ARCHIVED - Decision CRTC 2000-177
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| Decision CRTC 2000-177 | |
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Ottawa, 5 June 2000 |
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Rogers Ottawa Limited/Limitée Ottawa and surrounding areas, Ontario – 199906856 |
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6 December 1999 Public Hearing National Capital Region |
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New regional cable distribution undertaking approved; rate balancing denied |
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1. |
The Commission approves in part the application by Rogers Ottawa Limited/Limitée (Rogers) for a licence to carry on a regional cable distribution undertaking to serve Ottawa and surrounding areas. |
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2. |
The regional licence will replace the current individual licences held by Rogers for Ottawa East (part of Ottawa, Vanier, Rockliffe Park, Gloucester, part of Nepean and parts of the Rideau, Osgoode, Cumberland and Russell Townships), Ottawa West (part of Ottawa, part of Nepean, Kanata, parts of the Townships of March and Goulbourn, Almonte and Carleton Place) and Carp, Ontario. |
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Upon surrender of the current licences, the Commission will issue a Class 1 licence for all of these localities, expiring 31 August 2001. The operation of this undertaking will be regulated pursuant to the Broadcasting Distribution Regulations (the regulations) and the licence will be subject to the conditions specified in this decision and in the licence to be issued. Rogers proposed that the current exemptions and authorizations concerning programming should continue to be in effect, with minor modifications. |
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As part of this application, Rogers sought approval for a rebalancing of the rates charged to subscribers of the three different systems. Under the proposed unified rate structure, the monthly cable rates in the current Ottawa East service area would decrease by $0.26 and the monthly rates for subscribers in the current Ottawa West and Carp service areas would increase by $0.25. The Commission has denied the rate increase applied for. |
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As a result, while the 3 service areas will, in effect, be amalgamated under one licence, the rates charged in the areas of the new system corresponding to the original Ottawa East, Ottawa West and Carp service areas will be the same as the rates currently charged in those original territories. |
| Background | |
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6. |
The purpose of this application is to replace the three separate licences under which Rogers provides service to the Ottawa area with a single regional licence, with a uniform rate structure. The applicant stated that approval of this application would result in benefits to the customer, the CRTC and to itself. The benefit to the customer would be uniform services and rates regardless of location in the system. Rogers added that a regional licence with a single basic rate and standard conditions of licence would reduce the administrative burdens of both the Commission and itself. It further noted that rate discrepancies restrict marketing opportunities for cable companies with neighbouring systems in the same market areas, and approval of a unified rate would provide Rogers with an effective marketing tool equivalent to that currently used by its competitors. |
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The Commission set out its overall approach to regional licences for broadcasting distribution undertakings in Public Notice CRTC 1997-25. According to that notice, both new entrants and existing distributors may submit applications for a licence to serve a territory consisting of more than one market area. The Commission indicated that no separate class of licence would be created for this purpose. Rather, an applicant would generally be issued a Class 1 licence, and any exception to the Class 1 regulatory requirements that may be deemed appropriate for specific markets within the regional territory would be addressed by way of conditions of licence. The Commission did not address how it would establish the basic rate for a new regional licence in a case where the regional licence would include two or more previously licensed systems. |
| A regional licence | |
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8. |
As noted above, the Commission has approved the licensee's request for a new, regional licence to replace the three Ottawa-area licences now in effect. In approving this proposal, the Commission has taken into account the policy principles established in PN 1997-25. The Commission is satisfied that, as a result of this approval, the number of applications that the licensee would need to file will decrease, with a commensurate increase in efficiencies. |
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As a result of this approval, the former Carp Class 3 licence will form part of the new Class 1 regional licence, and the basic rate of the former Carp system, which was not subject to rate regulation, will be regulated, as are those of all Class 1 distributors. |
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10. |
The Commission also notes that Rogers has already regionalized most of its Ottawa area operations, and therefore the Commission expects that no technical disruption to subscribers should result. |
| Rate rebalancing | |
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11. |
As noted above, this application proposed a rebalancing of the basic rates charged to subscribers of the proposed regional Ottawa-area distribution undertaking. Rogers proposed one "revenue neutral" basic rate for the unified system, meaning that the overall revenue generated from basic service subscribers would be the same as the revenue currently earned from the three systems to be amalgamated. The new rate would result in roughly half of the subscribers benefitting from a monthly reduction of $0.26, and the other half subject to an increase of $0.25. |
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Rogers stated that the main advantage to subscribers would be uniform rates and service, regardless of where in the licensed territory they reside. The applicant also noted that a uniform rate structure would allow it to improve the marketing of its services. This would allow it to compete more effectively with new distribution technologies such as direct-to-home (DTH) and multi-point distribution systems (MDS), both of which are attracting new subscribers in the Ottawa area. |
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Rogers did note that, since rationalization of its operations has already taken place, rate unification would not, in and of itself, generate any significant cost savings. |
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In Decision CRTC 99-183, the Commission approved an application by Shaw Cablesystems Ltd. for a new regional cable distribution undertaking to serve Calgary and surrounding areas. Shaw also requested a unified rate structure for the new system. |
