ARCHIVED - Broadcasting Public Notice CRTC 2002-39

Broadcasting Public Notice CRTC 2002-39

Ottawa, 19 July 2002

Cable capacity reports - Confidentiality of bandwidth capacity information

In this notice, the Commission announces its decision to include, in its semi-annual updates on the cable capacity of Class 1 cable distribution undertakings having 20,000 or more subscribers, a simple confirmation as to whether an undertaking has a nominal bandwidth capacity of 750 MHz or more. The Commission will extract this information from the digital cable capacity reports filed every six months by the licensees of these larger Class 1 cable distribution undertakings. The first of the Commission's semi-annual updates on cable capacity to contain this information will reflect the data submitted in the digital cable capacity reports filed for the period ending 30 September 2002.

Until now, the Commission has treated the details concerning the digital bandwidth capacity of cable distribution undertakings as confidential information. The Commission's present decision to make public certain bandwidth capacity information in respect of certain Class 1 cable distribution undertakings, as described above, has been taken in the interest of fairness, transparency and accessibility. The purpose of this decision is to enable interested parties, including the licensees of pay and specialty services, and members of the public, to determine whether a particular Class 1 cable distribution undertaking that has 20,000 or more subscribers is meeting its regulatory obligations by distributing the licensed programming services it is required to distribute, pursuant to the access provisions of section 18 of the Broadcasting Distribution Regulations. The determination of what these requirements are is based in part on an undertaking's bandwidth capacity.

The Commission will not extend the existing digital cable capacity report filing requirements to include systems other than those that are now required to file these twice-yearly cable capacity reports. Nor will the Commission broaden the scope of its semi-annual updates to include any information that is currently treated as confidential, apart from the confirmation noted above concerning the nominal bandwidth capacity of Class 1 cable distribution undertakings having 20,000 subscribers or more.

Background

Digital cable capacity requirements

1.

In Postponement of public hearing to consider new specialty and pay television applications, Public Notice CRTC 1997-33-2, 11 December 1997, the Commission required licensees of Class 1 cable broadcasting distribution undertakings (BDUs) having 20,000 or more subscribers to submit quarterly reports providing information regarding their analog channel capacity along with their channel line-ups. The main purpose of these reports was to enable the Commission to monitor the capacity of the distribution industry to accommodate new specialty services.

2.

In Cable capacity reports, Public Notice CRTC 1999-130, 9 August 1999, the Commission expanded the scope of the reports to include information on digital capacity. At the same time, the Commission reduced the reporting frequency from every three months to every six months. The Commission confirmed that the service information contained in a licensee's cable capacity reports would be included in the Commission's updates on cable capacity published semi-annually, but that the Commission was prepared to keep non-service information confidential, including that respecting bandwidth capacity entered in column 4 of the digital portion of the report.

3.

In Extension of the Cable Capacity Report filing requirements for Class 1 cable distribution undertakings having 20,000 or more subscribers; and notice of the Commission's plans to conduct a one-time survey of other cable distribution undertakings, Public Notice CRTC 2001-40, 28 March 2001, the Commission extended the filing requirement "until further notice." This was to permit the Commission to monitor the ability of the distribution industry to accommodate new services and to track the roll out of digital technology. In its public notice, the Commission required licensees of Class 1 cable BDUs having more than 20,000 subscribers to submit cable capacity reports, along with their channel line ups, by 31 October and 30 April of each year. The reports were to reflect the status of each undertaking as of 30 September and 31 March, respectively. The Commission also made some changes to the categories of information required in the reports.

4.

In the same public notice, the Commission required the operators of Class 1 BDUs having fewer than 20,000 subscribers, as well as the operators of all Class 2 and all licensed Class 3 BDUs, to file a one time report. The purpose of the report was to provide the Commission with summary analog and digital capacity information reflecting the status of each of these undertakings as of 30 September 2001. In its notice, the Commission also required the licensees of these smaller BDUs to update the data contained in their one time reports for inclusion with future licence renewal applications. The Commission is now in the process of compiling, for release later this year, the data contained in the one time reports filed by these smaller licensees.

Nominal bandwidth capacity and the Access Rules

5.

Section 18 of the Broadcasting Distribution Regulations (the Regulations) sets out what are commonly referred to as the Access Rules. The Access Rules specify the obligations of Class 1 and Class 2 BDUs with respect to the provision of access to distribution by licensed specialty, pay television, and television pay-per-view services. The extent of these obligations is determined in part by an undertaking's nominal bandwidth capacity. Under section 18 (11.1) of the Regulations, licensees of Class 1 and Class 2 distribution undertakings that: a) have a nominal bandwidth capacity of 750 MHz or more, and b) make use of digital technology to deliver any programming service, are required to distribute all French- and English-language specialty services, other than Category 2 specialty services distributed on a digital basis. They are also required to distribute at least one pay television service in each official language.

6.

