CRTC 1997-25.

Distant signal carriage

18. Paragraph 19(1)(j) and subsection 19(2) of the proposed regulations would authorize a BDU to distribute the programming service of a distant television station, provided that the BDU obtains: (1) written consent from each local television station; and (2) written confirmation from the distant television station that it does not object to the distribution of its service by the BDU and that it will not solicit advertising in the BDU's market.

19. In light of the limited circumstances in which these provisions could be utilized by BDUs, the Commission invites comments on whether paragraph 19(1)(j) and subsection 19(2) should be retained in the regulations.

Rate deregulation process

20. Section 46 of the proposed regulations sets out the criteria for the rate deregulation of Class 1 cable distribution undertakings, as well as the procedure by which such rate deregulation would be implemented. As part of this procedure, a licensee intending to be rate deregulated would be required to notify subscribers of its intentions 60 days prior to the rate deregulation coming into effect. The Commission seeks comments on whether this procedure is appropriate and, in particular, whether prior notification of subscribers is necessary in light of the objective nature of the criteria for rate deregulation under subsection 46(1), and given that the Commission may suspend or disallow the proposed deregulation under subsection 46(2).

Contributions to Canadian programming

21. In Public Notice CRTC 1997-27, the Commission proposed that the contribution by BDUs to Canadian programming required under Public Notice CRTC 1997-25 be directed to a single fund, namely the Canada Television and Cable Production Fund. The proposed regulations reflect this proposal.

22. The Commission notes that the proposal set out in Public Notice 1997-27 is currently under consideration, and that it expects to reach its decision on this matter shortly. Parties should have regard to this decision when providing comments on the proposed regulation.

COMMENTS

23. Interested parties wishing to comment on the proposed regulations must send their submissions to the Secretary General, CRTC, Ottawa, Ontario, K1A 0N2, by 29 August 1997. To be considered as part of the proceeding, a submission must be actually received by the Commission and not merely mailed by that date. While receipt of submissions will not be acknowledged, they will be considered by the Commission and will form part of the public record of the proceeding.

Laura M. Talbot-Allan
Secretary General

This document is available in alternative format upon request.

JUS-97-197-01
(SOR/DORS)

Whereas, pursuant to subsection 10(3) of the Broadcasting Acta, a copy of the proposed Broadcasting Distribution Regulations, substantially in the annexed form, was published in the Canada Gazette, Part I, on , and a reasonable opportunity was given to licensees and other interested persons to make representations to the Canadian Radio-television and Telecommunications Commission with respect thereto;

Therefore, the Canadian Radio-television and Telecommunications Commission, pursuant to subsection 10(1) of the Broadcasting Acta, hereby makes the annexed Broadcasting Distribution Regulations.

Hull, Quebec, , 1998

LAURA M. TALBOT-ALLAN
Secretary General

JUS-97-197-01
(SOR/DORS)

BROADCASTING DISTRIBUTION REGULATIONS

interpretation

1. The definitions in this section apply in these Regulations.

"Act " means the Broadcasting Act. (Loi)

"AM station" means a station that broadcasts in the AM frequency band of 525 to 1 705 kHz. It does not include a carrier current undertaking or a transmitter that only rebroadcasts the radiocommunications of another station. (station AM)

" available channel" means any unrestricted channel of a distribution undertaking, other than a channel on which is distributed

(a) the programming service of a licensed programming undertaking other than a video-on-demand programming undertaking;

(b) community programming;

(d) a programming service comprising the proceedings of the legislature of the province in which the undertaking is located. (canal disponible)

" basic band" means the 12 analog cable channels that are commonly identified by the numbers 2 to 13 and that are used in the frequency bands 54 to 72 MHz, 76 to 88 MHz and 174 to 216 MHz. (bande de base)

" basic monthly fee" means the total amount that a licensee is authorized to charge to a subscriber on a monthly basis for provision of the basic service to an outlet to which a television receiver, FM receiver, channel converter or other terminal device may be connected in the subscriber's residence or premises. It does not include federal or provincial taxes. (tarif mensuel de base)

" basic service" means the services distributed by a licensee as a package and composed of the programming services the distribution of which is required by sections 17 and 22, or under a condition of its licence, and any other services that are included in the package for the basic monthly fee. (service de base)

" broadcast week" means a period of seven consecutive days beginning on a Sunday. (semaine de radiodiffusion)

" broadcast year" means the period beginning on September 1 in a calendar year and ending on August 31 of the following calendar year. (année de radiodiffusion)

" cable distribution undertaking" means an undertaking that distributes broadcasting to subscribers predominantly over closed transmission paths. (entreprise de distribution par câble)

" Canadian programming service" means

(a) a programming service that originates entirely within Canada or is transmitted by a licensed station;

(b) a programming service consisting of community programming;

(d) a pay television service;

(e) a television pay-per-view service;

(f) a DTH pay-per-view service;

(g) a video-on-demand service; or

(h) a pay audio service. (service de programmation canadien)

" channel" includes a digital channel. (canal)

" Class 1 licensee" means the holder of a Class 1 licence. (titulaire de classe 1)

" Class 2 licensee" means the holder of a Class 2 licence, other than a licensee that carried on an undertaking that had less than 2,000 subscribers immediately before the coming into force of these Regulations. (titulaire de classe 2)

" Class 3 licensee" means

(a) the holder of a Class 3 licence; or

(b) a licensee that, immediately before the coming into force of these Regulations

(i) held a Class 2 licence and carried on an undertaking that had less than 2,000 subscribers, or

(ii) was a Part III licensee within the meaning of section 2 of the Cable Television Regulations, 1986. (titulaire de classe 3)

" clock hour" means a period of 60 minutes beginning on each hour and ending immediately before the next hour. (heure d'horloge)

" commercial message" means an advertisement that is intended to sell or promote goods, a service or an activity, directly or indirectly, or an announcement that mentions or displays in a list of prizes the name of the person selling or promoting those goods or that service or activity. (message publicitaire)

" community channel" means the channel of a distribution undertaking that is used for the distribution of community programming. (canal communautaire)

" community programming" means, in relation to a distribution undertaking, programming that is produced

(a) by the licensee of the undertaking or by members of the community served by the undertaking;

(b) by the licensee of another undertaking or by the members of the community served by that other undertaking and that is relevant to the community referred to in paragraph (a); or

(c) by a network operator licensed to provide programming to a licensee for distribution on a community channel. (programmation communautaire)

" comparable", in respect of two or more programming services, means that not less than 95% of the video and audio components of those programming services, exclusive of commercial messages and of any part of the services carried on a subsidiary signal, are the same. (comparable)

" customer" means a person who is liable for payment for programming services that are distributed by a licensee and that are received directly or indirectly by one or more subscribers. It does not include the owner or operator of a hotel, hospital, nursing home or other commercial or institutional premises. (client)

" demarcation point", in respect of the wire that is used by a distribution undertaking for the distribution of its programming services to a subscriber, means

(a) if the subscriber resides in a single-unit dwelling, 30 cm centimetres outside the exterior wall of the subscriber's premises; and

(b) if the subscriber resides in a multiple-unit dwelling, the point inside the dwelling at which the wire is diverted to the exclusive use and benefit of that subscriber. (point de démarcation)

" digital radio station" means a station that broadcasts in the frequency band of 1 452 to 1 492 MHz (L-Band) using the wide-band EUREKA-147 transmission system as referred to in the Department of Industry's Allotment Plan for Digital Radio Broadcasting (DRB), as amended from time to time. (station de radio numérique)

" digital service area" means the area within which a digital radio station is authorized to provide service, as set out in the Department of Industry's Allotment Plan for Digital Radio Broadcasting (DRB), as amended from time to time. (zone de desserte numérique).

