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Ottawa, 29 November 2011

Our Reference: 555745

Mr. Jean Brazeau
Senior Vice President
Regulatory Affairs
Shaw Communications Inc.
40 Elgin Street, Suite 1400
Ottawa, Ontario K1P 5K6

Dear Mr. Brazeau:

This is further to Shaw’s letter of October 14, 2011, in which you provided an update to the implementation of Shaw’s Local Television Satellite Solution (LTSS) and requested a reallocation of tangible benefit funds towards an extension to the service and a marketing campaign as well as a redirection of unspent funds towards the conversion of a number of Shaw Direct’s services to MPEG-4.

As part of the purchase of Canwest Global Communications Inc. (Canwest), Shaw allocated a portion of its tangible benefits package to the provision of free local or regional services, and the necessary satellite receiving equipment and installation services, for up to 31,500 households that lose access to one or more local over-the-air stations as a result of the digital television (DTV) transition. Shaw was authorized to allocate $1 million of this $15 million benefit to costs incurred to implement and administer the service during the current offer period, which began on 1 May 2011 and will end on 30 November 2011.

Extension of LTSS offer period and marketing campaign

In Shaw’s letter, it noted that the offer period for the LTSS program will soon end and indicated that additional qualifying households may seek access to the service, particularly if over-the-air viewers lose access to CBC/Radio-Canada’s programming once its authorization to continue operating 22 analog television transmitters in major markets expires on 31 August 2012 . Accordingly, and in light of the modest uptake of the LTSS, Shaw proposed to extend the offer period for an additional 12 months, to 30 November 2012, and sought approval to allocate an additional $1.5 million of the LTSS benefit towards administration of the program during that period.

Shaw further noted that public awareness of the program has been limited by the absence of a marketing campaign, and proposed to allocate an additional $1 million to marketing of the LTSS service in local media in affected markets. In Shaw’s view, a public education and awareness campaign will result in increased uptake of the LTSS program and is consistent with the Commission’s and Government’s objectives to achieve the smoothest possible digital transition.

As the LTSS is not fully subscribed, and as it is foreseeable that qualifying households may still seek access to the program, the Commission considers it appropriate to extend the offer period of the program to 30 November 2012. To ensure that qualifying households are aware of the LTSS service, the Commission also considers it appropriate to increase public awareness of the service in affected markets. Accordingly, the Commission approves Shaw’s proposal to allocate an additional $2.5 million of the LTSS benefit to extend the offer period and to implement a marketing campaign, as set out above, provided that the program is made available to 31,500 households if such demand exists.

Redirection of benefits to the conversion of services to MPEG-4

In Broadcasting Decision CRTC 2010-782, the Commission indicated that any surplus experienced by the LTSS is to be redirected to the development, creation and promotion of incremental, independently-produced programming of national interest.

In Shaw’s letter, it indicated that the LTSS has been over-funded while other measures to support the digital transitions of local broadcasters may yet be undertaken. As a result, Shaw requested that an estimated LTSS surplus of $10 million be redirected towards Shaw Direct’s roll-out of advanced MPEG-4 compression technology, which would allow for the carriage of 15 Local Programming Improvement Fund (LPIF) eligible stations in high definition (HD). Shaw indicated that this proposal is consistent with the purpose of the original LTSS benefit and that these local stations would otherwise only be carried in standard definition.

Shaw, on 11 February 2011, had applied to redirect tangible benefit funds towards MPEG-4 conversion. The Commission, in its letter dated 18 March 2011, stated that it is not prepared to entertain the request by Shaw to amend the tangible benefits package approved in Broadcasting Decision CRTC 2010-782. Further, given the foreseeable increased interest in Shaw’s LTSS program, the Commission is of the view that it is inappropriate to consider Shaw’s request to redirect funds to MPEG-4 conversion.

LTSS eligibility & reporting

The Commission has received a number of reports that Canadians who have lost access to one or more over-the-air signals have been deemed ineligible for the LTSS program. Although Shaw has added flexibility to the eligibility assessment of its program to address this concern, it is expected that all necessary measures will be taken to ensure that over-the-air viewers that lose access to local programming
as a result of the DTV transition are provided access to this program.

Lastly, the Commission looks forward to the first of Shaw’s annual reports to the Commission, due on 30 November 2011, detailing progress in fulfilling tangible benefits related to the purchase of Canwest.



John Traversy
Secretary General

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