ARCHIVED - Public Notice CRTC 2000-171

Public Notice CRTC 2000-171

See also: 2000-171-1

Ottawa, 14 December 2000

Introductory statement - Licensing of new digital pay and specialty services

Summary

On 24 November 2000, the Commission made a decision to issue licences to 16 English-language and 5 French-language Category 1 digital specialty television services (Decisions CRTC 2000-449 to 2000-469). They will be made available to subscribers by all digital distributors. In addition, distributors may choose from among 262 Category 2 services, licensed in Decisions CRTC 2000-470 to 2000-731, to complement their new digital offerings. The Commission noted at that time that reasons, terms and conditions of the new licences would follow at a later date.

The Commission is confident that these new services will make a significant contribution to the Canadian broadcasting system, by:

• increasing the variety and diversity of programming choices for viewers;

• maximizing the production and exhibition of new Canadian programming;

• encouraging subscribers to subscribe to digital distribution;

• providing additional content to distributors to expand packaging flexibility; and

• pushing the capabilities of interactive digital technology.

With today’s announcements, the Commission is completing a process that it began in February 1999, when it called for comments on the most appropriate framework for the consideration of new pay and specialty applications.

The following sets out the principles that guided the Commission in selecting the new digital services, as well as some of the rules that will apply to them.

In other documents published today, the Commission announces its general approach to the approval of new pay-per-view (PPV) and video-on-demand (VOD) services (Public Notice 2000-172, and sets out specific terms and conditions for new PPV and VOD services (Decisions 2000-733 to 738).

As it indicated it would in the Notice of Public Hearing and in Public Notice 2000-68, the Commission has also considered the role that non-Canadian French-language services may play in increasing the availability and diversity of French-language programming in Canada, and whether the Commission should vary its approach to the authorization of such services. Having examined this issue, the Commission has determined that it will maintain its existing approach to authorizing foreign services, regardless of the language of the service. The Commission has today issued a call for requests to add foreign services to the lists of eligible services, for carriage on a digital basis (Public Notice 2000-173). The request submitted by BCE Media Inc. described in Public Notice 2000-68 will be examined as part of that proceeding.

The Commission wishes to thank all of the participants in this proceeding, and to assure them that their comments were taken into consideration in the decision making process.

The Commission would also like to commend all of the applicants on the quality of their proposals. It was impressed by the enthusiasm, creativity and vision demonstrated at the hearing, and by the volume of excellent applications that was submitted.

Introduction

Following a Public Hearing commencing 14 August 2000 in the National Capital Region, the Commission announced its decision to issue licenses for new Category 1 and Category 2 digital specialty and pay services on 24 November 2000.

In Decisions 2000-449 to 2000-469, the Commission approved the following services:

English-language Category 1 services

• 13^th Street (Global, TVA, Rogers)

• The Biography Channel (Rogers, Shaw, A&E)

• BookTelevision: The Channel (Learning and Skills Television of Alberta

• The Canadian Documentary Channel (Corus, CBC, NFB, 4 other independent producers)

• Connect (Craig)

• FashionTelevision: The Channel (CHUM)

• Health Network Canada (Alliance Atlantis, WebMD)

• Independent Film Channel Canada (Salter Street, Triptych Media)

• Issues Channel (Stornoway, Cogeco)

• Land & Sea (Corus, CBC)

• Men TV (TVA, Global)

• PrideVision (Levfam, Alliance Atlantis)

• techTV Canada (formerly ZDTV Canada) (Rogers, Shaw, techTV, formerly ZDTV)

• Travel TV (BCE Media, CTV, TVA)

• Wisdom: Mind, Body and Spirit Channel (Vision TV, Radio Nord, Wisdom Media Group)

• Women’s Sports Network (TSN)

French-language Category 1 services

• 13^ième Rue (TVA, Global, Rogers)

• LCN Affaires (TVA, Publications Transcontinental, BCE)

• Perfecto, La Chaîne (MusiquePlus, CHUM)

• Le Réseau Info Sport (RDS)

• Télé Ha! Ha! (TVA, Film Rozon, BCE)

In Decisions 2000-470 to 2000-731, the Commission also decided to issue licences for 262 bilingual, English-, French- and third-language Category 2 services. Decision 2000-739 listed the applications that were denied.

