ARCHIVED - Broadcasting Decision CRTC 2013-206

This page has been archived on the Web

Information identified as archived on the Web is for reference, research or recordkeeping purposes. Archived Decisions, Notices and Orders (DNOs) remain in effect except to the extent they are amended or reversed by the Commission, a court, or the government. The text of archived information has not been altered or updated after the date of archiving. Changes to DNOs are published as “dashes” to the original DNO number. Web pages that are archived on the Web are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, you can request alternate formats by contacting us.

PDF version

Route reference: Part 1 applications posted on 5 September 2012

Ottawa, 30 April 2013

Cogeco Cable Canada GP Inc. (the general partner) and Cogeco Cable Canada Inc. (the limited partner), carrying on business as Cogeco Cable Canada LP
Bath, Douglastown, Lancaster, Rockwood, Smithville and Wallaceburg, Ontario

Cogeco Cable Québec 2009 Inc. and Cogeco Cable Canada Inc., partners in a general partnership carrying on business as Cogeco Cable Quebec General Partnership
Acton Vale, Bécancour (Gentilly sector), Courcelles, Danville, Daveluyville, East Broughton, Forestville, Lac Carré, La Guadeloupe, Notre-Dame-du-Bon-Conseil, Rivière Beaudette, Saint-Anicet, Saint-Benoît-Labre, Saint-Donat-de-Montcalm, Saint-Ephrem-de-Beauce, Saint-Ferdinand (Bernierville sector), Saint-Léonard-d’Aston, Saint-Prosper-de-Dorchester, Saint-Théodore-d’Acton, Saint-Théophile, Saint-Vital de Lambton, Sainte-Anne-des-Lacs, Sainte-Gertrude, Tring-Jonction, Valcourt and surrounding areas, Quebec

Applications 2012-1053-3 and 2012-1054-1
Applications 2012-0989-1 and 2012-0991-6, received on 17 August 2012

Licence amendments, deletion and exemption of licensed service areas and revocation of licences

The Commission denies two applications that would have allowed the licensees to be relieved retroactively of their regulatory obligations regarding contributions that they must make to Canadian programming. However, the Commission approves the revocation of the licensees’ licences effective 1 September 2012 so that they can operate their undertakings under the terms and conditions of the exemption order. This will allow them to fund the operation of their community channels using the entire contribution to Canadian programming required by the Commission.

The applications

1. The Commission received two applications by Cogeco Cable Canada LP¹ (Cogeco Canada) relating to the regional broadcasting licence of broadcasting distribution undertakings (BDUs) serving Bath, Douglastown, Lancaster, Rockwood, Smithville and Wallaceburg, Ontario (applications 2012-1053-3 and 2012-0991-6).

2. The Commission also received two applications from Cogeco Cable Québec General Partnership² (Cogeco Québec) relating to the regional broadcasting licence of BDUs serving Acton Vale, Bécancour (Gentilly sector), Courcelles, Danville, Daveluyville, East Broughton, Forestville, Lac Carré, La Guadeloupe, Notre-Dame-du-Bon-Conseil, Rivière Beaudette, Saint-Anicet, Saint-Benoît-Labre, Saint-Donat-de-Montcalm, Saint-Ephrem-de-Beauce, Saint-Ferdinand (Bernierville sector), Saint-Léonard-d’Aston, Saint-Prosper-de-Dorchester, Saint-Théodore-d’Acton, Saint-Théophile, Saint-Vital de Lambton, Sainte-Anne-des-Lacs, Sainte-Gertrude, Tring-Jonction, Valcourt and surrounding areas, Quebec (applications 2012-1054-1 and 2012-0989-1).

3. In applications 2012-1053-3 and 2012-1054-1, Cogeco Canada and Cogeco Québec requested that the Commission add a condition of licence retroactive to 1September 2010 that would allow them to be relieved of certain of their regulatory obligations regarding mandatory contributions to Canadian programming.

4. Further, Cogeco Canada and Cogeco Québec requested that the Commission delete the above-mentioned service areas from their licences effective 1 September 2012 and that it exempt them from the requirement to hold a licence to operate their BDUs in these service areas (applications 2012-0991-6 and 2012-0989-1).

5. The Commission did not receive any interventions in connection with these applications.

Background

6. The Broadcasting Distribution Regulations (the Regulations) require BDUs to contribute 5% of their gross annual revenues derived from broadcasting activities to Canadian programming. Contributions to Canadian programming can take many forms, including contributions made by BDUs to fund the operation of their community channel (“local expression”) or contributions used to fund Canadian programming through production funds such as the Canadian Television Fund and certified independent production funds.

