ARCHIVED - Decision CRTC 2001-612

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Decision CRTC 2001-612

Ottawa, 28 September 2001

Mr. Robert Malcolmson
370 King Street West
Suite 308
P.O. Box 56
Toronto, Ontario
M5V 1J9
FAX: (416) 979-1300

Mr. Ken Stein
Senior VP Regulatory and Corporate Affairs
Shaw Communications
Toronto-Dominion Center
100 Wellington St. West
Suite 2140
P.O. Box 274
Toronto, Ontario
M5K 1J5
FAX: (416) 642-7415

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

Dear Sirs:

Re: Complaint by PrideVision against Shaw Cablesystems Ltd. and Star Choice Television Network Ltd. regarding "Free Previews" - Undue Disadvantage

On September 19, 2001 PrideVision filed a complaint against Shaw Cablesystems Ltd. (Shaw Cable) and Star Choice Television Network Incorporated (Star Choice) alleging a breach of section 9 of the Broadcasting Distribution Regulations (the Regulations) and certain Commission policies with respect to the carriage of Category 1 services.

Further to a Commission staff letter of September 19, 2001, Shaw Cable and Star Choice filed their respective comments on September 25, 2001. PrideVision filed a reply on September 26, 2001.


PrideVision was licensed in Decision CRTC 2000-456 (December 14, 2000) as a national English-language Category 1 specialty television service offering news and information, current affairs, lifestyle and entertainment programming designed to meet the needs of the gay and lesbian community. In Public Notice CRTC 2000-6 (January 13, 2000) the Commission set out the framework for all Category 1 and 2 specialty television services. The distribution requirements for these services were subsequently incorporated into the Regulations in subsections 18(11) and 38(2).

The Complaint and Comments

In its complaint, PrideVision indicated, among other things, that both Shaw Cable and Star Choice are not offering the same free and open preview of PrideVision that is being provided to other Category 1 and 2 programming services, including programming services owned by Corus Entertainment, an affiliate of Shaw Cable and Star Choice. In particular, PrideVision stated that, rather than offering PrideVision as part of the open preview along with other digital services, both Shaw Cable and Star Choice require customers who wish to preview PrideVision to actively select the channel and then take additional steps to have the service authorized. PrideVision noted that no other service is subject to these secondary requirements. Accordingly, PrideVision alleged that both Shaw Cable and Star Choice are subjecting PrideVision to an undue disadvantage and that, in doing so, have breached Section 9 of the Regulations. Section 9 states that "No licensee shall give an undue preference to any person, including itself, or subject any person to an undue disadvantage."

In its reply, Shaw Cable stated that it devised the mechanism described above in response to expressions of concern from its customers. Shaw Cable maintained that it has found an approach for the distribution of PrideVision that is not prejudicial to the service, satisfies its regulatory obligations, and respects the sensitivities of certain customers by allowing them to make the decision whether or not to view the service. Shaw argued, among other things, that it has treated PrideVision fairly and reasonably. Star Choice made similar arguments.

The Commission's Decision

In arriving at its decision, the Commission has reviewed the submissions of the parties, the applicable licensing decisions, relevant policies and regulations, as well as its mandate under the Broadcasting Act (particularly section 3(1), which sets out the broadcasting policy for Canada).

The Commission considers that the requirement for subscribers to take active steps to receive the PrideVision preview amounts to substantially different treatment of the service on the part of Shaw Cable and Star Choice.

In licensing the Category 1 services, the Commission concluded that each would make a meaningful contribution to the attainment of the objectives of the Broadcasting Act. The Commission considers it significant that it did not specify in either its licensing decision of PrideVision or its framework for digital specialty services that it would be appropriate for distributors to accord PrideVision treatment different from that accorded any other Category 1 specialty service, despite the fact that alternative carriage arrangements for PrideVision were considered as part of the hearing process.

Given the highly competitive and challenging environment in which these services are being launched, the Commission considers the initial preview period crucial to the long term success of the new digital services. Further, in the Commission's view, the additional steps required to sample PrideVision will act as a strong disincentive for subscribers to view the service during the preview period, which will be reflected in PrideVision's subscriber levels after the preview is over. Accordingly, the disadvantageous treatment afforded PrideVision, if continued, would have an unduly negative impact on the service relative to other digital services. Shaw Cable and Star Choice subscribers should therefore receive the PrideVision preview on the same basis as they receive all other Category 1 services.

Taking into account all of the above, the Commission, by a majority vote, concludes that Shaw Cable and Star Choice are subjecting PrideVision to an undue disadvantage in relation to other Category 1 services and, thus, are in breach of section 9 of the Regulations.

The Commission notes that the essence of its regulatory framework, under which PrideVision and other digital services were licensed, is to empower consumers with the ability to make their own viewing choices.

In closing, the Commission notes that the control features inherent in the set top boxes deployed by digital distributors (including Shaw Cable and Star Choice) provide consumers with a tool to control the programming they receive. Through a simple process that can be accessed via the on-screen program guide, consumers, including parents, have the ability to block out programming that they do not want members of their household to watch (by channels, time or program rating). The Commission is satisfied that, in this case, this mechanism provides consumers with an appropriate and sufficient level of control over the programming that is viewed in their homes.


Ursula Menke
Secretary General


Dissenting opinion of Commissioner Stuart Langford

I disagree with the majority decision with regard to the disposition of the main issue underlying this proceeding and would have dismissed these complaints. With regard to the ancillary matter of the confusing nature of charges and taxes, I would have instructed Shaw Cablesystems Ltd. (Shaw) to honour its written undertaking to correct immediately the technical problems that have arisen as a result of its approach to previewing PrideVision TV's (PVTV's) programming.

The supporting documentation filed by PVTV in this matter contains a number of serious allegations. What it lacks, however, is sufficient evidence to substantiate those allegations. Considering the unavoidably rushed nature of this proceeding and the reduced evidentiary burden placed on complainants to this regulatory Commission in contrast, for example, to those seeking relief in a Court of Law, the evidentiary gaps on the record in themselves may not have been fatal to PVTV's case. When combined, however, with the fact that PVTV's own supporting documentation conveys a distinct impression that though perhaps unintentionally the complainant in this proceeding may be the author of its own misfortune, PVTV's application must fail. The chasm between what the record substantiates and what PVTV alleges is so wide that any attempt to bridge it cannot succeed without a great deal more supporting evidence.

What we know.

The record of these proceedings enables us to say the following without fear of contradiction:

PVTV is a national English-language specialty service, licenced on December 14, 2000 as a Category 1 digital service. As such it enjoys a Commission-mandated right to digital carriage on all Class 1 and 2 cable systems as well as on Canada's two direct-to-home (DTH) satellite systems. Like all Category 1 services, PVTV also enjoys a Commission-directed right to fair treatment by these distribution systems, more particularly, to "be packaged and marketed on an equitable basis." Shaw since September 14, 2001, has distributed PVTV's digital service as required on its Class 1 and 2 systems and, as well, on its Class 3 systems. Star Choice Television Network Inc. (Star Choice) has been distributing PVTV's digital service since September 7, 2001. During the "free preview" marketing period now in place to introduce television watchers to newly available digital services, PVTV has been treated differently than other recently launched services.

What we do not know.

What is far less certain than the facts set out above, is the answer to the following four questions: Why is PVTV's service being treated differently than other new digital services? Did PVTV invite such different treatment? Are the differences now complained of inequitable? Has PVTV been subjected to the sort of "undue disadvantage" that is prohibited by the Broadcasting Distribution Regulations? PVTV would have the Commission answer all of these questions in its favour. The majority agrees. I do not because there is insufficient evidence on the record to justify such responses.

What we do not know, and what the evidence before us does not reveal is what agreement regarding distribution exists between the complainant and the two broadcast distribution undertakings (BDUs) made parties to this proceeding. If no agreement exists then, by default, the Commission's mandated directions regarding carriage apply. Those directions, however, are not absolute and unalterable. They can be changed by agreement and by PVTV's admission, they were voluntarily changed, apparently at the complainant's instigation.

Public Notice CRTC 2000-6 states in part: "To ensure that all Category 1 services have the benefit of favourable packaging arrangements, distributors will not be permitted to distribute any category 1 service on a stand-alone basis unless it is also distributed as part of a package." In its complaint against Shaw and Star Choice, PVTV informed the Commission that by agreement it waived this right: ".PrideVision has agreed to make itself available to cable and DTH customers, either on a standalone basis or as an optional add-on to other discretionary packages." As well, PVTV, apparently recognizing the controversial nature of its programming, entered into an agreement with distributors whereby its service could be marketed differently than others: "PrideVision accepts the fact that its programming will not be to everyone's tastes. It was for that reason, during negotiations with BDUs, it agreed to a marketing strategy that will ensure that only those subscribers who specifically want the service will receive it."

Arguably, the "marketing strategy" adopted by Shaw and the "marketing strategy" adopted by Star Choice during this free preview period comply with the agreements between them and PVTV or with the spirits of those agreements. Unfortunately, that is not a thesis that can be tested as the agreements were not filed as evidence. Star Choice and Shaw appear to feel that they are in

compliance; PVTV does not. There the question lies, unanswerable in my view on the strength of the record before us.

