ARCHIVED - Broadcasting Decision CRTC 2002-119
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Broadcasting Decision CRTC 2002-119 |
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Ottawa, 26 April 2002 |
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Canadian Satellite Communications Inc. (Cancom) |
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Application 2001-0770-8 |
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Distribution of all licensed radio and conventional television programming undertakings |
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1. |
The Commission approves the application by Canadian Satellite Communications Inc. (Cancom) to amend the licence of its national satellite relay distribution undertaking (SRDU) to permit the licensee to distribute to affiliated broadcasting distribution undertakings (BDUs) the signal of any licensed radio and conventional television programming undertaking. The amendment is authorized by two conditions of licence set out at the end of this decision. |
Background |
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2. |
Cancom operates one of three licensed SRDUs. Star Choice Television Network Incorporated (Star Choice), a wholly-owned subsidiary of Cancom, and Bell ExpressVu Limited Partnership (Bell ExpressVu) operates Canada's other licensed SRDUs. Unlike direct-to-home (DTH) satellite distribution undertakings which are authorized to distribute broadcasting services directly to subscribers* (There are two licensed DTH undertakings currently operating in Canada. One is licensed to Bell ExpressVu, while the other is operated by Star Choice.), the SRDU undertakings are only authorized to distribute broadcasting services to affiliated cable, multipoint distribution system (MDS) and satellite master antenna television (SMATV) distribution undertakings as well as to DTH distribution undertakings. Most of these affiliated BDUs are the licensees of small Class 3 cable distribution undertakings, although SRDUs do deliver signals to some larger cable distribution undertakings as well. The signals are then packaged by the affiliates and distributed to their individual residential subscribers. |
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3. |
In the past, the Commission has authorized SRDUs to distribute specified Canadian and non-Canadian broadcasting signals by condition of licence, as approved on a case-by-case basis. Cancom's current licence conditions authorize the distribution of almost 30 Canadian television services and a comparable number of non-Canadian television signals. Cancom is also authorized to distribute the signals of some 30 Canadian and 7 non-Canadian radio stations. All of these signals are individually listed in Appendix 3 to Short-term licence renewals for the satellite relay distribution undertakings operated by Cancom and Star Choice, Decision CRTC 2001-288, 28 May 2001. |
The application |
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4. |
In the current application, Cancom requested that the Commission authorize it to distribute the signal of any Canadian radio and conventional television programming undertaking, in addition to the currently authorized list of non-Canadian signals. Should the Commission decide not to approve this request, Cancom proposed, as an alternative, that the Commission authorize the SRDU to distribute a significantly expanded list of Canadian television and radio signals, as presented within the application. |
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In support of the first of these two proposals, Cancom claimed that a broadly inclusive condition of licence would be consistent with recent amendments made by the Commission to the Part 3 List set out in Revised lists of eligible satellite services, Public Notice CRTC 2001-82, 13 July 2001 (Public Notice 2001-82). This list no longer identifies every individual Canadian television service that the licensees of Class 3 BDUs are authorized to distribute. Rather, the list permits such licensees to distribute "the programming service of any licensed television programming undertaking" received from a licensed SRDU. Cancom also noted that its proposal would reduce, both for it and the Commission, the administrative burden associated with processing applications for future changes to the list of Canadian signals authorized for distribution by its SRDU undertaking. With respect to its alternative proposal, Cancom stated that its SRDU competitor, Bell ExpressVu, is already authorized to distribute many of the signals contained in the proposed expanded list of Canadian television signals. |
Interventions |
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6. |
Five parties filed interventions to Cancom's application. Only Bell ExpressVu supported the proposal. Bell ExpressVu stated that, like itself, Cancom operates its SRDU undertakings in conjunction with an associated DTH undertaking. This intervener also cited, as did Cancom, the reduced administrative burden that approval would bring about. In particular, Bell ExpressVu noted that it would no longer be necessary for the SRDU to file an application for a licence amendment each time its associated DTH undertaking adds a local signal to its line-up. |
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Bell ExpressVu did suggest that the condition of licence proposed by Cancom be revised to read as follows: |
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8. |
Cogeco Radio-television Inc. (Cogeco), the Canadian Association of Broadcasters (CAB), the Canadian Film and Television Production Association (CFPTA) and Global Television Network (Global) each filed an opposing intervention to Cancom's application. |
