ARCHIVED -  Decision CRTC 98-500

Decision

Ottawa, 23 November 1998

Decision CRTC 98-500

Bell Satellite Services Inc. (formerly ExpressVu Inc.)

Application processed by
Public Notice CRTC 1998-64
dated 10 July 1998

Summary of the decision

The Commission approves the application for a licence amendment by Bell Satellite Services Inc. (Bell Satellite), licensee of a national direct to home (DTH) satellite distribution undertaking. The amendment grants Bell Satellite temporary relief from conditions of licence that would otherwise require it, upon receipt of a request from a licensed Canadian television station, to carry out the simultaneous and non-simultaneous deletion of programming distributed to a subscriber. These requirements would apply where the subscriber is located within the station's Grade B contour (regional, over-the-air service contour), and where the deleted programming is identical to that broadcast by the station.

The text of the relevant licence conditions, as amended, follows later in this decision.

Discussion and reasons for the decision

1. As indicated above, Bell Satellite is currently required to delete programming received by subscribers located within the Grade B contour of a licensed Canadian television station where the programming distributed as part of the DTH service is identical to that broadcast by the station in question, and where there is a request by the station's licensee that it perform the deletion. As of 1 January 1999, Bell Satellite would also be required to delete programming received by these subscribers, where the programming of the DTH service is identical (as that term is defined in the condition) to the programming broadcast by the television station, and is distributed on a non-simultaneous basis within the same broadcast week.

2. The Commission imposed program deletion requirements on Bell Satellite at the time it granted the DTH licence (see Decision CRTC 95-901 dated 20 December 1995). Later, in Decision CRTC 97-576 dated 8 October 1997, the Commission amended the conditions of licence by suspending application of the simultaneous deletion requirement until 8 April 1998, and application of the non-simultaneous deletion requirement until 31 December 1998.

3. The deletion requirements have as their purpose the protection of program rights purchased by Canadian television undertakings. This purpose is the same as that underlying the substitution obligations imposed on cable licensees and other terrestrial distributors in respect of requests by the licensees of local and regional television stations.

4. In Public Notice CRTC 1995-217, which accompanied the original licensing decisions pertaining to Bell Satellite and other DTH distribution applicants, the Commission noted the discussions between some of these applicants and the Canadian Association of Broadcasters (CAB). The discussions concerned alternative measures that could be taken to compensate or protect local and regional television program rights and advertising revenues. The Commission stated that it would accept alternatives to program deletion requirements that were mutually agreed upon by the parties.

5. A comprehensive agreement for the compensation of television licensees has been reached between the CAB and Bell Satellite, and forms part of the present application. The application, itself, is the subject of a supporting intervention by the CAB. The Commission is satisfied the agreement constitutes a reasonable and acceptable alternative to the program deletion requirements imposed on Bell Satellite.

6. Based on the existence of this agreement and its acceptability to the Commission, it has approved the present application and has suspended application of the conditions pertaining to program deletion described above. As requested by the applicant, and in accordance with the terms of the compensation agreement, the suspensions will remain in effect from the date of this decision until the earlier of 30 August 2000 and the date upon which the DTH satellite distribution undertaking operated by Bell Satellite obtains 500,000 subscribers.

7. The Commission invited members of the public to comment on this application in its 10 July 1998 public notice. It has considered all of the interventions received and the applicant's replies in reaching this decision. Thunder Bay Electronics Limited and Radio Nord inc. filed interventions expressing their concerns about the provisions of the compensation agreement reached between the applicant and the CAB. Thunder Bay Electronics Limited is licensee of CHFD-TV (CTV) and CKPR-TV (CBC) Thunder Bay. Radio Nord Inc. is licensee of three television stations in the Abitibi-Témiscamingue area: CKRN-TV (CBC) and CFEM-TV (TVA) Rouyn-Noranda, and CFVS-TV (TQS) Val-d'Or. It also operates two television stations in Hull: CHOT-TV (TVA) and CFGS-TV (TQS).

8. Thunder Bay Electronics Limited noted that, under the agreement, compensation paid to an affected television broadcaster would be at the rate of $0.20 per month in respect of each DTH subscriber resident within the Grade B contour of the broadcaster's signal. However, for a broadcaster who operates two stations in a given market, compensation for the second signal would be at one half the rate for the first, namely $0.10 per DTH subscriber per month. According to the intervener, the compensation should be $0.20 for each signal.

9. Radio Nord inc. requested in its intervention that the Commission deny the proposed licence amendments. Among other things, the intervener proposed that another system be used to compensate television broadcasters - one that would be based on a calculation of the number of viewing hours that a broadcaster loses to services distributed by DTH undertakings.

10. In responding to the intervention by Thunder Bay Electronics Limited, the applicant noted that the compensation agreement is the culmination of negotiations involving give and take on a number of difficult issues. It argued that it would be unfair to revisit any single element of the compensation package unless the entire arrangement was reopened for discussion. It added that this would be contrary to the public interest because of the additional uncertainty this would create in the emerging competitive broadcasting market.

11. The applicant expressed similar concerns in its reply to the intervention by Radio Nord inc.:

It is impractical to have exceptions or "one-off" deals with different broadcasters. First, this would not be fair to the rank and file of the country's broadcasters which have agreed to the standard deal. Second, it would be impractical to undertake this type of negotiation because all parties would wait for the last deal or demand a "most favoured nation" clause.

12. Bell Satellite argued further that this intervener did not raise any concerns that have not already been canvassed thoroughly in previous Commission preceedings.

13. On balance, the Commission is satisfied that the terms of the agreement reached between the applicant and the CAB provide for appropriate compensation to affected broadcasters. It also agrees with Bell Satellite that the public interest would not be served by reopening the agreement to further negotiation at this time.

Licence amendment

14. Bell Satellite's condition of licence 4 reads, in part:

b) the licensee shall delete programming received by subscribers located within the Grade B contour of a licensed Canadian television programming undertaking, where the programming distributed as part of the DTH undertaking is identical to the programming broadcast by the Canadian television programming undertaking;

c) the licensee shall delete programming received by subscribers located within the grade B contour of licensed Canadian television programming undertakings where the programming distributed as part of its service is identical (i.e. in relation to the above-mentioned programming, not less than 95 percent of the video and audio components of those programming services, exclusive of commercial messages and any part of the services carried on a subsidiary signal are the same) to the programming broadcast by the Canadian television programming undertaking and is distributed on a non-simultaneous basis within the same broadcast week;

e) The application of the condition of licence specified in 4b) will be suspended from the date of this decision until 8 April 1998;

f) The application of the condition of licence specified in 4c) will be suspended from the date of this decision until 31 December 1998.

15. The Commission hereby amends the licence by deleting paragraphs e) and f) above, and substituting the following therefor:

e) The application of the conditions of licence specified in 4 (b) and 4 (c) will be suspended from the date of this decision until the earlier of 30 August 2000 and the date upon which the DTH satellite distribution undertaking obtains 500,000 subscribers.

Secretary General

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