" discretionary service" means a programming service that is not included in the basic service and that is distributed to subscribers on a discretionary basis for a fee separate from and in addition to the basic monthly fee. (service facultatif)

" distant television station" means a licensed television station that is not a local television station, regional television station or extra-regional television station. (station de télévision éloignée)

"DTH distribution undertaking" means a direct-to-home (DTH) satellite distribution undertaking. (entreprise de distribution par SRD)

"DTH eligible satellite service" means a programming service included in Appendix C of the Commission's Revised Lists of Eligible Satellite Services, as amended from time to time. (service par satellite admissible distribué par SRD)

"DTH pay-per-view service" means a programming service provided under an agreement between a licensee of a DTH distribution undertaking and a person licensed to carry on a direct-to-home pay-per-view television programming undertaking. (service de télévision à la carte par SRD)

" educational authority" means a body that is

(a) an independent corporation, within the meaning of section 2 of the Direction to the CRTC (Ineligibility to Hold Broadcasting Licences); or

(b) a provincial authority, within the meaning of section 2 of the Direction to the CRTC (Ineligibility to Hold Broadcasting Licences). (autorité éducative)

" educational radio programming service" means a radio programming service that provides the programming described in the definition of "independent corporation" in section 2 of the Direction to the CRTC (Ineligibility to Hold Broadcasting Licences). (service de programmation de radio éducative)

" educational television programming service" means a television programming service that provides the programming described in the definition of "independent corporation" in section 2 of the Direction to the CRTC (Ineligibility to Hold Broadcasting Licences). (service de programmation de télévision éducative)

" election period" means

(a) in the case of a federal or provincial election or of a federal, provincial or municipal referendum, the period beginning on the date of the announcement of the election or referendum and ending on the date of the election or referendum; or

(b) in the case of a municipal election, the period beginning two months before the date of the election and ending on the date of the election. (période électorale)

" ethnic station" means a station that is licensed as an ethnic station. (station à caractère ethnique)

" exempt programming undertaking" means a programming undertaking the operator of which is exempted from any or all of the requirements of Part II of the Act in an order made by the Commission under subsection 9(4) of the Act. (entreprise de programmation exemptée)

" extra-regional television station" means, in relation to a distribution undertaking, a licensed television station that has

(a) a Grade A official contour or Grade B official contour that does not include any part of the licensed area of the undertaking; and

(b) a Grade B official contour that includes any point located 32 km or less from the local head end of the undertaking. (station de télévision extra-régionale)

"FM station" means a station that broadcasts in the FM frequency band of 88 to 108 MHz. It does not include a carrier current undertaking or a transmitter that only rebroadcasts the radiocommunications of another station. (station FM)

" inside wire" means the wire that is used by a distribution undertaking for the distribution of its programming services that extends from the demarcation point to one or more terminal devices inside a subscriber's residence or premises. It does not include a secured enclosure that is used to house the wire and that is attached to the exterior wall of a subscriber's premises. (câblage intérieur)

" licence" means a licence issued by the Commission to carry on a distribution undertaking. (licence)

" licensed" means licensed by the Commission under paragraph 9(1)(b) of the Act. (autorisé)

" licensed area" means the area for which a licensee has been licensed to provide service. (zone de desserte autorisée)

" licensee" means a person who is licensed to carry on a distribution undertaking. (titulaire)

" local AM station" means, in relation to a distribution undertaking, a licensed AM station that has its principal studio located within 32 km of the local head end of the undertaking. (station AM locale)

" local digital radio station" means, in relation to a distribution undertaking, a licensed digital radio station that has a digital service area that includes any part of the licensed area of the undertaking. (station de radio numérique locale)

" local FM station" means, in relation to a distribution undertaking, a licensed FM station that has a 500 mV/m official contour that includes any part of the licensed area of the undertaking. (station FM locale)

" local head end", in respect of

(a) a cable distribution undertaking, means the specific location at which a licensee receives the majority of the programming services that are transmitted by local television stations or, if there are no such stations, by regional television stations, and that are distributed by the licensee; and

(b) a radiocommunication distribution undertaking, means the licensee's transmitter site. (tête de ligne locale)

" local radio station" means a local AM station, a local FM station or a local digital radio station. (station de radio locale)

" local television station", in relation to a distribution undertaking, means a licensed television station that

(a) has a Grade A official contour that includes any part of the licensed area of the undertaking; or

(b) has , if there is no Grade A official contour, a transmitting antenna that is located within 15 km of the licensed area of the undertaking. (station de télévision locale)

" multiplexed programming" means programming broadcast by a pay television service that is distributed on two or more channels. (programmation multiplexée)

" network operator" means a person licensed to carry on a network. (exploitant de réseau)

"non -Canadian television station" means a television station that has a transmitter site located outside Canada. (station de télévision non canadienne)

" official contour" means a service contour marked for a licensed television station, licensed AM station or licensed FM station on the map most recently published under the Department of Industry Act by the Minister of Industry pertaining to that station. (périmètre de rayonnement officiel)

" Part II eligible satellite service" means a programming service included in Appendix A of the Commission's Revised Lists of Eligible Satellite Services, as amended from time to time. (service par satellite admissible en vertu de la partie II)

" Part III eligible Canadian satellite service" means a programming service available from a Canadian satellite and included in Appendix B of the Commission's Revised Lists of Eligible Satellite Services, as amended from time to time. (service par satellite canadien admissible en vertu de la partie III)

" Part III eligible non-Canadian satellite service" means a programming service available from a non-Canadian satellite and included in Appendix B of the Commission's Revised Lists of Eligible Satellite Services, as amended from time to time. (service par satellite non canadien admissible en vertu de la partie III)

"pay audio service" means a programming service provided under an agreement between a licensee and a person licensed to carry on a pay audio programming undertaking. (service sonore payant)

"pay -per-view service" means a scheduled programming service that is provided to subscribers on a pay-per-view basis. (service à la carte)

"pay television service" means a programming service provided under an agreement between a licensee and a person licensed to carry on a pay television programming undertaking. (service de télévision payante)

" programming service" means a program that is distributed by a licensee. (service de programmation)

" production fund" means the Canada Television and Cable Production Fund, or its successor. (fonds de production)

" public affairs programming service" means the programming service of a person licensed to carry on a programming undertaking of which 100% of the programming provided represents categories 3 (reporting and actualities) and 12 (filler programming), as referred to in column I of item 6 of Schedule I to the Specialty Services Regulations, 1990. (service de programmation d'affaires publiques)

" radiocommunication distribution undertaking" means a distribution undertaking, other than a DTH distribution undertaking, that distributes programming services predominantly by means of radio waves. (entreprise de distribution de radiocommunication)

" regional television station" means, in relation to a distribution undertaking, a licensed television station, other than a local television station, that has a Grade B official contour that includes any part of the licensed area of the undertaking. (station de télévision régionale)

" relay distribution undertaking" means a distribution undertaking that receives the programming services of radio or television programming undertakings and distributes them only to one or more other distribution undertakings. (entreprise de distribution par relais)

" restricted channel" means a channel of a cable distribution undertaking that is the same channel on which signals are transmitted by

(a) a local television station or a local FM station; or

(b) a television station or an FM station that has a transmitter site located outside Canada within 60 km of any part of the licensed area of the undertaking. (canal à usage limité)

" specialty service" means a programming service provided under an agreement between a licensee and a person licensed to carry on a specialty programming undertaking. (service spécialisé)

" station" means a radio or television programming undertaking, or a radiocommunication distribution undertaking that rebroadcasts the programming service of a radio or television programming undertaking and whose signal is not encrypted and for which no fee is payable to a third party for the undertaking's right to distribute the signal. (station)

" subscriber" means

(a) a household of one or more persons, whether occupying a single-unit dwelling or a unit in a multiple-unit dwelling, to which service is provided directly or indirectly by a licensee; or

(b) the owner or operator of a hotel, hospital, nursing home or other commercial or institutional premises to which service is provided by a licensee. (abonné)

" subscription television system" means an undertaking that distributes encrypted programming services by low-power transmitters using the conventional VHF or UHF television bands. (système de télévision par abonnement)

" television pay-per-view service" means the pay-per-view service of a pay television programming undertaking. (service de télévision à la carte)

" unserved community" means the licensed area of a distribution undertaking where there is no local radio station and no local television station. (collectivité non desservie)

" video-on-demand service" means a programming service provided under an agreement between a licensee and a person licensed to carry on a video-on-demand programming undertaking. (service de vidéo sur demande)

application

2. These Regulations apply to persons licensed to carry on a distribution undertaking, other than a person licensed to carry on

(a) a subscription television system;

(b) a relay distribution undertaking; or

PART 1

GENERAL

Prohibition

3. A licensee shall not distribute programming services except as required or authorized under its licence or these Regulations.