The various documents released today include detailed decisions for all of these services, and the specific terms and conditions under which each will operate. Appendix 1 lists the terms and conditions that apply to all Category 1 services, and Appendix 2 lists the terms and conditions that apply to all Category 2 services. For ease of reference, Appendix 3 sets out the list of programming categories as referred to in the individual decisions.

Background — a transitional framework

Following an extensive public process, the Commission issued its Licensing framework policy for new digital pay and specialty services (Public Notice 2000-6, licensing framework). In that notice, the Commission announced that it would be prepared to license a diverse selection of attractive new programming services, which would be distributed to Canadian viewers via digital technology.

The notice also set out a new licensing approach. This approach is designed to provide a bridge between traditional licensing mechanisms that provide significant regulatory support for emerging Canadian services, and a more open-entry, competitive framework that encourages greater risk-taking and allows the success of services to be increasingly determined by customers. To accomplish this, the Commission announced its intention to license two categories of services:

Recognizing, among other things, the key role that distributors will play in launching new digital services, the Commission announced that it would consider applications for distributor-affiliated Category 1 and Category 2 services. As part of the licensing framework, the Commission established specific carriage terms for the new services, including measures to ensure equitable terms of carriage for services that are not affiliated with distributors. These matters are discussed below under Distribution.

In Public Notice 2000-22, the Commission issued a call for digital specialty and pay applications. The call also stated the Commission’s intention to consider at the same time applications for new digital pay-per-view (PPV) and video-on-demand (VOD) services.

In response to the call, 87 applications for new Category 1 services, 361 applications for new Category 2 services, as well as 6 applications for PPV and VOD services were considered at the 14 August 2000 Public Hearing. The Commission has issued its detailed decisions with respect to the PPV and VOD applications in separate documents (Public Notice 2000-172, and Decisions 2000-733 to 2000-738) also issued today.

As it stated in Public Notice 2000-22, the Commission will consider further applications for Category 2 services on an ongoing basis.

Category 1 services

Selection criteria

The Commission examined all of the Category 1 proposals in the context of the selection criteria set out in the licensing framework and the call for applications. These included:

• contributions to Canadian programming, including minimum commitments to exhibition (not less than 50% by the end of the licence term), expenditures and original production;

• attractiveness of the proposed service to potential viewers, including evidence of demand;

• contribution to the diversity of available programming genres, as well as contributions to the reflection of Canada’s cultural diversity and linguistic duality;

• reasonableness of the business plan and ability to fulfil proposed commitments;

• innovative use of the digital medium, e.g. interactivity; and

• cost of the proposed service to subscribers.

At the public hearing, the Commission discussed its selection criteria with all of the applicants. Virtually all of the participants suggested that attractiveness was the most important factor to take into consideration. Other criteria, such as diversity of programming and/or ownership, commitments to original Canadian production and Canadian programming expenditures were also cited as important. Applicants proposing French-language services also placed particular emphasis on affordability in their market, where specialty services are generally more expensive than in the English-language market. However, attractiveness was seen as essential to ensure the successful launch of the new digital channels.

Consistent with the view expressed by most participants, the Commission used attractiveness as a key criterion in the selection of Category 1 services. The Commission notes that attractiveness can be expressed in a variety of ways, including the creation of innovative programming that takes advantage of the interactive features of the digital platform and attracts early adopters of digital technology, the repackaging of popular, high-demand programming into one service, or the offering of a unique genre of programming not generally available.

In selecting the Category 1 services, the Commission also considered a range of related factors, including the synergies afforded through partnerships, the strength of the applicant, diversity of ownership, the way in which the group of services balances a range of interests, and the provision of under-represented programming.

In view of the uncertainty of the digital environment, particularly in the early stages of its development, the Commission considers that, in many cases, strong partnerships will be critical to the success of the new services, and will ensure that the services are able to fulfil their commitments. For example, partnerships with current providers of television services, producers of programming in particular genres, partnerships with established US or other foreign service operators, and alliances between English- and French-language services will be important in providing the experience and synergies necessary to establish and sustain the growth of the new digital channels.

At the same time, the Commission considers it important to select a diversity of licensees, including new entrants to the specialty industry. A broad range of ownership entities for the digital realm will contribute to increased diversity of voices in the broadcasting system. In addition, new players will have the opportunity to establish attractive new services, providing a fresh perspective and gaining experience in this burgeoning sector, and contributing to the diversity of programming available to subscribers.

The Commission also wished to license a well-rounded and balanced group of services that would serve as many interests as possible, with programming that spans the spectrum, from informative and educational to entertaining.

In addition, the Commission took into consideration the fact that this proceeding is likely to be one of the last opportunities to ensure that certain programming genres benefit from the more nurturing regulatory environment afforded by Category 1 status.

All of these elements played a role in the Commission’s decision, although no one specific criterion outweighed any other in considering the many strong applications. The Commission is satisfied that the package of specialty services chosen will meet all of its objectives. In addition, despite the risks inherent in a digital environment, these services will make meaningful contributions to the Canadian broadcasting system, including the production and exhibition of Canadian programming, as well as a significant level of support for independent production.

In approving 16 English-language and 5 French-language new services, the Commission considered the capacity of digital distributors to carry them, since all Category 1 services appropriate to a market must be carried. In this regard, the Commission notes the support expressed by many parties for the approval of a larger number of Category 1 services than the "approximately 10" originally contemplated in the licensing framework.

The Commission is confident that distributors will be able to create attractive packages that will appeal to the widest possible cross-section of Canadians, and that will motivate consumers to subscribe to digital distribution. The new Category 1 services will create a solid base for future industry development, while ensuring that sufficient capacity remains for the launch of other services, including Category 2 specialty and pay, and PPV and VOD services.

Canadian programming expenditures

Given the special challenges facing new services in a digital environment, the Commission discussed with each applicant whether Canadian programming expenditure (CPE) obligations for Category 1 services are still relevant or necessary. Most of the applicants stated that, even in a digital environment, such conditions were still appropriate and some stated that contributions could be seen as a necessary obligation for the privilege of being awarded a Category 1 licence.

The Commission also explored with each applicant a number of options for calculating appropriate contributions. The Commission has decided to set expenditure obligations based on the average expenditure level, as a percentage of total advertising, infomercial and subscriber revenue projected over the licence term. Beginning in the second year of operation, all Category 1 services will be required to spend a percentage of the previous year’s total advertising (including infomercials) and subscriber revenue on Canadian programming in each year.

Existing specialty services are permitted to overspend or underspend their commitments by 5% in any given broadcast year, provided that the total expenditure commitment is fulfilled before the end of the licence term. The Commission recognizes the need for additional flexibility in Canadian programming expenditures for the new services. In view of the significant risks in the digital environment, the Commission will permit a Category 1 service to overspend or underspend by 10% in a given broadcast year, provided that the full Canadian programming expenditure is made by the end of the licence term.

Conditions of licence related to the Canadian programming expenditures required of each new Category 1 service are set out in Decisions 2000-449 to 2000-469, and are to be applied by reference to the Commission’s approach to Canadian programming expenditures set out in Public Notices 1992-28, 1993-93 and 1993-174.

Independent production

Another issue examined at the hearing was contribution to independent production. The Commission explored with each party whether it should continue to be concerned about commitments to independent production, and what, if any, specific rules should be set.

A number of interveners from the production and arts communities emphasized the importance of commitments to independent production as a selection criterion for Category 1 services, particularly in the context of increased industry consolidation. Some interveners, such as the Canadian Film and Television Production Association and the Directors Guild, suggested specific rules that should apply to all services to ensure a certain amount of independent production, or to restrict the broadcast of in-house or affiliated production.

The majority of applicants stated that a case-by-case approach would be most appropriate for setting conditions limiting the amount of production that could be acquired from affiliated producers, noting that some types of programming lend themselves more easily to in-house production (e.g. news, current affairs, sports).

The Commission also discussed with parties at the hearing appropriate definitions of "independent producer" and "affiliated producer". Applicants suggested a range of definitions. Some suggested that any ownership by a broadcaster would make a producer "affiliated", others recommended thresholds of between 10% and 20% or 30% to 35% for determining if a producer is related to a broadcaster.

The Commission has decided to adopt a consistent but flexible approach to ensure that all Category 1 services make appropriate contributions to the independent production sector. The Commission will oblige each Category 1 licensee to ensure that at least 25% of its Canadian programming, other than news, sports, and current affairs is produced by non-related production companies. This obligation takes the form of a condition of licence, set out in Appendix 1 to this document. For the purpose of this condition, the Commission defines as non-related any production company in which the specialty service, or any of its shareholders, owns or controls, directly or indirectly, less than 30% of the equity.

