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Letter

Ottawa, 20 September 2002

Mr. Ken Stein
Senior Vice President
Corporate and Regulatory Affairs
Shaw Communications Inc.
45 O'Connor Street, Suite 870
Ottawa, Ontario
K1P 1A4

Dear Mr. Stein:

Re: Confidentiality Procedures Pursuant to Broadcasting Decision CRTC 2002-84

In Amendments to conditions of licence relating to structural separation for Cancom and Star Choice, Broadcasting Decision CRTC 2002-84, 12 April 2002 (Decision 2002-84), the Commission approved revisions to the conditions of licence of Canadian Satellite Communications Inc. (Cancom) and Star Choice Television Network Incorporated (Star Choice). The new conditions require Cancom and Star Choice each to maintain separate sales, marketing and customer service functions and staff. The new conditions also require that the Commission approve in advance Confidentiality Procedures intended to protect confidential information related to sales, marketing, customer service and, in the case of Star Choice, negotiation of affiliation agreements with programmers.

In Decision 2002-84, the Commission stated that its approval of the new licence conditions would take effect only upon its approval of revised Confidentiality Procedures. In particular, the Commission stated that the Confidentiality Procedures filed by the applicants required strengthening in order to ensure the separation of sales, marketing and customer service functions, and the confidentiality of information. Accordingly, the Commission directed that the applicants file revised Confidentiality Procedures that would (1) address implementation of the Procedures, (2) incorporate appropriate definitions of terms such as "confidential information" and "customer information", and (3) provide for the physical security of "confidential information".

On 13 May 2002, Shaw Communications Inc. (Shaw) filed revised Confidentiality Procedures pursuant to Decision 2002-84. The Canadian Association of Broadcasters (CAB) filed comments with regard to those Procedures on 24 May 2002. Shaw Communications Inc. filed a reply on 10 June 2002, along with a revised version of the Procedures.

The Confidentiality Procedures, as approved by the Commission, are set out in the Attachment to this letter.

In its comments, CAB submitted that the Procedures, as filed by Shaw on 13 May 2002, would prohibit Cancom and Star Choice staff carrying out sales, marketing and customer service functions, as well as those negotiating affiliation agreements with programmers, from providing confidential information to staff in other licensed companies. However, it would not preclude Shaw Cablesystems staff from providing such information to staff of Star Choice or Cancom.

Shaw replied, among other things, that it would be prepared to extend the applicability of the Confidentiality Procedures to "appropriate Shaw Cablesystems staff" involved with sales, marketing and customer service, and to affiliate relations staff involved in negotiating affiliation agreements. Shaw filed a revised version of the Confidentiality Procedures adding a reference to "Shaw" to certain provisions.

The Commission notes that the licences of Shaw cable broadcasting distribution undertakings (BDUs) were not before it in the proceeding leading to Decision 2002-84. However, the Procedures filed in the original proceeding specified that "there will be no sharing of customer information between the sales, marketing and customer service staff of the Shaw cable, Cancom/Star Choice and Star Choice DTH businesses." [ emphasis added] . Consistent with this approach, the Procedures approved by the Commission provide that Star Choice and Cancom staff "will not engage in any communication of Confidential Information to or from any other Division, or Shaw Communications Inc.," except in accordance with the Procedures themselves (section 3.1). In addition, the Commission is including information pertaining to Shaw cable BDUs in the definition of "Confidential Information".

The above places an obligation on employees of Cancom and Star Choice not to engage in any exchange of Confidential Information, in either direction, with each other, with the Shaw cable BDUs or with Shaw Communications Inc., except as provided for in the Procedures. However, the Commission considers it appropriate that the Shaw cable BDUs and their employees be bound directly by the Confidentiality Procedures by condition of licence. The Commission expects Shaw to file the appropriate proposed conditions of licence for its cable BDUs, as those licences come up for renewal.

In addition, consistent with the Preamble to the Procedures proposed by Shaw, the Commission is including a reference to customer service group (CSG) information in the definition of "Confidential Information". Further, the Commission is adding wording consistent with the Commission's finding in Decision 2002-84 that the definition should include language reflecting the definition of confidential information in the Teleglobe Carrier Services Agreement.

CAB's second concern was that the Procedures capture all staff negotiating agreements with programmers, including any management personnel and senior officers who might be involved. Shaw replied that the Procedures as drafted are clear and sufficient. Shaw stated that, if any employee of the companies becomes involved in negotiating affiliation agreements with programmers, that employee would be subject to the restrictions described in the Procedures.