Transfer of Ownership

4. (1) The definitions in this subsection apply in this section.

" associate", when used to indicate a relationship with a person, includes

(a) a partner of the person;

(b) a trust or an estate in which the person has a substantial beneficial interest or in respect of which the person serves as a trustee or in a similar capacity;

(d) a relative, not referred to in paragraph (c), of the person, or of the person's spouse or common-law spouse of the same or opposite sex, who has the same residence as the person;

(e) a corporation of which the person alone, or the person together with one or more associates as described in this definition, has, directly or indirectly, control of 50% or more of the voting interests;

(f) a corporation of which an associate, as described in this definition, of the person has, directly or indirectly, control of 50% or more of the voting interests; and

(g) a person with whom the person has entered into an arrangement, a contract, an understanding or an agreement in respect of the voting of shares of a licensee corporation or of a corporation that has, directly or indirectly, effective control of a licensee corporation, except when the person controls less than 1% of all issued voting shares of a corporation whose shares are publicly traded on a stock exchange. (liens)

" common shares" means the shares that represent the residual equity in the earnings of a corporation, and includes the preferred shares to which are attached rights to participate in the earnings of the corporation with no upper limit. (actions ordinaires)

" person" includes an individual, a partnership, a joint venture, an association, a corporation, an estate, a trust, a trustee, an executor and an administrator or a legal representative of any of them. (personne)

" voting interest", in respect of

(a) a corporation with share capital, means the vote attached to a voting share;

(b) a corporation without share capital, means an interest that entitles the owner to voting rights similar to those enjoyed by the owner of a voting share;

(c) a partnership, a trust, an association or a joint venture, means an ownership interest in the assets of it that entitles the owner to receive a share of its profits, to receive a share of its assets on dissolution and to participate directly in its management or to vote on the election of the persons to be entrusted with the power and responsibility to manage it; and

(d) a not-for-profit partnership, trust, association or joint venture, means a right that entitles the owner to participate directly in its management or to vote on the election of the persons to be entrusted with the power and responsibility to manage it. (intérêt avec droit de vote)

" voting share" means a share in the capital of a corporation, to which is attached one or more votes that are exercisable at meetings of shareholders of the corporation, either under all circumstances or under a circumstance that has occurred and is continuing, and includes any security that is convertible into such a share at all times at the option of the holder. (action avec droit de vote)

(2) For the purposes of this section, control of a voting interest by a person includes situations in which

(a) the person is, directly or indirectly, the beneficial owner of the voting interest; or

(b) the person, by means of an arrangement, a contract, an understanding or an agreement, determines the manner in which the interest is voted, but the solicitation of proxies or the seeking of instructions regarding the completion of proxies in respect of the exercise of voting interests is not considered to be such an arrangement, contract, understanding or agreement.

(3) For the purposes of this section, effective control of a licensee or its undertaking includes situations in which

(a) a person controls, directly or indirectly, other than by way of security only, a majority of the voting interests of the licensee;

(b) a person has the ability to cause the licensee or its board of directors to undertake a course of action; or

(c) the Commission, following a public hearing of an application for a licence, or in respect of an existing licence, determines that a person has such effective control and sets out that determination in a decision or public notice.

(4) Except as otherwise provided under a condition of its licence, a licensee shall obtain the prior approval of the Commission in respect of any act, agreement or transaction that directly or indirectly would result in

(a) a change of the effective control of its undertaking; or

(b) a person who, alone, or together with an associate,

(i) controls less than 30% of the voting interests of the licensee, having control of 30% or more of those interests,

(ii) controls less than 30% of the voting interests of a person who has, directly or indirectly, effective control of the licensee, having control of 30% or more of those interests,

(iii) owns less than 50% of the issued common shares of the licensee, owning 50% or more of those shares but not having, directly or indirectly, effective control of the licensee, or

(iv) owns less than 50% of the issued common shares of a person who has, directly or indirectly, effective control of the licensee, owning 50% or more of those shares but not having, directly or indirectly, effective control of the licensee.

(5) A licensee shall notify the Commission within 30 days after the occurrence of any act, agreement or transaction that, directly or indirectly, results in a person who, alone, or together with an associate, controls less than

(a) 20% of the voting interests of the licensee, having control of 20% or more but less than 30% of those interests;

(b) 20% of the voting interests of a person who has, directly or indirectly, effective control of the licensee, having control of 20% or more but less than 30% of those interests;

(c) 40% of the voting interests of the licensee, having control of 40% or more but less than 50% of those interests but not having, directly or indirectly, effective control of the licensee; or

(d) 40% of the voting interests of a person who has, directly or indirectly, effective control of the licensee, having control of 40% or more but less than 50% of those interests but not having, directly or indirectly, effective control of the licensee.

(6) A notification referred to in subsection (5) shall set out the following information:

(a) the name of the person or the names of the person and the associate;

(b) the percentage of the voting interests controlled by the person or by the person and the associate; and

Distribution of Basic Service

5. Except as otherwise provided under a condition of its licence or these Regulations, no licensee shall provide a subscriber with any programming services, other than pay-per-view services, video-on-demand services or the programming services of exempt programming undertakings, without also providing the basic service of the licensee.

Majority of Canadian Programming Services

6. (1) Except as otherwise provided under a condition of its licence, a licensee shall ensure that a majority of the video channels and of the audio channels received by a subscriber are devoted to the distribution of Canadian programming services, other than multiplexed programming or the programming distributed on program repeat channels.

(2) Except as otherwise provided under a condition of its licence, this section does not apply to a Class 3 licensee of a cable distribution undertaking that only distributes programming services on the basic band.

Alteration or Deletion of Programming Service

7. A licensee shall not alter or delete a programming service in the course of its distribution except

(a) as required or authorized under a condition of its licence or these Regulations;

(b) in accordance with an agreement entered into with a network operator; or

Prohibited Programming Content

8. (1) No licensee shall distribute a programming service that the licensee originates and that contains

(a) anything that contravenes any law;

(b) any abusive comment or abusive pictorial representation that, when taken in context, tends to or is likely to expose an individual or group or class of individuals to hatred or contempt on the basis of race, national or ethnic origin, colour, religion, sex, sexual orientation, age or mental or physical disability;

(d) any false or misleading news.

(2) For the purpose of paragraph (1)(b), sexual orientation does not include the orientation towards a sexual act or activity that would constitute an offence under the Criminal Code.

Undue Preference

9. No licensee shall, in relation to the acquisition or distribution of programming services, give an undue preference to any person, including itself, or subject any person to an undue disadvantage.

Transfer of Inside Wire to Customer

10. (1) Subject to subsection (2), if a licensee owns the inside wire, it shall offer the wire for purchase to a customer at the time the customer terminates service, at a price of not more than $0.33 per metre.

(2) If the customer is the owner or operator of a multiple-unit dwelling, the licensee shall offer to the customer for purchase the inside wire of each subscriber residing in the multiple-unit dwelling.

(3) If a customer decides not to purchase the inside wire, the licensee owning the wire may remove it within seven days after the date of the termination of service.

(4) If a licensee decides not to remove the inside wire under subsection (3), the licensee shall not later interfere with the ability of any person to use the wire for the purpose of receiving the programming services of another distribution undertaking.

Information To Be Submitted to the Commission

11. (1) On or before November 30 of each year, a licensee shall submit to the Commission a statement of accounts, on the annual return of broadcasting licensee form, for the 12-month period ending on the previous August 31.

(2) At the request of the Commission, a licensee shall submit to the Commission information in accordance with the form entitled Summary of Basic Tier/STV Fixed Assets, and any other forms that are issued by the Commission.

(3) At the request of the Commission, a licensee shall provide the Commission with a response to any inquiry regarding the licensee's programming, ownership or any other matter within the Commission's jurisdiction that relates to the licensee's undertaking.

Dispute Resolution

12. (1) For the purpose of sections 12 to 15, "wholesale rate" means the fee payable on a monthly basis by a licensee to a programming undertaking to receive a programming service.

