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Broadcasting Decision CRTC 2003-429
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Ottawa, 28 August 2003
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Bell ExpressVu Inc., the general partner, and BCE Inc. and 4119649 Canada Inc. (partners in BCE Holding G.P.), the limited partners, carrying on business as Bell ExpressVu Limited Partnership
Across Canada
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Application 2003-0452-7
Broadcasting Public Notice CRTC 2003-29
10 June 2003
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Terrestrial television pay-per-view service - Licence amendment
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The Commission approves the application by Bell ExpressVu Inc., the general partner, and BCE Inc. and 4119649 Canada Inc. (partners in BCE Holding G.P.), the limited partners, carrying on business as Bell ExpressVu Limited Partnership, to amend the broadcasting licence for its national terrestrial television pay-per-view undertaking.
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The application
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1.
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The Commission received an application by Bell ExpressVu Inc., the general partner, and BCE Inc. and 4119649 Canada Inc. (partners in BCE Holding G.P.), the limited partners, carrying on business as Bell ExpressVu Limited Partnership (Bell ExpressVu), to amend the broadcasting licence for its national terrestrial television pay-per-view (PPV) undertaking in order to amend its conditions of licence 1, 2, 3 and 4 pertaining to programming and carriage.
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2.
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Currently, Bell ExpressVu operates a national direct-to-home (DTH) television PPV undertaking. In New national terrestrial pay-per-view service, Decision CRTC 2000-737, 14 December 2000 (Decision 2000-737), the Commission authorized Bell ExpressVu to operate a national terrestrial television PPV undertaking.
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3.
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Bell ExpressVu has not yet implemented the authority granted to it in Decision 2000-737. It considers that it would not be economically feasible to implement the terrestrial television PPV undertaking under its current conditions of licence, which differ from those of its DTH television PPV undertaking as well as those of its competing terrestrial PPV undertakings. Bell ExpressVu indicated that the proposed amendments are intended to make the programming and carriage requirements for its terrestrial television PPV undertaking comparable to those for its DTH television PPV undertaking and those of its competitors.
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Conditions of licence 1 and 2
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4.
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The current conditions of licence 1 and 2 read as follows:
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1. The licensee is authorized to make available for distribution by licensed or exempt terrestrial distribution undertakings its service, which will consist of English- and French-language channels, as well as English- and French-language "barker" channels.
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2. The licensee shall maintain the channels in a ratio 1:3 of French to English with a minimum of five French-language signals in addition to the French-language barker channel.
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5.
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Bell ExpressVu proposed to amend these conditions of licence so that its service could be offered to a terrestrial broadcasting distribution undertaking (BDU) in English, in French or in both official languages, depending upon the market served by the BDU, and that the ratio of French to English channels and the minimum number of French-language channels to be offered would apply only in markets where a bilingual service is offered. Specifically, the applicant proposed to replace the phrase "English and French-language channels" set out in condition of licence 1 with "English and/or French-language channels" and to add the following phrase at the beginning of condition of licence 2: "In markets in which a bilingual service is offered."
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6.
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In support of its proposals, Bell ExpressVu argued that, under its current conditions of licence, a BDU serving a unilingual market must allocate sufficient bandwidth to offer a bilingual PPV service, even if there is little or no interest on the part of its subscribers for second language PPV programming. Bell ExpressVu pointed out that Viewer's Choice, the competing terrestrial television PPV service operated by Shaw Pay-Per-View Ltd. (formerly Corus VC Ltd.) (Shaw PPV), is not subject to comparable requirements. The proposed amendments would enable Bell ExpressVu to offer a unilingual PPV service to BDUs that wish to receive such a service. In circumstances where a BDU elects to take a bilingual service, Bell ExpressVu would still be required to provide a ratio of 1:3 of French to English with at least five French-language signals as well as the French-language barker channel.
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Conditions of licence 3 and 4
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7.
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The current conditions of licence 3 and 4 read as follows:
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3. With respect to English-language programming, the licensee shall ensure that its agreements with the operators of licensed or exempt terrestrial distribution undertakings operating in non-francophone markets provide that, in each broadcast year, the following is made available by these licensees to their PPV subscribers:
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- a minimum of 12 Canadian feature films (including all new Canadian feature films suitable for PPV exhibition that meet the Pay television standards and practices code);
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- a minimum of four English-language Canadian-based events; and
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- yearly minimum percentages of Canadian programming as follows: 5% of feature film titles, and 20% of all program titles other than feature films.
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4. With respect to French-language programming, the licensee shall ensure that its agreements with the operators of licensed or exempt terrestrial distribution undertakings operating in francophone markets provide that, in each broadcast year, the following is made available by these licensees to their PPV subscribers:
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- a minimum of 20 Canadian feature films in the original French-language version, or dubbed in French, which have been exhibited in theatres in French-language markets, including all new Canadian feature films suitable for PPV exhibition that meet the Pay television standards and practices code;
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- a minimum of six French-language events in each of years one and two of operation, eight in each of years three and four; ten in each of years five and six; and twelve in year seven of operation; and
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- yearly minimum percentages of Canadian programming as follows: 8% of feature film titles, and 20% of all program titles other than feature films.
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8.
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Bell ExpressVu proposed to delete from each of these conditions of licence the requirement that, in each broadcast year, a minimum of 20% of all program titles other than feature films offered by its service be Canadian. The applicant proposed to replace that requirement, as set out in condition of licence 3, with a requirement that it maintain "a minimum of 1:7 ratio of Canadian to non-Canadian events". With respect to condition of licence no. 4, the applicant proposed the replace the current 20% minimum requirement with the following:
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minimum (a:b) ratio of Canadian to non-Canadian events:
6:20 in years 1 and 2;
8:20 in years 3 and 4;
10:20 in years 5 and 6; and
12:20 in year 7.
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9.
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In support of its proposals, Bell ExpressVu stated that no other terrestrial television PPV service is subject to the 20% minimum requirement for Canadian programming set out in its current conditions of licence 3 and 4. It also stated that approval of the proposed amendments to these conditions of licence would make the Canadian content requirements imposed on its terrestrial television PPV service consistent with those imposed on its DTH television PPV service.
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10.
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Bell ExpressVu also pointed out that the current 20% minimum requirement prevents it from providing PPV programming in the sports category and adult programming category. Bell ExpressVu maintained that it cannot efficiently offer a terrestrial television PPV service without these program categories, given the dynamic bandwidth allocations between the PPV channels dedicated to these categories and the PPV channels used for other categories. It also pointed out that programs offered in the sports and adult programming categories are very marketable titles for cable BDUs.
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Interventions
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11.
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The Commission received interventions in support of this application from Saskatchewan Telecommunications (SaskTel), MTS Communications Inc. (MTS) and TELUS Communications Inc. (TELUS). The Commission also received an opposing intervention from Mr. Anthony W. Robertson. He did not provide any reasons for his opposition.
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12.
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Both SaskTel and MTS are licensees of new entrant cable BDUs. SaskTel began operation of its Class 1 cable BDU, authorized to serve nine major centres in Saskatchewan, on 12 September 2002. For its part, MTS began operating its Class 1 cable BDU, authorized to serve Winnipeg and surrounding communities in Manitoba, on 14 January 2003. In Regional broadcasting distribution undertakings in Alberta and British Columbia,Broadcasting Decision CRTC 2003-407, 20 August2003, the Commission authorized TELUS to operate two regional cable BDUs to serve various communities in Alberta and British Columbia.
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13.
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The supporting interveners noted that Bell ExpressVu has indicated that, if the amendments proposed in its application were approved, it would begin operation of the terrestrial television PPV service authorized in Decision 2000-737. According to the interveners, there is a critical need for Bell ExpressVu's terrestrial television PPV service to be implemented because it will provide a competitive alternative to Shaw PPV, which is currently the only wholesale distributor of terrestrial television PPV services in western Canada.
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14.
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The interveners wish to have the opportunity to negotiate with an alternative terrestrial television PPV provider, particularly in view of the fact they each have been unable to reach a satisfactory affiliation agreement in order to obtain PPV programming from Shaw PPV. As a result, SaskTel and MTS are currently operating without a PPV service and TELUS has not been able to obtain a PPV service for its future cable BDU. SaskTel and MTS maintained that operating without a PPV service places their cable BDUs at a serious competitive disadvantage with other BDUs. In addition, they are not able to meet their carriage requirements as set out in section 18(5) of the Broadcasting Distribution Regulations, which stipulates that a licensee of a Class 1 cable BDU serving an anglophone market must distribute at least one English-language general interest television PPV service.
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15.
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The supporting interveners stated that the proposed amendments would make the requirements imposed on Bell ExpressVu's terrestrial television PPV undertaking comparable with those imposed on its terrestrial television PPV competitors as well as with its own DTH television PPV undertaking. The interveners submitted that Bell ExpressVu should have the flexibility to be able offer its service to a BDU in English, in French or in both official languages. The interveners also agreed with the revised Canadian content requirements proposed by Bell ExpressVu in its application.
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The Commission's analysis and determination
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16.
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The Commission agrees with the arguments presented by Bell ExpressVu that it would not be cost efficient for it to implement its terrestrial television PPV undertaking unless the conditions of licence imposed on this undertaking are amended, as described in the application, to be more closely aligned with the conditions of licence imposed on its existing DTH television PPV undertaking. The Commission notes that approval of the proposed amendments would, for example, enable the applicant to avail itself of the inherent efficiency of offering, on both services, the PPV schedule that is already in place for its DTH television service.
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17.
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The Commission also considers that the implementation of Bell ExpressVu's terrestrial television PPV undertaking would benefit terrestrial BDUs in western Canada by providing a competitive alternative to the incumbent terrestrial television PPV provider, Shaw PPV. In this respect, the Commission has taken into consideration the interventions submitted by SaskTel, MTS and TELUS describing the difficulties they have encountered in obtaining a television PPV service for their respective new entrant cable BDUs. The Commission further considers that permitting the applicant to offer its terrestrial television PPV to terrestrial BDUs in English, French or in both official languages would provide opportunities for licensees of BDUs to negotiate with Bell ExpressVu in order to obtain a PPV service that is appropriate to their respective markets.
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18.
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Based on all of the foregoing, the Commission approves the application by Bell ExpressVu Inc., the general partner, and BCE Inc. and 4119649 Canada Inc. (partners in BCE Holding G.P.), the limited partners, carrying on business as Bell ExpressVu Limited Partnership, to amend the broadcasting licence for its national terrestrial television PPV undertaking by amending its conditions of licence 1, 2, 3 and 4 pertaining to programming and carriage.
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19.
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The amended conditions of licence will read as follows:
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1. The licensee is authorized to make available for distribution by licensed or exempt terrestrial distribution undertakings its service, which will consist of English- and /or French-language channels, as well as English- and French-language "barker" channels.
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2. In markets in which a bilingual service is offered, the licensee shall maintain the channels in a ratio 1:3 of French to English with a minimum of five French-language signals in addition to the French-language barker channel.
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3. With respect to English-language programming, the licensee shall ensure that its agreements with the operators of licensed or exempt terrestrial distribution undertakings operating in non-francophone markets provide that, in each broadcast year, the following is made available by these licensees to their PPV subscribers:
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- a minimum of 12 Canadian feature films (including all new Canadian feature films suitable for PPV exhibition that meet the Industry code of programming standards and practices governing pay, pay-per-view and video-on-demand);
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- a minimum of four English-language Canadian-based events;
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- yearly minimum percentages of Canadian programming of: 5% of feature film titles, and a minimum 1:7 ratio of Canadian to non-Canadian events.
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4. With respect to French-language programming, the licensee shall ensure that its agreements with the operators of licensed or exempt terrestrial distribution undertakings operating in francophone markets provide that, in each broadcast year, the following is made available by these licensees to their PPV subscribers:
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- a minimum of 20 Canadian feature films in the original French-language version, or dubbed in French, which have been exhibited in theatres in French-language markets, including all new Canadian feature films suitable for PPV exhibition that meet the Industry code of programming standards and practices governing pay, pay-per-view and video-on-demand;
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- a minimum of six French-language events in each of years one and two of operation, eight in each of years three and four; ten in each of years five and six; and twelve in year seven of operation;
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- yearly minimum percentages of Canadian programming as follows: 8% of feature film titles, and a minimum ratio of Canadian to non-Canadian events of:
6:20 in years 1 and 2;
8:20 in years 3 and 4;
10:20 in years 5 and 6;
12:20 in year 7.
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Secretary General
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This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: http://www.crtc.gc.ca
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Date Modified: 2003-08-28