7. Until 31 August 2011, the Regulations made a distinction between Class 1, 2 and 3 terrestrial BDUs. Class 3 BDUs, which generally served a smaller number of subscribers, were not required to contribute to Canadian programming. However, in Broadcasting Regulatory Policy 2011-455, the Commission made certain amendments to the Regulations that came into effect on 1 September 2011. These amendments included the elimination of the different licence classes. Accordingly, former Class 3 BDUs were for the first time required to contribute to Canadian programming and to the Local Improvement Programming Fund³ (LPIF) on the same basis as the largest BDUs.

8. These amendments to the Regulations were accompanied by a series of regulatory amendments that must be considered as a whole, including those set out in Broadcasting Public Notice 2008-100. In that notice, the Commission indicated that the existing licensing regime could be streamlined and that a greater number of small BDUs could be exempted from regulation without detracting in a material manner from the implementation of Canadian broadcasting policy. The Commission consequently decided to exempt under a single exemption order all terrestrial BDUs serving fewer than 20,000 subscribers.

9. Once exempt from the requirement to hold a licence, these BDUs are no longer subject to the provisions concerning Canadian programming or LPIF contributions set out in the Regulations. On the contrary, they are now subject to the conditions set out in the exemption order for terrestrial BDUs serving fewer than 20,000 subscribers.⁴ Under this exemption order, these BDUs are permitted to use all of their mandatory contributions to Canadian programming to fund their community channels.

10. In Broadcasting Regulatory Policy 2009-543, the Commission indicated that licensees of undertakings serving fewer than 20,000 subscribers that for one reason or another were ineligible for exemption could request that the Commission impose a condition of licence allowing them to be relieved of the new requirements regarding contributions to Canadian programming and to the LPIF. As a result, all BDUs serving fewer than 20,000 subscribers and that wished to direct their entire 5% contribution to fund their own community channels could file an application with the Commission for the revocation of their licences.

Commission’s analysis and decisions

11. Under section 34 of the Regulations, a BDU licensee that distributes its own community programming on the community channel must make a contribution to Canadian programming in each broadcast year that is equal to or greater than the following:

5% of its gross revenues derived from broadcasting activities in the broadcast year less any contribution to local expression made by the licensee in that broadcast year; or
3% of its gross revenues derived from broadcasting activities in the broadcast year.

12. After examining the public record for these applications in light of applicable regulations and policies, the Commission considers that the issues it must address are the following:

the appropriateness of adding a condition of licence retroactive to 1 September 2010 to relieve Cogeco Canada and Cogeco Québec of their regulatory obligations concerning mandatory contributions to Canadian programming; and
the deletion and exemption of authorized service areas effective 1 September 2012, and the revocation of the licences.

Application for a retroactive condition of licence

13. Cogeco Canada and Cogeco Québec recently realized that they had failed to submit an application to the Commission for a condition of licence to relieve some of their non-exempt BDUs from the requirements relating to Canadian programming contributions. For this reason, Cogeco Canada and Cogeco Québec requested that the Commission impose such a condition of licence retroactive to
1 September 2010.

14. In support of their applications, Cogeco Canada and Cogeco Québec submitted that the BDUs in question contributed 5% of their broadcasting revenues to local expression for the 2010-2011 and 2011-2012 broadcast years. They submitted that because they contributed 5% of their revenues to fund community programming during the period in question, the retroactive approval of the condition of licence would have the same effect as if it had been approved before the obligation to Canadian programming was imposed.

15. The Commission is not satisfied that the arguments provided by Cogeco Canada and Cogeco Québec are sufficient to justify granting them an exception to the Regulations that would allow them to be relieved retroactively of the obligation to make contributions to Canadian programming.

16. In this case, the Commission notes that since the regulatory consolidation of 1 September 2011, certain of the BDUs of the applicants continued to be operated under a broadcasting licence and did not make their contributions to Canadian programming in accordance with the provisions set out in the Regulations. On the contrary, these BDUs mistakenly contributed 5% of their revenues to local expression.

17. In their applications, Cogeco Canada and Cogeco Québec indicated that they had not been aware of the impacts of the changes to the Regulations on their BDUs. In a letter dated 12 October 2012, the applicants submitted that they had made the payments to Canadian programming and the LPIF required under the Regulations. In the same letter, the applicants confirmed that despite the payment of these contributions, they maintained their requests for a retroactive condition of licence.

18. The Commission notes that since 31 August 2009, applicants can request the exemption of their BDUs under Broadcasting Order 2009-544 or the imposition of a condition of licence under Broadcasting Regulatory Policy 2009-543 to be relieved of the obligation to contribute to Canadian programming. However, the applicants did not take advantage of these opportunities in a timely fashion and are now seeking to remedy the situation retroactively.