(2) If there is a dispute between the licensee of a distribution undertaking and the licensee of a programming undertaking or the operator of an exempt programming undertaking concerning the carriage or terms of carriage of programming, including the wholesale rate, originated by the programming undertaking, one or both of the parties to the dispute may refer the matter to the Commission for resolution, with or without mediation.

(3) If the Commission accepts a referral of a matter for resolution, the Commission may appoint a person to mediate the dispute.

(4) Any information relating to the resolution of a dispute must be kept confidential, unless the Commission determines that it would be in the public interest to do otherwise.

(5) Information provided by a party for the purposes of the resolution of a dispute may not be used by the other party to the dispute for any other purpose except with the prior consent of the party providing the information.

(6) During the mediation of a dispute, the mediator may request additional information from the parties, or require their attendance at a meeting to discuss the matters in dispute.

(7) A mediator may refer a matter to the Commission if a party does not comply with a request of the mediator, and the Commission may require the additional information or attendance at a meeting in order to discuss the matters in dispute.

13. An agreement that is reached after mediation must be in writing and be signed by all parties.

14. If no agreement is reached by the parties, the mediator must submit a report to the Commission concerning all matters unresolved after mediation, within the period established by the Commission.

15. The Commission may, if no agreement is reached after mediation or if a matter is referred for resolution without mediation, render a decision regarding carriage and the terms and conditions of carriage, including the wholesale rate, of programming originated by the programming undertaking involved in the dispute.

PART 2

CLASS 1 AND CLASS 2 LICENSEES

Application

16. Except as otherwise provided in this Part or in a licensee's condition of licence, this Part applies to Class 1 and Class 2 licensees.

Television Programming Services that Must Be Distributed as Part of the Basic Service

17. (1) Except as otherwise provided in subsections (3) to (6) or under a condition of its licence, a licensee shall distribute the following as part of its basic service, in the following order of priority:

(a) the programming services of all local television stations owned and operated by the Corporation;

(b) the educational television programming services received over the air or by satellite or microwave relay, the operation of which is the responsibility of an educational authority designated by the province in which the licensed area of the undertaking is located;

(d) the programming services of a regional television station owned and operated by the Corporation, unless the licensee is distributing, under paragraph (a), the programming services of a local television station owned and operated by the Corporation that broadcasts in the same official language as the regional television station;

(e) the programming services of all other regional television stations, unless the licensee is distributing, under paragraph (a), (c) or (d), the programming services of a television station that is an affiliate or member of the same network;

(f) if they are received by satellite or microwave relay and if they are not being distributed under paragraph (a), (c), (d) or (e), the programming services of at least one television station that broadcasts in English and at least one that broadcasts in French that are owned and operated by, or that are affiliates of, the Corporation;

(g) the programming services of an extra-regional television station owned and operated by the Corporation, unless the licensee is distributing, under paragraph (a), (d) or (f), the programming services of a television station owned and operated by the Corporation that broadcasts in the same official language as the extra-regional television station; and

(h) the programming services of all other extra-regional television stations that are not affiliates or members of the network to which a station referred to in any of paragraphs (a) to (g) belongs.

(2) A licensee of a cable distribution undertaking shall distribute the services in subsection (1) beginning with the basic band of its undertaking.

(3) If a licensee receives programming services that are identical, the licensee is required to distribute, under subsection (1), only one of them.

(4) If a licensee receives over the air an educational television programming service the operation of which is the responsibility of an educational authority designated by a province other than the province in which the licensed area of the undertaking is located, the licensee is not required to distribute it under subsection (1) but may distribute the service as part of the basic service.

(5) If the Commission has determined that a programming service is of national public interest and has licensed the service as a mandatory service, the licensee shall distribute the service as part of the basic service.

(6) If the programming services of two or more television stations rank equally in the order of priority established by this section, unless the operators of the stations agree otherwise in writing, a licensee shall give priority

(a) if the studios of the stations are located in the same province as the licensee or in the National Capital Region, as described in the schedule to the National Capital Act, to the programming services of the stations in the order of the proximity of their main studios to the local head end of the licensee; and

(b) in any other case, to the programming service of the station the studio of which is located in the same province as the licensee.

Access for Specialty, Pay and Pay-per-view Services

18. (1) Except as otherwise provided under a licensee's condition of licence, this section applies to Class 1 licensees.

(2) In this section, "general interest pay-per-view service" means a pay-per-view service offered by a pay television programming undertaking, the programming of which is selected from any of the categories listed in column I of item 6 of Schedule I to the Pay Television Regulations, 1990.

(3) For the purposes of this section,

(a) a licensee is considered to be operating in a francophone market if more than 50% of the total population of all cities, towns and municipalities encompassed in whole or in part within the licensed area of the licensee has French as its mother tongue, according to the most recent population figures published by Statistics Canada; and

(b) a licensee that is not operating in a francophone market is considered to be operating in an anglophone market.

(4) Except as otherwise provided under a condition of its licence or in this section, and subject to section 20, a licensee shall distribute, to the extent of available channels,

(a) if the licensee is operating in an anglophone market,

(i) each English-language specialty service, the operator of which is authorized to provide the service to all or part of the licensed area of the undertaking, other than a single or limited point-of-view religious specialty service,

(ii) each English-language pay television service, the operator of which is authorized to provide the service to all or part of the licensed service area of the undertaking, other than a pay-per-view service or a single or limited point-of-view religious pay television service, and

(iii) at least one English-language general interest pay-per-view service;

(b) if the licensee is operating in a francophone market,

(i) each French-language specialty service, the operator of which is authorized to provide the service to all or a part of the licensed service area of the undertaking, other than a single or limited point-of-view religious specialty service,

(ii) each French-language pay television service, the operator of which is authorized to provide the service to all or a part of the licensed service area of the undertaking, other than a pay-per-view service or a single or limited point-of-view religious pay television service, and

(iii) at least one French-language general interest pay-per-view service; and

(c) the ethnic programming service of a programming undertaking authorized to provide the service to all or any part of the licensed area of the undertaking if

(i) the licensee was distributing the service on May 16, 1994, or

(ii) the licensee is operating in a market in which 10% or more of the total population of all cities, towns and municipalities encompassed in whole or in part within the licensed area of the licensee is of one or a combination of the ethnic origins to which the service is intended to appeal, according to the most recent population figures published by Statistics Canada.

(5) If a licensee is distributing a pay-per-view service on more than 10 analog channels, the Commission may declare one or more channels to be available channels for the purposes of subsection (4).

(6) A licensee is not required to distribute, under subsection (4), the service of a programming undertaking that was licensed after May 6, 1996 if the only available channel on the licensee's undertaking is an unrestricted channel on which the licensee is distributing a non-Canadian programming service that was distributed by the licensee before May 6, 1996.

(7) If the Commission has authorized a programming undertaking in a condition of its licence to require the licensee to commence distribution of its programming service on the earlier of the date on which the licensee first uses digital technology for the delivery of programming to subscribers and September 1, 1999, the licensee is not required to distribute the service under subsection (4) until the earlier of the two dates.

Television Programming Services that May Be Distributed

19. (1) Except as otherwise provided under a condition of its licence, if a licensee satisfies the requirements of sections 17 and 18, it may distribute

(a) the programming service of any regional television station that is not distributed under section 17;

(b) the programming service of any extra-regional television station that is not distributed under section 17;

(c) any pay television service that is not distributed under section 18, the operator of which is authorized to provide the service to all or part of the licensed area of the undertaking;

(d) any specialty service that is not distributed under section 18, the operator of which is authorized to provide the service to all or part of the licensed area of the undertaking;

(e) any video-on-demand service, the operator of which is authorized to provide the service to all or part of the licensed area of the undertaking;

(f) subject to subsection 20(3) and section 26, community programming;

(g) the programming service of any non-Canadian television station that is received directly over the air at the local head end, unless

(i) the programming service consists of programming that has predominantly religious content, or

(ii) the non-Canadian television station began operation after January 1, 1985;

(h) any Part II eligible satellite service;

(i) the programming service of any distant television station that is not a Part II eligible satellite service and that was distributed before June 3, 1993;

(j) subject to subsection (2), the programming service of any distant television station that is not distributed under paragraph (h) or (i);

(k) the programming service provided by the licensee of any local television station or specialty service and authorized by the Commission for distribution on program repeat channels, in accordance with Public Notice CRTC 1993-74, entitled Structural Public Hearing;

(l) any public affairs programming service;

(m) subject to section 21, the programming service of any exempt programming undertaking;

(n) any programming service that promotes a pay television service, in accordance with Public Notice CRTC 1995-172, entitled Revision to the Commission's Policy Governing the Distribution of Pay Television Promotional Material by Cable Television Licensees; and

(o) any programming service authorized under a condition of its licence.