The Commission notes that the Procedures filed by Shaw in this proceeding provide that "staff carrying out sales, marketing and customer services functions, or negotiating affiliation agreements with programmers will not provide Confidential Information to persons in Other Divisions carrying out sales, marketing and customer service functions, or negotiating affiliation agreements with programmers." The Commission is of the view that this language would be broad enough to ensure that the Confidentiality Procedures would apply to any employee, including management employees and senior officers, who might become involved in any of the named functions.

Nonetheless, the Commission has concerns with the scope of the prohibition on the provision of Confidential Information as proposed by Shaw, and considers that it would likely not prove effectual in preventing the disclosure of Confidential Information among the licensees. For example, the Commission notes that the Procedures filed by Shaw in this proceeding would, on their face, permit a sales or marketing employee of Star Choice to provide Confidential Information to a member of the accounting staff of Shaw cable, who would then be free to relay the information to Shaw cable sales or marketing personnel.

In light of the above, the Commission considers it appropriate to take a different approach. The Commission is therefore revising the prohibition on the communication of Confidential Information to apply to all employees of Star Choice and Cancom (section 3.1), with an exception (section 3.4) for the provision of such information to employees of other licensees or of Shaw Communications who may be involved in providing support or advisory services to Star Choice or Cancom. However, employees involved in the provision of support and advisory services must themselves, among other things, become subject to the Confidentiality Procedures and agree not to provide the Confidential Information to the staff of any "Division", as defined, other than the one with which it originated.

The Commission considers this approach consistent with the following provision, which was included in the Confidentiality Procedures filed in the original proceeding, but deleted in Shaw's filings in May and June 2002:

All supervisory personnel and officers or employees who are engaged in providing support services to sales, marketing and customer service staff of the licensed businesses generally will only be provided with access to confidential customer information on a need-to-know basis consistent with their corporate responsibilities, and will take all measures necessary to ensure that such information is not provided to sales, marketing and customer service staff of licensed businesses other than the one in which such confidential information originated.

In addition, the Commission is re-incorporating a provision similar to the following, also deleted in the Procedures as filed by Shaw in May and June 2002:

No sales, marketing or customer service staff of one licenced business will promote or give any information to the potential or actual customers of that business concerning other licensed business, unless expressly requested by the customer.

The Commission considers the deletion of the above elements in Shaw's filing of 13 May 2002 to be inconsistent with its determination in Decision 2002-84 that the Procedures required "strengthening". In addition, the Commission considers their re-incorporation into the Procedures necessary to achieve the desired end of ensuring that the licensees maintain the separation of sales, marketing, customer service and the negotiation of agreements with programmers.

Other revisions to the Procedures are intended to ensure that they are clear and that the relevant functions do, in fact, remain separate and consistent with the conditions of licence approved in Decision 2002-84.

Yours sincerely,

Diane Rhéaume
Acting Secretary General

c.c. Canadian Association of Broadcasters
       Canadian Cable Systems Alliance Inc.
       CTV Inc.
       Global Television Network
       Bell ExpressVu Limited Partnership

Confidentiality Procedures

1.0 Preamble

1.1 Shaw Communications Inc. and its subsidiaries are engaged in a number of distinct businesses which operate under licences granted to the companies by the Canadian Radio-television and Telecommunications Commission (CRTC) under the Broadcasting Act. In particular, various subsidiaries of Shaw Communications Inc. (whether direct or indirect) operate cable distribution undertakings, Canadian Satellite Communications (Cancom) operates a satellite relay distribution undertaking (SRDU), and Star Choice Television Network Incorporated (Star Choice) operates a direct-to-home (DTH) distribution undertaking.

1.2 Each of these licensed businesses has its own sales, marketing and customer service staff, and in the case of Shaw cable distribution undertakings and Star Choice, separate program affiliate relations staff. In addition, customer service groups (CSGs) operate within Shaw cable distribution undertakings, pursuant to paragraph 33 of Public Notice CRTC 2000-81, 9 June 2000. These staff have access to Confidential Information pertaining to their respective businesses.

1.3 To protect the confidentiality of certain information, the following Confidentiality Procedures are established. The purpose of these Confidentiality Procedures is to ensure the separation of the functions noted in 1.2, above, in accordance with Amendments to conditions of licence relating to structural separation for Cancom and Star Choice, Broadcasting Decision CRTC 2002-84, 12 April 2002.

2.0 Definitions

2.1Shaw means Shaw Cablesystems GP, thepartners thereof, or any other subsidiaries (direct or indirect) or affiliates of Shaw Communications Inc. holding cable distribution licences.

2.2 Star Choice means Star Choice Television Network Inc.

2.3 Cancom means Canadian Satellite Communications Inc.

2.4 Division means (i) any one of Shaw, Star Choice or Cancom, as defined above, or (ii) any combination thereof.

2.5 Confidential Information (i) means any information, verbal or written, related to the sales, marketing, customer service or CSG functions of Star Choice, Cancom or Shaw, or to their affiliation agreements with programmers or to their product lines, that is not generally known outside of Star Choice, Cancom or Shaw, respectively, or whose confidentiality they would in the normal course seek to protect from competitors, whether or not such information is expressly identified as "Confidential" , and (ii) includes information obtained from a customer or developed exclusively for the benefit of a customer, relating to the provision of service.

3.0 Confidentiality Procedures

3.1Star Choice and Cancom staff (including officers, managers and supervisory personnel) shall not engage in any communication of Confidential Information to or from any other Division, or Shaw Communications Inc.,except in accordance with these Confidentiality Procedures.

3.2 Star Choice and Cancom managers with responsibility for the employees described in 3.1 above shall review these Confidentiality Procedures with each employee at the beginning of his/her employment and on an annual basis thereafter, as well as the information specified in the acknowledgment form Agreement to Protect Confidential Information. The acknowledgment form will be signed by the employee as well as the employee's immediate supervisor indicating that the Agreement and these Confidentiality Procedures have been reviewed and understood, and such signed acknowledgment form will be retained by each of Star Choice and Cancom. Provided that if each of Star Choice and Cancom has made reasonable efforts to obtain an employee's signature but cannot, an acknowledgment form signed by the employee's supervisor confirming the review shall be sufficient.

3.3 No sales, marketing or customer service staff of Cancom or Star Choice will promote or give any information to potential or actual customers concerning other licensed businesses, unless expressly requested by the customer.

3.4 Cancom and Star Choice may, from time to time, be provided with support or advisory services by officers and employees of other Divisions or of Shaw Communications Inc. Cancom and Star Choice may provide such officers and employees with Confidential Information only on a need-to-know basis consistent with their corporate responsibilities and with the support or advisory services to be provided, and on condition that (i) such information is not provided to the staff of any Division other than the one with which the information originated, and (ii) the officers or employees to whom the Confidential Information is provided agree to be bound by the Confidentiality Procedures and the Agreement to Protect Confidential Information.

3.5 Any questions concerning the application of these Confidentiality Procedures should be directed by an employee to his or her supervisor and, if necessary, may be referred by the supervisor to the General Counsel and Corporate Secretary or to the Senior Vice-President, Corporate and Regulatory Affairs of Shaw Communications Inc.

4.0 Storage of Information

4.1 Separate databases will be maintained for Confidential Information pertaining to each of the Shaw, Cancom and Star Choice businesses, including Confidential Information provided to officers and employees pursuant to section 3.4, above.

4.2 All physical media on which any Confidential Information resides, in the possession of any of the employees specified in 3.1 or in 3.4 above, shall be kept in locked offices and/or in locked desks, cabinets or other storage areas at night and on all non-business days as well as during other prolonged periods when an employee is absent from his/her work station.

5.0 Confidential Information and Former Employees

5.1 With respect to the employees specified in 3.1 and in 3.4, above, upon termination of employment or retirement, or upon leaving a position of employment in which the employee was provided access to Confidential Information, the employee's immediate supervisor will review with the employee his or her Agreement to Protect Confidential Information hereof and will ensure that the employee understands its contents.

Agreement to Protect Confidential Information

Confidential Information (i) means any information, verbal or written, related to the sales, marketing, customer service or CSG functions of Star Choice, Cancom or Shaw, or to their affiliation agreements with programmers or their product lines, that is not generally known outside of Star Choice, Cancom or Shaw, respectively, or whose confidentiality they would in the normal course seek to protect from competitors, whether or not such information is expressly identified as "Confidential" and (ii) includes information obtained from a customer or developed exclusively for the benefit of a customer, relating to the provision of service.

Confidentiality Procedures means the procedures approved by the CRTC pursuant to Amendments to conditions of licence relating to structural separation for Cancom and Star Choice, Broadcasting Decision CRTC 2002-84, 12 April 2002 (Decision 2002-84), and to the licences of Cancom and Star Choice.

The Employee acknowledges that he/she has ormay have access to Confidential Information, the disclosure of which would contravene the Confidentiality Procedures.

The Employee acknowledges that the Confidentiality Procedures are required pursuant to the licences of Cancom and Star Choice andthat the businesses of Shaw, Cancom and Star Choice cannot be properly protected from adverse consequences of the actions of the Employee other than by the restrictions set forth in the in the Confidentiality Procedures and in this Agreement to Protect Confidential Information.

To this end, in part consideration of their employment, the Employee agrees not to disclose any Confidential Information to anyone at any time, during the Employee's employment, other than in accordance with the Confidentiality Procedures. The employee also agrees not to disclose any Confidential Information to anyone after the Employee's employment.