ARCHIVED -  Public Notice CRTC 1999-108

Public Notice

Ottawa, 7 July 1999

Public Notice CRTC 1999-108

Amendments to the Broadcasting Distribution Regulations regarding basic service fees

Summary

The Commission has adopted, by majority vote, the amendments to the Broadcasting Distribution Regulations (the regulations) which are attached to this public notice. These amendments were put forward for public comment in Public Notice CRTC 1999-56. They were registered with the clerk of the Privy Council on 28 June 1999 and came into effect on that same date. They will be published in Part II of the Canada Gazette on 21 July 1999.

The amendments will:

·  enable the Commission to suspend or disallow all or part of a proposed increase in the base or the pass-through portion of a cable licensee's basic monthly fee associated with the carriage of specialty services on the basic service. The Commission may take such action where it has determined that such an increase is not justified under the broadcasting policy set out in Section 3(1) of the Broadcasting Act (the Act).

·  require licensees to file information to justify the distribution of the specialty service as part of the basic service with the Commission when they propose such increases.

·  Set out the details of the notice that licensees must provide to subscribers about such increases and provide those subscribers with a 30-day period to provide their own comments to the Commission.

This public notice also sets out a number of factors that the Commission may take into consideration when it reviews proposed increases to basic monthly fees associated with the carriage of additional specialty services on the basic service.

Background

1.  In the early part of 1999, the Commission received a number of complaints from cable subscribers objecting to increases to their basic monthly fees resulting from a cable licensee adding one or more Canadian specialty services to the basic service package, and passing on the associated cost for the service directly to subscribers.

2.  Cable licensees have a degree of flexibility concerning how they distribute Canadian specialty services. In certain circumstances, licensees may include such services as part of the basic cable service package and recover from subscribers the cost of providing the service. This is known as a "pass-through fee," and is paid to the specialty service. In addition to this pass-through fee, the regulations also allow the licensee to charge a mark-up fee of either $0.02 or $0.03 per subscriber per month, depending on the market. In both cases, the regulations had provided that Class 1 licensees could automatically increase their basic monthly fee by these amounts upon complying with the notice and filing requirements set out in the regulations. However, there was no explicit opportunity for subscribers to provide their comments, or for the Commission to suspend or disallow all or part of the proposed increase.

3.  In order to respond to the concerns of consumers, the Commission issued Public Notice CRTC 1999-56 in which it called for comments on the amendments to the regulations being adopted today.

The Commission's Decision

4.  As indicated above, the Commission has, by majority vote, decided to adopt amendments to the regulations that it proposed in P.N. 1999-56. This will provide a mechanism for it to suspend or disallow all or part of a proposed increase in the base or the pass-through portion of a licensee's basic monthly fee associated with the addition of a specialty service to the licensee's basic service. The Commission may decide to suspend or disallow all or part of a proposed increase if it determines that the increase is not justified under the broadcasting policy set out in Section 3(1) of the Act.

5.  The amendments also set out the details of the notice that licensees must provide to subscribers and provide those subscribers with a 30-day period to provide their own comments to the Commission.

6.  Some of the factors that the Commission may take into consideration in applying section 54(2) of the revised regulations include:

·  Whether the cable licensee has assessed the level of interest that the service is likely to attract. In this regard, the Commission considers that a general interest specialty programming service, as opposed to a special interest specialty programming service, may be more appropriate for basic carriage.

·  Whether the cable licensee has demonstrated that there is a demand within its market area for carriage of the specialty service on the basic service as evidenced by market studies and/or other relevant documentation such as information on the demographics of its licensed service area.

·  The amount of the fee increase, as well as the cumulative effect of past and proposed fee increases on subscribers.

·  Whether the specialty service to be added to the basic service is owned by the licensee. In these cases the Commission will wish to determine if there is a potential issue of undue preference.

·  Whether the specialty service was granted dual or modified dual carriage status when it was licensed.

7.  The Commission also notes that these amendments will only apply to the addition of specialty services to basic, and not to the addition of services that the Commission requires licensees to carry on the basic service on a mandatory basis.

This notice is available in alternative format upon request, and may also be viewed at the following Internet site: http://www.crtc.gc.ca

Secretary General

Whereas, pursuant to subsection 10(3) of the Broadcasting Act(a), a copy of the proposed Regulations Amending the Broadcasting Distribution Regulations, substantially in the annexed form, was published in the Canada Gazette, Part I, on 10 April, 1999, 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 to the Regulations;

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

Hull, Quebec, 25 June, 1999

Secretary General

REGULATIONS AMENDING THE BROADCASTING DISTRIBUTION REGULATIONS

amendments

1. Section 54 of the Broadcasting Distribution Regulations (1) is replaced by the following:

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

(a)  it sends to each of its subscribers a written notice in the form set out in Schedule 3;

(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,

(iii) a  list of the specialty services for which the increase is sought and the amount of the increase in relation to each specialty service, and

(iv)  information to justify the distribution of the specialty services referred to in subparagraph (iii) as part of the basic service; and

(c)  60 days have elapsed since receipt by the Commission of the documents and information referred to in paragraph (b).

(2) The Commission may, before the date on which an increase in the basic monthly fee referred to in subsection 52(2) or 53(1) is to take effect,

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

(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, if the Commission determines that the increase is not justified having regard to the broadcasting policy for Canada set out in subsection 3(1) of the Act.

2. The Regulations are amended by adding the following after Schedule 2:

SCHEDULE 3
(Paragraph 54 (1) (a))

NOTICE TO SUBSCRIBERS

(Name of licensee) is proposing to increase its basic monthly fee, in accordance with section(s) (52 and/or 53) of the Broadcasting Distribution Regulations. That section permits a licensee to increase its basic monthly fee unless the Canadian Radio-television and Telecommunications Commission 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 sending 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) coming into force

3. These Regulations come into force on the day on which they are registered.