19. The Commission considers that the arguments put forward by the applicants, namely their failure to submit their applications to add such a condition of licence in a timely manner and their conclusion regarding the impact that the imposition of such a condition of licence would have on Canadian programming, are not sufficient to justify the proposed amendment.

20. In light of all of the above, the Commission denies the applications to amend the regional broadcasting licences for the BDUs serving the above-mentioned localities by adding a condition of licence retroactive to 1 September 2010 relieving the applicants of their regulatory obligations regarding mandatory contributions to Canadian programming.

Deletion and exemption of licensed service areas, and revocation of licences

21. The applicants also filed applications to delete and exempt licensed service areas as of 1 September 2012 from the above-mentioned licences and to revoke these licences (applications 2012-0989-1 and 2012-0991-6).

22. In Broadcasting Public Notice 2008-100, the Commission decided that BDUs operating under regional licences might apply to “carve out” (i.e. remove or delete) certain service areas from their licences so that they may operate in those areas as exempt undertakings, provided they met certain conditions.

23. In Broadcasting Order 2009-544, the Commission indicated that parties seeking to qualify for exemption from licensing requirements should file applications with the Commission to request a licence revocation.

24. With regard to BDUs operating under regional licences, the Commission set out criteria to assess if their operations in a specific area constituted a discrete operation that would be eligible for exemption under Broadcasting Order 2009-544. Specifically, the Commission stated that it would consider applications to carve out a service area from a regional licence if in that service area the licensee:

(a) operates separate head-end facilities;

(b) distributes one or more unique priority (local and/or regional) television stations as part of its basic service in the service area that are not offered as part of the basic service in other service areas in which the BDU operates under the same regional licence; or

25. The Commission included a requirement that in order to qualify under (c) above, BDUs that do not operate a community channel specific to the particular service area⁵ must demonstrate that 5% or more of the gross broadcasting revenues derived from that service area have been spent on community programming specific to that area in the previous broadcast year.

26. Cogeco Canada requested the deletion of the authorized service areas of Bath, Douglastown, Lancaster, Rockwood, Smithville and Wallaceburg from its regional licence, while Cogeco Québec requested the deletion of the authorized service areas of Acton Vale, Bécancour (Gentilly sector), Courcelles, Danville, Daveluyville, East Broughton, Forestville, Lac Carré, La Guadeloupe, Notre-Dame-du-Bon-Conseil, Rivière Beaudette, Saint-Anicet, Saint-Benoît-Labre, Saint-Donat-de-Montcalm, Saint-Ephrem-de-Beauce, Saint-Ferdinand (Bernierville sector), Saint-Léonard-d’Aston, Saint-Prosper-de-Dorchester, Saint-Théodore d’Acton, Saint-Théophile, Saint-Vital de Lambton, Sainte-Anne-des-Lacs, Sainte-Gertrude, Tring-Jonction, Valcourt and surrounding areas from its regional licence. In support of their applications, Cogeco Canada and Cogeco Québec indicated that the above-noted service areas have fewer than 20,000 subscribers and meet the discrete operation test for community programming expenditures. Cogeco Canada and Cogeco Québec requested that the Commission decision be retroactive to 1 September 2012.

27. Since the licensees have filed documentation demonstrating that they devote 5% or more of the gross broadcasting revenues derived from these areas to community programming specific to these areas and have rectified their situation of non-compliance by making the required contributions under section 34 of the Regulations, the Commission approves the applications by Cogeco Canada and by Cogeco Québec to delete and exempt the above-noted licensed service areas as of 1 September 2012.

28. Further, since there will no longer be licensed service areas under the regional licences subsequent to the deletion of these areas, the Commission approves the applications by Cogeco Canada and Cogeco Québec to revoke these regional broadcasting licences.

29. On 26 July 2012, the Commission issued Broadcasting Order 2012-408 to implement amendments made to the Regulations in Broadcasting Regulatory Policy 2012-407. Appendix 1 to that order sets out the terms and conditions of the exemption order relating to terrestrial BDUs serving fewer than 20,000 subscribers.

30. The Commission reminds Cogeco Canada and Cogeco Québec that they must at all times comply with the terms and conditions set out in Appendix 1 to Broadcasting Order 2012-408, as amended from time to time, for all of the above-noted areas.

31. In addition, to continue operating these undertakings as discrete operations eligible for exemption under this exemption order, Cogeco Canada and Cogeco Québec must maintain their current minimum contribution of 5% to community programming for each of the carved-out service areas.

Secretary General

Language selection

Search and menus

Search