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Broadcasting Decision CRTC 2003-407
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Ottawa, 20 August 2003
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TELUS Communications Inc.
Calgary, Edmonton (including St. Albert, Sherwood Park, Spruce Grove and Stony Plain), Fort McMurray, Grande Prairie, Lethbridge, Medicine Hat and Red Deer, Alberta; Kamloops, Kelowna, Nanaimo, Penticton, Prince George, Terrace, Vancouver (including Lower Mainland and Fraser Valley), Vernon and Victoria, British Columbia
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Applications 2002-0681-4 and 2002-0423-0
Public Hearing in the National Capital Region
24 March 2003
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Regional broadcasting distribution undertakings in Alberta and British Columbia
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In this decision, the Commission approves the applications by TELUS Communications Inc. (TELUS), a regulated provider of telephony services in Alberta and British Columbia, to operate terrestrial broadcasting distribution undertakings (BDUs) to serve various communities in these provinces.
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TELUS' request to be relieved of the requirement to distribute the signals of all local radio services in the affected markets is denied, as is its request to carry the signals of CISA-TV Lethbridge and CKAL-TV Calgary, on the basic service. The new BDUs will be required to carry television signals altered to remove advertising, in both Kamloops and Prince George, British Columbia.
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The applications
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1.
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The Commission received applications by TELUS Communications Inc. (TELUS) for authority to operate two regional broadcasting distribution undertakings (BDUs). One of the proposed BDUs would serve Calgary, Edmonton (including St. Albert, Sherwood Park, Spruce Grove and Stony Plain), Fort McMurray, Grande Prairie, Lethbridge, Medicine Hat and Red Deer, Alberta. The second would serve Kamloops, Kelowna, Nanaimo, Penticton, Prince George, Terrace, Vancouver (including Lower Mainland and Fraser Valley), Vernon and Victoria, British Columbia.
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2.
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TELUS is a corporation with share capital, incorporated under Alberta provincial jurisdiction, controlled by a board of directors. The applicant is a regulated provider of telephony services in the provinces of Alberta and British Columbia. TELUS has conducted BDU field trials in Edmonton and Calgary, and operates a hotel entertainment service under the Commission's Exemption Order Respecting Closed Circuit Video Programming Undertakings. Additionally, in Video-on-demand service for CityPlace, Broadcasting Decision CRTC 2003-210, 3 July 2003, the Commission approved an application by TELUS for a video-on-demand (VOD) service to serve the CityPlace development in downtown Toronto.
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3.
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In its current applications, TELUS proposed to offer a broad range of broadcasting services, and requested authority to distribute, on a discretionary digital basis, any of the Canadian signals on the Commission's List of Part 3 eligible satellite services, as set out in Revised lists of eligible satellite services, Public Notice CRTC 2001-82, 13 July 2001.
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4.
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The applicant sought exemption from the requirements of section 22 of the Broadcasting Distribution Regulations (the Regulations) that it distribute all of the audio services specified in that section. The applicant also requested a condition of licence, pursuant to section 25 of the Regulations, to be allowed to distribute specialty and pay television, and possibly one general interest pay-per-view television service on restricted channels.
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5.
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In addition, TELUS also requested authority to carry, on a discretionary digital basis, a second set of signals that provides the programming of the four U.S. commercial networks (CBS, NBC, ABC and FOX) and the non-commercial PBS network (the U.S. 4+1 signals). In all locations to be served, TELUS proposed to offer two basic service options: one basic service would include U.S. 4+1 signals and the other would not.
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6.
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TELUS indicated that it would abide by the Commission's priority carriage requirements, and would offer services in compliance with the appropriate guidelines, including those regarding distribution and linkage requirements, a preponderance of Canadian services and the requirement to provide the subscriber with a basic service package before providing discretionary services.
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Overview of interventions
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7.
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The Commission received 36 interventions related to these applications, including one in opposition, seven that offered qualified support while expressing concerns or opposition to some elements of the applications, and 28 other interventions that expressed support for the applications. The interventions and comments are discussed in the following section of this decision, which addresses the issues raised by the applications.
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Issues raised by the applications
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Timing of telephone company entry into the BDU market and the potential for cross-subsidization
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8.
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The interventions by Shaw Communications Inc. (Shaw), the Canadian Cable Television Association (CCTA) and the Telecommunications Workers Union all expressed concern with the potential for cross-subsidization of TELUS' BDU licences by its telephone utility services.
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9.
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The Commission set out its policy on the timing of entry of telephone companies (telephone service providers, TSPs) into the broadcast marketplace in Applications by telephone companies to carry on broadcasting distribution undertakings, Public Notice CRTC 1997-49, 1 May 1997 (Public Notice 1997-49) and in Local competition, Telecom Decision CRTC 97-8, 1 May 1997 (Decision 97-8). In summary, the Commission's policy stipulated that applications by TSPs to enter the core business of BDUs should not be entertained until rules removing regulatory barriers to effective competition in local telephony had been established. The Commission determined that, by 1 January 1998, barriers to entry into local telephony would have been addressed to the extent that TSPs would be permitted to carry on BDUs as of that date.
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10.
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Since then, the Commission has licensed several telephone companies to operate BDUs including MTS Communications Inc., in New cable broadcasting distribution undertaking, Broadcasting Decision CRTC 2002-235, 14 August 2002 (Decision 2002-235). The Commission is satisfied that the examination of this issue undertaken as part of the proceedings leading to the awarding of BDU licences to other telephone companies found there were sufficient safeguards against cross-subsidization.
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11.
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In order that there be adequate safeguards to ensure that TSPs compete fairly, the Commission relies on Decision 97-8, which prescribed an imputation test to determine if rates for regulated services are compensatory and, until May 1997, on the framework established in Implementation of regulatory framework - Splitting of the rate base and related issues, Telecom Decision CRTC 95-21, 31 October 1995 (Decision 95-21). In Decision 95-21, the Commission determined that the most appropriate treatment for broadband initiatives was to require TSPs to assign to the competitive segment all new investments and related expenses incurred after 31 December 1994. In Telecom Order CRTC 97-144, 31 January 1997, the Commission approved, for the years 1995 and 1996, a procedure for assigning costs associated with fibre cable placement and support structure equipment and facilities. Subsequently, in Telecom Order CRTC 99-475, 31 May 1999, the Commission approved the same procedures for 1997.
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12.
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The Commission has, since 1997, issued a number of decisions and determinations refining and modifying the co-location framework. The Commission notes that TELUS has been subject to all of the above decisions and determinations with respect to cross-subsidization, and that TELUS has implemented all of the requirements set out in those decisions and determinations.
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13.
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In Price Cap Regulation and related issues,Telecom Decision CRTC 97-9, 1 May 1997, the Commission established a four year price cap regime for the Utility Segment. In Telecom Order CRTC 99-940, 30 September 1999, the Commission stated that the incentives to cross-subsidize between the Competitive and Utility segments are minimal under price caps. The Commission concluded that, consistent with general Phase III/SRB principles of cost causality, the assignment of all costs associated with the deployment of broadband-capable equipment and facilities to the Utility and Competitive segments on the basis of relative usage represented a more appropriate and practical methodology.
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14.
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In Regulatory Framework for Second Price Cap Period, Telecom Decision CRTC 2002-34, 30 May 2002 the Commission adopted a price regulation regime that differed from the initial regime in a number of ways, including a revised basket structure and more focused pricing constraints. These changes reduced the incentive that existed under rate of return regulation to overstate intercorporate transactions. In addition, to streamline and improve the efficiency of regulation and in light of the structure of the second price cap regime, the ILECs' obligation to file Phase III/Split Rate Base (SRB) reports and intercorporate reports was eliminated.
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15.
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In their submissions on possible cross-subsidization, the CCTA and Shaw suggested that TELUS be required to file with the Commission detailed financial results identifying the cost assignments of its BDU-related investments and expenses between Utility and Competitive segments. The Commission finds that TELUS' ability to cross-subsidize its BDU services from its Utility services is subject to the safeguards in Decision 97-8 and the revised price cap regime and considers it unnecessary to impose such a reporting requirement on TELUS.
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16.
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The Commission finds that there is no impediment to the issuance of a BDU licence to TELUS.
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Carriage of audio programming services
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17.
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TELUS requested that the Commission exempt both of its proposed BDUs from the requirements of section 22 of the Regulations, which stipulates that all Class 1 BDU licensees must distribute all mandatory audio programming services identified in that section, including all local radio services.
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18.
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TELUS based its request for exemption largely on the technology used by its digital distribution network. It cited the high cost, technical and market uncertainties associated with the provision of local off-air radio stations over digital distribution networks. It argued that its request for an exemption is similar to that granted by the Commission in Applications by Teleglobe Inc. and others, on behalf of a company to be incorporated, for a licence to carry on a new MDS radiocommunication distribution undertaking to be known as "LOOK TÉLÉ" - Approved Competing applications - Denied, Decision CRTC 98-55, 20 February 1998 (Decision 98-55).
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19.
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While generally supporting TELUS' applications, the Canadian Association of Broadcasters (CAB), the CCTA and Shaw all expressed the view that TELUS had not provided sufficient justification for its request for exemption.
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The Commission's determination
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20.
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In Application for a broadcasting licence to carry on a new (cable) distribution undertaking to serve the Province of New Brunswick, Broadcasting Decision CRTC 98-194, 23 June 1998, approving an application by New Brunswick Telephone to operate a distribution undertaking in New Brunswick using similar technology, the Commission did not grant an exemption to the requirements of section 22. Further, in New cable distribution undertaking, Decision CRTC 2000-332, 16 August 2000, New cable distribution undertaking in Saskatchewan, Decision CRTC 2001-171, 12 March 2001, and in Decision 2002-235, the Commission also required similar undertakings to carry audio programming services.
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21.
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The Commission is of the view that the applicant's requests differ fundamentally from that approved in Decision 98-55. The undertaking approved in that decision, now known as Look TV, is a multipoint distribution system (MDS). While its operation is digital, it does not employ the same technology as TELUS, and has a limited spectrum equivalent to only 15 analog channels. The Commission notes that TELUS did not provide any information related to the costs TELUS asserts would be associated with the distribution of local audio services. Based on the limited information provided by the applicant in support of its request, the Commission is not convinced that the request should be approved.
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22.
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Accordingly, the applicant's requests for exemption from the requirements of section 22 of the Regulations are denied.
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Proposed carriage of CHEK-TV Victoria on a discretionary tier in Vancouver
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23.
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TELUS indicated its intention to distribute CHEK-TV Victoria on a discretionary tier of the proposed undertaking to serve Vancouver.
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24.
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The Commission notes that section 17(1)(c) of the Regulations requires that a licensee must carry on the basic service the programming services of all local television stations. The Commission reminds the licensee that, since CHEK-TV is considered to be a local station in Vancouver, it will be obligated to distribute CHEK-TV on the basic service of the undertaking serving Vancouver.
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Carriage of a second set of 4+1 network signals and distant Canadian signals
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Digital discretionary carriage of a second set of 4+1 network signals and distant Canadian signals
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25.
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TELUS' plans for the proposed distribution undertakings include the carriage on digital discretionary tiers of a second set of U.S. 4+1 signals and certain distant Canadian signals from eastern and central time zones, in each of the communities proposed to be served.
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26.
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Interventions expressing concern with these proposals were submitted by the CAB, Craig Broadcast Systems Inc., now known as Manalta Investment Company Ltd. (Craig), and The Jim Pattison Broadcast Group (Pattison).
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27.
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The CAB did not oppose the plan, but suggested that TELUS' request should be approved only if the criteria stipulated by the Commission in Decision 2002-235 were also applied to the undertakings proposed by TELUS. Under that decision, the distribution on a discretionary basis on the licensee's digital service of a second set of U.S. 4+1 signals (that is, a set of U.S. 4+1 signals in addition to the set of such signals already carried by the system) and Canadian distant signals is subject to the provision that, with respect to such signals, the licensee must adhere to the requirements regarding non-simultaneous program deletion set out in section 43 of the Regulations. The Commission may suspend the application of this provision upon its approval of an executed agreement between the licensee and broadcasters. Such an agreement must deal with issues related to the protection of program rights arising in connection with the discretionary carriage of a second set of U.S. 4+1 signals and Canadian distant signals solely on the applicant's digital service, as approved in Decision 2002-235.
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28.
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Craig opposed TELUS' proposals on the grounds that it "could adversely affect the local program rights purchased by Craig as a local conventional broadcaster." It agreed, however, with the CAB's position that, should the proposal be approved, the criteria set out in Decision 2002-235 should be applied.
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29.
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Pattison opposed the distribution by TELUS of a number of Canadian stations on a discretionary tier in Kamloops and Prince George. The intervener stated that the stations TELUS proposes to distribute on a discretionary tier in those communities "are not currently available on the incumbent cable system."
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30.
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In response to the interveners' concerns, TELUS stated that it has not sought an exemption from the obligation to provide non-simultaneous substitution upon request. It further stated that its distribution proposals are identical to those approved by the Commission in Distribution of additional signals on a discretionary digital basis, Broadcasting Decision CRTC 2002-286, 11 September 2002, and in (letter) Decision CRTC 2001-398, 10 July 2001. TELUS was of the view that this authorization would not adversely affect local program rights holders.
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31.
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In reply to Pattison's specific concerns, TELUS noted that, if approved, it would offer the same sorts of services that direct-to-home (DTH) BDUs provide at present. TELUS made the commitment that it would distribute those services in line with the criteria set out by the Commission in Carriage of Canadian and U.S. 4+1 signals on a digital basis, Decision CRTC 2000-437, 8 November 2000 (Decision 2000-437), and that under those circumstances, local program rights holders would not be adversely affected.
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The Commission's determination
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32.
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The Commission notes that, contrary to Pattison's assertion that the Canadian stations are not currently available on the incumbent cable systems, the Shaw BDUs in Kamloops and Prince George are authorized to carry a second set of 4+1 U.S. signals, as well as all of the distant Canadian signals listed on the Part 3 list in Decision 2000-437. Although Shaw may not be distributing exactly the same stations as those noted in Pattison's intervention, it is carrying other distant Canadian signals and could, if it wished, carry the signals mentioned by Pattison. The Commission does not restrict BDU licensees to the carriage of some distant Canadian signals and not others on the list. In order to protect program rights, the Commission considers that the criteria set out in Decision 2002-235 are appropriate.
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33.
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The Commission therefore approves the request by TELUS to be authorized to carry a second set of 4+1 U.S. signals and all distant Canadian signals listed on the Part 3 list, so long as TELUS adheres to the requirements regarding non-simultaneous program deletion set out in section 43 of the Regulations. This approach is consistent with the Commission's determination in Decision 2000-437. The text of each authorization is set out in the appendix attached to this decision.
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Basic service carriage of distant Canadian signals - Medicine Hat
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34.
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TELUS proposed to carry CISA-TV Lethbridge (Global) and CKAL-TV Calgary (Craig) on the basic service of the undertaking to serve Medicine Hat.
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35.
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Pattison objected strongly to the inclusion of CKAL-TV on the basic service in Medicine Hat. It pointed out that Monarch Cablesystems Ltd. (Monarch), licensee of the incumbent BDU serving Medicine Hat, is only authorized to carry CKAL-TV on a discretionary tier of the system as a distant Canadian signal.
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The Commission's determination
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36.
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Any proposal to carry distant Canadian signals not carried on the basic service of the incumbent distributor must be considered in the context of the Commission's distant Canadian policy, as set out in Structural Public Hearing, Public Notice CRTC 1993-74, 3 June 1993. The intent of the distant signals policy is to promote the increased availability of Canadian programming, but only to the extent that the ability of local broadcasters to attract revenues and maintain local programming commitments are not unduly affected.
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37.
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The Commission notes that, in Medicine Hat, Monarch distributes the Edmonton Global affiliate CITV-TV, rather than CISA-TV (Global), and distributes CKAL-TV only on a discretionary basis. The Commission therefore denies the applicant's proposal to carry CISA-TV and CKAL-TV on the basic service of the undertaking to serve Medicine Hat.
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38.
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In addition, the Commission expects TELUS to adhere to its commitment not to introduce any distant Canadian signal without first securing commitments from distant signal providers that the provider would not originate advertising in any of the communities to be served by TELUS.
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Basic service carriage of distant Canadian signals - Kamloops and Prince George
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39.
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TELUS proposed to carry CIVT-TV Vancouver (CTV) on the basic service and CHAN-TV Vancouver (Global) on a discretionary tier in Kamloops and Prince George, British Columbia.
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40.
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Pattison requested that, should TELUS be granted approval, TELUS should grant the Pattison-owned television stations CFJC-TV Kamloops and CKPG-TV Prince George the same cover-over arrangements as have been required of Global and CTV for regional coverage in the British Columbia interior, set out in Licence renewals for CHAN-TV, CHKM-TV, CHKL-TV and CIFG-TV, Decision CRTC 2001-458-12, 2 August 2001 (Decision 2001-458-12) and Licence renewal for CIVT-TV, Decision CRTC 2001-457-13, 2 August 2001 (Decision 2001-457-13).
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41.
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In Decision 2001-458-12, the Commission applied a condition to Global Communications Limited's (Global) licence for CHAN-TV. The condition allows the licensees of CFJC-TV Kamloops, CKPG-TV Prince George, CJDC-TV Dawson Creek and CFTK-TV Terrace to "cover-over" commercials on CHAN-TV that are not carried on all conventional television undertakings owned or controlled by Global, with commercials sold by the above-noted broadcasters.
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42.
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In Decision 2001-457-13, the Commission applied a similar condition to CTV Television Inc.'s (CTV) licence for CIVT-TV Vancouver, requiring CTV to "cover-over" commercials with program promotion or public service announcements, on the CIVT-TV signal provided to the licensees of the BDU's serving Terrace, Kamloops, Kelowna, Prince George and Dawson Creek.
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43.
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In reply, TELUS expressed doubt that such a condition would be necessary, but committed to working with Pattison to explore how cover-over arrangements currently in place could be incorporated as part of TELUS' proposed undertaking.
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The Commission's findings
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44.
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The Commission finds that only the "covered signal" of both CIVT-TV and CHAN-TV should be distributed by TELUS in Kamloops and Prince George. The covered commercial content may be replaced with commercials sold by the licensees of CFJC-TV Kamloops and CKPG-TV Prince George.
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Other matters raised by the applications
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Channel placement on the proposed services
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45.
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Pattison sought assurance from the Commission and TELUS that, should approval be granted to TELUS for a regional broadcast distribution undertaking, the channel placement of CFJC-TV Kamloops, CKPG-TV Prince George and CHAT-TV Medicine Hat on the new systems would be identical to the placement of those stations on the Shaw and Monarch distribution undertakings serving those communities.
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46.
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The Commission's position on disputes involving channel placement can be found in Access Rules for Broadcasting Distribution Undertakings, Public Notice CRTC 1996-60, 26 April 1996. In that notice, the Commission concluded that channel placement issues should "properly be the subject of negotiation between the parties concerned" and that, generally, it would not be prepared to apply its dispute resolution powers in matters that are essentially commercial in nature.
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47.
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The Commission therefore considers that the channel placement of CFJC-TV, CKPG-TV and CHAT-TV is a matter for negotiation between TELUS and the licensees of these television stations.
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Implementation of high definition television
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48.
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In its intervention, Shaw referred to Call for comments on a proposed policy framework for the distribution of digital television services, Broadcasting Public Notice CRTC 2002-32, 12 June 2002. Shaw stated that, since TELUS proposes to employ asymmetric digital subscriber line (ADSL) technology, it should be required to provide the Commission with details on how it intends to meet the obligations respecting high definition television outlined in that public notice.
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49.
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The Commission's process of considering a final policy framework for the distribution of digital television services is in progress. When such a framework is complete, all distribution licensees will be subject to its requirements. The Commission therefore finds that it is unnecessary for TELUS to submit the information requested by Shaw.
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Contributions to Canadian programming
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TELUS' proposal
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50.
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TELUS did not set out plans to distribute community programming or any other form of local expression on either of the two proposed undertakings. The applicant did, however, propose to contribute a minimum of 5% of its gross programming revenue to the creation of Canadian programming. Of that contribution, it proposed to allocate 80% to the Canadian Television Fund (CTF) and 20% to the TELUS Foundation, administrator of the TELUS BC New Media and Broadcast Fund (the TELUS BC Fund), which is an independent, arm's length production fund. TELUS indicated that it planned to request the addition of the TELUS BC Fund to the list of independent production funds approved by the Commission pursuant to Contributions to Canadian programming by broadcasting distribution undertakings, Public Notice CRTC 1999-29, 16 February 1999.
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Benefits to the Alberta production community
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51.
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The Alberta Motion Picture Industries Association (AMPIA) and White Iron Pictures both submitted interventions raising concern with the level of benefits to the Alberta production community that TELUS' applications offer.
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52.
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TELUS responded that its proposed contribution meets the existing contribution rule, which calls for BDU licensees to contribute at least 5% of gross programming revenues to the creation of Canadian programming, and proposed that 20% of its contribution would be directed to the TELUS BC Fund.
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53.
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Subsequent to the TELUS reply, AMPIA submitted a second intervention, expressing unqualified support for the TELUS applications, due to the proposed direction to the TELUS BC Fund of 20% of TELUS' total contribution to Canadian programming.
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The Commission's findings
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54.
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As set out in Contributions to Canadian Programming by Broadcasting Distribution Undertakings, Public Notice CRTC 1997-98, 22 July 1997, licensees of all terrestrial broadcasting distribution undertakings, other than Class 3 systems, must contribute at least 5% of annual gross revenues derived from their broadcasting activities to the creation and presentation of Canadian programming. The Commission is satisfied that the applicant's proposals for the support of Canadian programming are consistent with those requirements.
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55.
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The Commission notes that the TELUS BC Fund has not yet been approved by the Commission. Accordingly, pending approval, the applicant should direct any contribution other than that directed to the Canadian Television Fund, to an existing approved fund.
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56.
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The Commission expects the applicant to adhere to its commitment to comply with the Commission's policy regarding the calculation of the 5% contribution of gross revenue, and ascribe to the portion of these gross revenues that consists of payment for a broadcasting service distributed within a bundled package, a dollar value equal to that which would be earned from subscribers, if the service was taken on a stand-alone, list price basis. TELUS also committed to according similar treatment to broadcasting services offered on a free or discounted basis, whether bundled or not.
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57.
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With respect to local expression, the Commission also expects TELUS to adhere to its commitment that, as it "rolls out its BDU services and makes inroads and connections with those in the communities it serves, TELUS will evaluate its position on creating or contributing to a community channel or other form of local expression."
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Obligations for third party Internet access
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58.
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The CCTA and Shaw submitted comments relating to TELUS' obligation to provide Internet access to third parties.
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59.
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The CCTA stated that it had been demonstrated in the case of at least one other telephone company deploying ADSL-based BDU service that it is not possible for a third-party Internet service provider to use a telecommunications line to deliver a competing Internet service if that line is also being used to deliver a BDU service. The intervener argued that TELUS should indicate how third-party ADSL access service would be accommodated where TELUS provides broadcast services over the same local loop. The CCTA also urged TELUS to address the issues of service quality where a second loop is required by a customer for a second DSL service, and the issue of additional costs associated with providing or upgrading wiring for the second loop.
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60.
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Shaw expressed the concern that TELUS had not addressed how the provision of BDU services to customers in Alberta and British Columbia will restrict other Internet service providers (ISPs) from employing the ADSL tariff to provide competitive Internet access service.
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61.
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In response to both the CCTA and Shaw interventions, TELUS stated that its ability to fulfil obligations to provide access to its telecommunications facilities for the provision of Internet service by third parties will not be compromised by approval of these applications. It stated that it has tariffs in place to provide competitive local exchange carriers (CLECs) and alternate DSL providers (ADSLPs) with access to both the ADSL bandwidth of TELUS' local loops and to the entire loop, and it has been able to successfully meet this obligation without delays.
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The Commission's findings
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62.
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The Commission notes that the CRTC Interconnection Steering Committee (CISC) has developed an industry-approved procedure that allows CLECs and ADSLPs to acquire loops from an incumbent local exchange carrier (ILEC), either new or migrated, for both voice and DSL access. Loops can be acquired that meet certain technical and service standards, including those loops to support ADSL service. Included in that procedure are measurements to evaluate the service quality of the ILEC. In addition, the NTWG (Network Working Group) of CISC is developing a service performance standard for loops supporting ADSL that are in proximity to each other but under the control of different service providers. Based on the above, no further action by the Commission or the applicant is necessary on this matter at this time.
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Level of non-Canadian ownership
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63.
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As a licensee with a parent company that has more than 20% non-Canadian ownership, as well as a 23% non-Canadian representation on its Board of Directors, TELUS must meet the definition of a "qualified corporation" as set out in Direction to the CRTC (Ineligibility of Non-Canadians) (the Direction) P.C. 1997-486, as modified by P.C. 1998-1268. Therefore, the licensee must comply with the requirement that neither the parent corporation, TELUS Corporation, nor its Board of Directors can exercise control or influence over any programming decision. Generally, the establishment of an independent programming committee has been the accepted mechanism to ensure this result.
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64.
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The Commission discussed with the applicant the establishment of an independent programming committee, and the applicant stated that it would be amenable to a condition of licence requiring the establishment of such a committee, similar to that adopted by other licensees. The Commission is of the view that such a condition is appropriate in these circumstances, and a condition of licence requiring the applicant to establish such a committee, to be governed by a number of criteria, is set out in the appendix to this decision.
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65.
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The applicant must provide the Commission with confirmation that an independent programming committee has been created in accordance with the criteria set out in the appendix to this decision. The licences for the undertakings will not be issued until the applicant submits to the Commission an executed copy of the by-law for the implementation of an independent programming committee that will ensure that the applicant complies with the Direction. The applicant must also provide the Commission with a list of this committee's management members, including their names, citizenship, residential address and occupation.
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The Commission's conclusion
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66.
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The Commission considers that it is appropriate to license TELUS to offer broadcasting services to the communities listed in the applications. Accordingly, the Commission approves the applications by TELUS for regional BDUs to serve Calgary, Edmonton (including St. Albert, Sherwood Park, Spruce Grove and Stony Plain), Fort McMurray, Grande Prairie, Lethbridge, Medicine Hat and Red Deer, Alberta, and the communities of Kamloops, Kelowna, Nanaimo, Penticton, Prince George, Terrace, Vancouver (including Lower Mainland and Fraser Valley), Vernon and Victoria, British Columbia.
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67.
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However, in light of the findings set out above, the Commission denies the request by TELUS to be relieved of the requirements of section 22 of the Regulations. The applicant will therefore be required to distribute on each of the new undertakings all of the audio services required to be distributed under section 22 of the Regulations. The Commission also denies the applicant's request for the distribution of CISA-TV and CKAL-TV on the basic service of the undertaking to serve Medicine Hat. With respect to the carriage of CISA-TV Lethbridge and CKAL-TV Calgary in Kamloops and Prince George, TELUS is authorized to carry only the "covered advertising" versions of these signals in those communities.
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68.
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The Commission also approves the applicant's requests to be relieved, by condition of each licence, of the requirement under section 25(a) of the Regulations that it not distribute services on restricted channels. This approval will allow the applicant to distribute specialty television, pay television and possibly one general interest pay-per-view television service on restricted channels of the undertakings. The text of each condition is set out in the appendix to this decision. The Commission further requires the applicant, by condition of licence, to adhere to its commitment that it will obtain the prior written agreement of a service that it intends to carry on a restricted channel.
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Issuance of the licences
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69.
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Subject to the requirements of this decision, the Commission will issue Class 1 regional broadcasting licences to TELUS to operate cable BDUs to serve Calgary, Edmonton (including St. Albert, Sherwood Park, Spruce Grove and Stony Plain), Fort McMurray, Grande Prairie, Lethbridge, Medicine Hat and Red Deer, in Alberta and Kamloops, Kelowna, Nanaimo, Penticton, Prince George, Terrace, Vancouver (including Lower Mainland and Fraser Valley), Vernon and Victoria, in British Columbia. The operation of these undertakings will be regulated pursuant to the Regulationsand the licences will be subject to the conditions set out in the appendix to this decision as well as in the licences to be issued. The licences will expire 31 August 2009.
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70.
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Furthermore, the licences for these undertakings will be issued once the applicant has informed the Commission in writing that it is prepared to commence operations. The undertakings must be operational at the earliest possible date and in any event no later than 24 months from the date of this decision, unless a request for an extension of time is approved by the Commission before 20 August 2005. In order to ensure that such a request is processed in a timely manner, it should be submitted at least 60 days before this date.
