ARCHIVED -  Decision CRTC 99-438

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Ottawa, 14 September 1999
Decision CRTC 99-438
Cogeco Cable Systems Inc.
Hamilton (Part of) and Stoney Creek; Hamilton (Part of), Dundas, Fergus, Grimsby, Georgetown and Rockwood; and Hamilton (Part of), Ontario - 199907135 - 199907143 - 199907151
Applications processed by
Public Notice CRTC 1999-122
dated 28 July 1999
Transfer of control
1.  The Commission approves the applications by Cogeco Cable Inc. (Cogeco Cable), on behalf of Cableworks Communications Inc. (Cableworks) and Halton Cable Systems Inc. (Halton Cable), on behalf of its subsidiaries Cogeco Cable Canada Inc. (Cogeco Canada) and Cogeco Cable Systems Inc. (CCS), for authority to acquire effective control of Cableworks, through the transfer of all of the shares of the licensee and its subsidiary Halton Cable, to CCS. Cableworks is the licensee of cable systems serving approximately 64,000 cable subscribers in Hamilton, Stoney Creek, Fergus and Grimsby. Halton Cable serves some 20,000 subscribers in Rockwood and Georgetown.
2.  In addition, the Commission approves the application by Cogeco Cable, on behalf of TV Hamilton Limited (TV Hamilton) and on behalf of its subsidiaries Cogeco Canada and CCS for authority to acquire effective control of TV Hamilton. TV Hamilton is a consortium of Hamilton area cable distributors which produces community programming for distribution on the consortium members' cable systems. This portion of the transaction will see the one-third voting interest in TV Hamilton currently held by Cableworks transferred to CCS which already holds a one-third voting interest. This transaction will result in a change of effective control.
3.  The Commission notes that the shares of Cableworks and its subsidiary Halton Cable, as well as the one-third voting interest in TV Hamilton, will be transferred to Cogeco Cable; from Cogeco Cable to Cogeco Canada; and finally, from Cogeco Canada to CCS. CCS is a wholly owned subsidiary of Cogeco Canada, which in turn is a wholly owned subsidiary of Cogeco Cable.
4.  Cogeco Cable is one of the four largest multiple system cable operators in Canada. It has diversified holdings in television and cable systems serving over 800,000 subscribers in British Columbia, Alberta, Saskatchewan, Ontario and Quebec.
5.  The purchase price for the shares is approximately $162,000,000. Based on the evidence filed with the applications, the Commission has no concerns with respect to the availability or the adequacy of the required financing.
6.  The Commission reminds the purchaser of its longstanding policy that subscribers should not be required to pay higher fees merely because the ownership or control of a cable television system has changed hands.
7.  CHUM Limited (CHUM) filed an intervention in support of the applications. It suggested however that the Commission require Cogeco Cable to fulfil all of its regulatory obligations and distribute, in a fair manner, all licensed specialty services. The Commission points out that measures are currently in place to address the issues raised by CHUM. The access provisions in the Broadcasting Distribution Regulations (sections 18(3), 18(5) and 18(8)) address the obligations of Class 1 broadcasting distribution undertakings to carry the 13 licensed specialty services whose access rights were deferred to no later than 1 September 1999. Public Notice CRTC 1999-126 entitled Distribution of Specialty Services clarifies these obligations and sets out a streamlined dispute resolution process for dealing with any issues remaining unresolved after the 1 September 1999 deadline.
8.  The intervention by Torstar Corporation (Torstar), operator of an exempted teleshopping service (Toronto Star Television) opposes the Cableworks and Halton applications on the basis that it has outstanding complaints against Cogeco Cable and Cableworks regarding compliance with the access rules and the undue preference provision. The Commission notes that the complaints that form the basis of Torstar's intervention are being handled as part of a separate process. It notes further that when the Commission makes a determination on Torstar's complaint regarding Cableworks, it will be binding on Cogeco Cable as the new owner. Accordingly, the Commission considers that this matter does not warrant further consideration as part of this proceeding.
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Secretary General
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