(2) A licensee that intends to distribute the programming service of a distant television station under paragraph (1)(j) shall not distribute the service unless

(a) it sends to the Commission

(i) a written statement from each local television station confirming that the station does not object to the distribution of the programming service by the licensee, and

(ii) a written statement from the distant television station confirming that the station

(A) does not object to the distribution of its programming service by the licensee, and

(B) will not solicit advertising in the market in which the licensee seeks to distribute the programming service; and

(b) 30 days have elapsed following receipt by the Commission of the documents referred to in paragraph (a).

Distribution and Linkage

20. (1) Except as otherwise provided under a condition of its licence, if a licensee distributes a programming service referred to in subsection 18(4) or paragraph 19(1)(c), (d) or (h), the licensee shall distribute the service in accordance with the Commission's Public Notice entitled Distribution and Linkage Requirements, as amended from time to time.

(2) If a licensee distributes a programming service that comprises the proceedings of the House of Commons or the proceedings of the legislature of the province in which its undertaking is located, the licensee shall include that service as part of its basic service, unless the operator of the programming service agrees in writing to the distribution of its service as a discretionary service.

(3) If a licensee distributes community programming, the licensee shall distribute it as part of the basic service.

Access by Exempt Programming Undertakings

21. (1) Except as otherwise provided under a licensee's condition of licence, this section applies to Class 1 licensees.

(2) The definitions in this subsection apply in this section.

" affiliate" means a person who controls the licensee, or who is controlled by the licensee or by a person who controls the licensee. (affiliée)

" control" means control in any manner that results in control in fact, whether directly through the ownership of securities or indirectly through a trust, an agreement or an arrangement, the ownership of a body corporate or otherwise. (contrôle)

" share" means a share in the capital of a corporation and includes a security that is convertible into a share at all times at the option of the holder. (action)

" third party exempt programming undertaking" means an exempt programming undertaking of which the licensee or an affiliate, or both, controls less than 15% of the total shares issued and outstanding. (entreprise de programmation tierce exemptée)

(3) If a licensee distributes on one or more analog channels the programming services of an exempt programming undertaking of which the licensee or an affiliate, or both, controls 15% or more of the total shares issued and outstanding, the licensee shall make available an equal number of analog channels for the distribution of programming services of third party exempt programming undertakings.

Audio Programming Services that Must Be Distributed

22. (1) Except as otherwise provided under a condition of its licence, a Class 1 licensee and any Class 2 licensee that elects to distribute an audio programming service shall distribute

(a) the programming services of all local radio stations; and

(b) if they are not distributed under paragraph (a),

(i) the programming services of at least one radio station that broadcasts in English and at least one that broadcasts in French that are owned and operated by the Corporation, and

(ii) the educational radio programming service of an educational authority designated by the province in which the licensed area of the undertaking is located.

(2) Despite subsection (1), a licensee is not required to distribute the programming service of a local digital radio station that is licensed on a transitional basis.

Audio Programming Services that May Be Distributed

23. (1) The definitions in this subsection apply in this section.

" affiliate" has the same meaning as in subsection 21(2). (affiliée)

" control" has the same meaning as in subsection 21(2). (contrôle)

" share" has the same meaning as in subsection 21(2). (action)

" third party pay audio programming undertaking" means a pay audio programming undertaking of which the licensee or an affiliate, or both, controls less than 30% of the total shares issued and outstanding. (entreprise tierce de programmation sonore payante)

(2) Except as otherwise provided under a condition of its licence or in subsection (3), a licensee may distribute

(a) any audio Canadian programming service;

(b) any audio non-Canadian programming service that is receivable over the air at the local head end, unless the service

(i) solicits advertising in Canada, or

(ii) consists of programming that has predominantly religious content;

(d) any audio programming service authorized under a condition of its licence.

(3) Except as otherwise provided under a condition of its licence, no licensee shall distribute

(a) the programming service of a carrier current undertaking that is an exempt programming undertaking;

(b) any audio Canadian programming service in a language other than French, English or a language spoken by an aboriginal people of Canada that contains commercial messages, unless

(i) the licensee was authorized by the Commission to distribute that service on or before July 4, 1985, or

(ii) there is no local radio station that is an ethnic station.

(4) Subject to subsection (5), if a Class 1 licensee distributes the programming service of a pay audio programming undertaking of which the licensee or an affiliate, or both, controls 30% or more of the total shares issued and outstanding, the licensee shall distribute the programming service of at least one third party pay audio programming undertaking.

(5) A licensee is not required to distribute the programming service of a third party pay audio programming undertaking that is delivered to the licensee's head end in a format that is technically incompatible with the licensee's method of signal distribution.

Restricted Channel

24. Except as otherwise provided under a condition of its licence, a licensee shall not distribute on a restricted channel

(a) a programming service referred to in subsection 18(4); or

(b) a programming service referred to in subsection 17(1) or (5) or 20(2) or section 22, unless the licensee has the prior written agreement of the operator of the programming service.

Notice of Channel Realignment

25. If a licensee intends to change the channel on which a Canadian programming service is distributed, the licensee shall not implement the change unless, at least 60 days before the proposed effective date of the change, it sends a written notice to each of the operators of the programming services whose channel placements will be affected by the proposed realignment.

Community Channel

26. (1) If a licensee elects to distribute community programming, except as otherwise provided in subsections (2) and (3) or under a condition of its licence, a licensee shall not distribute on the community channel any programming service other than

(a) community programming;

(b) an announcement promoting services that the licensee is authorized to provide;

(d) an information program funded by and produced for a federal, provincial or municipal government or agency or a public service organization;

(e) the question period of the legislature of the province in which the undertaking is located;

(f) an announcement providing information about the programming to be distributed on the community channel;

(g) a commercial message that mentions or displays the name of a person who sponsored a community event or the goods, services or activities sold or promoted by the person, if the mention or display is in the course of, and incidental to the production of, community programming relating to the event;

(h) an oral or a written acknowledgement contained in community programming that mentions no more than the name of a person, the goods, services or activities that are being sold or promoted by the person and their address and telephone number, if the person provided direct financial assistance for the community programming in which the acknowledgement is contained;

(i) an oral or a written acknowledgement contained in community programming that mentions no more than the name of a person, the goods or services provided by the person and their address and telephone number, if the person provided the goods or services free of charge to the licensee for use in connection with the production of the community programming in which the acknowledgement is contained; or

(j) a still image programming service as described in Public Notice CRTC 1993-51, entitled Exemption Order Respecting Still Image Programming Service Undertakings, if the service is produced by the licensee or by members of the community served by the undertaking and does not contain commercial messages, other than commercial messages contained within the programming service of a licensed radio station.

(2) Whenever a licensee is not distributing community programming on the community channel, or is distributing on that channel community programming that has no audio component, the licensee may distribute on that channel the programming service of a local radio station other than an educational radio programming service the operation of which is the responsibility of an educational authority.

(3) Whenever a Class 2 licensee is not distributing community programming on the community channel, the licensee may distribute the programming services referred to in Public Notice CRTC 1985-151, entitled Complementary Programming on the Community Channel.

(4) If a licensee provides time on the community channel during an election period for the distribution of programming of a partisan political character, the licensee shall allocate that time on an equitable basis among all accredited political parties and rival candidates.

27. (1) Except as otherwise provided under a condition of its licence, a licensee shall

(a) keep a program log or a machine-readable record of programs distributed on the community channel and retain it for a period of one year after distribution of the programs; and

(b) enter into the program log or machine-readable record of programs each day the following information for each program:

(i) the date of distribution,

(ii) the title,

(iii) the name of the undertaking at which the program was produced,

(iv) a brief description of the program, including a statement as to whether it was produced by employees of the undertaking or by volunteers, and

(v) the duration of the program.

