ARCHIVED - Broadcasting Decision CRTC 2002-138

Broadcasting Decision CRTC 2002-138

Ottawa, 15 May 2002

Shaw Communications Inc., on behalf of 616554 B.C. Ltd.
Western Canada

Application 2001-1147-7

Redirection of Benefits

1.

In Decision CRTC 2001-765, 17 December 2001 (the decision), the Commission granted conditional approval to an application by Shaw Communications Inc. (Shaw), on behalf of its wholly owned subsidiary 616554 B.C. Ltd., for authority to acquire effective control of Corus VC Ltd. (Corus VC). Corus VC is the licensee of a terrestrial and direct-to-home (DTH) pay-per-view (PPV) service serving Western Canada.

2.

In the decision, the Commission noted Shaw's commitment to contribute $3.5 million in tangible benefits to build a high-definition (HD) encoding facility, and to subsidize the cost of converting existing content to HD format. The Commission indicated that it found the proposed expenditures to be unacceptable as benefits, as it considered them to be part of the normal course of business. It therefore made its approval of the proposed change of control conditional on Shaw filing new tangible benefits initiatives for the Commission's review and approval.

3.

In a letter dated 8 February 2002, Shaw proposed a new tangible benefit initiative to provide $3.5 million in financial support to Canadian universities in Western Canada. The applicant clarified its plans in further letters dated 7 March and 19 March 2002. The tangible benefits initiative would provide funding to universities conducting research and offering technical programs involving the study and development of electronic media communications across broadcast networks. Shaw stated that financial support would be provided for advanced research in next generation digital network architectures and multimedia systems, including research and development in client/server models, real-time transmission standards, the convergence of technologies and content innovation.

4.

Shaw added that, through this initiative, the Canadian broadcasting system will gain valuable research and information to support the development of new digital content applications over broadcast networks, and to assist the system in its transition to digital broadcasting. It suggested that the research could also be useful in supporting the federal government's 'connectivity' agenda and the broader goal of developing and promoting broadband digital communications to Canadians.

5.

As one criterion to be applied in determining what projects would receive funding, the applicant indicated that projects must demonstrate a significant and sustainable research and development focus in the areas of advanced digital broadcast network development and deployment. This would include: creation of advanced digital content for digital transmission over broadcast networks; integration and interoperability of digital content and data; creation of advanced digital transport and transmission protocols; and client user interfaces.

6.

It added that projects, to be eligible, should also be designed to achieve viable development and deployment in the commercial marketplace, and that each project must be supported with adequate intellectual, technical, personnel, software and testing capabilities within the university.

7.

Shaw stated that it would work with the research faculties concerned to determine jointly which projects should be considered and short-listed, in accordance with the established criteria. The short-listed projects would be forwarded to academic research committees at the universities for a final recommendation. Shaw would ensure that the selected projects in the final list meet the established criteria and that the projects do not duplicate other research initiatives to be funded as part of the initiative.

8.

The Commission is satisfied that the initiative is consistent with the Commission's policies respecting the allocation of benefits. The funding criteria detailed above were of particular importance to the Commission in reaching this determination. Accordingly, the Commission approves Shaw's new tangible benefits initiative.

9.

The Commission expects the licensee to ensure that the funding committed under this initiative is provided to the universities in Western Canada most capable of undertaking the research proposed for the goals intended. It also expects Shaw to adhere to its commitment to file a written report, within six months of the date of this decision, providing a complete list and description of the specific projects that are to receive funding.

Secretary General

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