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By fax
Ottawa, 30 October 2003
Mr. Art Reitmayer
President and Chief Executive Officer
Channel M
Multivan Broadcast Corp.
88 East Pender Street
Vancouver, B.C.
V6A 3X3
Fax: (604) 678-3907
Dear Mr. Reitmayer:
Re: Channel M - Placement on Shaw's Vancouver cable system
Multivan Broadcast Limited Partnership, licensee of the television station CHNM-TV Vancouver, also known as Channel M, has asked the Commission for written confirmation that it has priority over CHNU-TV Fraser Valley with respect to distribution on channel 10 of the Vancouver cable system operated by Shaw Cablesystems Ltd. (Shaw). The Commission, having considered the matter, finds that there is nothing in the wording of Section 17 of the Broadcasting Distribution Regulations to confer upon the licensee of a programming service listed in that section an entitlement to a specific channel within the basic band. Rather, section 17 identifies those services that must be distributed on some channel beginning with the basic band, as specified in section 17(2), as part of basic service.
The Commission finds that, since the record indicates that Shaw stands prepared to distribute Channel M as part of its basic service, on an unrestricted channel in the basic band, Shaw has met its regulatory obligations in this regard.
Background
Trinity Television Inc. is the licensee of CHNU-TV Fraser Valley and provides a service known as NOWTV. The station entered into operation in the summer of 2001. Since that time, its signal has been distributed on channel 10 of the Vancouver cable system of Shaw Cablesystems Ltd. (Shaw). Multivan Broadcast Limited Partnership (originally Multivan Broadcast Corporation) was granted authority to carry on a new television station at Vancouver in February 2002. The station, bearing the call sign CHNM-TV, commenced broadcasting in June 2003. The service it provides is branded as Channel M, and is currently distributed by Shaw in the Vancouver area on channel 8.
Section 17(1) of the Broadcasting Distribution Regulations (the Regulations) lists, in order of priority, services that a licensed Class 1 or 2 broadcasting distribution undertaking (BDU) is required to distribute as part of its basic service, beginning, as specified in section 17(2), with its basic band, i.e., channels 2 to 13.
Section 25 of the Regulations states that, "except as otherwise provided under a condition of its licence, a licensee shall not distribute on a restricted channel . (b) a programming service referred to in subsection 17(1) or (5) or 20(2) . unless the licensee has the prior written agreement of the operator of the programming service."
Channel M's request
On 8 May 2003, Channel M wrote to the Commission requesting written confirmation that Channel M has priority over Trinity Television Inc.'s NOWTV on channel 10 of Shaw's Vancouver cable system. Channel M stated that, based on its signal contour, it is considered a local service throughout the majority of the lower mainland and is licensed as a Vancouver service. Channel M submitted, among other things, that NOWTV is not considered a local station in any of the major municipal areas of the region and is licensed as a Fraser Valley service. Channel M added that, based on its grade A signal contour, NOWTV is at best a regional service and, in some cases, an extra-regional service, to the majority of the Vancouver market.
Channel M submitted that its signal has priority over that of NOWTV, pursuant to section 17(1)(c) of the Regulations, for distribution on the basic band and, specifically, on channel 10. Channel M stated further that, pursuant to section 25 of the Regulations, it had provided prior written agreement to Shaw for distribution on channel 10, despite the fact that channel 10 is a restricted channel as defined in the Regulations.
In its letter of 8 May 2003, Channel M stated that it had discussed channel placement with Shaw, and had initially understood that placement on channel 10 would be acceptable to Shaw. It noted, however, that in a letter dated 25 April 2003, Shaw had advised Channel M of its intention to distribute Channel M on channel 8. According to Channel M, Shaw subsequently offered to distribute the Channel M signal on either channel 2 or channel 4.
Channel M submitted that none of channels 2, 4 or 8 were acceptable. Channel M stated that channels 2 and 8 are restricted. With regard to channel 4, Channel M stated that an important part of its viewership is the Chinese community in Vancouver, Victoria and the Lower Mainland, and that the number 4 has particularly unfortunate connotations among many in the Chinese community.
Shaw's comments
In a letter dated 28 May 2003, Shaw stated that, while it did not concur with Multivan's reading of the Regulations in terms of the meaning of "priority", Shaw did not object to the distribution of Channel M on channel 10, provided that an agreement could be reached between Multivan and Trinity. However, Shaw indicated that NOWTV had informed it that it was not prepared to relocate from channel 10 to channel 8. Accordingly, Shaw had initially offered to distribute Channel M on restricted channel 8, and subsequently informed Channel M that channels 2 and 4 would also be available.