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Among other things, Cogeco is the licensee of French-language television stations, CFKM-TV and CKTM-TV Trois Rivières, CFKS-TV and CKSH-TV Sherbrooke, and CFRS-TV and CKTV-TV Jonquière. CFKM-TV, CFKS-TV and CFRS-TV are affiliated to TQS, while CKTM-TV, CKSH-TV and CKTV-TV are affiliated to Société Radio Canada (SRC). Cocego pointed out that the list of Canadian signals Cancom has requested authority to distribute, as part of the second option described in its application, does not include the intervener's television signals noted above, but does include those of other stations that serve the areas in question and are affiliates of Cogeco's competitor, the TVA network. According to the intervener, Cancom's distribution of the TVA signals would confer an undue preference upon the licensee of those stations, unless Cancom were to distribute Cogeco's signals as well. Cogeco also referred to a public process initiated by the Commission in Call for comments - carriage of local television stations by DTH undertakings in smaller markets, Public Notice CRTC 2001-103, 28 September 2001 (Public Notice 2001-103), which called for comments on the carriage of local television stations by DTH undertakings in smaller markets. The intervener claimed that approval of Cancom's application would effectively prejudge the outcome of that public process. |
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The concerns of the three other opposing interveners generally related to copyright and program licensing issues. They argued that local television stations whose signals receive distribution by SRDUs and DTH undertakings gain access to audiences across a territory far broader than the area for which they have purchased program rights. According to Global, increasing the possibility that terrestrial BDUs would offer multiple distant signals "impedes local broadcasters' ability to protect their exclusive program rights in their markets." The CFPTA stated that independent producers rely on their ability to negotiate separate licensing agreements for each exhibition window in order to earn fees that are commensurate with the value of the window. The CFPTA claimed that this ability is undermined when local stations receive national distribution without having to acquire the underlying national distribution rights. |
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For its part, the CAB acknowledged that DTH distributors, who compete directly with Class 3 BDUs presently operate at a "significant competitive advantage" because they have "virtually unrestricted authorization" to distribute as many distant signals to their subscribers as they wish. The CAB claimed, however, that approval of Cancom's application would "extend a flawed and destructive DTH signal carriage regime to all Class 3 cable distributors without the benefit of any further review by the Commission", and would increase the impact of distant signals on local television broadcasters, particularly those serving smaller markets. |
Cancom's reply to opposing interventions |
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Cancom responded that the opposing interveners have used the current application and the intervention process essentially to reiterate the concerns and arguments they have already put before the Commission in responding to Public Notice 2001-103. As mentioned above, that notice called for comments on the carriage of local television stations by DTH undertakings in smaller markets. Cancom claimed that the positions taken by the opposing interveners overlook the essential distinction between the function of SRDUs and that of all other distributors, including DTH, cable and MDS operators. As noted by Cancom, the latter group distributes services directly to subscribers on a retail basis. SRDUs, on the other hand, offer services on a wholesale basis, and only to other BDUs. |
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Cancom emphasized that all distribution undertakings, whether they are satellite-based or terrestrially-based, are obliged to comply with the Commission's regulatory requirements and policies, as well as with all other applicable legal requirements, including those established by copyright law. In Cancom's view, the opposing interventions raise concerns that are, in fact, related to matters of regulation, policy and law affecting not the wholesale distribution, but the retail distribution of broadcasting services. Cancom argued further that its proposed general authorization for the carriage of any licensed radio and conventional television radio signal would not fetter the Commission's ability to regulate the retail distribution of distant Canadian signals directly to subscribers. It would merely improve regulatory efficiency at the level of the SRDU as a wholesaler. |
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In responding to the concerns of the interveners regarding copyright, Cancom noted that compensation is paid by BDUs to copyright collectives for programming contained in the signals of distant Canadian television stations that they distribute on a retail basis to subscribers. It added, however, that the level of compensation paid for such retransmission of distant signals falls outside the regulatory jurisdiction of the Commission and within that of Copyright Board Canada. |
