ARCHIVED -  Decision CRTC 98-493

Decision

Ottawa, 4 November 1998

Decision CRTC 98-493

TELUS Multimedia, operating as a division of TELUS Cable Holdings Inc. (TELUS)

Community of Lake Bonavista, a subdivision of Calgary; and the communities of Greenfield and Rhatigan Ridge, a subdivision of Edmonton, Alberta - 199800917 - 199800925

Applications processed by
Public Notice CRTC 1998-52
dated 19 May 1998

Summary of Decision

· The Commission approves TELUS's applications to amend its broadcasting licences by suspending the application of conditions of licence 1 b) and 9 until the licensee has provided subscribers with digital set top boxes. The amended conditions of licence are set out at the end of this decision.

· TELUS is licenced to conduct limited market and technical trials in two communities to test the packaging of certain broadcasting and telecommunications services. Under TELUS's current conditions of licence, customers receiving broadcasting services must first subscribe to a digital broadcasting service before they can receive an analog service. TELUS is also exempted from the regulatory requirement to adhere to the distribution and linkage requirements.

· TELUS's proposed licence amendments will suspend the application of these licence conditions and allow the licensee to continue the trials based on the provision of analog service only until digital set top boxes are installed in the homes of all subscribers. TELUS will abide by the distribution and linkage requirements until it is distributing services in a digital format. The Commission considers that allowing TELUS to continue its trials is in the public interest.

Background

1. These applications are a response to a direction to TELUS from the Commission that the licensee provide evidence that it was operating in compliance with condition of licence 9, or to cease operation until it is operating in full compliance. The Commission issued this direction because it was not satisfied with the licensee's replies to complaints by Shaw Communications Inc. (Shaw) and Videotron Communications Ltd. (Videotron) claiming that TELUS was not complying with condition 9.

Interventions and reasons for decision

2. Currently, TELUS is authorized to conduct trials, in digital format, to serve 2,000 households in the community of Bonavista and 1,400 households in the communities of Greenfield and Rhatigan Ridge.

3. TELUS's present condition of licence 9 ensures that households participating in the licensee's trials subscribe to a digital broadcasting service before they are permitted to subscribe to an analog broadcasting service. Current condition 1 b) exempts the licensee from the requirement to abide by the distribution and linkage rules set out in section 20 of the Broadcasting Distribution Regulations.

4. TELUS requested that the Commission suspend the application of these two conditions because it is currently unable to distribute services in a digital format. It explained that it has experienced delays in receiving digital set top boxes from its prospective supplier and would like to continue its field trials on an analog basis.

5. The Commission recognizes that TELUS has had difficulties in obtaining digital set top boxes. In the circumstances and given the commitments made by TELUS set out below, the Commission considers that allowing TELUS to continue gathering information on packaging of certain broadcasting and telecommunication services serves the public interest. Accordingly, the Commission has approved TELUS's applications. Once the digital set top boxes have been provided to all subscribers receiving broadcasting services, the suspensions will no longer apply and TELUS will be permitted to distribute broadcasting services in accordance with the existing conditions of licence.

6. In approving these amendments, the Commission has taken into account TELUS's commitments:

· not to provide service on an analog basis to any party other than to subscribers whose cable service had been installed as of 24 December 1997;

· to limit the number of trial participants receiving the analog service to a combined total of 1,000 at both locations; and

· to inform the Commission fully on all aspects of the trials, including its dealings with the prospective supplier of the set top boxes and its roll-out schedule for digital service.

7. The Commission acknowledges the seven interventions filed in support of TELUS's applications. The Commission also acknowledges the conditional support expressed in interventions filed by the Canadian Cable Television Association (CCTA), the Canadian Broadcasters Association (CAB) and Shaw as well as the opposing interventions filed by Friends of Canadian Broadcasting and Videotron.

8. The Commission notes that TELUS's commitment not to serve additional trial customers until it has put all the digital set top boxes in place responds to concerns expressed in the interventions submitted by the CCTA and Shaw. TELUS's commitment to adhere to the distribution and linkage rules when it is not distributing signals in a digital format responds to concerns expressed by the CCTA, Shaw and the CAB.

9. The CCTA and Shaw also asked that TELUS be required to charge trial participants a monthly fee after a customer has received a minimum of four months service. TELUS responded that its ability to provide service free of charge is an integral part of its technical trial.

10. Friends of Canadian Broadcasting opposed the proposed licence amendments on the grounds that they are inconsistent with the original purpose of a digital trial. In response, TELUS referred to the complexities of the technologies being developed and deployed by the licensee.

11. In its opposing intervention, Videotron recommended, among other things, that TELUS's trials be limited to 1,000 subscribers, even after it has deployed the digital set-top boxes. Videotron also stated that it has lost over 250 subscribers to TELUS's cable analog service. TELUS responded that, as an incumbent service provider, Videotron can be expected to lose subscribers either to new commercial competitors or to experimental trials such as the one TELUS is conducting.

12. The Commission is satisfied with TELUS's responses to the interveners and with its commitments. With respect to Videotron's intervention, the Commission considers the fact that TELUS is restricting its analog subscribership to a combined total of 1,000 households for both trial locations should limit the impact of this trial on the intervener.

Amended conditions of licence

TELUS's former conditions of licence 1 b) and 9 state:

1. b) section 20 and Part 5 of the regulations shall not apply to the licensee; ...

9. The licensee shall not deliver a broadcasting service to trial participants in an analog transmission format, unless they first subscribe to a broadcasting service delivered in a digital transmission format.

TELUS's amended conditions of licence 1 b) and 9 state:

1. b) If and when the licenseee has distributed digital set top boxes to all trial participants, section 20 and Part 5 of the Broadcasting Distribution Regulations shall no longer apply to the licensee.

9. If and when the licensee has distributed digital set top boxes to all trial participants, it shall not deliver a broadcasting service to a participant unless that participant first subscribes to a broadcasting service delivered in a digital transmission format.

Reference Document: Broadcasting Decision CRTC 97-193/Telecom Decision CRTC 97-12 dated 8 May 1997

Secretary General

This decision is to be appended to each licence.
This document is available in alternative format upon request, and may also be viewed at the following Internet site:www.crtc.gc.ca