PVTV further contends that despite any agreement between it and Shaw and Star Choice, it had a right to equal treatment during the free preview period based on the Commission's direction in PN 2000-6 dictating "equitable" treatment. As such directives can be altered by consensual agreement and as some sort of agreement was made, I fail to see how the complainant can take this position without more evidence to support it. Even if no agreement exists and the complainant were entitled to "equitable" treatment, however, PVTV would not necessarily be entitled to equal treatment. Equitable does not mean equal; it means fair in the circumstances. Having admitted on the record that its programming is not "to everyone's taste" and that PVTV "voluntarily" sought a means of ".ensuring that it is not forced on those who do not wish to receive it", the complainant finds itself in a difficult position when it claims that it is now entitled as of right to equal treatment

Neither PVTV nor any other Category 1 service is entitled as of absolute right to equal treatment. The entitlement is to "equitable" or fair treatment, all things considered, and even that level of entitlement is variable depending upon what a service provider and a BDU agree upon between themselves. Whatever claim PVTV could have made to equitable treatment may or may not have been altered by its negotiations and arrangements with Shaw and Star Choice. PVTV's claim is confusing rather than enlightening on this key issue.

Guessing games.

It could be argued that the ancient claim of "res ipsa loquitor" or "the thing speaks for itself" applies in this case. Why, one might ask, would PVTV make these claims, make them so forcefully, and demand relief on an expedited basis if their complaint were not justified? Who knows? This Commission is mandated by Parliament to make regulatory decisions on the evidence before it, not to indulge in guessing games. Findings of fact must be grounded in the evidence on the record. Suspicions and hunches are not sufficient. One could as easily speculate that having made a bad business decision in agreeing to alter the Commission-mandated rules of carriage, PVTV now regrets entering into agreements with Shaw and Star Choice and wishes to return to the Commission directives set out in Public Notice, CRTC 2000-6. The record as easily supports this interpretation

of the evidence before us as it does the interpretation urged by the complainant and accepted by the majority.

Doubt is fatal

The Commission's position on claims of undue preference or disadvantage is a long established one. More than a suspicion must exist; more than a prima facie case must be made. The record must demonstrate the undue treatment complained of and demonstrate as well that no other conclusion except that urged by the complainant can reasonably be drawn from the evidence presented. In a recent case before the Commission, for example, Cogeco Radio-Télévision inc. (Cogeco) alleged that Star Choice, by distributing local TVA signals but not local Cogeco signals, was giving undue preference to TVA and subjecting Cogeco to an undue disadvantage. The record supported Cogeco's allegation but not its complaint that it was suffering financial losses as a result of Star Choice's action. The record demonstrated that Cogeco's service was losing advertising revenues but not that those losses could be traced to Star Choice's treatment of the complainant.

The Commission regarded this as fatal to Cogeco's case and dismissed the complaint: "In the current case, the Commission considers that Cogeco did not sufficiently demonstrate that its anticipated losses of advertising revenues are directly attributable to Star Choice's decision to distribute the local TVA signals. The Commission considers that the financial harm suffered or projected to be suffered by Cogeco as alleged in the complaint may result from a number of market circumstances in addition to the Star Choice distribution decision."

In my opinion the same level of doubt regarding cause and effect is glaringly obvious in this case and that doubt is fatal to PVTV's claim. To paraphrase slightly the Commission's words in the Cogeco decision, the different treatment accorded to PVTV's service by Shaw and Star Choice does not amount to undue preference or undue disadvantage because, ".it may result from a number of . circumstances." There is an old expression, which says, "He who alleges must prove." The complainant's allegations are serious in this case but at day's end they remain unproven and, accordingly, I would dismiss this complaint.

Shaw Response, September 25, 2001, at page 3, paragraph 2: "Shaw is working diligently to correct this technical problem and is hopeful that this problem will be remedied soon."

Shaw Response, September 25, 2001, at page 3, paragraph 2: "Shaw is working diligently to correct this technical problem and is hopeful that this problem will be remedied soon"
2 Decision CRTC 2000-456
3 Public Notice CRTC 2000-6, paragraph 22.
4 Broadcasting Distribution Regulations, section 9: "No licensee shall give any undue preference to any person, including itself, or subject any person to an undue disadvantage."
5 PN 2000-6, paragraph 22.
6 PrideVision TV complaint, September 19, 2001, paragraph 7.
7 Ibid, paragraph 22.
8 Ibid.
9 Ibid, paragraph 17: "PrideVision submits that this is an egregious breach of CRTC policy and the Regulations and it should not be permitted on the Shaw systems."
10 Ibid, paragraph 26: "PrideVision cannot over-emphasize the need for immediate Commission relief."
11 Decision CRTC 2001-609.
12 Ibid, page 2.

Date Modified: 2001-09-28

Date modified: