ARCHIVED -  Public Notice CRTC 1999-56

Public Notice CRTC 1999-56

Ottawa, 31 March 1999

Summary

The Commission seeks public input regarding its proposal to amend the process by which cable companies may increase basic monthly subscriber fees when adding Canadian specialty television services to the basic service package.

1. Over the past several months, the Commission has received complaints from cable subscribers about increases to basic monthly fees. The objections related to cases where a cable licensee added one or more Canadian specialty services to the basic service package, and passed on the associated cost for the service directly to subscribers.

2. The Broadcasting Distribution Regulations (the regulations) provide cable licensees with a degree of flexibility as to how Canadian specialty services are distributed. In certain circumstances, licensees may include such services as part of the basic cable service package. When this is done, the regulations allow cable licensees to 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 the pass-through fee, the regulations also allow the licensee to charge a mark-up fee of either $0.02 or $0.03 per subscriber, depending on the market, without the need to obtain prior Commission approval for either increase.

3. In providing this flexibility for the distribution of Canadian specialty services, the Commission expects cable licensees to assess and respond to the needs and interests of their subscribers in making decisions related to the carriage, placement and pricing of specialty television services. The delivery of broadcasting services is moving from a monopoly-based market to a more competitive one and Canadians will have access, over time, to a greater variety of service providers, pricing and packaging options. However, the development of such competition has been slower than anticipated and the full benefits to be derived from a competitive framework have yet to be fully realized. The Commission also notes that the replacement of analog channels by digital cable technology, which will increase channel capacity and expand programming choice, has been slower than expected.

4. In this context, the Commission is of the opinion that it is appropriate to consider whether it should amend the regulations with respect to the implementation of fee increases, in cases where cable licensees propose to add services to the basic service package. The Commission notes that in some cases, increases may result from the carriage of a mandatory service on a basic tier. When such a service is added in accordance with an order under section 9 (1)(h) of the Broadcasting Act (the Act), the implementation of any increase to the basic monthly fee would be set out in the terms and conditions of the order itself, rather than determined by the proposed amendments.

5. Accordingly, the Commission is proposing to make amendments to the applicable section of the regulations (section 54), in order to:

• provide that the Commission may postpone the implementation of all or part of the proposed increase of the basic monthly fee, pending further consideration of the increase and the receipt of additional information, the completion of a public hearing into the matter, or both;

• provide that the Commission may disallow, either without postponement or after such a postponement, the implementation of all or part of the proposed increase where the Commission has determined that such an increase is not justified, having regard to the broadcasting policy set out in the Act;

• require, in addition to the current filing requirements under section 54 of the regulations, that the licensee file with the Commission the amount of the increase sought in relation to each specialty service distributed as part of the basic service and information to justify such distribution; and

• set out in Schedule 3 of the regulations the details of the notice required and the requirement to provide to subscribers a 30-day comment period.

Call for comments

6. The Commission invites interested parties to submit comments regarding the proposed amendments to the regulations. The Commis-sion notes that the purpose of this Public Notice is to seek comments on the proposed amend-ments and not on the issue of specific wholesale fees authorized for various specialty services. Interested parties may forward submissions by 12 May 1999 to the Secretary General, CRTC, Ottawa, K1A 0N2. Although the Commission is unable to acknowledge in writing the submissions received, it will consider and include them in the public record of this proceeding.

7. All submissions must be filed in hard copy format. The Commission, however, also encourages parties to file electronic versions of their submissions (email or diskette). Such submissions should be in the HTML format. As an alternate choice, "Microsoft Word" may be used for text and "Microsoft Excel" for spreadsheets. Each paragraph of the document should be numbered. In addition, as an indication that the document has not been damaged during electronic transmission, the line ***End of Document*** should be entered following the last paragraph of each document. The Commission's Internet e-mail address for electronically filed documents is public.broadcasting@crtc.gc.ca

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

JUS-600859
(SOR/DORS)

REGULATIONS AMENDING THE BROADCASTING DISTRIBUTION REGULATIONS

(b) it sends to the Commission

(ii) a declaration that the notice has been or will be sent at least 60 days before the proposed effective date of the increase,

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

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

(i) the receipt of additional information,

(iii) both the receipt of additional information and the completion of a public hearing into the matter; and

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

(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:

If the CRTC does not disallow this increase, your new basic monthly fee will be $ .

(Provide a brief statement outlining the purpose of the proposed increase and any other relevant information).