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Broadcasting Public Notice CRTC 2004-82

Ottawa, 4 November 2004

Regulatory framework for interactive television services

The Commission announces its determinations regarding the types of interactive television content that it will consider to be program-related, and that will generally be entitled to mandatory distribution on broadcasting distribution undertakings.

Background

1. In Fact finding inquiry on interactivity, Public Notice CRTC 2001-113, 2 November 2001 (Public Notice 2001-113), the Commission invited comments on various issues and questions related to the provision of interactive television (ITV) services. Subsequently, on 22 October 2002, the Commission issued its Report on Interactive Television Services (the ITV Report), which set out the findings of the Commission's inquiry into the development of ITV services in Canada. Also on 22 October 2002, the Commission issued Call for comments on program-related interactive television (ITV) services, Broadcasting Public Notice CRTC 2002-63 (Public Notice 2002-63).

2. One of the questions put forward for comment in Public Notice 2001-113 was what interactive activities, if any, would fall within the definition of broadcasting set out in the Broadcasting Act (the Act). The majority of those who submitted comments on this matter considered that certain ITV activities, which were subsequently described by the Commission in the ITV Report as "enhanced programming services", might be considered broadcasting under specific circumstances, including services that provide viewers with:

3. Despite the wide variety of views expressed, the Commission found the record of the proceeding to contain insufficient information to enable it to make a determination in the ITV Report as to which interactive activities would fall within the definition of broadcasting. For example, some parties considered that even programming consisting primarily of alpha-numeric text would fall under the definition of broadcasting if that text was "program-related" or was "integral" to a program. However, none of the parties who used the terms "program-related" or "integral to a program" proposed definitions for these terms or guidelines as to how the Commission might apply them.

4. In Public Notice 2002-63, the Commission noted that section 7(f) of the Broadcasting Distribution Regulations (the Regulations) prohibits a distributor from altering or deleting a programming service in the course of its distribution except "for the purpose of deleting a subsidiary signal, unless the signal is, itself, a programming service or is related to the service being distributed." The Commission requested public comment on the specific method or test that could be employed to determine whether or not ITV content is program-related. Specifically, the Commission solicited comment on whether a test used by the Federal Communications Commission (FCC) in the United States would be a suitable model to determine what ITV content might be program-related. The FCC had used the same test as that used by the United States Court of Appeals for the Seventh Circuit (the Appeals Court) in WGN Continental Broadcasting Co. v United Video Inc. for the purpose of determining whether ancillary or supplementary material transmitted in the vertical blanking interval (VBI) is program-related and, therefore, entitled to mandatory carriage. This has come to be known as the "WGN test".

5. Under the WGN test, the following three criteria must be met for data to qualify as program-related:

6. The Commission also asked parties to address issues with respect to must-carry obligations for program-related ITV content in relation to the capacity limitations of broadcasting distribution undertakings (BDUs).

7. The Commission established a two-phase process for filing comments. It received a total of 19 comments in Phase I and 10 reply comments in Phase II. In the following sections of this notice, the Commission examines these comments and sets out its determinations on the various issues mentioned above.

Overview of comments received

8. The Canadian Association of Broadcasters (CAB) argued that the term "program-related" was too restrictive. It submitted that the term "programming-related" should be used instead. According to the CAB, the term "programming-related" would be more relevant to programming services such as a 24-hour news or music service, whose content cannot always be easily divided into discrete programs. Further, the CAB suggested that the term "programming-related" would include ITV content that is available outside the time slot of the specific program with which it is associated. Other parties also considered that certain aspects of the WGN test were too narrow and would severely limit the types of ITV enhancements that would qualify as program-related.

9. In its comment, the Canadian Cable Telecommunications Association (CCTA) opposed the CAB's suggestion that the term "programming-related" be used instead of "program-related". Bell ExpressVu Inc., (the general partner), and BCE Inc. and 4119649 Canada Inc. (the partners in BCE Holdings G.P., a general partnership that is the limited partner), carrying on business as Bell ExpressVu Limited Partnership (ExpressVu), also opposed this suggestion.

10. The CCTA submitted that, from a jurisdictional perspective, non-programming material can only be subject to a must-carry requirement if it forms part of the specific program being aired. ExpressVu stated its concern that the CAB's "programming-related" framework would give each broadcaster a "dedicated full-time segment of additional capacity" on each BDU. ExpressVu argued that, while programmers stood to benefit from this additional capacity, it would be provided at the expense of BDUs and would reduce their ability to provide capacity for new Canadian programming services.

11. Distributors generally considered that, subject to some minor adjustments, the criteria contained in the WGN test would be applicable to the Canadian ITV context. The CCTA submitted that the "WGN test provides established and objective criteria for determining whether information on a subsidiary signal is program-related", and that the Commission itself has "implicitly endorsed and applied the WGN criteria on several occasions".

12. Parties also offered comments on each of the three specific criteria set out in the WGN test. The majority of parties agreed that the first criterion of the WGN test should be included in the Commission's definition of program-related content.

13. With regard to the second criterion, it was the CCTA's view that a requirement for simultaneity should be a key factor in defining program-related ITV material. The CCTA argued that, if an interactive application is accessed at a different time than the main program, it is arguably a telecommunications activity that falls outside the Commission's jurisdiction under the Act.

14. In contrast, the CAB argued that a strict requirement for simultaneity would exclude many ITV applications that are clearly related to the content of the main service, such as audience voting that might occur either before or after the program telecast. The CAB also submitted that viewers may prefer to watch a program or video in its entirety before accessing additional information. Pelmorex Communications Inc. (Pelmorex), licensee of the specialty service known as The Weather Network in English and as MétéoMédia in French, also objected to a simultaneity requirement on the basis that the type of ITV applications that would enhance its weather information programming might not meet such a requirement.

15. CHUM Limited (CHUM) was also opposed to a requirement for simultaneity, arguing that this requirement could rule out many potentially popular ITV services. CHUM gave the example of an ITV service in the United Kingdom that allows Wimbledon fans to select which of a number of tennis matches they would like to watch. According to CHUM, if the tennis match that a fan wishes to view is other than that being broadcast on the main channel, the fan may click on an icon and be directed automatically to a virtual channel that is broadcasting the alternative tennis match. CHUM noted that a requirement for simultaneity would appear to exclude this and any other ITV services that exist on virtual channels.

16. In their comments, representatives of the BDU industry agreed that any ITV enhancement should be an integral part of the program, as stipulated in the third criterion of the WGN test. The CCTA stated that the "concept of integrality presumes a component that is intrinsically and uniquely related to the core viewing experience". ExpressVu agreed, arguing that the importance of the ITV enhancement to the program must be such that, without it, the viewing experience would be incomplete.

17. All broadcasters objected to the third criterion, arguing that it would significantly limit the scope of interactive material that would be capable of meeting the definition of program-related material. The CAB added that the only ITV applications that would meet this requirement are those that have been designed as a central element of a program. According to the CAB, a broadcaster or producer could only design such a program in an environment having a large installed base of digital set-top boxes. It noted that, otherwise, the program enhancements would be inaccessible to a large portion of the audience.

The Commission's analysis and determinations regarding the definition of "program-related"

The WGN test

18. The Commission notes that, although the original application of the WGN test was in a case involving use of the analog VBI, the test itself is technologically neutral. In the Commission's view, the criteria used in the WGN test, with modifications as discussed below, are appropriate in the Canadian ITV context and will provide ITV producers, broadcasters and BDUs with practical guidelines as to what types of ITV content are properly considered program-related. At the same time, the Commission believes it worthwhile to provide a number of specific descriptions and examples of how it considers each of the three criteria that make up the definition should be interpreted, with a view to providing the greatest possible clarity as to what it would accept as constituting program-related ITV content.

Criterion 1: The broadcaster's intention must be that the information be seen by the same viewers as those who are watching the video signal

19. The Commission has determined that, in order for ITV content to be considered as "program-related", it must be intended for viewing by those watching the main program, and not just by a general audience. For the purposes of this criterion, the Commission considers the "video signal", also referred to as the "primary video signal" or "main program", to be the signal that is received by all viewers of the programming service, without interaction on the part of the viewer.

20. The Commission finds this first criterion to be an important element in defining program-related ITV content, in that it establishes the basic relationship between the ITV content and the viewers of the main program. Examples of ITV content that would meet this criterion include enhancements that provide viewers with access to more detailed information on the main program. For instance, in the case of a drama, such enhancements might include biographies of the principal actors or background on the story. In a hockey telecast, enhancements might include access to league or player statistics.

21. Certain enhancements that provide viewers with the opportunity to personalize their viewing experience of the main program may also meet the first criterion. An existing example of such an enhancement is one that allows viewers of a sports event to select from among a number of different camera angles and positions to watch a game or to focus on a particular player.

22. The Commission considers that ITV enhancements that are intended to be viewed completely independently from the main program would not meet the first criterion of the definition of program-related. Examples of ITV content that would very likely fail to meet the first criterion would include a cartoon for pre-schoolers provided during a news program, interactive weather forecasts offered to viewers during a drama program or a music video offered during a sports program. In the Commission's view, the example cited by CHUM involving the offering of a selection of alternative Wimbledon tennis matches to viewers not wishing to watch the tennis match broadcast on the primary video signal, would also be unlikely to meet this criterion. The Commission considers that these alternative offerings could not reasonably be considered as the offering of ITV content intended to enhance the audience's experience of the main program, i.e., the tennis match broadcast on the primary video signal.

Criterion 2: The information must be available during the same interval of time as the video signal.

23. The Commission finds that a requirement for simultaneity is essential to the definition of program-related ITV content. Without a simultaneity condition, broadcasters could expect BDUs to distribute their ITV content at any time, provided the content is related to any program that the broadcaster offers in its schedule. This could impose unreasonably high capacity demands on BDUs.

24. Accordingly, the Commission considers that the program information must be delivered to the viewer during the main program. The CAB's concern was that this criterion would exclude many ITV applications that are clearly related to the content of the main service, such as audience voting. The Commission notes, however, that a viewer might still access the content after the program has ended, provided that all the interactive content has been downloaded and stored in the viewer's set-top box during the broadcast of the program. The Commission also notes that this criterion would not preclude broadcasters from negotiating with BDUs for carriage of additional interactive elements, either before or after the program telecast, or from conducting voting through other means such as telephone lines or websites.

25. Pelmorex was concerned that information-based services, such as The Weather Network and MétéoMédia, do not air "programs" in the conventional sense of the word, but typically air programming consisting of short elements, some as brief as 30 seconds, and few lasting more than five minutes. Pelmorex argued that a requirement for simultaneity would restrict the availability of ITV segments consisting of interactive local weather reports to the times when local weather reports are being aired on the main service, thus limiting their usefulness to viewers.

26. The Commission acknowledges that there are programming undertakings that do not generally include long-form programming in their schedules. A news service, for example, may provide news, weather, sports and other reports on a continuously updated program wheel. Pelmorex operates its weather information service on a similar basis, providing, among other things, continuously updated local weather forecasts.

27. The Commission finds that it would be unreasonable to require such services to restrict ITV content to the same time interval and subject matter as a 30-second newsclip or weather report in order to meet the definition of program-related. The Commission considers that this would seriously limit the opportunities that these services have to provide their viewers with useful ITV enhancements. Accordingly, for the purposes of defining program-related ITV content on these types of services, the Commission will interpret the phrase "the same interval of time as the video signal", as contained in the second criterion, as encompassing a typical program wheel for the service. This interpretation would allow Pelmorex, for example, to make available detailed local information on an interactive basis outside the times that it broadcasts the local weather report on the main video signal. Similarly, a news service could provide viewers with more detailed information on any one of the news stories that are being presented during a typical news wheel.

Criterion 3: The information must be an integral part of the program.

28. The Commission does not consider this criterion to be helpful in defining program-related content. As several parties pointed out, a literal interpretation of "integral" could exclude most ITV enhancements, leaving only ITV enhancements that constitute a central element of a program. Further, such programs, with interactivity as a central element, would only be designed in an environment having a large installed base of digital set-top boxes.

29. That said, the Commission considers that, in order to be properly considered to be program-related, the ITV content must have a substantial connection to the main program being broadcast. In other words, the presence of ITV content should be for the purpose of enhancing the viewer's experience of the main program.

Conclusion

30. Based on all of the considerations discussed above, the Commission has adopted the following criteria for assessing whether ITV content is "program-related":

31. For the purposes of applying these three program-related criteria, the Commission will also distinguish between the main program and the advertisements that accompany it. Specifically, the Commission will consider an advertisement itself to be a program, separate from the main program into which it is inserted. This means that any interactive advertising content can only be offered during the advertisement to which it is related, and not during the main program. The Commission notes that this stipulation with respect to advertisements and their ITV content will apply to all services, including news and other programming services whose schedules do not generally include long-form programming.

32. The Commission notes that nothing in the above criteria with respect to the term "program-related" affects the obligations of programmers and or distributors with respect to the provision of closed captioning or described video.

Carriage of program-related ITV content

33. In Public Notice 2002-63, the Commission asked parties to comment on whether a distributor should be prohibited under section 7(f) of the Regulations from altering or deleting a subsidiary signal containing program-related ITV enhancements. The Commission also asked parties to provide views on whether distribution capacity was generally available to support a "must carry" rule for program-related ITV material, particularly given the significant bandwidth that the large-scale distribution of ITV content could require.

Overview of comments received

34. Distributors were of the view that a must-carry requirement for program-related ITV content should not be automatic and should not impose unreasonable burdens on BDUs. For instance, ExpressVu submitted that "mandatory carriage for ITV enhancements should be invoked only where a clear and important benefit to the Canadian broadcasting system will result, which is the standard that the Commission has traditionally applied." The CCTA stated that "it cannot be presumed that carriage is automatically 'free' to broadcasters if program-related ITV imposes additional costs on BDUs - video applications or multiple camera angles could impose substantial capacity requirements."

35. Notwithstanding their statements above, both the CCTA and ExpressVu were of the view that distributors would be willing to pass through program-related ITV content, subject to reasonable bandwidth limits. The CCTA submitted that distributors should not be required to pass through program-related data that cannot be reasonably accommodated within the bandwidth normally assigned to a programming service. ExpressVu recommended that there be a cap placed on the amount of bandwidth that would be required for the mandatory carriage of ITV content.

36. Broadcasters were generally of the view that BDUs should be required to carry program-related ITV content. Further, many argued that capacity would not be an issue with respect to this content since ITV applications are not generally bandwidth intensive. According to the CAB, a typical ITV application that uses 250 kilobits per second - enough to transmit 5000 words per second - would require 14 times less bandwidth than a standard definition digital video signal on a cable system, 79 times less bandwidth than a high definition television (HDTV) signal, and 159 times less bandwidth than an analog TV signal. The CAB proposed that, in exceptional circumstances, where significant amounts of bandwidth are required to carry large-scale ITV applications such as multiple video streams, BDUs could apply to the Commission for relief from mandatory carriage requirements.

37. The Canadian Broadcasting Corporation (CBC) likewise considered that ITV applications would not impose significant new capacity obligations on BDUs. In the CBC's view, "the current 19.4 Mbs of digital bandwidth defined by the ATSC Digital Television Standard for the delivery of over-the-air HDTV services, and the 6 MHz allotted to analog channels, are sufficient for the distribution of digital and analog ITV services." The CBC argued that broadcasters should be required to work within these limitations to ensure that a program, including any program-related ITV enhancements, does not exceed these thresholds.

38. Pelmorex submitted that BDUs that are providing their own ITV services and/or ITV services of affiliated companies should make a comparable amount of capacity available on their set-top boxes to accommodate the interactive services of the non-affiliated programming services they distribute.

39. Parties also noted that some ITV applications will require a return path for viewers to send information back, either to the head-end or to the broadcast point of origin. The CCTA argued that BDUs should not be required to make bandwidth available to broadcasters for the purpose of providing viewers a return path for program-related ITV content or commercial transactions such as T-commerce. The CAB argued, however, that if a program-related ITV application requires a return path, that return path should be considered directly related to the programming service being distributed, and should be offered to the customer without restriction. The CBC noted that return paths could be provided by BDUs or third-parties such as Internet service providers. The CBC added that BDUs should not be allowed to use their initial monopoly over the provision of set-top boxes to block or disable program-related triggers that use the customer's return path of choice.

40. Parties also commented on technical standards for ITV. While the Commission did not raise the issue of standards in Public Notice 2002-63, parties did comment on the need for common standards to encourage the development of ITV content. ExpressVu argued that "distributors should be permitted to alter or delete an ITV data stream, even where that stream would otherwise warrant mandatory carriage, where the applications contained therein are incompatible with the distributor's technological platform".

41. With respect to standards, both Pelmorex and the CBC recommended that the Commission require BDUs to disclose their set-top box and formatting standards to broadcasters and programming undertakings. According to the CBC, this would ensure that broadcasters are able to design their interactive enhancements to meet the specifications of the middleware employed by BDUs.

The Commission's analysis and determinations regarding carriage of program-related ITV content

42. The Commission acknowledges that the carriage of ITV content raises significant capacity issues for BDUs. While recent network upgrades and the conversion to digital technology have substantially increased BDU capacity, there will be intense demand for this capacity as new services are launched and digital services, particularly HDTV services, are implemented. In addition to their carriage of HDTV services, some cable BDUs are in the process of launching video-on-demand services and all BDUs will likely wish to continue to launch Category 2 services that will appeal to their subscribers. Finally, it may be some time before digital set-top box penetration achieves the level that would allow cable BDUs, with Commission approval, to free up capacity by discontinuing their distribution of analog services.

43. The Commission notes that the technologies used to incorporate ITV content in a broadcast are of two general types, which can be described as broadcast-based and transport-based. The chief difference between the two types is the point at which the ITV content is introduced into the broadcast signal. With broadcast-based technologies, the broadcaster adds the ITV content at the point of origin. The active participation of the distributor is not required in order to introduce the necessary data into the broadcast signals. With transport-based technologies, the ITV content is generally added at the head-end. The ITV content, when provided by the broadcaster, is delivered to the head-end independently of the program signal. Transport-based technologies would generally require the active participation of the distributor in order to introduce the ITV content into the broadcast signal or otherwise deliver it and co-ordinate the ITV content with the broadcast signal.

44. Further complicating the carriage issues raised by ITV services is the uncertainty over what types of ITV enhancements will be deployed by broadcasters and their corresponding capacity requirements. Parties described a wide variety of potential ITV enhancements in their submissions, ranging from simple text-based applications to more bandwidth-intensive audio-visual applications. In addition, as the Commission noted in its ITV Report, the potential demand for ITV services and the type of business models that may emerge for their carriage, including revenue-sharing arrangements, remain unclear. This is due in part to relatively limited penetration of digital television services among cable BDU subscribers.

45. While broadcasters participating in this proceeding were of the view that, in the short-term, ITV enhancements would not create capacity issues, the Commission remains concerned about the impact of imposing broad carriage obligations for ITV content on BDUs. Notwithstanding this concern, the Commission notes that BDUs appear willing to carry program-related ITV enhancements that would not require significant amounts of bandwidth or that would be subject to a cap on bandwidth. Accordingly, the Commission will adopt different approaches that will take into account whether or not the ITV content can be accommodated within the bandwidth normally assigned to a programming service.

46. As indicated above, the Commission recognizes that the development and provision of ITV services is still at a very early stage. Much remains to be seen about how the market for these services, and the services themselves, will evolve. Nevertheless, the regulatory framework for ITV services set out below has been designed by the Commission to provide parties wishing to begin adding interactive elements to programming with guidelines as to how to proceed. The Commission will continue to monitor how ITV develops over the next few years, its popularity among consumers, and the capacity demands that it places on BDUs.

ITV content falling within capacity normally allocated to a programming service

47. The Commission has determined that, if program-related interactive content is incorporated into the signal by the broadcaster before it is delivered to the distributor, distributors will not be permitted to alter or delete that content, provided that the signal remains within the normal bandwidth or data rate for that signal, i.e., 6 MHz or its digital equivalent for standard definition analog and digital signals, respectively, or a maximum data rate of 19.4 MBs for high definition digital signals. Interactive content, however, must not degrade the quality of the broadcast signal or cause interference to other services, particularly those in adjacent bands.

48. The Commission notes that the mere passing through of the ITV content may not ensure its functionality. Among other things, the subscriber's set-top box will not necessarily be capable of processing the interactive information in the signal. The Commission will not require the distributor to take any active steps to make such ITV content functional. In the absence of generally accepted standards, broadcasters may choose between a number of proprietary standards. The Commission does not consider it reasonable to expect distributors to accommodate the array of standards that may be adopted by broadcasters.

49. Notwithstanding the above, should the distributor install an interactive capability, either broadcast-based or transport-based, the distributor, in accordance with section 9 of the Regulations, must make that interactive capability available to broadcasters, provided that the signal to be distributed is within the bandwidth limits specified above. In other words, in order to ensure such access to a BDU's interactive capability, broadcasters will have to produce ITV programming in a format compatible with the BDU's platforms. However, with respect to transport-based platforms, BDUs need not offer their interactive capability to over-the-air broadcasters who do not include ITV content in their over-the-air signals.

50. The Commission considers that requiring BDUs to disclose their set-top box and formatting standards to broadcasters would help to prevent a BDU from conferring an undue preference upon itself or another party by either refusing to disclose, or by selectively disclosing, the technical specifications of its system. It would also serve the public interest and Canadian viewers by facilitating the production and distribution of the widest possible array of ITV applications. Accordingly, all BDUs that have installed platforms for interactive applications will be expected to provide a copy of all specifications of the set-top box, middleware and any other equipment or facilities necessary for the design, production and distribution of compatible interactive applications to any programmer, or its agent, requesting this information. In addition, if a BDU decides to make any changes to its technical standards that would have a material impact on its ITV platform, the BDU should provide notice to programmers, preferably at the time it reaches a decision to proceed with any such change, but in any event, no later than six months before its implementation.

51. The Commission considers that, just as it would be unreasonable to require BDUs to accommodate a myriad of different standards on the part of broadcasters, it would be equally unreasonable to require broadcasters to make ITV enhancements available to all BDUs in a variety of formats. This would be extremely costly for broadcasters and, as such, would likely inhibit or render uneconomical the production of ITV content. Therefore, the Commission considers that broadcasters should generally make their ITV content available to BDUs that have compatible ITV platforms, while pay and specialty programmers who produce ITV content for a specific distribution platform will not generally be found to be unjustly discriminating against distributors with incompatible platforms.

ITV content in excess of capacity normally allocated to a programming service

52. The Commission will not, at this time, require the carriage of interactive services that exceed the bandwidth normally assigned to programming services. Rather, broadcasters will be able to negotiate with BDUs for the distribution of ITV content that would exceed such bandwidth.

53. The Commission notes that section 9 of the Regulations provides that no distributor shall give an undue preference to any person, including itself, or subject any person to an undue disadvantage.

54. Generally, in assessing alleged violations of section 9, the Commission would not be inclined to find that a BDU has unjustly discriminated or conferred an undue preference simply by virtue of having provided out-of-broadcast-band carriage to the ITV content of one broadcaster and not another. In the Commission's view, it would be unreasonable to expose BDUs to potentially open-ended demands for capacity. Such demands could have the effect of stifling the development of ITV rather than encouraging experimentation and cooperation between BDUs and broadcasters.

55. At the same time, the Commission would be inclined to consider a BDU that made a practice of giving priority or preference to its own interactive services, or those of an affiliate, to be in contravention of section 9.

Return paths

56. The Commission notes that parties other than BDUs can provide return paths for ITV services. Accordingly, the Commission will not require BDUs to provide a return path for ITV services. Rather, access to a return path provided by the distributor will be a matter of negotiation between broadcasters and distributors.

57. Generally, in assessing alleged violations of section 9 of the Regulations, the Commission would not be inclined to find that a BDU has unjustly discriminated or conferred an undue preference simply by virtue of having provided a return path to one broadcaster and not another. However, as noted above with respect to the out-of-broadcast-band carriage of ITV content, the Commission would be inclined to consider a BDU that made a practice of giving priority or preference to its own interactive services, or those of an affiliate, with respect to access to return paths, to be in contravention of section 9.

Secretary General

This document 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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