Shaw also argued that, based on a historical reading of the various cable regulations enacted over the years, the concept of priority has been linked solely to available channel capacity, and not to channel placement. Thus, in its view, cable operators are required to distribute the priority services as part of the basic service, beginning with the basic band (channels 2 to 13). According to Shaw, where there is a shortage of channels, the Regulations provide an order of priority. Section 25 of the Regulations requires the priority services listed in section 17 to be distributed on unrestricted channels, unless the programming services request or accept distribution on a restricted channel.
Shaw noted that, in the present case, it can accommodate Channel M on an unrestricted channel of the basic band. Accordingly, the order of priority related to an insufficiency of channels is not applicable in this instance.
NOWTV's comments
In its comments of 28 May 2003, NOWTV stated, among other things, that Channel M was suggesting, based on the dictionary definition of "priority", that the Regulations bestow upon Channel M the "inalienable right" to distribution on the channel of its choosing and, specifically, the right to displace NOWTV on restricted channel 10. NOWTV submitted that this interpretation of the Regulations represents a radical departure from established industry practice.
NOWTV also argued that Channel M's use of the traditions of a specific cultural group to eliminate channel 4 as an "acceptable" placement for its service is fraught with inconsistencies and pitfalls for the effective regulation of multicultural broadcasting. Among other things, NOWTV submitted that Channel M had singled out one tradition from one cultural group. NOWTV submitted that this was a "slippery slope", since there are no grounds for favouring the traditions of one cultural group over another when setting regulatory precedents. That stated, however, NOWTV added that "Multivan has chosen to focus on the negative associations of number '4' but has conveniently ignored the extremely positive meanings of the number '8' in Chinese numerology".
NOWTV urged the Commission to consider the channels offered by Shaw (2, 4 or 8) to be acceptable alternatives for Channel M, and to reject Channel M's assertion that channel 10 is the only acceptable channel placement for its service.
Channel M's reply
In its reply of 4 June 2003, Channel M submitted, among other things, that based on the principles of statutory interpretation, Shaw is required under section 17(1) of the Regulations to distribute the services set out in paragraph (a) through (h) in that order of priority. It submitted that the priority assigned to Channel M appears in paragraph (c) and clearly has priority over NOWTV, which is assigned a priority as an extra-regional service "five levels down in paragraph (h)."
Channel M also noted that section 26 of the Regulations requires a licensee such as Shaw to provide at least 60 days notice if it "intends to change the channel in which a Canadian programming service is distributed . indicating the intended date of the change and the channel number on which the programming service will be distributed." Channel M indicated that this section is necessary because of the priority established by section 17, and is intended to ensure that, when a service such as Channel M asserts a higher priority for distribution on a specific channel of the basic band, in this case on channel 10, its request will be accommodated by the licensee (Shaw) giving notice to the Canadian programming service of the new channel number on which it will be distributed.
Channel M submitted that NOWTV appeared to be asserting that it is a local programming service. Channel M disputed this assertion, reiterating among other things that NOWTV is extra-regional in Vancouver proper and in several other communities, and is local in a rather limited area from Langley to Aldergrove. Channel M stated that it, on the other hand, was local in these communities, and would have regional and extra-regional carriage on southern Vancouver Island, as well. Channel M stated that "the ability to obtain consistent placement on channel 10 throughout the entire region enhances the potential of [its] service and is not available with other channels that have recently been offered by Shaw."
With regard to the negative connotations of the number 4 in the Chinese community, culture and languages, Channel M replied that it had not singled out one tradition from one cultural group. Channel M noted that its service will broadcast ethnic programs directed toward a minimum of 22 distinct ethnic groups. At the same time, it will recognize the importance of the Chinese community by programming up to 20 hours per week in Chinese languages. Channel M submitted that there is no inconsistency in its expression of sensitivity toward Chinese culture and its commitments relative to multicultural programming.
Channel M stated that, in an effort to demonstrate concerns in the Chinese community regarding use of the number 4 and the location of Channel M on the dial, it contacted a "cross section of authorities and community leaders requesting their input." Channel M attached to its submission, among other things, a number of letters expressing concern with the use of the number 4.
Staff letter of 27 June 2003
On 27 June 2003, Commission staff sent a letter to Channel M, Shaw and NOWTV responding to Channel M's request for written confirmation from the Commission that Channel M has priority over Trinity Television Inc.'s NOWTV on Channel 10 of Shaw's Vancouver system. Staff responded that, among other things, Channel M has the right to be distributed on Shaw's Vancouver system as part of basic service, on the basic band and on an unrestricted channel. Staff indicated, however, that the Commission has generally taken the position that such matters are preferably resolved by the parties concerned, and encouraged the parties to continue their negotiations in this regard.