(2) A licensee shall retain a clear and intelligible audio-visual recording of each program distributed on the community channel for a period of

(a) four weeks after the date of distribution of the program; or

(b) if the Commission receives a complaint from a person regarding the program or for any other reason wishes to investigate the complaint and so notifies the licensee before the end of the period referred to in paragraph (a), eight weeks after the date of distribution of the program.

(3) If, before the end of the relevant period referred to in subsection (1) or (2), the Commission requests from a licensee a program log, machine-readable record or clear and intelligible audio or audio-visual recording of a program, the licensee shall immediately furnish the log, record or recording to the Commission.

Contribution to Community and Canadian Programming

28. (1) In this section, "contribution to community programming" means a contribution made in accordance with Public Notice CRTC 1997-25, entitled New Regulatory Approach for Broadcasting Distribution Undertakings.

(2) A Class 1 licensee that has 60,000 or more subscribers on August 31 of the previous year shall contribute to the production fund

(a) in the broadcast year ending on August 31, 1998, an amount equal to or more than the greater of

(i) 5% of its gross revenues derived from broadcasting activities in the period beginning on January 1, 1998 and ending on August 31, 1998, less any contribution to community programming made by the licensee during that period, and

(ii) 3% of its gross revenues derived from broadcasting activities in the period beginning on January 1, 1998 and ending on August 31, 1998; and

(b) in the broadcast year ending August 31, 1999, and in each broadcast year thereafter, an amount equal to or more than the greater of

(i) 5% of its gross revenues derived from broadcasting activities in the year less any contribution to community programming made by the licensee in that year, and

(ii) 3% of its gross revenues derived from broadcasting activities in that year.

(3) A Class 1 licensee that has fewer than 60,000 subscribers on August 31 of the previous broadcast year shall contribute to the production fund

(a) in the broadcast year ending on August 31, 1998, an amount equal to or more than the greater of

(i) 5% of its gross revenues derived from broadcasting activities in the period beginning on January 1, 1998 and ending August 31, 1998 less any contribution to community programming made by the licensee during that period, and

(ii) 2% of its gross revenues derived from broadcasting activities in that period;

(b) in the broadcast year ending on August 31, 1999, an amount equal to or more than the greater of

(i) 5% of its gross revenues derived from broadcasting activities in that year less any contribution to community programming made by the licensee in that year, and

(ii) 2. 5% of its gross revenues derived from broadcasting activities in that year; and

(c) in the broadcast year ending on August 31, 2000, and in each broadcast year thereafter, an amount equal to or more than the greater of

(i) 5% of its gross revenues derived from broadcasting activities in the year less any contribution to community programming made by the licensee during that year, and

(ii) 3% of its gross revenues derived from broadcasting activities in that year.

(4) A Class 2 licensee shall contribute to the production fund

(a) in the broadcast year ending on August 31, 1998, an amount equal to or greater than 5% of its gross revenues derived from broadcasting activities in the period beginning on January 1, 1998 and ending on August 31, 1998 less any contribution to community programming made by the licensee during that period; and

(b) in the broadcast year ending on August 31, 1999, and in each broadcast year thereafter, an amount equal to or greater than 5 % of its gross revenues derived from broadcasting activities in the year less any contribution to community programming made by the licensee during that year.

Programming Service Deletion and Substitution

29. (1) The definitions in this subsection apply in this section.

" broadcaster" includes an educational authority responsible for an educational television programming service. (radiodiffuseur)

" local television station" includes an educational authority responsible for an educational television programming service. (station de télévision locale)

" privately-owned local television station" means a local television station that is not owned by the Corporation and that is not an educational authority responsible for an educational television programming service. (station de télévision locale privée)

" specialty service" includes the Atlantic Satellite Network. (service spécialisé)

(2) Except as otherwise provided under a condition of its licence, and subject to subsection (5), a Class 1 licensee

(a) shall delete the programming service of a television station and substitute the programming service of a local television station or a regional television station, if

(i) the programming service to be deleted and the programming service to be substituted are comparable and simultaneously broadcast,

(ii) the local television station or regional television station has a higher priority under section 17, and

(iii) the broadcaster operating the local television station or regional television station

(A) has, at least four days before the date on which the programming service is broadcast, delivered to the licencee a written request for the deletion and substitution, or

(B) effects the deletion and substitution under an agreement with the licensee;

(b) may delete and substitute in accordance with paragraph (a) notwithstanding that the licensee has received a written request from the broadcaster operating the local television station or regional television station less than four days before the date on which the programming service is broadcast; and

(c) may delete the programming service of a television station and substitute the programming service of a specialty service if

(i) the programming service to be deleted and the programming service to be substituted are comparable and simultaneously broadcast, and

(ii) the operator of the specialty service has delivered to the licensee a written request for the deletion and substitution.

(3) If a substitution is requested by more than one broadcaster under subsection (2), the licensee shall give preference to the programming service of the television station that has the highest priority under section 17.

(4) Except as otherwise provided under a condition of its licence, and subject to subsection (5), a Class 2 licensee

(a) shall delete the programming service of a television station and substitute the programming service of the privately-owned local television station, if

(i) the main studio of the privately-owned local television station is located within the licensed area of the licensee,

(ii) the programming service to be deleted and the programming service to be substituted are comparable and simultaneously broadcast,

(iii) the privately-owned local television station has a higher priority under section 17, and

(iv) the broadcaster operating the privately-owned local television station

(A) has, at least four days before the date on which the programming service is broadcast, delivered to the licensee a written request for the deletion and substitution, or

(B) effects the deletion and substitution under an agreement with the licensee; and

(b) may delete the programming service of a television station and substitute that of a local television station, regional television station or specialty service in the circumstances in which a Class 1 licensee is required or authorized by subsection (2) to make the deletion and substitution.

(5) A licensee shall not delete the programming service of a television station under subsections (2) or (4) if the Commission notifies the licensee that the deletion is not in the public interest because

(a) undue financial hardship would result for the operator of the television station; or

(b) the programming service to be deleted contains subsidiary signals designed to inform or entertain and the programming service to be substituted does not contain similar signals.

(6) A licensee may discontinue a deletion and substitution made under subsection (2) or (4) if the programming services in respect of which the deletion and substitution are made are not, or are no longer, comparable and broadcast simultaneously.

PART 3

CLASS 3 LICENSEES

Application

30. Except as otherwise provided under a licensee's condition of licence, this Part applies to Class 3 licensees.

Television Programming Services that Must Be Distributed as Part of the Basic Service

31. (1) Except as otherwise provided in this section or under a condition of its licence, a licensee shall distribute as part of its basic service

(a) the programming services of all local television stations; and

(b) the programming services of all regional television stations other than affiliates or members of a network of which a local television station is an affiliate or member.

(2) A licensee of a cable distribution undertaking shall distribute the services referred to in subsection (1) beginning with the basic band of its undertaking.

(3) If a licensee receives programming services that are identical, the licensee is required to distribute, under subsection (1), only one of them.

(4) If the programming services of two or more regional television stations that are affiliates or members of the same network are received at the local head end, the licensee is required to distribute only one of them.

(5) If a licensee receives over the air an educational television programming service the operation of which is the responsibility of an educational authority designated by a province other than the province in which the licensed area of the undertaking is located, the licensee is not required to distribute it under subsection (1) but may distribute the service as part of the basic service.

Television Programming Services that May Be Distributed

32. (1) Except as otherwise provided under a condition of its licence, a licensee may distribute

(a) the programming service of any regional television station that is not distributed under section 31;

(b) the programming service of any extra-regional television station;

(c) any pay television service the originator of which is authorized to provide the service to all or part of the licensed area of the undertaking;

(d) any specialty service the originator of which is authorized to provide the service to all or part of the licensed area of the undertaking;

(e) any video-on-demand service the originator of which is authorized to provide the service to all or part of the licensed area of the undertaking;

(f) the programming service of any television station that is received directly over the air at the local head end, other than a non-Canadian television station

(i) the programming of which has predominantly religious content, or

(ii) that began operation after January 1, 1985;

(g) subject to section 34, community programming;

(h) any eligible Canadian satellite service;

(i) any eligible non-Canadian satellite service;

(j) any public affairs programming service;

(k) the programming service of any exempt programming undertaking;

(l) any programming service that promotes a pay television service, in accordance with Public Notice CRTC 1995-172, entitled Revision to the Commission's Policy Governing the Distribution of Pay Television Promotional Material by Cable Television Licensees;

(m) any educational television programming service the operation of which is the responsibility of an educational authority designated by the province in which the licensed area of the undertaking is located; and

(n) any programming service authorized under a condition of its licence.

Audio Programming Services that May Be Distributed

33. Except as otherwise provided under a condition of its licence, a licensee may distribute

(a) any audio Canadian programming service;

(b) any audio non-Canadian programming service that is receivable over the air at the local head end, unless the service

(i) solicits advertising in Canada, or

(ii) consists of programming that has predominantly religious content;

(d) any audio programming service authorized under a condition of its licence.

Community Programming

34. Except as otherwise provided under a condition of its licence, if a licensee elects to distribute community programming under paragraph 32(1)(g), the licensee

(a) shall distribute the programming as part of the basic service;

(b) shall comply with the requirements of paragraphs 26(1)(a) to (i) and subsections 26(2) to (4);

(c) may distribute a still image programming service as described in Public Notice CRTC 1993-51, entitled Exemption Order Respecting Still Image Programming Service Undertakings, if the service is produced by the licensee or by members of the community served by the undertaking; and

(d) may, if it provides service to an unserved community, distribute a maximum of 12 minutes of commercial messages during each clock hour of community programming.

PART 4

DTH DISTRIBUTION UNDERTAKINGS

Application

35. This Part applies to licensees who hold a licence to operate a DTH distribution undertaking.

Television Programming Services that Must Be Distributed as Part of the Basic Service

36. Except as otherwise provided under a condition of its licence, a licensee shall distribute as part of its basic service

(a) the programming service of at least one of each of the Corporation's English-language and French-language television network affiliates or members; and

(b) the programming service of at least one affiliate of each television network licensed on a national basis.

Access for Specialty, Pay and Pay-per-view Services

37. (1) In this section, "general interest DTH pay-per-view service" means a pay-per-view service of a direct-to-home pay-per-view television programming undertaking, the programming of which is selected from any of the categories listed in column I of item 6 of Schedule I to the Pay Television Regulations, 1990.

(2) Except as otherwise provided under a condition of its licence, a licensee shall distribute, to the extent of available channels,

(a) each specialty service, other than a single or limited point-of-view religious specialty service;

(b) each pay television service, other than a pay-per-view service or a limited point-of-view religious pay television service;

(d) at least one French-language general interest DTH pay-per-view service.

Television Programming Services that May Be Distributed

38. Except as otherwise provided under a condition of its licence, a licensee may distribute

(a) the programming service of any licensed programming undertaking, other than a television pay-per-view service;

(b) any DTH eligible satellite service;

(i) the programming services of four non-Canadian television stations that are each affiliated with a different commercial network, and

(ii) the programming service of one non-Canadian non-commercial television station;

(d) any public affairs programming service;

(e) subject to section 40, the programming service of any exempt programming undertaking;

(f) any programming service that promotes a DTH pay-per-view service;

(g) any programming service that promotes the service of the licensee; and

(h) any programming service authorized under a condition of its licence.

Distribution and Linkage

39. (1) Except as otherwise provided under a condition of its licence, if a licensee distributes one of the services referred to in subsection 37(2) or section 38, the licensee shall distribute the service in accordance with the Commission's Public Notice entitled Linkage Requirements for Direct-to-home (DTH) Satellite Distribution Undertakings, as amended from time to time.

(2) If a licensee distributes a programming service that comprises the proceedings of the House of Commons, the licensee shall include that service as part of its basic service, unless the licensee and the operator of the programming service agree in writing to the distribution of the service as a discretionary service.

(3) A licensee shall not distribute an English-language DTH pay-per-view service unless it also distributes a French-language DTH pay-per-view service.

Access by Pay Audio Programming Undertakings

40. (1) The definitions in this subsection apply in this section.

" affiliate" has the same meaning as in subsection 21(2). (affiliée)

" control" as the same meaning as in subsection 21(2). (contrôle)

" share" has the same meaning as in subsection 21(2). (action)

" third party pay audio programming undertaking" has the same meaning as in subsection 23(1). (entreprise tierce de programmation sonore payante)

(2) If a licensee distributes the programming service of a pay audio programming undertaking of which the licensee or an affiliate, or both, controls 30% or more of the total shares issued and outstanding, the licensee shall distribute the programming service of at least one third party pay audio programming undertaking.

(3) Despite subsection (2), a licensee is not required to distribute the programming service of a third party pay audio programming undertaking that is delivered to the licensee in a format that is technically incompatible with the licensee's existing method of signal distribution.

Simultaneous Program Substitution and Deletion

41. (1) Except as otherwise provided under a condition of its licence, if a licensee receives, at least four days before the date on which the programming service is broadcast, a written request for substitution or deletion from the operator of a licensed Canadian television programming undertaking whose signal is distributed by the licensee, the licensee shall

(a) delete a non-Canadian programming service and substitute the comparable and simultaneously broadcast programming service of the Canadian television programming undertaking; and

(b) delete, in respect of subscribers located within the Grade B contour of the Canadian television programming undertaking, a programming service that is comparable to that of the Canadian television programming undertaking and that would otherwise be received simultaneously by those subscribers.

(2) A licensee may discontinue a deletion or substitution made under subsection (1) if the programming services in respect of which the deletion or substitution is made are not, or are no longer, comparable and broadcast simultaneously.

Non-simultaneous Program Deletion

42. (1) Except as otherwise provided under a condition of its licence, if a licensee receives, at least four days before the date on which the programming service is broadcast, a written request for deletion from the operator of a licensed Canadian television programming undertaking, the licensee shall delete, in respect of subscribers located within the Grade B contour of the Canadian television programming undertaking, a programming service that is comparable to that of the Canadian television programming undertaking and that would otherwise be received by those subscribers on a non-simultaneous basis within the same broadcast week.

(2) A licensee may discontinue a deletion made under subsection (1) if the programming services in respect of which the deletion is made are not, or are no longer, comparable and broadcast on a non-simultaneous basis within the same broadcast week.

Contribution to Canadian Programming

43. Each licensee shall contribute to the production fund

(b) in the broadcast year ending on August 31, 1999, and in each broadcast year thereafter, an amount equal to or greater than 5% of its gross revenues derived from broadcasting activities in that year.

PART 5

FEES FOR AND PROVISION OF BASIC SERVICE

Interpretation

44. The definitions in this section apply in this Part.

" base portion" means the basic monthly fee less the pass-through portion. (frais de base)

" distribution system" means the equipment and facilities used by a licensee for the distribution of its basic service from its processing facilities to the points at which the service is diverted for the exclusive benefit of a subscriber. (système de distribution)

" pass-through portion" means the part of the basic monthly fee that reflects the amount payable by a licensee to a person licensed to operate a broadcasting undertaking for the transmission of programming services, where

(a) the amount varies in proportion to the number of subscribers to whom the licensee distributes the programming services; and

(b) the Commission has authorized the amount as a condition in the licence of the broadcasting undertaking under subsection 9(1) of the Act. (frais imputables)

" subscriber drop" means the equipment or facilities used by a licensee for the distribution of the programming services distributed on its basic band from the point at which those services are diverted from the distribution system to a terminal device located in the subscriber's residence or premises for the exclusive benefit of the subscriber. (prise de service d'abonné)

Application

45. Except as otherwise provided in this Part or under a condition of its licence, this Part applies to

(a) a Class 1 licensee that on May 17, 1996 held a licence to carry on a cable distribution undertaking; and

(b) the successor of a licensee referred to in paragraph (a).

46. (1) Subject to subsection (2), this Part does not apply to a licensee if

(a) it sends to each of its subscribers a written notice that contains the information set out in Schedule 1;

(b) it sends to the Commission

(i) a copy of the notice referred to in paragraph (a),

(ii) a declaration verifying the date on which the notice was mailed to subscribers under paragraph (a), and

(iii) on or before the date of mailing of the notice to subscribers, documentation consisting of

(A) evidence demonstrating that the basic service of one or more other licensed distribution undertakings is available to 30% or more of the households in its licensed service area, and

(B) an affidavit provided by the licensee's auditor, in accordance with section 5800 of the Canadian Institute of Chartered Accountants Handbook, confirming that the licensee has lost 5% or more of its subscribers since the basic service of another licensed distribution undertaking first became available in its licensed service area; and

(2) The Commission may, before the date on which a licensee would no longer be subject to this Part under subsection (1),

(a) suspend the application of subsection (1) in respect of the licensee, pending

(i) the receipt of additional information,

(ii) the completion of a public hearing into the matter, or

(iii) both the receipt of additional information and the completion of a public hearing into the matter; and

(b) disallow the licensee's proposal to be removed from the obligations of this Part either without suspension under paragraph (a) or after such a suspension.

Prohibition

47. A licensee shall not increase its basic monthly fee except in accordance with this Part.

Installation and Provision of Basic Service

48. Except as otherwise provided under a condition of its licence, each Class 1 and Class 2 licensee shall

(a) install the distribution system necessary for the provision of its basic service at a household or premises within a reasonable time after a request for the service is received from a member of the household or an owner or operator of the premises, if the household or premises are

(i) situated in a residential area within the licensed area, and

(ii) provided with water or sewer services by a municipal or other public authority;

(b) at the request of a member of a household or an owner or operator of premises referred to in paragraph (a), install the subscriber drop and provide the basic service to that household or those premises, unless the member, owner or operator has not complied with the licensee's request for payment of

(i) an amount not greater than the amount of the non-recurring costs to be reasonably incurred by the licensee for the installation or reconnection of the subscriber drop, determined in accordance with Circular No. 354 to All Class 1 & 2 Cable Licensees, published by the Commission on November 29, 1988,

(ii) the licensee's fee for the provision of the basic service for one month to that household or those premises, or

(iii) an overdue debt for the provision of basic service that the member, owner or operator owes to the licensee; and

(c) provide the basic service to a subscriber as long as the subscriber pays in advance the fee for each month of the basic service.

Increase in Base Portion

49. Subject to section 50, a licensee may increase the base portion of its basic monthly fee if

(a) it sends to each of its subscribers a written notice that includes the relevant information set out in Schedule 2;

(b) it sends to the Commission

(i) a copy of the notice referred to in paragraph (a),

(ii) a declaration that the notice has been or will be sent to each of its subscribers at least 90 days before the proposed effective date of the increase, and

(iii) appropriate documentation to justify the proposed increase, in accordance with Public Notice CRTC 1993-146, entitled New Assessment Guidelines for Fee Increases Under Subsection 18(8) of the Cable Television Regulations, 1986; and

(c) 90 days have elapsed since receipt by the Commission of the copy of the notice, declaration and documentation referred to in paragraph (b).

Commission Suspension or Disallowance

50. The Commission may, before the date on which an increase in the base portion of the basic monthly fee referred to in section 49 is to take effect,

(a) suspend the implementation of all or part of the increase pending

(i) the receipt of additional information,

(ii) the completion of a public hearing into the matter, or

(iii) both the receipt of additional information and the completion of a public hearing into the matter; and

(b) disallow the implementation of all or part of the increase either without suspension under paragraph (a) or after such a suspension.

Increase in Base Portion for Distribution of Specialty Services

51. (1) For the purposes of subsection (2), a licensee is considered to be operating in a francophone market if more than 50% of the total population of all cities, towns and municipalities encompassed in whole or in part within the licensed area of the licensee has French as its mother tongue, according to the most recent population figures published by Statistics Canada.

(2) Subject to section 53, a Class 1 licensee may increase its base portion by a maximum of

(a) $0.03 for each specialty service that it distributes as part of the basic service, if that licensee is operating in a francophone market; or

(b) $0.02 for each specialty service that it distributes as part of the basic service, if that licensee is not operating in a francophone market.

(3) If a licensee has increased its base portion under subsection (2) with respect to a specialty service and ceases to distribute that service as part of the basic service, the licensee shall decrease its base portion by an amount equal to the amount of the increase.

Increase in Pass-through Portion

52. (1) Subject to section 53, a licensee may increase its pass-through portion if the increase is less than or equal to the amount of an increase that the Commission has, after September 1, 1996, authorized in the licence of a broadcasting undertaking to be payable to the operator of that undertaking.

(2) If a licensee has increased its pass-through portion under subsection (1) with respect to a programming service and ceases to distribute that service as part of the basic service, the licensee shall decrease its pass-through portion by an amount equal to the amount of the increase.

(3) If a licensee has increased its pass-through portion under subsection (1) with respect to a programming service and the operator of the broadcasting undertaking charges the licensee less than the amount in the pass-through portion that reflects the amount payable to the operator of that undertaking for the service, the licensee shall decrease its pass-through portion by an amount equal to the difference.

Notice

53. If a licensee intends to increase its basic monthly fee under subsection 51(2) or 52(1), it shall not implement the increase unless

(a) it sends to each of its subscribers a written notice of the increase, setting out the amount of the increase, expressed in dollars, in respect of each part of the basic monthly fee increased under subsection 51(2) or 52(1), as applicable;

(b) it sends to the Commission

(i) a copy of the notice referred to in paragraph (a),

(ii) a declaration that the notice has been or will be sent at least 60 days before the proposed effective date of the increase, and

(iii) in the case of an increase referred to in subsection 51(2), a list of the specialty services for which the increase is sought; and

54. The written notice sent to subscribers under paragraphs 46(1)(a), 49(a) and 53(a) must be clearly identifiable as coming from the licensee and must not be packaged with any material emanating from a person other than the licensee.

Availability of Refund or Credit

55. If a licensee charges a fee for the provision of the basic service that is greater than the basic monthly fee, the licensee must, on receipt of a notice from the Commission that the licensee's fee is greater than the basic monthly fee, provide to each subscriber who is so over charged a refund or credit that is equal to the unauthorized amounts paid by the subscriber.

PART 6

REPEAL AND COMING INTO FORCE

Repeal

56. The Cable Television Regulations, 1986(2) are repealed.

Coming into Force

57. These Regulations come into force on .

SCHEDULE 1

(Subsection 46(1))

NOTICE TO SUBSCRIBERS

(Name of licensee) is proposing that its rates be deregulated, in accordance with subsection 46(1) of the Broadcasting Distribution Regulations. If a licensee meets the criteria set out in that subsection, its rates will no longer be regulated by the Commission under Part 5 of the Regulations unless the Commission intervenes to suspend or disallow the proposed deregulation.

The details of (name of licensee)'s justification for the proposed rate deregulation are set out in documents filed with the Commission, which are available for public inspection during normal business hours at (address of licensee) and at the offices of the CRTC, 1 Promenade du Portage, Hull, Quebec, and (address of nearest regional office).

SCHEDULE 2

(Section 52)

NOTICE TO SUBSCRIBERS

(Name of licensee) is proposing to increase its basic monthly fee, in accordance with section 52 of the Broadcasting Distribution Regulations. That section permits a licensee to increase its basic monthly fee unless the CRTC intervenes to disallow all or part of the increase.

The proposed amount and effective date of the increase are given below, in items 1 and 2. The reason for the proposed increase is given in item 3.

The details of (name of licensee)'s justification for the proposed increase are set out in documents filed with the Commission, which are available for public inspection during normal business hours at (address of licensee) and at the offices of the CRTC, 1 Promenade du Portage, Hull, Quebec, and (address of nearest regional office). You may express your comments on the proposed increase by writing to:

Secretary General
Canadian Radio-television and Telecommunications Commission
Ottawa, Ontario
K1A 0N2

before (30 days after the date of mailing of this notice). A copy of your letter must be sent to (name of licensee's representative, title, address).

Item 1:

Proposed amount of increase per subscriber per month $_________
Your current basic monthly fee is$_________

If the CRTC does not disallow this increase, your new basic monthly fee will be$_________

Item 2:

Effective date of the proposed increase: ____________

Item 3:

Reason for the proposed increase

( Provide a brief statement outlining the purpose of the proposed increase and any other relevant information.)

AVI97-84_2

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