Category 2 services

As indicated above, the Commission adopted an open-entry approach to licensing 262 Category 2 pay and specialty services. Consistent with the licensing framework, the Commission has been as open and flexible as possible, to encourage the development of Canadian programming options that will serve the needs and interests of the broadest possible range of viewers. Of the 99 Category 2 applications denied, approximately 90 were found by the Commission to be directly competitive with existing services or new Category 1 services. The remaining nine applications were denied because they did not meet the following tests, set out in the licensing framework:

• Does the application meet all of the basic licensing criteria?

• Would the service be directly competitive with either an existing pay or specialty service or a new Category 1 service?

The Commission also took into account the potential impact on conventional television services. For example, some applicants proposed to focus on foreign drama, a genre of programming that is already broadly available from conventional sources.

In determining whether proposed services should be considered directly competitive, the Commission has adopted a case-by-case approach, as recommended by many interveners and applicants. No rule or threshold was set for determining when a service is directly competitive. Instead, the Commission examined each application in detail, taking into consideration the proposed nature of service and the unique circumstances of the genre in question. Where appropriate, in setting conditions of licence, the Commission narrowed the nature of service from that proposed, rather than deny the application.

In some cases, the Commission has imposed conditions of licence preventing or limiting the broadcast of specific types of programming to ensure that the service is not, nor will become directly competitive with any existing service or new Category 1 service. In other cases, the Commission has removed certain program categories included in the application, to reduce the potential for competition with existing services.

In addition, the Commission has removed Category 15 (Filler) from almost all of the Category 2 nature of service descriptions. The Commission notes that all programming drawn from Category 15 can be categorized more particularly under other categories, and should be logged as such.

The Commission also notes that any licensee that broadcasts programming drawn from Category 4 - Religion must abide by the balance policy set out in Religious broadcasting policy (Public Notice 1993-78), with the exception of single or limited point of view religious services licensed as fully discretionary services in accordance with that policy.

Any licensee that is permitted to broadcast infomercials (through the inclusion of Category 14 in its nature of service), must abide by the Commission's policies with respect to infomercials, as set out in Public Notices 1994-139 and 1995-93, and clarified in Public Notice 1999-205.

The Commission is confident that the new Category 2 services will have sufficient flexibility to offer creative and attractive programming to viewers. To ensure that Category 2 services complement existing services and new Category 1 services, the Commission reminds all Category 2 licensees that a service may only broadcast programming that specifically conforms to the nature of service description approved by the Commission.

Ownership

As contemplated in Notice of Public Hearing 2000-5, some Category 1 services are required, as a condition of approval, to make minor changes to their ownership or control, to ensure that they comply with the Direction to the CRTC (Ineligibility of Non-Canadians) (the Direction). No licence will be issued until the applicant, where required, demonstrates to the Commission that it fully complies with the Direction.

For Category 2 services, the Commission will conduct an ownership and control analysis once the service demonstrates to the Commission that it has entered into a carriage agreement with a distributor. As described above, the Commission may then require certain changes to the ownership to ensure compliance with the Direction, before issuing a licence. Any correspondence in this respect will form part of the public file.

Distribution

As set out in the amendments to the Broadcasting Distribution Regulations, proposed in Public Notice 2000-150, Class 1 and 2 licensees who offer programming services to the public using digital technology will be required to distribute all Category 1 services appropriate to their market, on a digital basis. Direct-to-home (DTH) undertakings will be required to carry all Category 1 services on a digital basis. Class 1 and 2 and DTH distributors may only distribute Category 1 services on a stand-alone basis if they are also distributed as part of a package. All Category 1 services must be packaged and marketed on an equitable basis, with terms comparable to those applied to any other new digital service.

The Commission will permit independent Class 3 distribution systems (small systems not interconnected with a Class 1 or 2 distribution system) that do not make use of digital technology, to distribute Category 1 services on an analog basis. Nevertheless, the Commission encourages all distributors to implement digital distribution technology as soon as practicable.

Category 2 services may be distributed only on a digital basis. The Commission will permit independent Class 3 cable systems to distribute them using analog technology on an exceptional basis, for example, where a Category 2 ethnic service is suitable for distribution in a particular market. An independent Class 3 distributor could apply for a condition of licence authorizing it to carry such a service using analog distribution.

As stated in the licensing framework, existing undue preference regulations will continue to apply, and will address concerns related to the potential for distributors to confer an undue preference on related services in matters such as access, packaging, marketing and other terms of carriage. In addition, as outlined in Public Notice 2000-150, the Commission will require a distributor to offer at least five non-related Category 2 services for every Category 2 service it distributes in which it owns, directly or indirectly, more than 10% of the equity.

Implementation of service

Virtually all participants at the hearing stated that Category 1 services should be required to implement service within a year of the licensing decision. The Commission agrees. Accordingly, all Category 1 licensees must begin operation no later than 24 November 2001, unless the Commission approves a request for an extension before that date.

Given that Category 2 licensees are not assured digital access, they must implement service no later than 24 November 2003, unless the Commission approves a request for an extension before that date.

A common launch

There was strong consensus at the hearing that there should be a common launch of the new digital services to maximize the impact of their introduction, with September 2001 cited as the most logical date. A launch at that time would give programming services and distributors approximately nine months to negotiate affiliation agreements and develop promotional campaigns for the new services. Programmers also expressed the view that Category 2 and foreign services should not be launched before the Category 1 services.

The Canadian Association of Broadcasters (CAB) called for the creation of a joint marketing committee to be made up of representatives of both the distribution and programming sectors, working together to achieve an orderly launch through co-ordinated planning and promotion of the new digital services.

Both the Canadian Cable Television Association (CCTA) and Bell ExpressVu generally supported a co-ordinated launch in September 2001, but stressed the need for content to drive digital penetration. They questioned the utility of delaying the carriage of any programming service that wished to launch at an earlier date, including Category 2 and new eligible foreign services. Bell ExpressVu also submitted that, in a competitive marketplace, distributors will need to differentiate themselves and their offerings, and that participating in an industry forum and discussing marketing plans with their competitors could restrict competition.

The Commission has considered all of the various points of view on this matter, and endorses a common launch date in September 2001. The Commission is also of the view that Category 2 and foreign services should not launch before that date. Launching them at the same time could provide increased support for the new Category 1 services. While the Commission acknowledges the need for distributors to differentiate themselves in a competitive environment, it also supports the concept of joint marketing initiatives.

Carriage terms

At the hearing, some interveners expressed concern about establishing parameters for fair and equitable access. The CAB and the Specialty and Premium Television Association called for the creation of an industry code that would include principles and guidelines to ensure equitable access for all services in a digital environment.

The CCTA expressed qualified support for such a code. It stated that it was willing to work collectively with programming licensees in a number of areas. However, it argued that issues of a competitively sensitive nature — such as price, packaging, marketing and advertising — should be dealt with through bilateral business negotiations rather than through an industry code or other multilateral processes. The CCTA also argued that the cable industry is not the dominant player in the digital environment, and that the presence of competing distributors will ensure that programming licensees have equitable access to distribution.

At the hearing, Bell ExpressVu tabled a Voluntary access and equitable treatment code, stating, among other things, that it was developed with a view to ensuring that programmers have fair access to distribution, and that distributors have fair access to programming services.

The Commission has carefully considered the comments of interested parties, and is of the opinion that a code, developed and accepted by both programmers and distributors, could provide important additional guidance to facilitate the negotiation of affiliation agreements. In addition, such a code could minimize disputes by providing examples of what might constitute instances of acceptable preference as well as circumstances that could constitute undue preference.

The Commission therefore directs the industry to develop a code dealing with equitable terms of carriage, including launch arrangements, and undue preference or disadvantage for the new digital services. The code should be developed jointly by the pay/specialty and distribution sectors through their respective industry associations and licensees, and should be filed by 15 February 2001 for approval by the Commission.

The industry code should address, but not necessarily limit itself to, the following matters:

• equitable terms of carriage such as pricing and packaging.

• provisions to ensure that subscribers are able to benefit from service-specific interactivity;

• launch arrangements such as promotion, launch costs/marketing fees, and free preview periods;

• examples of what could constitute acceptable preference versus undue preference or disadvantage; and

• processes for the resolution of disputes arising from different interpretations of the code, including third party dispute resolution, prior to any request for dispute resolution by the Commission.
  

Notwithstanding the development of an industry code, there may be instances in which a distributor and a programming service may not be able to agree on the terms of affiliation agreements. In these instances, the Commission notes that, consistent with its policy on dispute resolution, parties should participate in mediation with the assistance of an independent mediator before referring the matter to the Commission. The Commission intends to deal with any disputes submitted to it expeditiously and on a final-offer basis.

A number of applicants suggested that the Commission should impose a deadline by which affiliation agreements for all of the Category 1 services would have to be finalized. They argued that finalizing the affiliation agreements well in advance of the launch would provide certainty and allow the parties to focus their energies on the co-ordinated promotion of the new digital services. The distribution sector did not support this proposal, arguing that it was unrealistic to expect that all affiliation agreements could be concluded in such a short time with so many different parties involved. In view of the relatively short time before the proposed launch date, the Commission has decided not to impose a deadline for the completion of affiliation agreements.

Service to the hearing-impaired

As indicated in the call for applications, the Commission expects all English-language Category 1 and 2 services to close caption at least 90% of all programming broadcast during the broadcast day, by the end of the licence term. Given the more significant challenge of captioning in French, the Commission expects all French-language Category 1 licensees to meet the levels of captioning identified in their applications, and encourages them to caption 90% of all programming by the end of the licence term. For French-language Category 2 services, the Commission expects at least 50% of all French-language programming aired during the broadcast day to be captioned, by the end of the licence term.

For Category 2 music video services, the obligations outlined above apply to all non-music programming (including presentations by program hosts). In addition, the Commission encourages such services to provide captioned versions of music videos to the extent possible.

The Commission expects ethnic pay and specialty services to caption 90% of all English-language programming and 50% of all French-language programming broadcast during the broadcast day, by the end of the licence term. It also encourages them to provide captioning for as much third-language programming as possible.

The Commission also encourages all licensees to work with representatives of the hearing-impaired community to ensure that captioning is of high standard and responds to that community’s needs and interests.

Service to the visually-impaired

In Public Notice 1999-97, Building on success: A policy framework for Canadian television (the television policy) the Commission strongly encouraged all television licensees to adapt their programming to include audio description wherever it is appropriate, and to take the necessary steps to ensure that their customer service responds to the needs of the visually-impaired. The Commission also encouraged licensees to explore ways to effect the gradual implementation of descriptive video services (DVS).

In its intervention to this process, the National Broadcast Reading Service (NBRS) recommended that the Commission oblige all Category 1 licensees to be technically equipped to broadcast DVS programming and to air one hour per month of DVS programming in the first year of the licence term, increasing by one hour each year.

During this public proceeding, all Category 1 applicants were asked to describe their plans for meeting the needs of the visually-impaired. All of the applicants confirmed that they would be technically equipped to allow the broadcast of DVS. However, many argued that it would be premature to impose specific obligations, particularly on services that, in the short term, will have limited penetration, and therefore limited resources.

The Commission has decided not to impose specific obligations at this time. However, it requires all Category 1 licensees to be technically equipped to broadcast DVS programming, and to fulfil the commitments included in their applications.

In addition, the Commission encourages all Category 1 and 2 licensees to provide audio description of visual information wherever possible, and to provide described video programming as recommended by NBRS. At the time of licence renewal, all licensees will be asked to report on their efforts to make their programming more accessible to the visually-impaired.

Cultural diversity

The television policy also asked conventional television licensees to make commitments to initiatives that would result in a more accurate reflection of cultural and racial minorities and Aboriginal peoples. All such licensees are also expected to ensure that the on-screen portrayal of all minority groups is accurate, fair and non-stereotypical.

During this proceeding, Category 1 applicants were asked to provide details of the ways in which they would contribute to cultural diversity. The Commission expects all licensees of Category 1 services to fulfil the commitments outlined in their applications. Consistent with the approach taken in the television policy, the Commission also expects all Category 1 and 2 licensees to contribute to the fair and accurate portrayal and reflection of cultural diversity. At the time of licence renewal, all licensees should be prepared to comment on their contributions to the reflection of culture diversity.

Industry codes

As set out in the appendices to this document, by condition of licence, Category 1 and 2 services are required to adhere to the following codes, as amended and approved by the Commission from time to time:

• Sex role portrayal code for television and radio programming (Public Notice 1990-99);

• the appropriate code addressing violence in programming: for specialty services, the Canadian Association of Broadcasters' (CAB) Voluntary code regarding violence in television programming (Public Notice 1993-149); and for pay television services, the Pay television and pay-per-view programming code regarding violence (Public Notice 1994-155); and

• for specialty services, the Broadcast code for advertising to children (Public Notice 1993-99).

Where appropriate, conditions may be suspended so long as the service provider is a member in good standing of the Canadian Broadcast Standards Council.

Employment equity and on-air presence

The Commission expects all licensees to consider employment equity issues in their hiring practices and in all other aspects of their management of human resources. Licensees with 100 or more employees are subject to the Employment Equity Act, and file reports concerning employment equity with Human Resources Development Canada. The Commission expects all Category 1 licensees with fewer than 100 employees to fulfil the commitments outlined in their applications.

In addition, the Commission expects all Category1 licensees with 25 or more employees to implement the plans described in their applications with respect to the on-air presence of members of the four designated groups (women, aboriginal persons, disabled persons and members of visible minorities).

V-chip

The Commission reminds all Category 1 and 2 services of their responsibilities under its Policy on violence in television programming (Public Notice CRTC 1996-36), and specifically of their obligation to encode programs for reception by V-chip technology, as announced in Television Violence - Timetable for introduction of Canadian rating system codes using V-chip technology (Public Notice 2000-109). Licensees are also expected to provide on-screen program classification until the Commission is satisfied that V-chip technology is widely available to Canadian viewers.

Addition of foreign services to the lists

As part of the licensing framework, the Commission announced that it would consider requests to add foreign services to the list of eligible satellite services for carriage on a digital basis, provided those services were not competitive, in whole or in part, with Canadian services. However, it had not specifically addressed the commercial realities that may be unique to the French-language market.

In Public Notice 2000-68, the Commission indicated that it had received an application from BCE Media to add certain foreign French-language services to the lists. The Commission announced that, as part of the public hearing to consider new digital applications, it also wished to explore the role that non-Canadian French-language services could play in increasing the availability and diversity of French-language programming in Canada.

Recognizing the disparity between the variety of foreign services available to French-speaking Canadians as opposed to these who speak English, applicants who addressed this matter indicated that they would not oppose the addition of foreign French-language services, provided that the Commission evaluated them according to the existing policy on the authorization of foreign services.

As a distributor, BCE Media proposed specific criteria to determine if a foreign French-language service is competitive with a Canadian service. It also suggested specific provisions that foreign services could be compelled to accept, to be authorized for distribution in Canada.

The Commission has considered all of the information filed as part of the public process, and has decided to maintain its approach with respect to the addition of non-Canadian services to the lists of eligible satellite services, regardless of the language of the service.

In Public Notice 2000-173 released today, the Commission has issued a call for proposals to amend the lists of eligible satellite services through the inclusion of additional non-Canadian services to be distributed on a digital basis only. The request submitted by BCE Media will be examined as part of that proceeding.

Secretary General

This document is available in alternate format upon request and may also be examined at the following Internet site: http://www.crtc.gc.ca.

Appendix 1 to Public Notice CRTC 2000-171

The following terms and conditions of licence are applicable to all Category 1 services, except where an authorization which represents a change from or addition to these terms and conditions is included in the decision granting a particular licence.

Terms of licence

A licence will be issued and effective at such time as the licensee has met any ownership requirement and confirms in writing that it is ready to begin operation. This must take place no later than 24 November 2001. Any request for an extension to that deadline requires Commission approval and must be made in writing before that date.

The conditions for distribution of Category 1 specialty services are explained in Public Notice 2000-6 Licensing framework policy for new digital pay and specialty services and in the text of the present public notice. These conditions will be incorporated into the Broadcasting Distribution Regulations, as contemplated in Public Notice 2000-150.

Expectations with respect to closed captioning and employment equity are set out in the individual decisions.

Conditions of licence

Definitions

The programming shall be drawn exclusively from the categories specified in the nature of service condition of licence. These categories are set out in their entirety in Schedule I to the Specialty Services Regulations, 1990 or Schedule I to the Pay Television Regulations, 1990 (see appendix 3 to this notice).

For the purposes of these conditions of licence, all time periods shall be calculated according to Eastern standard time.

• "broadcast month", "broadcast year", "evening broadcast period" and "clock hour" shall have the same meanings as those set out in the Television Broadcasting Regulations, 1987.