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In that case, the Commission approved the unified rate. As a result, the subscribers of one of the original service areas were subject to a fee increase. In making its decision, the Commission noted that the same increase would have been permitted in that area under the criteria set out in the regulations for a rate increase based on economic need. |
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Rogers noted at the hearing that, for Ottawa West, the criteria noted above to justify a rate increase would not apply, but argued that an exception should be made because there were other benefits for those subscribers that would offset the increase. The Commission disagrees, especially in view of the fact that the systems have already been unified to a great extent. The proposed increase in the basic service rate for a portion of the new territory is therefore denied. |
| Conditions of licence and authorizations | |
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17. |
In addition to the services required or authorized to be distributed pursuant to the applicable sections of the regulations, the licensee is authorized, by condition of licence, to distribute, at its option: |
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Further, the Commission authorizes the licensee to distribute, at its option, the programming services of WROC-TV (CBS), WHEC-TV (NBC) and WOKR (ABC) Rochester, New York, as part of the basic service. In addition, the licensee is authorized to distribute, at its option, the programming service of WUTV (FOX) Buffalo, New York on a discretionary tier, or on the basic service, as long as it is not distributed on both the basic service, and a discretionary tier at the same time. The Commission notes that the licensee will receive these signals via microwave or optical fibre. Rogers will also distribute WNPE-TV (PBS) Watertown. That signal is received over the air at the local head end and therefore requires no authorization. |
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The licensee is also authorized to distribute, at its option, the audio signals of The Nashville Network and The Arts and Entertainment Network, on audio channels of the undertaking. The Commission notes that the licensee will receive these signals via satellite. |
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20. |
The Commission authorizes the licensee to substitute, at its option, the signals of WNED-TV (PBS), WGRZ-TV (NBC), WIVB-TV (CBS) and WKBW-TV (ABC) Buffalo, New York for the Watertown and Rochester signals noted above. The Commission notes that the undertaking will carry the Buffalo signals only when all of the following criteria are met: |
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21. |
The licensee may receive any authorized signals over the air, or from any licensed or exempted Canadian broadcasting distribution undertaking authorized to provide signals to other broadcasting distribution undertakings. |
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22. |
The licensee is authorized to distribute, at its option, the special programming service of Carleton University, without advertising material. |
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23. |
The licensee is authorized to use contra, credit and sponsorship messages, on the special programming channels of this undertaking, in accordance with section 27 of the regulations, when community programming (as defined in section 1 of the regulations) is broadcast. |
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24. |
The licensee is relieved, by condition of licence, from the requirement of section 17(1)(c) of the regulations to distribute on the basic service, the signal of the Smiths Falls transmitter of CKWS-TV Kingston. |
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The licensee is relieved, by condition of licence, of the requirement of section 25 of the regulations to distribute the programming services of CHRO-TV 43 Ottawa and CFGS-TV Hull on unrestricted channels. Should the quality of the signals deteriorate significantly, the Commission expects the licensee to undertake immediate corrective action including, if necessary, the distribution of the services on other channels. |
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26. |
The licensee is authorized, by condition of licence, to insert, at its option, certain promotional material as a substitute for the "local availabilities" (i.e. non-Canadian advertising material) of non-Canadian satellite services. At least 75% of these local availabilities must be made available for use by licensed Canadian programming services for the promotion of their respective services, for the promotion of the community channel and for unpaid Canadian public service announcements. A maximum of 25% of the 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. |
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27. |
It is a condition of licence, that, for community programming and any other programming of a service that it originates, the licensee adhere to the guidelines on the depiction of violence in television programming set out in the Canadian Association of Broadcasters' Voluntary Code Regarding Violence in Television Programming, as amended from time to time and approved by the Commission. |
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28. |
The licensee is relieved, by condition of licence, from the requirement of section 7 of the regulations that it not alter or delete a programming service in the course of its distribution, except as provided below. The licensee may alter or curtail the programming services noted below for the purposes of sharing certain channels in accordance with the licensee's agreements with the operators of these programming services. The following pairs of programming services may share channels: |
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29. |
The licence will only be issued and effective when the new regional undertaking is ready to begin operation. When the licensee is prepared to commence operation, it must advise the Commission in writing. If the undertaking is not ready to operate within 12 months of today’s date, extensions to this time frame may be granted provided that the licensee applies in writing to the Commission before the 12-month period or any extension of that period expires. |
| Other matters | |
| 30. | The Commission notes that this licensee is subject to the Employment Equity Act that came into effect on 24 October 1996, and therefore files reports concerning employment equity with Human Resources Development Canada. |
| Related CRTC documents | |
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• Public Notice 1997-25 – New regulatory framework for broadcasting distribution undertakings |
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• Decision 99-183 – New regional cable distribution undertaking |
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Secretary General
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This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca |
- Date modified: