ARCHIVED - Broadcasting Decision CRTC 2003-69

Broadcasting Decision CRTC 2003-69

Ottawa, 24 February 2003

AGI Cablevision Inc.
Aylmer, Brownsville, Courtland, Langdon, Lyons, Port Bruce, Port Burwell, Simcoe and Straffordville, Ontario

Application 2002-0888-6

Transfer of effective control of AGI Cablevision Inc.

1.

The Commission received an application by AGI Cablevision Inc. (AGI Cable) (the licensee) to effect a transfer of effective control of AGI Cable.

2.

AGI Cable, a wholly-owned subsidiary of Information Communications Services (ICS) Inc. (ICS), is the licensee of nine regulated¹ cable distribution undertakings serving the communities noted above.

3.

The applicant proposed to implement the transfer of control in two stages.

4.

In the first stage, the applicant would transfer all of the issued and outstanding shares of AGI Cable from ICS to a new income trust to be known as the Amtelecom Income Fund (the Fund). The Fund would be formed pursuant to a declaration of trust for the purpose of holding the shares of AGI Cable. The ownership interest in the Fund would be widely held by the public (unit holders).

5.

The second stage would be implemented immediately following the first stage and would consist of the transfer of all of the issued and outstanding shares of AGI Cable from the Fund to Cablevision Acquisition Inc. (CAI), a wholly-owned subsidiary of Amtelecom Communications Inc. (Amtelecom Holdco). In exchange for its involvement in this transaction, the Fund would receive voting interests in CAI's parent corporation, Amtelecom Holdco. As a result, the shareholdings in Ametelecom Holdco would be widely held by the Fund's unit holders.

6.

The Commission notes that, in the first stage where the licensee's shares would be transferred to the Fund, 80% of the Fund's unit holders would be Canadian citizens, residing in Canada. Following the second stage, when the licensee's shares would be transferred fromthe Fund's unit holders to CAI, 66 2/3% of the unit holders would be Canadians, residing in Canada.

7.

The Commission notes the applicant's commitment to establish a monitoring mechanism of non-resident unit holders to ensure that the level of non-Canadian ownership of the Fund's units complies with the Direction to the CRTC (Ineligibility of Non-Canadians) (the Direction) P.C. 1997-486, 8 April 1997 as amended by P.C. 1998-1268, 15 July 1998.

8.

The Commission approves the application by AGI Cable (the licensee) to effect a transfer of effective control of AGI Cable and will modify its ownership records accordingly.

9.

AGI Cable stated that, following the execution of the transactions proposed in the application, it would amalgamate with CAI to form a new corporation to be incorporated, identified as Amtelecom Cable OBCI (the new licensee). This amalgamation does not require prior approval by the Commission. The Commission, nevertheless, reminds the applicant that the amalgamation will not be effective and the licences affected by it will not be amended until the Commission receives a copy of the executed amalgamation corporate documents and associated agreements.

10.

As a result of all the transactions described above, including the proposed amalgamation involving AGI Cable, the new licensee will be a wholly-owned subsidiary of Amtelecom Holdco. Control of Amtelecom Cable OBCI, however, will be exercised by the new licensee's proposed board of directors.

11.

The Commission notes the applicant's commitment to amend the draft by-laws of the parent corporation, Amtelecom Holdco, as well as the draft declaration of trust, to ensure that the programming decisions of the subsidiary, the new licensee, will not be controlled or influenced by the parent corporation or its directors should the non-Canadian ownership of Amtelecom Holdco exceed the 20% voting interest threshold established by the Direction and that all programming decisions will be within the exclusive power of the subsidiary's board of directors and officers.

12.

The applicant must file with the Commission, within 60 days of the closing of the prospectus an executed copy of any corporate document for which it has filed only a draft. Specifically, the Commission requires the applicant to file the following documents:

• the executed amalgamation corporate documents and associated agreements;

• the final prospectus;

• Amtelecom Income Fund's Declaration of Trust;

• Amtelecom Holdco's bylaws amended in accordance with the applicant's commitment that the parent corporation or its directors not control the subsidiary's programming decisions;

• CAI's by-laws;

• the complete corporate documents for Amtelecom Cable OBCI; and

• any related agreements.

Secretary General