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Broadcasting - Commission Letter addressed to Chris Edwards (Canadian Communication Systems Alliance Inc.) and Kevin Goldstein (Goldstein Communications Law)

Ottawa, 20 September 2022

BY E-MAIL

Mr. Chris Edwards
Vice-President, Regulatory Affairs
Canadian Communication Systems Alliance Inc.
cedwards@ccsaonline.ca

Mr. Kevin Goldstein
Goldstein Communications Law
kevin@goldsteincommunicationslaw.com

Re: Request for final offer arbitration (2022-0802-4) with respect to Telelatino Network discretionary service

Dear Mr. Edwards and Mr. Goldstein:

Pursuant to sections 12 to 15 of the Broadcasting Distribution Regulations, sections 14 and 15 of the Discretionary Services Regulations, and Broadcasting and Telecom Information Bulletin CRTC 2019-184(the Bulletin), this letter is to advise the parties that the Commission accepts the request by Canadian Communication Systems Alliance Inc. (CCSA) for final offer arbitration (FOA) with Telelatino Media Group (TMG) regarding the Telelatino Network (TLN) discretionary service.

This letter sets out the matters upon which the Commission will make a determination, the dates upon which the FOA process is to be conducted, and the procedure to be followed.

The Commission strives to release FOA decisions as expeditiously as possible. However, any procedural issues that arise may result in delays to the applicable timelines (see details in the attached Procedural Appendix).

The application

On 25 August 2022, the Commission received a request for FOA from CCSA, pursuant to sections 12 to 15 of the Broadcasting Distribution Regulations, for the purpose of establishing packaged rates for the distribution of TLN.

In its application, CCSA explains the potential for retroactive payments if the FOA is not processed according to the Commission’s service standards. CCSA does not see a basis for further Commission mandated mediation outside of the FOA process.

CCSA further asserted that this case meets all of the criteria for FOA set out in paragraph 4 of the Bulletin:

In its response dated 30 August 2022, TMG supported CCSA’s application and proposed scope. TMG further requested that the Commission follow their service standards and the already “aggressive” timelines for the processing of FOAs as set out in the Bulletin.

Commission Decision

Upon review of the record, the Commission considers that FOA is the appropriate method of dispute resolution in this case, as the dispute is exclusively monetary, involves only two parties, and otherwise meets the criteria for dispute resolution set out in paragraph 4 of the Bulletin (as listed above).

Accordingly, the Commission accepts CCSA’s application for FOA.

In accordance with paragraph 22 of the Bulletin, the matter upon which the Commission will make a determination is as set out by CCSA and agreed upon by TMG.

In the final offers to be submitted, the parties’ proposals must be consistent with the Commission’s characterization of the matter in dispute, as noted above. Staff may ask the parties to respond to clarifying questions following the submission of final offers, as needed, to ensure a complete record for Commissioners to make a determination.

The Commission will examine the final offers submitted by the parties and will select one in its entirety. Footnote1 The Commission’s decision will be binding on the parties, specifically TMG and each member of the CCSA.

Documents to be provided

The Commission requires that the parties each file their final offers with the Commission by 5 October 2022. Refer to the attached Procedural Appendix for the procedure to be followed in the filing of documents, in addition to the Bulletin.

When preparing your arguments, please refer, where applicable, to the criteria for fair market value set out in the Wholesale Code, Broadcasting Regulatory Policy CRTC 2015-438. As noted in the Interpretation of the Wholesale Code, Broadcasting Information Bulletin CRTC 2022-140, the Commission will determine which fair market value factors are applicable in a given case and assess proposed rates or final offers in relation to those factors.

In addition, the Commission will apply, where appropriate, a public interest test that examines whether the proposed wholesale rates are consistent with the relevant public policy objectives. To that end, the parties can make submissions on which public policy objectives are relevant to this case. Footnote2

To complete the record, CCSA must also provide the following information, by 5 October 2022 Footnote3 Footnote4 :

  1. The latest affiliation agreement between CCSA and TMG for the distribution of TLN and any applicable amendment (or whatever term sheet may apply);
  2. The wholesale rates paid by CCSA members for TLN when offered in a preassembled and/or build-your-own package (as applicable);
  3. The average monthly number of subscribers to CCSA’ licensed and exempt BDUs, and the average monthly number of subscribers to TLN, in preassembled and/or build-your-own package (as applicable);
  4. The retail rate for packages (including build-your-own) offered by CCSA members that include TLN;
  5. CCSA members’ subscribers’ viewership of TLN via set-top-box data, including average minute audience and the total number of hours watched (as available);
  6. The wholesale rates paid by CCSA for other comparable services (Canadian and foreign) in a preassembled and/or build-your-own package (as the case may be);
  7. The average monthly number of subscribers to each comparable service (Canadian and foreign) distributed by CCSA;
  8. The retail rate for preassembled or build-your-own package packages on each comparable service (Canadian and foreign) distributed by CCSA members; and
  9. CCSA members subscribers’ viewership to all other comparable services offered by CCSA (e.g., set top box data, average minute audience, total number of hours watched).

To complete the record, TMG must also provide the following information by 5 October 2022 Footnote5 Footnote6 .

  1. Affiliation agreements in effect between TMG and other BDUs in the Canadian market for the distribution of TLN;
  2. The wholesale rates broken down by preassembled and/or build-your-own packages (as applicable) for each BDU (other than CCSA members) that distribute TLN;
  3. The average number of subscribers and actual penetration levels for each BDU (other than CCSA members) that distribute TLN;
  4. Subscribers’ viewership of TLN via set-top-box data, including average minute audience and the total number of hours watched; and,
  5. Total payments received by TMG from each BDU (including CCSA members) that distributes TLN.

By 11 October 2022, once Commission staff has confirmed that the offers respond to the identified scope of the proceeding, they will forward to each party a copy of the other party’s offer. Should clarification questions be required, staff will notify the parties and specify the timeline for a response.

The parties will have until 17 October 2022 to file comments on the other party’s final offer with the Commission, and to serve a copy of those comments on the other party. However, neither party will be authorized to amend its offer.

As soon as possible after the filing of comments, Commission staff will communicate with the parties to schedule a mandatory mediation session to support reaching a mutually-beneficial solution. Should the mediation not be successful, the Commission will proceed to render its final decision.

Any documents filed with the Commission should be filed via the secure service “My CRTC Account” (GCKey or Partner Log In) using the “Broadcasting Online Form and Cover Page” on that same webpage and quoting the application number 2022-0802-4.

A redacted copy of this letter will be added to the public record.

Responsibilities of the parties

The parties may contact Jonathon Greenberg at 819-664-4492 or at jonathon.greenberg@crtc.gc.ca if they require additional information regarding the organization and conduct of the final offer proceeding.

Where a document is to be filed or served by a specific date, the document must be received, not merely sent, by that date. In addition to filing with the Commission via “My CRTC Account”, the parties must send copies of all the documents in question to Differends-disputes@crtc.gc.ca and jonathon.greenberg@crtc.gc.ca.

Yours sincerely,

Signed by Claude Doucet
Secretary General

APPENDIX

Procedural Appendix

Information Bulletin CRTC 2019-184 sets out the practices and procedures to be followed in FOA (par. 17-33), as well as matters relating to the filing of documents and confidentiality (par. 58-64). Parties should be aware that any deviation from the FOA process may result in delays to the applicable timelines.

Filing of documents

Parties must follow the following naming convention in filing documents via GC key:

FOA – Application number – Filing party – Document name – Document version – Filing date (yyyy-mm-dd)

In the confidential CRTC version, parties are to highlight text that is designated confidential towards the other party in green, and confidential towards the public in yellow.

Confidentiality

In accordance with paragraph 59 of Information Bulletin CRTC 2019-184, existing Commission confidentiality rules and practices will apply throughout the FOA proceedings. The applicable rules and practices are set out in the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure (the Rules) and described in Broadcasting and Telecom Information Bulletin 2010-961.

Subsection 31(1) of the Rules provides that in broadcasting matters, a party may designate information related to the following as confidential:

  1. information that is a trade secret;
  2. financial, commercial, scientific or technical information that is confidential and that is treated consistently in a confidential manner by the person who submitted it; or
  3. information the disclosure of which could reasonably be expected:
    1. to result in material financial loss or gain to any person;
    2. to prejudice the competitive position of any person; or
    3. to affect contractual or other negotiations of any person.

Subsection 31(2) of the Rules provides that the party must make the designation at the time that they file the document that contains the information. Moreover, the party that designates information as confidential must provide reasons, as well as any supporting documents, why the disclosure of the information would not be in the public interest, including why the specific direct harm that would be likely to result from the disclosure would outweigh the public interest.

[These sections are only an excerpt of the applicable Rules.]

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