Broadcasting Public Notice CRTC 2002-45

Ottawa, 12 August 2002

Effective today, the Commission will exempt radiocommunication distribution undertakings from licensing requirements and associated regulations. The exemption order is appended to this notice. The order sets out the specific criteria that radiocommunication distribution undertakings must meet to qualify for exemption.

Exemption order respecting radiocommunication distribution undertakings (RDUs)

1.

In Proposed Exemption Criteria for radiocommunication distribution undertakings (RDUs), Public Notice CRTC 2001-123, 7 December 2001, the Commission invited public comment on a draft order (draft exemption order) that proposed to exempt all RDUs from licensing requirements, subject to specific exemption criteria.

2.

An RDU is defined in the Broadcasting Distribution Regulations as a distribution undertaking, other than a direct-to-home (DTH) distribution undertaking, that distributes programming services predominantly by means of radio waves.

3.

In this notice, the Commission addresses the issues raised by the various parties to the proceeding. The exemption order, as approved by the Commission, is appended to this notice. The order sets out the specific criteria that RDUs must meet to qualify for exemption.

Issues

Services eligible for distribution

4.

The Canadian Association of Broadcasters (CAB) noted that proposed exemption criterion 6 limited the services that may be broadcast by an exempt undertaking to those that are included on the lists of eligible satellite services. The CAB asked that the order be revised to clarify that all local television services, as well as Canadian specialty and pay television services, are eligible for broadcast by an exempt RDU.

5.

The Commission notes that RDUs currently may distribute any authorized service. Given that the proposed criteria are not intended to change the level of service that exempt RDUs might provide, the Commission revises criterion 6 to clarify that exempt RDUs may continue to distribute any authorized service. The Commission notes that the revised wording is similar to that used for the eligibility criteria established in the Exemption Order respecting cable systems having fewer than 2,000 subscribers, Public Notice CRTC 2001-121, 7 December 2001.

Preponderance of Canadian services

6.

The CAB also submitted that the draft exemption order did not establish any requirements for the distribution of an overall preponderance of Canadian services and suggested the establishment of a preponderance factor for exempt RDUs.

7.

The Commission notes that cable systems offering fewer than 13 services on the basic band are not required to carry a preponderance of Canadian services. Most RDUs offer only one programming service and more than 90 per cent offer no more than five services. The Commission also notes that the licensing of RDUs has been predicated on the provision of access to services in small and remote communities, as well as the availability of Canadian services from other over-the-air sources. In the Commission's view, this approach continues to meet the objectives of the Broadcasting Act and the Commission does not consider that a new obligation for exempt RDUs to distribute a preponderance of Canadian services is either necessary or appropriate at this time.

Carriage of the Canadian Broadcasting Corporation (CBC)

8.

In its submission, the Yukon Government requested the elimination of proposed exemption criterion 8. This criterion required that RDUs distributing the CBC prior to the publication of the draft exemption order continue to do so. The Yukon Government argued that such a carriage requirement was not reasonable, citing the high costs of maintaining an RDU in a remote area, and particularly, the high cost of providing electrical power to remote sites that are served by aircraft.

9.

The Yukon Government also expressed its understanding that the CBC does not contribute financially towards the distribution of programming to communities with populations of fewer than 500 inhabitants and that the Yukon Government was paying the costs associated with the distribution of the CBC's signal in small and remote Yukon communities. It suggested that multi-channel RDUs should have the option to discontinue carrying the CBC service if they could demonstrate that continuing to do so was no longer financially viable.

10.

The Commission recognizes that the broadcasting delivery landscape has changed substantially in recent years. The introduction of competition to broadcasting distribution, including the addition of DTH satellite distribution undertakings, has significantly increased the range of services available in the North. Nonetheless, the Commission notes that DTH undertakings do not offer CBC North, the primary local broadcasting service of and for Canadians living in the North.

11.

In the Commission's view, the carriage of CBC North by RDUs serving northern communities would thus serve as an attraction, and would distinguish their service offerings from those of DTH and other competing distribution undertakings. It is confident that market forces will thus ensure that CBC North continues to be available in all or most communities that currently receive it. Accordingly, the Commission considers it unnecessary to impose mandatory carriage of the CBC service by RDUs.

Application of the Exemption Order

12.

The Yukon Government noted that proposed exemption criterion 7 limited the exemption to undertakings that serve areas covered by the Grade A contour of no more than two licensed television programming undertakings. It argued that this negated the value of the order because small Yukon communities such as Pelly Crossing already have two RDUs offering the CBC and APTN and therefore would not qualify for exemption. The Yukon Government further argued that the proposed two-signal limit represented a significant disincentive to improvements in quality of life and asked the Commission to revise criterion 7.

13.

The Commission notes that only two Yukon communities, Whitehorse and Teslin, receive the signals of two licensed television programming undertakings as referred to in the proposed exemption criterion 7. In both cases, these undertakings are the sole licensed television programming undertakings operating in their respective communities. RDUs serving these communities would therefore meet the terms of exemption criterion 7. Signals received in other communities, such as Pelly Crossing, are provided by RDUs rather than by licensed television programming undertakings. As there are no other licensed television programming undertakings serving these communities, all the currently licensed RDUs in the Yukon, including that serving Pelly Crossing, would be eligible for exemption under criterion 7.

14.

In addition, the Commission notes that the APTN signal referred to by the Yukon Government is provided under a satellite to cable programming licence (SCPRL) and the CBC North signal is rebroadcast by Yukon-based RDU licensees. Neither of these services are "television programming undertakings" as referred to in exemption criterion 7.

High power signals

15.

The Yukon Government noted that proposed exemption criterion 8 in effect excludes RDUs offering high power signals from exemption under the order. It submitted that high power RDUs carrying the CBC's radio signal should be eligible under the exemption order since low and very low power FM transmitters are not capable of providing an acceptable signal quality to sparsely populated areas in mountainous terrain.

16.

The Commission recognizes the important role played by high power RDUs such as those that solely redistribute CBC radio and those that operate in Canada's North. However, the Commission notes that high-powered signals have the potential to cause interference with local and international signals. Therefore, there is a greater need to manage the potential signal conflicts that could arise. In light of the foregoing, and given the small number of high power RDUs in the Yukon, and the fact that licensing requirements are not overly onerous, the Commission does not consider it appropriate to change the proposed exemption criterion.

Transition

17.

Unless licensees are informed otherwise, licences for RDUs that qualify for exemption under the order will be allowed to lapse at the end of their terms.

Secretary General

Appendix to Broadcasting Public Notice CRTC 2002-45

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 (RDUs) defined by the following criteria:

I  Purpose

The purpose of these RDUs is to serve small, rural and remote communities having small populations by distributing the services 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 rights of a third party, 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.