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Employment equity
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71.
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Because this licensee is subject to the Employment Equity Act and files reports with Human Resources Development Canada, its employment equity practices are not examined by the Commission.
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Secretary General
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This decision is to be appended to each licence. It is available in alternative format upon request, and may also be examined at the following Internet site: http://www.crtc.gc.ca
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Appendix to Broadcasting Decision CRTC 2003-407
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New cable broadcasting distribution undertaking in Alberta
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Authorizations
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The licensee is authorized to distribute, at its option,
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- CFTO-TV (CTV) and CIII-TV (Global) Toronto, and CKND-TV (Global) and CKY-TV (CTV) Winnipeg as part of its discretionary service in Calgary, Edmonton, Fort McMurray, Grande Prairie, Lethbridge, Medicine Hat and Red Deer.
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- CKRD-TV (CBC) Red Deer as part of its discretionary service in Edmonton, Grande Prairie, Medicine Hat and Lethbridge.
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- WGBH-TV (PBS) Boston, Massachusetts as part of its discretionary service in Calgary, Edmonton, Fort McMurray, Grande Prairie, Lethbridge, Medicine Hat and Red Deer.
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- WCVB-TV (ABC), WBZ-TV (CBS), WHDH-TV (NBC) and WFXT-TV (FOX) Boston, Massachusetts as part of its discretionary service in Calgary, Edmonton, Fort McMurray, Grande Prairie, Lethbridge, Medicine Hat and Red Deer.
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The Commission notes that TELUS will receive the above-noted signals via satellite.
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The distribution of a second set of U.S. 4+1 signals on a digital discretionary basis, in addition to the set of such signals already carried by the system, and of Canadian distant signals contained in the List of Part 2 Eligible Satellite Services, is subject to the provision that, with respect to such signals, the licensee adhere to the requirements regarding non-simultaneous program deletion set out in section 43 of the Broadcasting Distribution Regulations. The Commission may suspend the application of this provision upon its approval of an executed agreement between the licensee and broadcasters. Such an agreement must deal with issues related to the protection of program rights arising in connection with the discretionary carriage of a second set of U.S. 4+1 signals and Canadian distant signals solely on the applicant's digital service, as approved in this decision.
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Conditions of licence:
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The licence will be subject to the following conditions:
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1.
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In addition to the services required or authorized to be distributed pursuant to the applicable sections of the Broadcasting Distribution Regulations, the licensee is authorized, by condition of licence, to distribute, at its option and as part of the basic service:
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- KOMO-TV (ABC) Seattle
- KIRO-TV (CBS) Seattle
- KING-TV (NBC) Seattle
- KCPQ (FOX) Tacoma
- KSPS-TV (PBS) Spokane
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2.
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The licensee is relieved of the requirement, under section 25(a) of the Broadcasting Distribution Regulations. It may distribute a programming service referred to in section 18(5) or section 19(f) of the Broadcasting Distribution Regulations on a restricted channel only where the licensee has the prior written agreement of the programming service.
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3.
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In order to ensure that neither TELUS Corporation, nor its Board of Directors can exercise control or influence over programming decisions, an independent programming committee must be established in accordance with the following:
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a) There shall be a committee of three persons to be known as the Programming Committee which shall be responsible for making all programming decisions of the licensed undertaking.
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b) "Programming decisions" means all decisions of any kind relating to or affecting television programming broadcast by the licensed undertaking and includes all decisions relating to the content and presentation of the licensed undertaking's programming.
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c) The directors of the licensee, by enactment of the appropriate by-law, will delegate to the Programming Committee the sole and exclusive responsibility and authority to make all programming decisions on behalf of the licensed undertaking, and to supervise the implementation thereof.
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d) The members of the Programming Committee shall be Canadian citizens, ordinarily resident in Canada.
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e) No member of the Programming Committee may be either a director, an officer, or a current or former employee of TELUS Corporation and no member of the Programming Committee may be either a director, an officer, or a current or former employee of any non-Canadian shareholder of the licensed undertaking.
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f) At least one member of the Programming Committee shall be an independent member having no links to the licensed undertaking, its affiliates or its shareholders.
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g) A quorum of the Programming Committee shall be made by a majority of members present at a meeting of the Programming Committee, either in person or by telephone.
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h) Any decisions respecting removal of members of the Programming Committee shall be made by majority vote of the Programming Committee.
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i) The Programming Committee shall ensure that the programming will be in conformity with any applicable conditions, regulations and policies of the CRTC, as well as with the Broadcasting Act.
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j) No change may be made to these criteria unless prior Commission approval is obtained.
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New cable broadcasting distribution undertaking in British Columbia
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Authorizations
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The licensee is authorized to distribute, at its option,
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- CFTO-TV (CTV) and CIII-TV (Global) Toronto, and CKND-TV (Global) and CKY-TV (CTV) Winnipeg as part of its discretionary service in Kamloops, Kelowna, Nanaimo, Penticton, Prince George, Terrace, Vancouver, Vernon and Victoria.
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- CHEK-TV (Global) Victoria as part of its discretionary service in Vancouver, Prince George and Terrace.
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- CHAN-TV (Global) Vancouver as part of its discretionary service in Kelowna, Kamloops, Penticton, Victoria, Nanaimo and Vernon.
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- CIVI-TV (Independent) Victoria as part of its discretionary service in Vancouver, Vernon, Prince George, Kelowna, Kamloops, Penticton and Terrace.
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- CKVU-TV (Independent) Vancouver as part of its discretionary service in Victoria, Nanaimo, Vernon, Prince George, Kelowna, Kamloops, Penticton and Terrace.
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- WGBH-TV (PBS) Boston, Massachusetts as part of its discretionary service in Kamloops, Kelowna, Nanaimo, Penticton, Prince George, Terrace, Vancouver, Vernon and Victoria.
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- WCVB-TV (ABC), WBZ-TV (CBS), WHDH-TV (NBC) and WFXT-TV (FOX) Boston, Massachusetts as part of its discretionary service in Kamloops, Kelowna, Nanaimo, Penticton, Prince George, Terrace, Vancouver, Vernon and Victoria.
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The Commission notes that TELUS will receive the above-noted signals by satellite.
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The distribution of a second set of U.S. 4+1 signals on a digital discretionary basis, in addition to the set of such signals already carried by the system, and of Canadian distant signals contained in the List of Part 2 Eligible Satellite Services, is subject to the provision that, with respect to such signals, the licensee adhere to the requirements regarding non-simultaneous program deletion set out in section 43 of the Broadcasting Distribution Regulations. The Commission may suspend the application of this provision upon its approval of an executed agreement between the licensee and broadcasters. Such an agreement must deal with issues related to the protection of program rights arising in connection with the discretionary carriage of a second set of U.S. 4+1 signals and Canadian distant signals solely on the applicant's digital service, as approved in this decision.
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In Kamloops, only one English-language CBC station, CFJC-TV Kamloops will be carried. The service will also carry CHBC-TV Kelowna (Global).
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In Kamloops and Prince George, the applicant will carry only covered-over signals of CHAN-TV Vancouver (Global) and CIVT-TV Vancouver (CTV), and replace the covered commercial content with commercials sold by CFJC-TV Kamloops or CKPG-TV Prince George.
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Conditions of licence
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The licence will be subject to the following conditions:
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1.
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In addition to the services required or authorized to be distributed pursuant to the applicable sections of the Broadcasting Distribution Regulations, the licensee is authorized, by condition of licence, to distribute, at its option and as part of the basic service:
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- KOMO-TV (ABC) Seattle
- KIRO-TV (CBS) Seattle
- KING-TV (NBC) Seattle
- KCPQ (FOX) Tacoma
- KCTS-TV (PBS) Seattle
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2.
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The licensee is relieved of the requirement, under section 25(a) of the Broadcasting Distribution Regulations. It may distribute a programming service referred to in section 18(5) or section 19(f) of the Broadcasting Distribution Regulations on a restricted channel only where the licensee has the prior written agreement of the programming service.
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3.
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In order to ensure that neither TELUS Corporation, nor its Board of Directors can exercise control or influence over programming decisions, an independent programming committee must be established in accordance with the following:
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a) There shall be a committee of three persons to be known as the Programming Committee which shall be responsible for making all programming decisions of the licensed undertaking.
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b) "Programming decisions" means all decisions of any kind relating to or affecting television programming broadcast by the licensed undertaking and includes all decisions relating to the content and presentation of the licensed undertaking's programming.
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c) The directors of the licensee, by enactment of the appropriate by-law, will delegate to the Programming Committee the sole and exclusive responsibility and authority to make all programming decisions on behalf of the licensed undertaking, and to supervise the implementation thereof.
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d) The members of the Programming Committee shall be Canadian citizens, ordinarily resident in Canada.
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e) No member of the Programming Committee may be either a director, an officer, or a current or former employee of TELUS Corporation and no member of the Programming Committee may be either a director, an officer, or a current or former employee of any non-Canadian shareholder of the licensed undertaking.
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f) At least one member of the Programming Committee shall be an independent member having no links to the licensed undertaking, its affiliates or its shareholders.
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g) A quorum of the Programming Committee shall be made by a majority of members present at a meeting of the Programming Committee, either in person or by telephone.
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h) Any decisions respecting removal of members of the Programming Committee shall be made by majority vote of the Programming Committee.
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i) The Programming Committee shall ensure that the programming will be in conformity with any applicable conditions, regulations and policies of the CRTC, as well as with the Broadcasting Act.
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j) No change may be made to these criteria unless prior Commission approval is obtained.
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Date Modified: 2003-08-20
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