ARCHIVED -  Letter

Ottawa, 29 November 2013

Ms. Cynthia Rathwell
Vice President
Regulatory Affairs
Shaw Communications Inc.
40 Elgin Street, Suite 1400
Ottawa, Ontario K1P 5K6

RE: Request for Final Extension of Local Television Satellite Solution Broadcasting Decision CRTC 2010-782

Dear Ms. Rathwell:

This is in response to your letter of October 11, 2013, in which Shaw Communications Inc. for Shaw Direct (Shaw) requested approval to: 1) extend the eligibility period for the Local Television Satellite Solution (LTSS) for a final 12 months to November 30, 2014; 2) to reallocate tangible benefit funds towards the administration of the program during that period; and 3) to reallocate any unspent funds following the end of the eligibility period towards the maintenance of the LTSS program until August 31, 2019. As described herein, the Commission approves the final extension of the program eligibility period and reallocation of the tangible benefit funds requested during that period. The Commission denies the reallocation of unspent funds, once the eligibility period expires, to the maintenance of the program and directs Shaw, consistent with Broadcasting Decision CRTC 2010-782, to reallocate any unspent funds to the development, creation and promotion of incremental, independently-produced programming of national interest initiative.

The Commission notes that, as part of the purchase of Canwest Global Communications Inc. (Canwest) in Broadcasting Decision CRTC 2010-782, 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 have lost 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 the $15 million LTSS benefit to costs incurred to implement and administer the service during the initial eligibility period ending November 30, 2011. A one-year extension of the offer period was granted permitting an additional $1.5 million to administer the program ending on November 30, 2012, and an additional $1.5 million to administer the program during a second one-year extension of the offer period ending on November 30, 2013. Shaw was also authorized to allocate $1 million of the benefit funds to undertake a targeted local marketing campaign in order to increase awareness of the program in the first 1-year extension period ending November 30, 2012, and an additional $1 million in the second 1-year extension period ending November 30, 2013.

Final Extension of Program Offer Period

In your letter, Shaw noted that subscriptions to the LTSS program have increased 400% from August 31, 2012 to August 31, 2013, and that a total of 25,946 households have availed themselves of the program. Shaw further indicated that given the actual month over month rate of subscription and the approval of the final extension period, the threshold of 31,500 subscriptions would be expected to be reached approximately at the end of August 2014.

As the program has not been fully subscribed, and to continue to ensure a smooth digital broadcasting transition in Canada at minimum public expense, Shaw proposed to extend the offer period for a final 12 months, to November 30, 2014. In order to extend the offer as proposed, Shaw sought approval to allocate an additional $1.5 million of the LTSS benefits towards administration of the program during that period.

Considering that qualifying households still seek access to the program as demonstrated by the continued uptake of subscriptions and that sufficient funds remain in the program, the Commission considers it appropriate to extend the offer period of the program from November 30, 2013 to November 30, 2014, and to approve the allocation of $1.5 million of the LTSS benefit to administer the program during that period, provided that the program is made available to 31,500 households, if such demand materialize. This extension is final as the Commission also considers that sufficient time would have been provided to eligible Canadians affected by the DTV transition to subscribe to the LTSS program.

Marketing of the LTSS

In your letter, Shaw also indicated that the $1 million allocation that was approved towards marketing expenditures in the offer period ending on November 30, 2013, was not used because of the success of the 2012 campaign and the uptake of subscriptions that resulted from it.

Considering that the current extension to the offer period is final, the Commission expects that Shaw directs previously approved funds towards local marketing in order to ensure that the maximum subscription target of 31,500 households is reached. The Commission further expects that Shaw will continue to make readily available information describing the program and subscription process on its website. This information should be accessible from Shaw’s homepage for the duration of the eligibility period unless the program is fully subscribed prior to November 30, 2014.

Redirection of benefits past the eligibility period towards administration expenditures

In your letter, Shaw requested that following December 1, 2014 and for the duration of the LTSS program, ending August 31, 2019, an expenditure of $50,000 per month be allocated for administration costs of the LTSS program maintenance until the $15 million LTSS benefit is depleted.

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

The Commission denies the reallocation of unspent funds, once the eligibility period expires, to the maintenance of the LTSS program. Further the Commission reiterates the expectation as set out in Broadcasting Decision CRTC 2010-782 that any unspent funds be reallocated to the development, creation and promotion of incremental, independently-produced programming of national interest initiative.

The Commission commends Shaw for its continuous efforts in ensuring that Canadian households maintain access to local and regional programming.

Sincerely,

John Traversy
Secretary General

Date modified:

2013-11-29