ARCHIVED - Decision CRTC 2001-521

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Decision CRTC 2001-521

Ottawa, 24 August 2001

Ms. Pamela Dinsmore
Vice President, Regulatory
Rogers Cablesystems Limited
333 Bloor Street East, 9th Floor
Toronto, Ontario
M4W 1G9
Fax: (416) 935-4875

Mr. Brad Shaw
Senior Vice President of Operations
Star Choice Communications Inc.
50 Burnhamthorpe Road West, 10th Floor
Mississauga, Ontario
L5B 3C2
Fax: (905) 272-7599

Dear Ms. Dinsmore and Mr. Shaw:

Re: Rogers' Complaint Against Star Choice -
Bulk Billing in Multi-Unit Dwellings

On 1 May 2001, Rogers Cable Inc. (Rogers) complained to the Commission that Star Choice Communications Inc. (Star Choice) had breached the terms of its direct-to-home (DTH) satellite distribution licence by entering into, either directly or through agents, bulk billing arrangements with owners of various multiple unit dwellings (MUDs) in and around Toronto.

Rogers stated that bulk billing occurs when a building owner acquires programming services from a broadcasting distribution undertaking (BDU) on a wholesale basis for redistribution to the tenants of the owner's building. Rogers indicated that the building owner is responsible for selecting the services that will be available to the tenants who reside in the building, and for paying the BDU for those services. Rogers added that the building owner recoups the fee that he or she pays to the BDU for bulk delivery of the programming services by charging each tenant a fixed monthly fee, which is typically included in the tenant's monthly rent.

Rogers contended, among other things, that Decision CRTC 96-529, which awarded Star Choice its DTH licence, specifically restricts Star Choice's authority to distribute programming services, as follows:

The service herein authorized, to be known as Star Choice, will derive its revenues entirely from subscription fees, and will provide programming services exclusively to individual subscribers in all parts of Canada on a DTH basis (emphasis added by Rogers).

Rogers submitted that, by providing the buildings in question with television services on a bulk basis, Star Choice is providing services to subscribers on a "non individual" basis, contrary to its licence decision.

In support of its position, Rogers also cited a letter dated 13 February 2001 from Commission staff responding to a request from Rogers for a clarification of Bell ExpressVu - Service to Multiple-Unit Dwellings, Public Notice CRTC 2000-51, 31 March 2000 (Public Notice 2000-51). In that letter, staff cited Public Notice 2000-51 as follows:

. the Commission expects the licensee to retain control over the authorization of its services for each individual subscriber and maintain a separate billing account with each.

Commission staff then went on to state that "this would seem to preclude the type of bulk billing concepts identified in your letter."

Rogers requested that the Commission order Star Choice to cease and desist and/or to refrain from distributing television services to the buildings until Star Choice ensures to the Commission's satisfaction that "'individual subscribers' [in the buildings] are receiving Star Choice DTH service, are retaining control over the authorization of these services and are maintaining a separate billing account with Star Choice."

Star Choice responded to Rogers' complaint on 25 May 2001. Star Choice argued that its DTH licence authorized it to contract with customers on a bulk basis. Specifically, it submitted that the words "exclusively to individual subscribers" in its licence decision were intended to underscore that the DTH licence granted to Star Choice did not authorize it to operate as a satellite relay distribution undertaking (SRDU). Star Choice also argued (among other things) that, under arrangements in the buildings in question, individual billing accounts are established when tenants subscribe to additional options such as pay-per-view, specialty and ethnic services. Further, each MUD tenant has a set top receiver unit located in their suite, and a tenant cannot receive services until the company "authorizes" the receiver. In addition, Star Choice submitted that a prohibition on the use of bulk billing arrangements by DTH undertakings would create a competitive advantage for terrestrial BDUs and could reduce the choice that consumers have among service providers.

Rogers filed a reply to Star Choice's comments on 4 June 2001. In addition, the Commission received comments from Bell ExpressVu Limited Partnership (ExpressVu) dated 12 June 2001. ExpressVu was broadly supportive of Star Choice's position, and noted that resolution of Rogers' complaint could have a significant impact on ExpressVu, since it operated under the same conditions of licence. Pursuant to a letter from Commission staff, Rogers filed a reply to ExpressVu's comments on 21 June 2001. In that reply, Rogers argued that the Commission should not have accepted ExpressVu's comments as part of the record of the proceeding.

The Commission notes that Rogers was provided with an opportunity to respond to ExpressVu's comments. Accordingly, the Commission has taken into account all of the submissions referenced above in considering Rogers' complaint.

Having considered the submissions of the parties, the Commission finds that the arrangements of Star Choice in the buildings in question would constitute operating in a manner authorized under its licence only in those instances where: (a) it retains control over the authorization of services to the tenant, and (b) it establishes a separate billing account with the tenant for additional services such as pay-per-view, specialty or ethnic services.

The Commission is concerned, however, that the inability of DTH providers to engage in the practice of bulk billing without restrictions, as cable companies currently do, may place DTH providers at a competitive disadvantage relative to other types of distribution undertaking. Accordingly, the Commission has today issued Public Notice CRTC 2001-96 entitled Call for Comments - Bulk Billing by Direct-to-home Satellite Distribution Undertakings, in which it seeks comment on the question of bulk billing by DTH undertakings.

Yours sincerely,

Ursula Menke
Secretary General

c.c. Bell ExpressVu, fax. (613) 749-4249

Date Modified: 2001-08-24

Date modified: