ARCHIVED - Letter

Ottawa, 27 September 2010

Natalie MacDonald
Vice President, Regulatory Matters
Bragg Communications Incorporated
6080 Young Street, Suite 801
Halifax, Nova Scotia
B3K 5M3
Email: regulatory.matters@corp.eastlink.ca

Dear Ms. MacDonald :

Re: Application by Bragg Communications Inc. to be exempted from Broadcasting Regulatory Policy 2009-560

The Commission has received and considered Bragg Communications Inc.’s (Bragg) application dated 8 April 2010, supplemented by comments filed on 9 August 2010, to be exempted from Broadcasting Regulatory Policy 2009-560, and more specifically from the requirement to file the public version of the aggregated annual return for broadcasting distribution undertakings (BDUs) on the public record. Bragg also filed comments with the Commission regarding its application on 14 September 2010.

In Broadcasting Regulatory Policy 2009-560 the Commission determined that the disclosure of the public version of the aggregated annual return filed by the large ownership groups, including Bragg, was in the public interest, and that any harm that would result from such disclosure did not outweigh the public interest.

The Commission considers that Bragg’s application, with the exception of its submissions regarding section 8 of the Canadian Charter of Rights and Freedoms (Charter) which are considered below, does not raise, in substance, any new arguments or evidence which was not considered by the Commission in making its determinations in Broadcasting Regulatory Policy 2009-560.

The Commission notes that Bragg owns approximately 600 BDUs, which are located in nine provinces. Bragg is the dominant cable BDU service provider in Nova Scotia and Prince Edward Island and provides service to a number of communities in Newfoundland and Labrador, making it a significant regional provider of cable BDU services. According to the Commission’s records, the next largest owner of BDUs after Bragg is approximately 1/6th the size of Bragg in terms of broadcasting distribution revenues and number of subscribers. Bragg provides service to roughly 4% of Canadian households that subscribe to the services of a BDU.

While it is true that many of Bragg’s cable systems are exempt from licensing, the Commission notes that exempt BDUs with over 2,000 subscribers are nevertheless required to file financial information with the Commission pursuant to Broadcasting Order 2009-544. The Commission further notes that this information is aggregated along with information on the licensed BDUs in an ownership group in the aggregated annual return. As such, the Commission does not consider the fact that most of Bragg’s systems are unlicensed outweighs the public interest in disclosing the aggregated annual return for Bragg.

In light of the above, the Commission continues to consider that Bragg occupies an important position in the Canadian broadcasting system and that disclosure of the information in the aggregated annual return would serve the Commission’s goal, expressed in Broadcasting Regulatory Policy 2009-560, of making available sufficient data related to large ownership groups so that the public can participate in the Commission’s public proceedings and decision-making processes in a better informed and more meaningful manner. As such, the Commission considers that disclosure of Bragg’s aggregated annual return is in the public interest.

The Commission notes that Broadcasting Regulatory Policy 2009-560 only requires the disclosure of aggregated information. The aggregated annual returns do not provide information on individual undertakings.

As a result, the Commission considers that the disclosure of the information in the aggregated annual returns would not prejudice the ability of Bragg to compete, particularly where its most significant competitors are themselves disclosing aggregated financial information. Similarly, the Commission is not convinced that Bragg’s competitors would be able to target market segments or areas of Bragg’s business based on the aggregated information contained in the returns.

The Commission also considers that Bragg has failed to demonstrate how disclosure of the information in the aggregated annual return will negatively affect Bragg’s ability to negotiate contracts or access credit. Large programming undertakings, including pay and specialty undertakings, are also subject to public disclosure requirements. While Bragg has made assertions in this regard, it has failed to support these assertions with a credible explanation as to why disclosure will have the claimed effect.

With respect to Bragg’s claim that Broadcasting Regulatory Policy 2009-560 violates its rights under section 8 of the Charter, the Commission considers that it is not evident that Bragg has a reasonable expectation of privacy with respect to the aggregated information contained in the aggregated annual return. However, the Commission considers that even if it does, such an expectation is low in the circumstances. A number of considerations support this conclusion:

• the information is not personal information but rather is aggregated financial information produced in the course of a business;
• Bragg participates in a regulated industry and it is, from time to time, required to submit information on the public record pursuant to its obligations under the Broadcasting Act;
• there is no express protection for information submitted to the Commission under the Broadcasting Act; and
• the information is not being disclosed in the context of criminal or quasi-criminal proceedings, but to allow for more meaningful participation by the public in regulatory proceedings.

Furthermore, the Commission notes that the courts have established that a flexible approach must be adopted to evaluating whether a search or seizure is reasonable in an administrative or regulatory context.

As noted above, the Commission has determined that there is a public interest in disclosure of Bragg’s aggregated returns, and that any harm to Bragg caused by that disclosure does not outweigh the public interest. Given this finding, and the low expectation of privacy by Bragg in the information, the Commission considers that disclosure of the aggregated annual returns would not amount to a violation of Bragg’s rights under section 8 of the Charter.

In light of the above, the Commission denies Bragg’s request to be exempt from the requirement to file the aggregated return for public disclosure.

The Commission notes that to date Bragg has filed neither the confidential nor public version of the aggregated return for the 2007-2008 and 2008-2009 broadcast years. Bragg is to file such returns no later than 30 days from the date of this letter.

Sincerely,

Robert A. Morin
Secretary General

An abridged version of these comments was submitted for the public file on 16 August 2010.

Date modified:

2010-09-27