• "broadcast week" shall have the same meaning as that set out in the Radio Regulations, 1986.

• "paid national advertising" shall mean advertising material as defined under the Specialty Services Regulations, 1990 and that is purchased at a national rate and receives national distribution on the service.

• "first year of operation" and "Year 1" shall mean the period in which the licensee is first in operation for a period exceeding 90 days, excluding any free trial period, and ending on 31 August of that calendar year.

• "second year of operation", "Year 2" and corresponding terms referring to subsequent years of operation, shall mean the broadcast year or years following the first year of operation.

Appendix 2 to Public Notice CRTC 2000-171

The following terms and conditions of licence are applicable to all Category 2 services, except where an authorization which represents a change from or addition to these terms and conditions is included in the decision granting a particular licence.

Terms of licence

A licence will be issued and effective at such time as:

• the Commission receives documentation confirming that the licensee has entered into a distribution agreement with at least one licensed distributor.

• the Commission receives documentation establishing that an eligible Canadian corporation has been incorporated in accordance with the application in all material respects acceptable to the Commission and that this corporation may be issued a licence.

• the licensee files, and the Commission reviews and finds satisfactory, all relative documents and agreements pertaining to the control and management of the licensee (i.e. shareholder agreement, program supply agreement, licence trademark agreement). The licensee must file all such documents prior to beginning operation.
  

• the licensee confirms in writing that it is ready to begin operation. This must take place no later than 24 November 2003. Any request for an extension to that deadline requires Commission approval and must be made in writing before that date.
  

The conditions for distribution of Category 2 specialty services are explained in Public Notice 2000-6  Licensing framework policy for new digital pay and specialty services and in the text of the present public notice. These conditions will be incorporated into the Broadcasting Distribution Regulations, as contemplated in Public Notice 2000-150 .

Category 2 services are expected to caption 90% of all English-language programming and 50% of all French-language programming by the end of the licence term. Category 2 services providing programming in third-languages are encouraged to caption as much of this programming as possible.

Licensees with fewer than 100 employees are encouraged to consider employment equity issues in their hiring practices and in all other aspects of their management of human resources.

Conditions of licence for specialty television services

6. Note: Condition of licence number 6 as set out in Appendix 1 applies only to Category 1 services.

For English- or French-language (or both) services only:

For ethnic services only:

For music video services only:

Conditions of licence for pay television services

Definitions

The programming shall be drawn exclusively from the categories specified in the nature of service condition of licence. These categories are set out in their entirety in Schedule I to the Specialty Services Regulations, 1990, or Schedule I to the Pay Television Regulations, 1990 (see appendix 3 to this notice).

For the purposes of these conditions of licence, all time periods shall be calculated according to Eastern standard time.

• "broadcast month", "broadcast year", "evening broadcast period" and "clock hour" shall have the same meanings as those set out in the Television Broadcasting Regulations, 1987.

• "broadcast week" shall have the same meaning as that set out in the Radio Regulations, 1986.

• "first year of operation" and "Year 1" shall mean the period in which the licensee is first in operation for a period exceeding 90 days, excluding any free trial period, and ending on 31 August of that calendar year.

• "second year of operation" and "Year 2" and corresponding terms referring to subsequent years of operation, shall mean the broadcast year or years following the first year of operation.

• "paid national advertising" shall mean advertising material as defined under the Specialty Services Regulations, 1990 and that is purchased at a national rate and receives national distribution on the service.

• "paid regional advertising" shall mean advertising material as defined under the Specialty Services Regulations, 1990, and that represents retail chains that have locations in various central market areas.

Appendix 3 to Public Notice CRTC 2000-171

The programming broadcast by the new digital Category 1 and Category 2 services shall be drawn exclusively from the categories specified in the nature of service condition of licence. These categories are set out in their entirety in Schedule I to the Specialty Services Regulations, 1990, or Schedule I to the Pay Television Regulations, 1990 , and below:

News

Analysis and interpretation

Programs of comedy sketches, improvization, unscripted works, stand-up comedy

Long-form documentary

Reporting and actualities

Music and dance other than music video programs or clips

Religion

Formal education and pre-school

Informal education/recreation and leisure

Professional sports

Amateur sports

Drama and comedy

Ongoing dramatic series

Ongoing comedy series (sitcoms)

Specials, mini-series, made-for-TV feature films

Theatrical feature films aired on TV