ARCHIVED -  Public Notice CRTC 1999-204

Public Notice
CRTC 1999-204

Ottawa, 23 December 1999

Amendments to the Pay Television Regulations

Summary

The Commission has adopted the amendments to the Pay Television Regulations attached to this notice. These amendments were issued for comment in Public Notice CRTC 1999-83. They were published in Part II of the Canada Gazette on 22 December 1999 and came into effect on registration 30 November 1999.

The amendments serve to prohibit the licensee of a pay television network or undertaking from acquiring exclusive or other preferential rights for the distribution of a pay-per-view program. They also provide for a limited transition period.

Background

1. On 12 May 1999, the Commission issued Public Notice CRTC 1999-83 calling for comments on a proposed amendment to the Pay Television Regulations (the regulations). In particular, the Commission proposed to amend the regulations in order to ensure that pay television licensees do not acquire rights to pay-per-view programs on an exclusive or preferential basis. Under the proposal, subsection 2(1) would define a "pay-per-view program" and section 6.1 would prohibit licensees from acquiring exclusive or other preferential rights to the distribution of pay-per-view programs in Canada.

2. In reply to this call for comments, the Commission received submissions from nine interested parties.

The Commission's determination

3. Having considered the comments received in response to PN 1999-83, the Commission has decided to amend the regulations as proposed, with two modifications that:

• extend the prohibition to the exhibition of programs for which exclusive or other preferential rights have been acquired; and

• provide for a limited transition period.

4. The Commission agrees with those parties who submitted that the amendments should specifically extend to exhibition. Therefore, the prohibition, as adopted, is now against the distribution of programming.

5. The amendment will apply to exclusive or preferential rights already acquired. The Commission recognizes that this amendment would require licensees to immediately curtail programming for which they contracted and may cause some financial loss. To allow licensees to make an orderly restructuring of their affairs, the Commission has revised the amendment to provide for a limited transition period. This transition period will allow licensees to exhibit programs contracted for before 12 May 1999, the day that the Commission issued the call for comments on the proposed amendment, until 31 August 2000.

6. Certain parties submitted that the reference to "or other preferential rights" be changed to "or other unduly preferential rights" or similar language to indicate that whether the preference is undue will be a consideration.

7. The Commission notes that the conditions of licence attached to the licences of direct-to-home pay-per-view (DTH PPV) undertakings do not restrict the prohibition to "unduly preferential" rights. In order that the prohibition in the regulations and in the conditions of licence on DTH PPV undertakings be similar, the Commission has decided not to add the word "unduly" to modify "other preferential rights."

8. Some parties requested that the Commission make the prohibition conditional on the recognition that certain programming may not be available for both terrestrial and DTH PPV undertakings. They submitted that the prohibition should not extend to circumstances where the seller of the rights retains the ability to sell rights to the same programs to other buyers and should not be taken as an obligation on the buyer to require the seller to make any offers to others.

9. The Commission considers that such situations are not necessarily outside the prohibition or beyond the Commission's scrutiny upon complaint. While such circumstances may be relevant to the Commission's ultimate consideration of a complaint, the Commission considers that they are not determinative or outside the scope of matters to be addressed by these amendments.

10. The Commission will take into account all of the circumstances surrounding the acquisition or exhibition of rights when determining whether a particular contract or arrangement is in fact exclusive or otherwise preferential.

11. A number of parties submitted that the Commission should provide examples of situations it would likely consider to involve the acquisition or exhibition of exclusive or other preferential rights. It is difficult to foresee the wide variety of arrangements regarding the acquisition and exhibition of programming between contracting parties that might ultimately come under Commission scrutiny. The Commission's view is that it is preferable to consider what constitutes a breach of the regulations on a case-by-case basis.

12. Look Communications Inc. requested that the Commission remove the word "scheduled" from the definition of "pay-per-view program" and broaden the types of programming to which the amendment would apply. The Commission considers that the amendment is sufficient and will capture the types of scheduled "mass appeal" programs that have been or will be of most concern until such time as a sufficiently competitive market has been established.

Secretary General

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

Registration

SOR/99-455 30 November, 1999

BROADCASTING ACT

Regulations Amending the Pay Television Regulations, 1990

Whereas, pursuant to subsection 10(3) of the Broadcasting Act^a, a copyof the proposed Regulations Amending the Pay Television Regulations, 1990, substantially in the form set out in the annexed regulations, was published in the Canada Gazette, Part I, on May 22, 1999, and a reasonable opportunity was thereby given to licensees and other interested persons to make representations to the Canadian Radio-television and Telecommunications Commission with respect to the proposed 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 Pay Television Regulations, 1990.

Hull, Quebec, November 29, 1999

REGULATIONS AMENDING THE PAY TELEVISION REGULATIONS, 1990

amendments

1. Subsection 2(1) of the Pay Television Regulations, 1990¹ is amended by adding the following in alphabetical order:

"pay-per-view program" means a scheduled program that is provided by a licensee for distribution by a distribution undertaking on a pay-per-view basis; (émission à la carte)

2. The Regulations are amended by adding the following after section 6:

prohibition

6.1 (1) No licensee shall distribute any pay-per-view program for which it has acquired exclusive or other preferential rights.

(2) Notwithstanding subsection (1), a licensee may distribute a pay-per-view program for which it has acquired exclusive or other preferential rights, provided the contract to acquire such rights was entered into before May 12, 1999 and the pay-per-view program is not distributed after August 31, 2000.

coming into force

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