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ARCHIVED -  Public Notice CRTC 1999-93

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Public Notice

Ottawa, 27 May 1999
Public Notice CRTC 1999-93
Advertising Internet Services on community channels or during "local availabilities"
Summary
Broadcasting Distribution Undertakings (BDUs) such as cable systems deliver a variety of programming services to their customers. Many also offer a community channel as an outlet for local expression. In addition, some BDUs provide other services such as retail level Internet Services.
The purpose of this Public Notice is to inform interested parties that a BDU may not distribute promotions on its community channel for a non-programming service such as a retail Internet Service.
This is consistent with the Commission's determination that a BDU that is authorized to use "local availabilities" for the promotion of discretionary programming services and packages, customer service information, etc., may not use such availabilities to provide commercial advertisements for its retail Internet Services.
"Local availabilities" refers to places in the programming of U.S. satellite services where opportunities are provided for BDUs to insert promotional messages.
Background: Complaint and Telecom Decision 98-9
1.  In a letter dated 21 February 1996, QuébecTel Communications (QuébecTel) complained that Cogeco Câble Canada inc. (Cogeco) was using the community channel of its cable system in Rimouski to promote its own Internet Services. The Commission summarized the complaint in Telecom Decision CRTC 98-9 Regulation under the Telecommunications Act of Certain Services Offered by Broadcast Carriers, 9 July 1998. The decision also noted Cogeco's position that its practice was in conformity with the Broadcasting Act (the Act), and that Cogeco considered that the Act was the relevant legislation with respect to such issues.
Submissions subsequent to Decision 98-9
2.  In September 1998, Commission staff wrote to Cogeco requesting an update on its practices with respect to advertising Internet Services on the community channel. Cogeco answered by letter dated 24 September 1998, stating that it was not currently advertising Internet Services on its cable systems.
3.  In a letter dated 30 September 1998, QuébecTel responded that even though Cogeco stated that it did not now advertise Internet Services on its community channels, nothing would prevent it from doing so again in the future. QuébecTel added that a distribution undertaking that uses its community channel to advertise its own Internet Service could be giving itself an undue preference, contrary to section 9 of the Broadcasting Distribution Regulations (the regulations).
4.  Cogeco submitted, in a letter dated 5 October 1998, that QuébecTel's complaint, filed before entry into force of the new regulations, should be considered moot, since Cogeco had already ceased to distribute promotions for its Internet Services on its community channel.
The Commission's determination
5.  Section 27 of the regulations permits advertising over the community channel in only a limited number of circumstances. Section 27(1) of the regulations states, in part, that a licensee shall not distribute on the community channel any programming service other than, "(b) an announcement promoting broadcasting services that the licensee is authorized to provide."
6.  The Commission wishes to emphasize that section 27(1)(b) of the regulations does not permit a licensee to distribute an announcement promoting a non-programming service. Rather, under this section, a licensee is only permitted to distribute an announcement promoting broadcasting programming services that it is authorized to provide under the Act. Accordingly, a BDU licensee is not permitted to distribute an announcement that promotes a retail Internet Service.
7.  Similarly, a BDU is not permitted under section 27 of the regulations to distribute video demonstrations or promotions of its retail Internet Services on the community channel. Moreover, the limited types of advertising permitted on the community channel do not include a video of the launch of a BDU's own retail Internet Services. These are examples of announcements or promotions aimed at generating a positive image for the BDU, with a view to encouraging customers to subscribe to the BDU's own retail Internet Service.
8.  The Commission notes that, should a BDU start to advertise its own retail Internet Services on the community channel, this practice could have an anti-competitive impact on other Internet Service providers in the area. Such harm would generally be difficult to redress.
Similar situation: use of "local availabilities"
9.  In a similar situation, the Commission wishes to clarify that it would be contrary to its condition of licence for a BDU to use "local availabilities" on U.S. specialty channels to distribute commercial advertisements for its own retail Internet Service.
10.  The applicable condition, which several BDUs have applied for and received, states that 25% of local availabilities may be made available for the promotion of discretionary programming services and packages, customer service information, channel realignments, cable FM service and additional cable outlets.
11.  The Commission has determined that the list of services that a BDU may promote, which are referred to in the condition of licence, does not include a non-programming service that is available on a commercial basis. Accordingly, a promotion or advertisement for a retail Internet Service is not to be inserted into "local availabilities" on U.S. specialty channels since it does not fall within the above-noted condition of licence.
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

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