Further request from Channel M
On 11 July 2003, Channel M wrote to the Executive Director, Broadcasting, asking that Channel M's request, set out in its letter of 8 May 2003, be placed before the Commission for a determination. Channel M stated, among other things, that it was content to ask for a determination based on the record that had been produced in the matter.
The Executive Director, Broadcasting, also received further letters from Shaw, NOWTV and Channel M, dated 15 July 2003, 16 July 2003 and 14 August 2003, respectively.
The Commission's determination
As mentioned above, section 17 of the Regulations lists, in order of priority, services that a licensed Class 1 or 2 BDU is required to distribute as part of its basic service, beginning, as specified in section 17(2), with channels 2 to 13 of the basic band. In the Commission's view, there is nothing in the wording of section 17 to confer upon a licensee of a programming service listed in that section an entitlement to a specific channel within the basic band. Rather, section 17 identifies those services that must be distributed on some channel beginning with the basic band, as specified in section 17(2), as part of basic service. Section 25 of the Regulations specifies further that the services listed in section 17(1) must be distributed on unrestricted channels, beginning with the basic band, except as otherwise provided under a condition of the BDU's licence or unless the licensee has the prior written agreement of the operator of the programming service.
The Commission introduced the provision permitting a programming service referred to in section 17(1) to be distributed on a restricted channel with the consent of the service when the Commission made the Regulations in 1997. Prior to that, the distribution of such a signal on a restricted channel required the Commission's approval. In New Regulatory Framework for the Broadcasting Distribution Undertakings, Public Notice CRTC 1997-25, 11 March 1997, the Commission stated the following with regard to this provision:
214. Restricted channels are basic band cable channels that use the same frequency as those of local television stations, and are thus subject to potential interference. The existing regulations prohibit their use for the distribution of priority services, including the community channel, unless an application for such use is approved by the Commission. Restricted channels, however, can sometimes be successfully used for the distribution of priority services, because impairment is negligible. Applications to carry a priority service on such a channel have been routinely approved where the affected broadcaster agreed to such carriage.
215. In Public Notice CRTC 1996-69, the Commission proposed that, where a distributor has the agreement of the licensee of a priority television station to distribute its signal on a restricted channel, an application for approval of such distribution would no longer be required..
219. In light of the above, the Commission intends to allow a distribution undertaking, where it has the written agreement of the licensee of a priority television station, to carry its signal on a restricted channel without having to obtain Commission approval (emphasis added).
Thus, the section is intended as purely permissive, in that it allows a licensee to carry a priority signal on a restricted channel, provided that the programming service agrees. The mere fact that a licensee of a section 17(1) service unilaterally consents, pursuant to section 25(b) of the Regulations, to be distributed on a restricted channel, does not impose an obligation on a cable distribution undertaking to distribute the service on that channel or grant the programming service the right to be distributed on that channel.
Consistent with the above, the Commission finds that Shaw is obliged to distribute the signal of Channel M as part of its basic service, on an unrestricted channel, beginning with the basic band. Further, since the record indicates that Shaw stands prepared to distribute Channel M as part of its basic service, on an unrestricted channel in the basic band, Shaw has met its regulatory obligations in this regard.
Within the context of the broad framework set out above, the Commission continues to believe that the most appropriate mechanism for resolving channel placement issues is negotiations between the parties concerned. As stated in Access Rules for Broadcasting Distribution Undertakings, Public Notice CRTC 1996-60, 26 April 1996:
The Commission agrees with interested parties that such ancillary issues as channel placement are important. However, due to the complexity of these issues, the number of parties involved, and the difficulty and regulatory burden associated with establishing rules applicable to a myriad of circumstances ., the Commission has concluded that such matters should properly be the subject of negotiation between the parties concerned.
The Commission notes Channel M's arguments that the number 4 has unfortunate connotations in Chinese culture. The Commission acknowledges Channel M's concerns. In this regard, and consistent with the view set out by Commission staff in its 27 June 2003 letter, the Commission encourages Shaw and Channel M to continue discussions with a view to arriving at a mutually acceptable channel placement.
Sincerely,
Diane Rhéaume
Secretary General
c.c. Mr. Michael Ferras
Director, Regulatory Planning
Shaw Communications Inc.
45 O'Connor Street
Suite 870
Ottawa, Ontario
K1P 1A4
Fax: (613) 234-2997
Mr. Jeffrey Thiessen
Senior Vice President
Managing Director
NOWTV BC
Trinity Television, Inc.
Box 2010
Winnipeg, MB
R3C 3R3
Fax: (204) 949-3334
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