Under section 18 (11.2) of the Regulations, Class 1 and Class 2 BDUs that: a) have a bandwidth capacity below the benchmark of 750 MHz, b) make use of digital technology to distribute any programming service, and c) operate in an anglophone market, must distribute at least one French-language specialty service for every ten English-language specialty services that are distributed. Similarly, for every ten French-language specialty services that are distributed by an undertaking that: a) has this lower bandwidth capacity, b) makes use of digital technology to distribute any programming service, and c) operates in a francophone market, the undertaking must also distribute at least one English-language specialty service.

7.

The Commission notes that additional capacity based carriage requirements will soon come into effect. In The distribution of the proceedings of the House of Commons on CPAC, Public Notice CRTC 2001-115,6 November 2001, the Commission announced its intention to amend the Regulations by, among other things, adding a requirement that all Class 1 and Class 2 BDUs distribute the proceedings of the House of Commons and its committees as part of the basic service. In addition, the Commission determined that all Class 1 and Class 2 BDUs employing digital technology, and having a nominal capacity of 750 MHz or more, would be required to make available a separate video channel of the proceedings of that service, in the official language of the minority, on either a digital or an analog basis. The amendments to the Regulations are scheduled to take effect 1 September 2002.

Confirming compliance with the regulations

8.

In order that an interested party may determine whether, pursuant to section 18 (11.1) or section 18 (11.2) of the Regulations, a particular service is eligible for access to distribution on a cable BDU, the party must first establish whether the undertaking is making use of digital technology for the delivery of programming services to subscribers. The Commission notes that this information is now or will soon be obtainable in the case of each licensed cable BDU by consulting the public file. Both the semi-annual cable capacity report and the one time report contain an analog and digital section. The Commission requires BDUs, depending on what technical upgrades they have completed, to complete and submit one or other or both of these sections. If a licensee has filed either a semi-annual cable capacity report or a one time report with the Commission for a particular cable BDU, but has not completed the report's digital section, it is because the undertaking is not using digital technology.

9.

All of the Commission's semi-annual updates on the capacity of Class 1 BDUs having 20,000 or more subscribers have listed those undertakings that do make use of digital technology separately from those that do not. The Commission's compilation of the data presented in the one time reports filed by other smaller cable BDUs will likewise identify hose undertakings that make use of digital technology and those that do not. Thus, anyone consulting the public file to determine whether a particular BDU is using digital technology would have this question answered.

10.

Interested parties may also contact the Commission to ask whether a BDU complies with the Regulations. In most instances, the Commission's response to such a request will also indirectly reveal information about the bandwidth capacity of the undertaking concerned. For example, an interested party might notice that a particular French-language specialty service is not being distributed by a certain Class 1 or Class 2 cable system in Southern Ontario. Such information can often be obtained simply by consulting the distributor's website, by checking the television guides published in magazines and newspapers, or by contacting the distributor to request a copy of its channel line-up. The party might then ask the Commission whether the BDU should be distributing the service in question in accordance with either section 18 (11.1) or section 18 (11.2) of the Regulations. If the party is assured by the Commission that the BDU is operating in compliance with the Regulations, the party is then able to conclude that the nominal bandwidth capacity of the BDU is below the threshold of 750 MHz. The Commission notes that a rough estimate of the digital bandwidth capacity of a cable BDU can also be obtained through reference to the total number of programming services it distributes.

11.

On 1 March 2002, the Canadian Association of Broadcasters (CAB) filed a request with the Commission that it extract and make public such information contained in the digital cable capacity reports as would enable interested parties to determine the obligations of licensees under the Regulations with respect to their distribution of services in the official language of the minority. Specifically, the CAB requested that the Commission:

· make public, in its future semi-annual updates on cable capacity, a list of all BDUs having a nominal bandwidth capacity of 750 MHz or greater, including undertakings that are not currently required to submit digital cable capacity reports; and

· require each BDU employing digital distribution technology to file with the Commission, on a regular basis, a list of all programming services distributed on the undertaking for incorporation into the Commission's semi-annual reports on cable capacity.

12.

The CAB argued that, without access to the bandwidth capacity information filed by distributors, it would remain "difficult for Canadian specialty and pay services to determine whether or not they are entitled to carriage under either section 18 (11.1) or 18 (11.2) of the Regulations." The CAB stated that the information it was requesting would greatly assist the licensees of specialty services operating in the official language of the minority in anglophone and francophone markets to determine their eligibility for carriage on BDUs employing digital distribution technology.

13.

On 7 March 2002, the Commission sent letters to the Canadian Cable Television Association (CCTA), the national industry association representing 818 large and small, federally licensed cable systems in Canada, and to Vidéotron ltée (Vidéotron), a company operating many cable systems, but that is not a member of the CCTA. The Commission asked each of these parties to provide comments on the CAB's request.

CCTA's response

14.

The CCTA opposed the CAB's request for publication of the additional information described above concerning bandwidth capacity. Its reasons include the following:

· the Commission had granted confidentiality with respect to the bandwidth information filed by BDUs in their reports;

· in an increasingly competitive distribution environment, the disclosure of a list of cable BDUs rebuilt to a nominal bandwidth capacity of 750 MHz or more would provide competitors, specifically direct-to-home (DTH) satellite BDUs, with information that would allow them to target specific markets and enable them to better evaluate the competitive strengths and weaknesses of cable companies;

· the Commission has access to the system-specific information filed with the cable capacity reports, and hence, the ability to promptly and accurately respond to a complaint that a particular system may not be in compliance with its obligations to carry individual programming services (e.g., programming services in the official language of the minority); and

· the fact that such information is on file with the Commission puts all parties on notice that there are safeguards in place respecting carriage requirements for systems at or above the capacity threshold of 750 MHz.

15.

The CCTA also opposed the CAB's request that the public file include a list of the programming services distributed by all BDUs that make use of digital technology to deliver programming services. As reasons, it stated that:

· Class 1 systems having 20,000 subscribers or more are expected to provide channel line ups when they file their capacity report information;

· it is an inefficient use of the Commission's resources to compile information that is already available publicly;

· the Commission, in Public Notice CRTC 2001-40, has already stated its expectation that smaller systems update the cable capacity report information at the time of licence renewal; and

· to increase the administrative burden on smaller systems would be fundamentally at odds with the Commission's intent, as expressed in recent decisions, to reduce regulatory obligations for smaller systems.

16.

The CCTA concluded that the Commission should deny the CAB's request in its entirety. The CCTA submitted that, if the Commission wished to disclose information previously deemed confidential, it should make a formal request for disclosure, specifying the information to be made public and the rationale underlying the request. The CCTA added that the Commission should also allow parties an opportunity to respond to any formal request before placing the information on the public file.

Vidéotron's response

17.

In its response to the Commission, Vidéotron agreed with part of the CAB's request. Specifically, it supported the identification on the public file of those cable BDUs having 20,000 subscribers or more that are currently required to file digital cable capacity reports and have a nominal bandwidth capacity of 750 MHz or more. Vidéotron, however, did not agree with the CAB's request that would expand the reporting requirement to include undertakings that are not currently required to submit the semi-annual cable capacity reports. Vidéotron also opposed the CAB's request that all BDUs using digital technology for the delivery of programming services be required to provide the Commission with a list of the services they distribute. According to Vidéotron:

· the workload that this additional request would create for distributors would be significant;

· expanding the existing reporting requirement would, in Vidéotron's case at least, provide little additional information, because the various Class 1 BDUs having 20,000 or more subscribers for which Vidéotron now files semi-annual reports represent 90% of all of Vidéotron's subscribers; and

· access to a listing of the services distributed by small systems in rural areas, where DTH is a strong competitor, would be of significant commercial value to such competitors.

Commission's analysis

Importance of public access to programming services in the official language of the minority and to the House of Commons proceedings

18.

As noted earlier, section 18 (11.1) and section 18 (11.2) of the Regulations set requirements applicable to Class 1 and Class 2 cable BDUs for the distribution of licensed pay and specialty services that vary based on bandwidth capacity. In addition, the Commission will soon make amendments to the Regulations introducing new carriage requirements for the proceedings of the House of Commons and of its various committees. These requirements will also vary depending upon bandwidth capacity.

Commission's determination

24.

The Commission is convinced that placing limited additional information on the public file regarding the nominal bandwidth capacity of those larger Class 1 BDUs that are subject to the requirements of section 18 (11.1) or section 18 (11.2) of the Regulations would make the process more transparent and equitable. It would also serve to reduce the Commission's administrative burden. The Commission acknowledges the CCTA's concern that having access to system-by-system bandwidth capacity information in one report could be of some use to competitors. It notes, however, that information concerning the approximate bandwidth capacity of any particular cable system has always been obtainable by these competitors, in any case, using the methods described earlier in this notice. It is also the Commission's view that the public interest considerations outweigh concerns regarding the potential harm to cable BDUs.

25.

At the same time, it is the Commission's view that the information it requests of the larger Class 1 BDUs in their cable capacity reports should not be expanded. Nor does it believe that reporting requirements should be extended to include any additional BDUs, as this would increase the administrative burden on both cable distributors and the Commission. Further, it is convinced that any information currently held confidential, but which would in future be made public, should be limited to that which is strictly necessary to establish the applicability of section 18 (11.1) or section 18 (11.2) of the Regulations to Class 1 cable BDUs having 20,000 or more subscribers.

26.

Accordingly, with the release of all future updates on cable capacity, in the case of each Class 1 BDU having 20,000 or more subscribers, the Commission will include confirmation as to whether the system has a nominal bandwidth capacity of 750 MHz or more. The Commission will provide this confirmation beginning with the update that will be generated from data presented in the digital cable capacity reports filed for the period ending 30 September 2002 and due 31 October 2002.

27.

The confirmation of bandwidth capacity will be derived from information recorded in Column 4 of the digital cable capacity report (Total Bandwidth Capacity - Analog + Digital). The Commission emphasizes, however, that it will not divulge the precise digital bandwidth capacity of an undertaking. Information contained in the other columns of the digital report, and to which the Commission has granted confidentiality in the past (i.e., Columns 1 to 3, 5 to 11, and Column 34), will remain confidential.

Secretary General