ARCHIVED - Public Notice CRTC 2001-123

Public Notice CRTC 2001-123

Ottawa, 7 December 2001

Proposed exemption order for radiocommunication distribution undertakings (RDUs)

The Commission invites comments on a proposed order that would exempt radiocommunication distribution undertakings (RDUs) from licensing requirements provided they meet certain exemption criteria. Such undertakings are currently licensed by the Commission, but are generally subject to minimal regulation.

The Commission's objective is to put a regulatory framework into place that continues to meet the public policy goals set out in the Broadcasting Act (the Act) while reducing administrative burden on the operators of RDU undertakings and on itself.

Background

1.

RDUs are over-the-air systems that distribute television and/or radio signals. Five categories of technology make up the RDU broadcasting landscape:

2.

The Commission has licensed RDUs for approximately 25 years. RDUs are essentially transmitters or clusters thereof. These conventional distribution systems provide service to small and often remote communities not served by cable. Typically, a simple RDU undertaking might distribute a single television channel or radio frequency. An MTV system might offer 3 to 12 channels; an STV undertaking, 8 to 12 channels; while an analog MDS system could offer approximately 15 channels.

3.

There are currently 399 RDUs (191 radio and/or television transmitters, 168 MTVs, 28 STVs and 12 analog MDS) licensed by the Commission. They represent 20% of all licensed distribution undertakings, but serve fewer than 2% of all subscribers. Most RDUs are regulated by way of the terms and conditions of licences that they hold. Of the 5 categories listed above, only analog MDS, or 2.8 per cent of all RDUs, are subject to the Broadcasting Distribution Regulations (the BD Regulations). Both analog and digital MDSs are subject to the BD Regulations, but only the analog MDSs are considered RDUs. Digital MDS undertakings are licensed relative to the market served and receive the same class of license that a cable licensee serving the same market would hold.

4.

The launch of direct-to-home (DTH) distribution systems has fundamentally altered the markets in which RDUs operate, as well as the underlying economic conditions that fostered their deployment. The far greater capacity and technological superiority of DTH systems now allow Canadians in small and remote communities to access the same range of programming services available to cable subscribers in large and urban markets. This development is directly responsible for the erosion that virtually all RDU systems have experienced in their client base.

Rationale for exemption

5.

Under the Broadcasting Act, the Commission has the power to exempt from licensing requirements certain classes of broadcasting undertakings. Section 9(4) of the Act states:

The Commission shall, by order, on such terms and conditions as it deems appropriate, exempt persons who carry on broadcasting undertakings of any class specified in the order from any or all of the requirements of this Part or of a regulation made under this Part where the Commission is satisfied that compliance with those requirements will not contribute in a material manner to the implementation of the broadcasting policy set out in subsection 3(1).

6.

The Commission also notes that section 5(2)(g) of the Act provides that "the Canadian broadcasting system should be regulated and supervised in a flexible manner... that is sensitive to the administrative burden that, as a consequence of such regulation and supervision, may be imposed on persons carrying on broadcasting undertakings."

7.

In Public Notice CRTC 2001-121 of today's date, the Commission has announced its decision to exempt the operators of small cable systems from licensing requirements. The Commission believes that the rationale underlying its decision with respect to the exemption of small cable systems applies equally to RDUs. In both cases, the impact of competition from DTH is substantial. In both cases, the Commission considers that the elimination of administrative burden will allow system operators to realise increased efficiencies and enable them to compete more effectively with DTH. Moreover, most RDU systems are not-for-profit operations that have few employees and limited resources. They are thus potentially even more strongly affected by administrative burden than many small cable systems. Although there are potential issues associated with exempting RDUs from licensing, the Commission believes that these can be addressed through the inclusion of certain criteria in an exemption order, as proposed herein.

Proposed Exemption Order

8.

The proposed exemption order appended to this public notice would eliminate the administrative burden associated with licensing, but would establish a common set of RDU exemption criteria that are consistent with current licensing requirements.

9.

The licensees of certain RDUs also hold licences for the origination of programming, and are thus subject to the requirements of the Television Broadcasting Regulations, 1987 or the Radio Regulations, 1986. The proposed exemption order would only cover the distribution activity, and would not eliminate the requirement for such operators to hold licences to carry on television or radio programming undertakings.

10.

In certain communities, RDUs provide only one signal, the CBC's. Given the importance of the CBC as the national public broadcaster, the Commission is of the view that RDU transmitters not owned by the CBC, but broadcasting the CBC service, should continue to distribute the CBC service unless another terrestrial undertaking is established to broadcast the CBC service. The proposed exemption order contains a criterion to this effect.

11.

As is currently the case with all other exempt undertakings, an exempt RDU would have to meet the spectrum licensing requirements of Industry Canada at all times.

12.

In order to ensure that the services distributed by exempt RDUs are appropriate to their markets, the Commission proposes that only services it authorizes for distribution may be distributed. To limit the potential impact of RDUs on licensed undertakings, the Commission proposes to withhold application of the exemption order from high power RDUs.In addition, to maintain the small market focus of the order, the Commission proposes to limit the exemption to RDUs serving areas covered by the Grade A contour of two or fewer licensed television programming undertakings.

Call for comments

13.

The Commission invites comments that address the matters set out in this notice. The Commission will accept comments that it receives on or before 25 January 2002.

14.

The Commission will not formally acknowledge comments. It will, however, fully consider all comments and they will form part of the public record of the proceeding, provided that the procedures for filing set out below have been followed.

Procedures for filing comments

15.

Interested parties can file their comments on paper or electronically. Submissions longer than five pages should include a summary.

16.

Parties wishing to file their comments on paper should send them to the Secretary General, CRTC, Ottawa, K1A 0N2.

17.

Parties wishing to file electronic versions of their comments can do so by email or on diskette. The Commission email address is procedure@crtc.gc.ca

18.

Electronic submissions should be in the HTML format. As an alternative, those making submissions may use "Microsoft Word" for text and "Microsoft Excel" for spreadsheets.

19.

Please number each paragraph of your submission. In addition, please enter the line ***End of document*** following the last paragraph. This will help the Commission verify that the document has not been damaged during transmission.

20.

The Commission will make comments filed in electronic form available on its web site at www.crtc.gc.ca in the official language and format in which they are submitted. This will make it easier for members of the public to consult the documents.

21.

The Commission also encourages interested parties to monitor the public examination file (and/or the Commission's web site) for additional information that they may find useful when preparing their comments.

Examination of public comments and related documents at the following Commission offices during normal business hours

Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage, Room G-5
Hull, Quebec K1A 0N2
Tel: (819) 997-2429 - TDD: 994-0423
Fax: (819) 994-0218

Bank of Commerce Building
1809 Barrington Street
Suite 1007
Halifax, Nova Scotia B3J 3K8
Tel: (902) 426-7997 - TDD: 426-6997
Fax: (902) 426-2721

405 de Maisonneuve Blvd. East
2^nd Floor, Suite B2300
Montréal, Quebec H2L 4J5
Tel: (514) 283-6607 - TDD: 283-8316
Fax: (514) 283-3689

55 St. Clair Avenue East
Suite 624
Toronto, Ontario M4T 1M2
Tel: (416) 952-9096
Fax: (416) 954-6343

Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba R3B 2B3
Tel: (204) 983-6306 - TDD: 983-8274
Fax: (204) 983-6317

Cornwall Professional Building
2125 - 11^th Avenue
Room 103
Regina, Saskatchewan S4P 3X3
Tel: (306) 780-3422
Fax: (306) 780-3319

10405 Jasper Avenue
Suite 520
Edmonton, Alberta T5J 3N4
Tel: (780) 495-3224
Fax: (780) 495-3214

530-580 Hornby Street
Vancouver, British Columbia V6C 3B6
Tel: (604) 666-2111 - TDD: 666-0778
Fax: (604) 666-8322

Secretary General

Appendix to Public Notice CRTC 2001-123

Proposed exemption order respecting Radiocommunication Distribution Undertakings

The Commission, pursuant to subsection 9(4) of the Broadcasting Act, by this order, exempts from the requirements of Part II of the Act and any regulations, those persons carrying on radiocommunication distribution undertakings defined by the following criteria:

I  Purpose

The purpose of those radiocommunication distribution undertakings is to serve small, rural and remote communities having small populations by distributing the signals of one or more programming undertakings, as authorized by the Commission.

II  Description

(a) for the purpose of complying with subsection 328(1) of the Canada Elections Act;

(b) for the purpose of deleting a programming service to comply with an order of a court prohibiting the distribution of the service to any part of the licensed area;

(c) for the purpose of altering a programming service to insert an emergency alert message in accordance with an agreement entered into with the operator of the service or the network responsible for the service;

(d) for the purpose of preventing the breach of programming or underlying alert message in accordance with an agreement entered into with the operator of the service or the network responsible for the service; or

(e) for the purpose of deleting a subsidiary signal, unless the signal is, itself, a programming service or is related to the service being distributed.