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Cancom also pointed out that DTH operators are already authorized to carry the services of any licensed programming undertakings. It stated that allowing its SRDU to distribute all Canadian radio and conventional television services would make a wider choice of signals available to Class 3 BDUs serving remote areas that have access to few, if any, signals over-the-air. Cancom added that, in areas served by Class 1 and Class 2 BDUs, the addition of distant Canadian signals will continue to be regulated by the Commission's distant signal policy. |
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While Cancom did not reply directly to Cogeco's intervention, the applicant argued that its application reflects the competitive nature of the SRDU marketplace established by the Commission and reiterated that most of the new signals it wishes to distribute are already offered by Bell ExpressVu's SRDU. |
The Commission's decision |
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The Commission considers that the role played by licensed SRDUs in the Canadian broadcasting system differs from that carried out by other BDUs such as DTH, cable, MDS and SMATV undertakings. Unlike other BDUs, which deliver selected signals to subscribers on a retail basis, SRDUs are not licensed to provide programming services directly to subscribers. |
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The Commission is satisfied that authorizing Cancom to deliver any Canadian radio and conventional television service at a wholesale level on its SRDU undertaking will not impinge on the Commission's ability to regulate the distribution of distant signals directly to subscribers in areas served by Class 1 and Class 2 BDUs. The Commission's policy on the distribution of distant Canadian signals is set out in Structural public hearing, Public Notice CRTC 1993-74, 3 June 1993. In the public notice introducing the new distribution regulations, Broadcasting Distribution Regulations, Public Notice CRTC 1997-150, 22 December 1997, the Commission confirmed that this policy is still in effect. Among other things, the policy stipulates that a licensee of a Class 1 or Class 2 system wishing to add a Canadian distant signal to its undertaking must first file an application for approval by the Commission. This provides an opportunity for local broadcasters and other interested parties to comment on the proposal and enables the Commission to continue to evaluate any potential adverse impact. |
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In the Commission's view, approval of this application will increase the diversity of signals available to small BDUs in remote and underserved areas and enable them to better serve the needs of their communities while alleviating the administrative burden on both the Commission and Cancom. Small BDUs are already permitted to carry any distant Canadian signal that may be distributed by Cancom's SRDU undertaking. Subsection 33 (h) of the Broadcasting Distribution Regulations (the Distribution Regulations) permits licensees of Class 3 BDUs to distribute any Part 3 eligible satellite service. As stated in Public Notice 2001-82, which sets out the revised lists of eligible satellite services, Class 3 BDUs may distribute the programming service of any licensed television programming undertaking. Furthermore, in Exemption order respecting cable systems having fewer than 2,000 subscribers, Public Notice CRTC 2001-121, 7 December 2001, the Commission announced that it would exempt from licensing requirements and associated regulations those cable distribution undertakings that serve small and rural communities, and have fewer than 2,000 subscribers. |
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20. |
The Commission agrees with Cancom that the interveners' concerns related to compensation under copyright law fall within the jurisdiction of Copyright Board Canada. In any case, because Cancom delivers signals on a wholesale basis, these issues are not relevant to the present application. |
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21. |
The Commission considers that the issues raised by Cancom's application regarding its SRDU undertaking do not overlap with those to be considered in response to the call for comments on the carriage of local television stations by DTH undertakings in smaller markets. |
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22. |
The revision proposed by Bell ExpressVu to the condition of licence put forward by the applicant would have allowed Cancom to distribute not only Canadian radio and conventional television signals, but also all licensed programming services, such as specialty, pay television and pay-per-view television services. Such an authorization would be broader than the authority requested in Cancom's application to carry all licensed radio and conventional television signals. The Commission has, therefore, decided not to incorporate the revision suggested by Bell ExpressVu. |
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For all the reasons discussed above, the Commission has approved Cancom's application for an amendment to its licence and has replaced the licensee's current conditions of licence 6 and 7 with new conditions set out below authorizing it to carry any licensed radio and conventional television programming undertaking as well as other Canadian and non-Canadian signals and services that it is presently authorized to distribute. |
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24. |
The amended conditions of licence 6 and 7 will read as follows: |
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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: 2002-04-26
- Date modified: