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3379868 Canada Inc. (operating under the name Viewer's Choice Canada)
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Eastern Canada - 199708335
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Licence amendment - Approved
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1. Following Public Notice CRTC 1997-136 dated 3 November 1997, the Commission approves the application by 3379868 Canada Inc. (operating under the name Viewer's Choice Canada) to amend the licence for the regional English-language, direct-to-home pay-per-view (DTH PPV) television programming undertaking, by removing conditions of licence 11 and 13.
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2. Condition of licence 11 requires the licensee to ensure that the gross pay-per-view revenues earned by any feature film are equally split three ways among itself, the licensee of the DTH distribution undertaking, and the rights holder.
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3. When this condition of licence was first imposed, it was in response to concerns expressed that competition among DTH PPV services could produce a situation in which certain DTH PPV licensees which were also integrated with DTH distributors, could exert market pressures whereby DTH PPV licensees could be required to pay a greater portion of their revenues to foreign rights holders than is currently the case in the cable pay-per-view market. The Commission considered that the 1/3 split would promote market stability by ensuring that no licensee would be unduly pressured to accept escalating program costs.
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4. The Commission notes there are no integrated DTH/DTH-PPV services currently in operation. Furthermore, none of the twelve interveners supported the retention of this condition. Therefore, the Commission has determined that the retention of the condition is no longer necessary.
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5. Condition of licence 13 requires the licensee to purchase non-proprietary rights for feature films from Canadian distributors. These films would include any properties other than those where the world-wide distribution rights are owned by the licensor, or where the licensor has provided not less than one-half of the cost of the creation of the film.
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6. When this condition was imposed, the Commission considered that it would provide support for Canada's film distribution industry. At the time, it was anticipated that less than 10% of the feature films exhibited by a PPV undertaking would be subject to this condition, and the licensee was not opposed to the condition of licence, since it followed this practice with its cable pay-per-view service.
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7. Interventions in opposition to this request were submitted by ACTRA Performers, Canadian Association of Film Distributors and Exporters, Union des Artistes, Canadian Film and Television Production Association, Association des producteurs de films et de télévision du Québec, Canadian Conference of the Arts, Telefilm Canada and Alliance Communications Corporation. All of the interveners noted above supported the retention of the non-proprietary rights condition of licence, as a tool to ensure the security of a distinct Canadian rights market. In addition, an intervention submitted by the Directors' Guild of Canada suggested that the Commission could, as an alternative to the removal of the condition, consider suspension of it for 12 months.
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8. The Commission notes the interventions in support of this request, submitted by ExpressVu, Star Choice and SPTV. These interveners argued that the condition of licence should be removed to make these licences consistent with those of terrestrial PPV undertakings, which have no such conditions. The interveners also expressed the concern that, as long as such a condition remains in place, there will not exist viable Canadian services able to compete effectively with either cable distributors or grey market satellite services.
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9. The Commission has considered the views of the opposing interveners and the applicant. The Commission remains mindful that Canada's film distribution sector can make an important contribution to the broadcasting system. However, on balance, and in light of the policy objectives in section 3 of the Broadcasting Act, the Commission is of the view that approval of the application at this time is in the public interest.
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This decision is to be appended to the licence.
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Laura M. Talbot-Allan
Secretary General
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This document is available in alternative format upon request.
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