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Our reference: 560006
Ottawa, 12 December 2011
Ms. Alyson J. Townsend
President & CEO
Canadian Cable Systems Alliance Inc.
447 Condola Point Road
Quispamsis, NB
E2E 1E1
Dear Ms. Townsend:
I am writing in response to your letter of December 1, 2011. This response supersedes my letter to you dated December 9, 2011.
In Broadcasting Regulatory Policy CRTC 2011-601, the Vertical Integration Policy, the Commission set out its response to the issues raised by vertical integration including the “Code of conduct for commercial arrangements and interactions”. I want to be clear, the Code is in effect and members of the industry are to conduct themselves accordingly.
Further, I wish to draw your attention to paragraphs 99 and 105 of the Policy, which provide:
99. In Broadcasting Regulatory Policy 2011-415, the Commission further determined that, pending the outcome of the current proceeding, the following practice would apply:
A programming undertaking that is in negotiations with a broadcasting distribution undertaking or the operator of an exempt distribution undertaking with respect to the terms of carriage of programming originated by the programming undertaking should continue to provide the distributor or operator with its programming services on the same terms and conditions as contained in the last agreement reached between the concerned undertakings.
A broadcasting distribution undertaking that is in negotiations with a programming undertaking with respect to the terms of carriage of programming originated by that programming undertaking should continue to distribute the programming services of that programming undertaking on the same terms and conditions as contained in the last agreement reached between the concerned undertakings.[8]
105. Accordingly, before the end of the year, the Commission will issue a notice of consultation containing regulatory amendments to implement the standstill rule described above. The decisions reached in Broadcasting Regulatory Policy 2011-415 will remain in effect until these amendments are made.
This is to ensure that services continue to be offered and continue to be distributed while negotiations are ongoing between programming services and distributors.
In addition to the new Vertical Integration Policy there are existing regulatory provisions that govern the relationship between programming services and distributors. One of those is the prohibition on the conferring of an undue preference or subjecting a person to an undue disadvantage. Should any party feel that this prohibition is being contravened they may file an application with the Commission. In addition, should parties be unable to reach an agreement on the distribution of a programming service they can apply to the Commission for dispute resolution and the Commission can order a standstill pending its resolution of the dispute.
Finally, there are some aspects of the Vertical Integration Policy which are to be implemented by amendments to regulations or exemption orders. Examples of these are provisions relating to head start and standstill. These specific provisions referred to in the policy will only come into effect when the amendments are made.
I trust that this makes the position of the Commission clear.
Sincerely,
Konrad von Finckenstein, Q.C.
c.c.: John Traversy, Secretary General, CRTC
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