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Broadcasting Public Notice CRTC 2003-41
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Ottawa, 29 July 2003
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Call for comments on a proposed exemption order for cable broadcasting distribution undertakings that serve between 2,000 and 6,000 subscribers; and changes to the exemption order respecting cable systems having fewer than 2,000 subscribers
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In Exemption of cable broadcasting distribution undertakings that serve between 2,000 and 6,000 subscribers, Broadcasting Public Notice CRTC 2003-23, 30 April 2003 (Public Notice 2003-23), the Commission announced its intention to exempt from licensing and associated regulations, those cable broadcasting distribution undertakings that serve between 2,000 and 6,000 subscribers. In this Public Notice, the Commission invites comments from members of the public on the specific language of a draft exemption order setting out the criteria for exemption described in Public Notice 2003-23.
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Proposed exemption order
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1.
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In Exemption of cable broadcasting distribution undertakings that serve between 2,000 and 6,000 subscribers, Broadcasting Public Notice CRTC 2003-23, 30 April 2003 (Public Notice 2003-23), the Commission announced its determination to exercise its power under section 9(4) of the Broadcasting Act to exempt a class of undertaking that would generally include Class 2 cable broadcasting distribution undertakings (BDUs) and those Class 3 cable BDUs not already eligible for exemption under Exemption order respecting cable systems having fewer than 2,000 subscribers, Public Notice CRTC 2001-121, 7 December 2001 (Public Notice 2001-121).
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2.
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In Public Notice 2003-23, the Commission concluded that the class of undertaking eligible for exemption should consist of those cable BDUs with 2,000 to 6,000 subscribers. However, where separately licensed undertakings are fully interconnected, the Commission determined that the total number of subscribers served by the interconnected undertakings must not exceed 6,000 in order for them to be eligible for exemption. In order to accommodate subscriber growth, the Commission determined that exempt undertakings would, in the future, be able to exceed the 6,000 subscriber threshold by up to 10%, i.e., by up to 600 more subscribers, without having to obtain a broadcasting licence.
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3.
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Further, the Commission found that, while a new entrant cable BDU might serve between 2,000 and 6,000 subscribers, it would be ineligible for exemption if it were licensed to compete directly with an incumbent Class 1 cable BDU regardless of the number of subscribers it serves. The Commission has reflected this determination in the proposed exemption order (the proposed order) by defining the class of exempted undertaking as including only those undertakings that:
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.did not, as of 19 May 1995, serve all or part of the same service area as that of a cable undertaking that is a Class 1 licensee, as defined in the Broadcasting Distribution Regulations, or did not otherwise serve all or part of the same service area as that of a cable undertaking that is a Class 1 licensee at the time it first qualified for exemption.
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4.
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The date of 19 May 1995 mentioned above is that on which the Commission issued its report to the Minister of Canadian Heritage and the Minister of Industry entitled Competition and Culture on Canada's Information Highway: Managing the Realities of Transition. In this report, the Commission announced that it would consider applications for licences for BDUs to compete with undertakings that were already operating as part of the established cable industry. By defining the class of undertaking eligible for exemption in this manner, the Commission intends to exclude from exemption under the proposed order those undertakings that have been licensed to compete directly with Class 1 cable licensees.
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5.
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In addition to the above criteria, the Commission found in Public Notice 2003-23 that these exempt undertakings should be subject to conditions similar to those contained in Public Notice 2001-121, which exempts cable BDUs having fewer than 2,000 subscribers. However, since the cable BDUs to be included in this new class of exempt undertaking would have larger subscriber bases than those exempted under Public Notice 2001-121, the Commission determined that certain additional conditions of exemption would be required. These conditions include requirements related to:
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- the distribution of the programming services of Aboriginal Peoples Television Network (APTN), TVA Group Inc. (TVA) and Cable Public Affairs Channel (CPAC) as part of the basic service;
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- the distribution of the programming service of National Broadcast Reading Service (VoicePrint) as the secondary audio program (SAP) of CBC Newsworld, where the latter programming service is distributed;
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- the distribution of programming services in the official language of the minority in the market served by an exempt undertaking;
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- the simultaneous substitution of certain programming at the request of a local television station;
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- linkage requirements that approximate those that apply to direct-to-home (DTH) BDUs; and
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- the contribution of at least 5% of annual gross revenues derived from broadcasting activities to the development of Canadian programming.
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Changes to the exemption order respecting cable systems having fewer than 2,000 subscribers
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6.
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In Public Notice 2003-23, the Commission noted that there had been some uncertainty expressed regarding the intent of the wording contained in paragraph 2 of the Description section of the Exemption order for small cable undertakings (the Small Cable Exemption Order), as set out in the appendix to Public Notice 2001-121. Paragraph 2 states:
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In total, the number of subscribers served by the individual undertaking is fewer than 2,000, the undertaking operates its own head end, and does not serve all or part of the same licensed area as a cable undertaking that is a Class 1 or Class 2 licensee, as defined in the Broadcasting Distribution Regulations. [emphasis added]
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7.
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The Commission confirmed in Public Notice 2003-23 that the text in bold above was intended to clarify that a new entrant would continue to be licensed as a Class 1 or Class 2 undertaking, rather than be exempted, where it would compete directly with an incumbent Class 1 or Class 2 undertaking. Although such a new entrant may serve fewer than 2,000 subscribers, it would not be eligible for exemption. One party to the process that led to Public Notice 2003-23 suggested that the wording in question could also be interpreted to mean that, where a Class 1 or Class 2 undertaking extended its service area to include all or part of the service area of an exempt undertaking, the exempt undertaking would no longer be eligible for exemption.
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8.
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To clarify the matter further, the Commission proposes that paragraph 2 of the Description section of the Small Cable Exemption Order be revised to read:
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In total, the number of subscribers served by the individual undertaking is fewer than 2,000. The undertaking operates its own head end. The undertaking did not, as of 19 May 1995, serve all or part of the same service area as that of a cable undertaking that is a Class 1 or Class 2 licensee, as defined in the Broadcasting Distribution Regulations, or did not otherwise, at the time the undertaking first qualified for exemption, serve all or part of the same service area as that of a cable undertaking that is a Class 1 or Class 2 licensee. Once exempt, an undertaking shall at no time have more than 2,200 subscribers.
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9.
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The Commission also proposes that the Small Cable Exemption Order be amended to include the following as paragraph 3(g) of the Description section of the proposed exemption order:
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The undertaking meets all the technical requirements of the Department of Industry (the Department) and has acquired all authorizations or certificates prescribed by the Department.
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10.
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The Commission notes that the above provision is commonly included in exemption orders to clarify that an exempt undertaking must still obtain the necessary approvals from the Department of Industry and that this requirement is not altered, in any way, by an exemption made under the Broadcasting Act.
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Related processes
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11.
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The Commission notes that, in Distribution and Linkage requirements for Class 1 and Class 2 licensees, Broadcasting Public Notice CRTC 2003-42, 29 July 2003, it has amended the distribution and linkage requirements that apply to Class 2 licensees in order to reflect the Commission's determinations announced in Public Notice 2003-23.
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12.
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In Public Notice 2003-23, the Commission also announced its intention to amend section 48 of the Broadcasting Distribution Regulations to relieve Class 2 licensees of the requirement to install facilities and provide service on request. The Commission intends to request comments on this proposed regulatory amendment at a later date.
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Call for comments
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13.
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The Commission hereby invites comments on the proposed exemption order for cable BDUs serving between 2,000 and 6,000 subscribers set out in the appendix to this public notice, and on the proposed revisions to the Small Cable Exemption Order set out above. The Commission will accept comments that it receives on or before 29 August 2003. Parties should limit their comments to observations concerning whether or not the new proposed exemption order and the revisions to the Small Cable Exemption Order reflect the Commission's determinations as set out in Public Notice 2003-23. The Commission will not formally acknowledge comments. It will, however, fully consider all comments and they will form part of the public record of the proceeding, provided that the procedures for filing set out below have been followed.
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Procedures for filing comments
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14.
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Interested parties can file their comments either electronically (i.e. by email) or on paper. Submissions longer than five pages should include a summary.
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15.
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Parties wishing to file their comments electronically can do so by sending them to procedure@crtc.gc.ca.
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16.
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Parties wishing to file their comments on paper should send them to the Secretary General, CRTC, Ottawa, K1A 0N2.
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17.
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Please number each paragraph of your submission. In addition, please enter the line ***End of document*** following the last paragraph. This will help the Commission verify that the document has not been damaged during transmission.
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18.
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The Commission will make comments filed in electronic form available on its web site at www.crtc.gc.ca but only in the official language and format in which they are submitted. Such comments may be accessed in the Public Proceedings section of the CRTC web site. Copies of all comments, whether filed on paper or in electronic form, will also be placed on the public examination file.
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19.
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The Commission encourages interested parties to monitor the public examination file (and/or the Commission's web site) for additional information that they may find useful when preparing their comments.
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Examination of public comments and related documents at the following Commission offices during normal business hours
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Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage, Room G-5
Hull, Quebec K1A 0N2
Tel: (819) 997-2429 - TDD: 994-0423
Fax: (819) 994-0218
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Metropolitan Place,
99 Wyse Road, Suite 1410,
Dartmouth, Nova Scotia, B3A 4S5
Tel: (902 426-7997 - TDD: 426-6997
Fax: (902) 426-2721
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405 de Maisonneuve Blvd. East
2nd Floor, Suite B2300
Montréal, Quebec H2L 4J5
Tel: (514) 283-6607 - TDD: 283-8316
Fax: (514) 283-3689
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55 St. Clair Avenue East
Suite 624
Toronto, Ontario M4T 1M2
Tel: (416) 952-9096
Fax: (416) 954-6343
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Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba R3B 2B3
Tel: (204) 983-6306 - TDD: 983-8274
Fax: (204) 983-6317
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Cornwall Professional Building
2125 - 11th Avenue
Room 103
Regina, Saskatchewan S4P 3X3
Tel: (306) 780-3422
Fax: (306) 780-3319
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10405 Jasper Avenue
Suite 520
Edmonton, Alberta T5J 3N4
Tel: (780) 495-3224
Fax: (780) 495-3214
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530-580 Hornby Street
Vancouver, British Columbia V6C 3B6
Tel: (604) 666-2111 - TDD: 666-0778
Fax: (604) 666-8322
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Secretary General
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This document is available in alternate 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 Public Notice CRTC 2003-41
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Exemption order respecting cable broadcasting distribution undertakings that serve between 2,000 and 6,000 subscribers
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Pursuant to section 9(4) of the Broadcasting Act (the Act), the Commission, by this order, exempts from the requirements of Part II of the Act and any regulations made thereunder, those persons carrying on broadcasting distribution undertakings of the class defined by the criteria outlined below.
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Purpose
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The purpose of these broadcasting distribution undertakings is to serve small and rural communities, and serve between 2,000 and 6,000 subscribers.
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Description
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1.
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The Commission would not be prohibited from licensing the undertaking by virtue of any Act of Parliament or any direction to the Commission by the Governor in Council.
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2.
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In total, the number of subscribers served by the individual undertaking is 2,000 or more, but not more than 6,000. The undertaking operates its own head end. The undertaking did not, as of 19 May 1995, serve all or part of the same service area as that of a cable undertaking that is a Class 1 licensee, as defined in the Broadcasting Distribution Regulations, or did not otherwise, at the time the undertaking first qualified for exemption, serve all or part of the same service area as that of a cable undertaking that is a Class 1 licensee. Once exempt, an undertaking shall at no time have more than 6,600 subscribers.
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3.
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The undertaking meets all the technical requirements of the Department of Industry (the Department) and has acquired all authorizations or certificates prescribed by the Department.
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4.
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For the purpose of this order, the definitions of "anglophone market", "basic band", "basic service", "Canadian production fund", "Category 1 service", "Category 2 service", "community channel", "community programming", "comparable", "contribution to local expression", "Corporation", "educational television programming service", "extra-regional television station", "francophone market", "independent production fund", "licensed", "local television station", "official contour", "pay television service", "privately owned local television station", "programming service", "related programming undertaking", "regional television station", "specialty service" and "station" have the same meaning as in the Broadcasting Distribution Regulations; and "service area" shall mean the area in which an exempt undertaking carries on a broadcasting distribution undertaking.
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5.
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(1) All services of Canadian local television stations, regional television stations, educational television programming services designated by the province in which the undertaking is located, and extra-regional television stations other than affiliates or members of a network of which a local television station is an affiliate or member, are distributed over the undertaking. If not otherwise included in the list above, the undertaking must distribute the programming service of at least one television station owned and operated by the Corporation, in each of the official languages.
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(2) In each case, the programming services referred to in 5(1) must be distributed with no degradation of received signal. In addition, the undertaking shall distribute these services as part of its basic service on channels beginning with the basic band.
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(3) If the undertaking receives programming services that are identical, the undertaking is required to distribute only one of them under 5(1).
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(4) If the programming services of two or more regional television stations that are affiliates or members of the same network are received at the local head end, the undertaking is required to distribute only one of them.
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(5) If the undertaking was not required to distribute a specific programming service, including an educational programming service, as part of its basic service at the time it first qualified for exemption, the undertaking is not required to distribute that service under 5(1), but may distribute it as part of the basic service.
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6.
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(1) The undertaking must distribute the Aboriginal Peoples Television Network programming service, the programming service of TVA Group Inc. (CFTM-TV Montréal or the programming service of one of its affiliates). The undertaking must also distribute the Cable Public Affairs Channel's public affairs programming service, with the main audio channel in the official language of the majority of the market served and an auxiliary audio channel in the other official language. Each of these services must be offered as part of the basic service.
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(2) If the undertaking distributes the CBC Newsworld programming service, it must also distribute the programming service of National Broadcast Reading Service (VoicePrint) as the secondary audio program of the former service.
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7.
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An undertaking that has a nominal bandwidth capacity of 750 MHz or more and that delivers any programming service on a digital basis shall distribute at least one pay television service in each official language, and all French-language and English-language Canadian specialty services, other than Category 2 services distributed on a digital basis.
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8.
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An undertaking that has a nominal bandwidth capacity of less than 750 MHz and that delivers any programming service on a digital basis shall distribute:
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(1) at least one French-language Canadian specialty service, excluding those that the undertaking may be required to distribute under 5 or 6 above, for every ten English-language programming services distributed by the undertaking, if the undertaking is operating in an anglophone market;
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(2) at least one English-language Canadian specialty service, excluding those that the undertaking may be required to distribute under 5 or 6 above, for every ten French-language programming services distributed by the undertaking, if the undertaking is operating in a francophone market;
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(3) if the undertaking is operating in an anglophone market, each English-language Category 1 service that the operator of which is authorized to provide to all or part of the service area of the undertaking; and
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(4) if the undertaking is operating in a francophone market, each French-language Category 1 service that the operator of which is authorized to provide to all or part of the service area of the undertaking.
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9.
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An undertaking operating in an anglophone market shall distribute on an analog basis at least the same number of French-language Canadian programming services as it distributed on an analog basis on 10 March 2000.
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10.
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The undertaking must not provide a subscriber with any programming services, other than those licensed to carry on pay-per-view services, video-on-demand services or exempt programming services, without also providing the basic service described in 5.
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11.
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The undertaking must not alter or delete a programming service in the course of its distribution except:
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(1) for the purpose of complying with section 328(1) of the Canada Elections Act;
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(2) for the purpose of deleting a programming service to comply with an order of a court prohibiting the distribution of the service to any part of the service area;
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(3) for the purpose of altering a programming service to insert an emergency alert message in accordance with an agreement entered into with the operator of the service or the network responsible for the service;
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(4) for the purpose of preventing the breach of programming or underlying rights of a third party, in accordance with an agreement entered into with the operator of the service or the network responsible for the service; or
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(5) for the purpose of deleting a subsidiary signal, unless the signal is, itself, a programming service or is related to the service being distributed.
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12.
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(1) The undertaking shall delete the programming service of a television station and substitute the programming service of a Canadian privately owned local television station or, with the agreement of the broadcaster operating the privately owned local television station, shall have that broadcaster carry out the deletion and substitution, if
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(a) the main studio of the privately owned local television station
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(i) is located within the service area of the undertaking, and
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(ii) is used to produce locally originated programming;
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(b) the programming service to be deleted and the programming service to be substituted are comparable and simultaneously broadcast;
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(c) the privately owned local television station has a higher priority under 5; and
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(d) in a case where the broadcaster operating the privately owned local television station is not to carry out the deletion and substitution under an agreement with the undertaking, the undertaking has, at least four days before the date on which the programming service is broadcast, received from the broadcaster operating the privately owned local television station a written request for the deletion and substitution.
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(2) If a substitution is requested by more than one broadcaster, the undertaking shall give preference to the programming service of the television station that has the highest priority under 5.
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(3) An undertaking may discontinue a deletion and substitution if the programming services in respect of which the deletion and substitution are made are not, or are no longer, comparable and broadcast simultaneously.
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13.
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(1) The undertaking must not distribute a programming service that the undertaking originates and that contains
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(a) anything that contravenes any law;
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(b) any abusive comment or abusive pictorial representation that, when taken in context, tends to or is likely to expose an individual or group or class of individuals to hatred or contempt on the basis of race, national or ethnic origin, colour, religion, sex, sexual orientation, age or mental or physical disability;
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(c) any obscene or profane language or pictorial representation; or
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(d) any false or misleading news.
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(2) For the purpose of 13(1)(b), sexual orientation does not include the orientation towards a sexual act or activity that would constitute an offence under the Criminal Code.
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14.
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No service received over-the-air or by satellite or microwave or by optical fibre transmission is distributed over the undertaking, other than a service that the Commission, by regulation or otherwise, has authorized.
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15.
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In respect of each of analog and digital technology, the undertaking shall ensure that a majority of the video and audio channels received by a subscriber are devoted to the distribution of Canadian programming services. Each pay television service, television pay-per-view service, and video-on-demand service shall be counted as a single video channel.
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16.
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If an undertaking that operates in a francophone market distributes the service of arTV (La Télé des Arts), that undertaking must distribute that service as part of the discretionary package of services that is received by the highest number of subscribers. The fee payable to the service provider shall be $0.55 per subscriber per month.
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17.
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The undertaking may only distribute non-Canadian-originated services received by satellite in a package with Canadian pay television and/or Canadian specialty services, and such a package must be distributed on a discretionary basis, subject to the following requirements:
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(1) a Canadian pay television service may be linked in a given discretionary package of services with no more than five channels containing non-Canadian programming services. In no case can an undertaking distribute more than five channels of non-Canadian-originated services received by satellite linked with Canadian pay television services, regardless of the number of Canadian pay television services distributed by the undertaking;
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(2) (a) each Canadian specialty service may be linked in a given discretionary package of services with no more than one channel containing non-Canadian-originated services;
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(b) an undertaking may designate one U.S. superstation and distribute the signal of that superstation within a given discretionary package of services that may include one or more Canadian specialty and/or pay television services, provided that the superstation is included in a package of services that is distributed on a digital basis only;
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(c) an undertaking is not permitted to link non-Canadian-originated services received by satellite with a Canadian specialty service distributed on the basic service;
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(3) any Canadian programming service may be linked with a second set of
U.S. network signals offered on a digital basis as part of a discretionary package of services; and
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(4) an undertaking is not permitted to offer a tier containing only non-Canadian services.
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18.
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(1) Where an undertaking distributes a Category 1 service, the undertaking will not be permitted to distribute that service on a stand-alone basis unless the Category 1 service is also distributed as part of a package.
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(2) An undertaking is not permitted to package an Adult Category 2 programming service in such a way that subscribers are obligated to purchase the service in order to purchase any other programming service. Undertakings are required to take measures to fully block the reception of both the audio and video portions of any Adult Category 2 programming service to subscribers who request that it not be receivable in their home (in either unscrambled or scrambled mode).
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19.
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The undertaking may only distribute a single or limited point of view religious pay or specialty service in a package with other Canadian single or limited point of view religious pay or specialty services, and with any non-Canadian-originated religious services, and all such services must be distributed on a discretionary basis, subject to the following requirements:
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(1) each Canadian single or limited point of view religious pay service may be linked in a single discretionary package of services with no more than five channels containing non-Canadian-originated religious services, but in no case can a single discretionary package of services, whose Canadian component consists only of single or limited point of view religious pay services, contain more than five channels containing non-Canadian religious satellite services, regardless of the number of Canadian single or limited point of view religious pay services included in that package of services; and
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(2) each Canadian single or limited point of view religious specialty service may be linked, within a discretionary package of services that may include one or more Canadian single or limited point of view religious services, with no more than one channel containing non-Canadian-originated religious services.
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20.
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The undertaking must make a contribution to Canadian programming in each broadcast year of an amount not less than 5% of that undertaking's gross revenues derived from broadcasting activities in the year, less any contribution to local expression made by the undertaking in that year. Contributions to Canadian programming shall consist of:
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(1) contribution to the Canadian production fund of at least 80% of the undertaking's total required contribution; and
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(2) to one or more independent production funds, the remainder of its total required contribution.
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21.
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Where an undertaking elects to offer a community channel as part of its contribution to local expression, the community channel must offer community programming that meets the following requirements:
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(1) the programming offered must consist of at least:
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(a) 60% local community television programming consisting of programs that are reflective of the community and produced in the undertaking's service area by the undertaking or by other members of the community served by the undertaking;
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(b) 30% access programming consisting of programs produced by members of the community served by the undertaking;
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(2) the programming includes no more than two minutes per hour of promotional messages and at least 75% of this promotional time is made available for the promotion of the community channel, non-related Canadian programming undertakings and for unpaid Canadian public service announcements; and
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(3) the programming offered adheres to
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(a) the Cable television community channel standards, as amended; and
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(b) the Canadian Association of Broadcasters' Voluntary code regarding violence in television programming, as amended.
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Date Modified: 2003-07-29
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