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Broadcasting Regulatory Policy CRTC 2009-639 Route reference: 2009-84 Ottawa, 9 October 2009 Amendments to the requirements set out in the lists of eligible satellite services In this regulatory policy, the Commission amends certain requirements set out in the lists of eligible satellite services, as proposed in Broadcasting Notice of Consultation 2009-84. These amendments include, among other things, the removal of the requirement that licensed broadcasting distribution undertakings receive certain services from licensed satellite relay distribution undertakings. Introduction 1. In Broadcasting Public Notice 2008-100, the Commission announced its intention to amend its current policies relating to satellite relay distribution undertakings (SRDUs) and terrestrial relay distribution undertakings (TRDUs) in order to encourage greater competition in the signal transport sector. The Commission notes that SRDUs and TRDUs generally function as wholesalers by transporting broadcasting services and making those services available to broadcasting distribution undertakings (BDUs), which then offer them to subscribers. At present, SRDUs are licensed, while TRDUs operate under an exemption order. 2. Currently, licensed BDUs are generally prohibited from distributing certain services to their subscribers unless they receive those services from a licensed SRDU. The services in question include the four U.S. commercial networks (CBS, NBC, ABC, FOX) and the non-commercial PBS network (collectively, the U.S. 4+1 signals), U.S. super stations and distant Canadian signals. The requirement to receive these services from a licensed SRDU is currently found in the lists of eligible satellite services (the lists). 3. The Commission has granted exceptions to the restriction for a number of BDUs that wished to use their own facilities to receive and transport these signals. 4. In Broadcasting Public Notice 2008-100, the Commission noted that parties that commented on this rule advocated its removal. Having considered the views expressed, the Commission stated in Broadcasting Public Notice 2008-100 that it would remove the requirement that licensed BDUs receive certain services from a licensed SRDU. Accordingly, in Broadcasting Notice of Consultation 2009-84, the Commission called for comments on amendments to the lists to remove that requirement.1 1 In Broadcasting Public Notice 2008-100, the Commission also stated that it would amend its Exemption order respecting terrestrial relay distribution network undertakings, set out in Public Notice 2000-10, in order to eliminate the requirements that undertakings operating under the order be local or regional and that they be affiliated with the BDUs to which they transport programming services. Accordingly, in Broadcasting Notice of Consultation 2009-83, the Commission called for comments on a revised TRDU exemption order. Broadcasting Order 2009-638, also issued today, sets out the Commission’s determinations in this regard. 5. In that notice of consultation, the Commission also proposed the following amendments to the lists: • the revision of requirements relating to the distribution of U.S. 4+1 signals limiting the number of sets of U.S. commercial network signals that may be distributed unless they are received over the air; • the revision of the requirement relating to the distribution of licensed television programming undertakings offering TVA or CTV programming that, in the case of licensed television programming undertakings offering such programming, a licensee also distributing the signal of a local TVA or CTV affiliate be required to delete the duplicate programming from the services offered pursuant to the lists or substitute the local service(s) when programming is identical; and • the deletion of the requirement that BDUs wishing to distribute certain services must enter into contractual agreements with those services. The Commission set out the specific changes proposed in the form of proposed revised lists appended to Broadcasting Notice of Consultation 2009-84. 6. The Commission received several comments in support of the proposed amendments to the lists as well as a comment in opposition from Shaw Broadcast Services (SBS). The Commission considers that a remaining intervention from an individual fell outside the scope of this proceeding. The interventions are available on the Commission’s website at www.crtc.gc.ca under “Public Proceedings.” Issues raised by parties 7. SBS argued that approval of the proposal presented by the Commission in Broadcasting Notice of Consultation 2009-84, as well as of the proposal presented in Broadcasting Notice of Consultation 2009-83 relating to a revised TRDU exemption order, would create competitive inequities between two classes of undertakings (i.e., TRDUs and SRDUs) that perform the same function and are differentiated only by technology. It proposed that SRDUs be granted amendments to their licences so as to provide them with the same flexibility afforded TRDUs. 8. The Canadian Cable Systems Alliance Inc. (CCSA) and Cable Cable Inc. (CCI) both supported the proposed amendments to the lists but submitted that the lists (and in particular any limitations set out therein) should only apply to licensed BDUs, while exempt systems should be allowed to carry any service authorized for distribution in Canada. CCI further submitted that, since the new requirements set out in the lists refer only to licensees that receive signals and since the current exemption orders for small systems still refer to services received by satellite, licensed systems appear to gain more flexibility from these amendments than do exempt systems. Finally, CCI submitted that some U.S. specialty services have not allowed cable companies to pass on their signals to third parties, which it considered to be inefficient as well as costly for smaller systems that would prefer to receive non-Canadian services from larger BDUs. On this point, CCI suggested that the Commission require non-Canadian services to permit signal reception by any means. 9. Quebecor Media inc. (QMI) generally supported the proposed revisions to the requirements set out in the lists but submitted that BDUs should be allowed to distribute more U.S. 4+1 signals, even if these signals are not received over the air. It also submitted that the Commission should not impose program deletion/substitution requirements on Class 3 undertakings. 10. The Commission did not receive any interventions opposing its proposal to delete requirements relating to the need for BDUs to enter into contractual arrangements with certain specified services on the lists. Commission’s analysis and determinations 11. As indicated in a letter from Commission staff to SBS dated 30 March 2009, the amendments sought by SBS were contingent upon the outcome of the proceedings initiated by Broadcasting Notices of Consultation 2009-83 and 2009-84. In Broadcasting Public Notice 2008-100, the Commission stated that it would be prepared, at the next renewals of the SRDU licences,2 to review evidence and consider whether exemption would constitute an appropriate course of action. At that time, the Commission may also consider options other than exemption, such as modifications to conditions of licence. 12. In regard to CCI’s concern that some U.S. specialty services were not allowing cable companies to pass on their signals to third parties, and in regard to its request that non-Canadian services be required to permit reception of their signals by any means, the Commission is not persuaded that it would be appropriate for it to require a programming service, be it Canadian or non-Canadian, to deal with any SRDU or TRDU that might wish to distribute its signals to BDUs. 13. In regard to CCI’s concern relating to the degree of flexibility that the proposed revisions would provide to licensed systems as compared to exempt systems, the Commission notes that, in Broadcasting Order 2009-544, it issued its Exemption order for terrestrial broadcasting undertakings serving fewer than 20,000 subscribers. Paragraph 13(a) of the terms and conditions of that exemption order, set out in the appendix to that broadcasting order, specifies that “no service received over-the-air or by any other means is distributed over the undertaking, other than a service that the Commission, by regulation or otherwise, has authorized” (emphasis added). As noted in Broadcasting Order 2009-544, paragraph 13(a) provides exempt BDUs with a general authorization to distribute any service authorized for distribution anywhere in Canada. This authorization is not limited by the conditions attached to the distribution of programming services by licensed systems unless such conditions are explicitly incorporated into the exemption order. The effect of this is that exempt BDUs will have all the flexibility afforded to licensed 2 SBS’s licence expires on 31 August 2010. systems by virtue of the amendments to the lists. 14. The Commission notes that certain comments by QMI pertain to matters that the Commission did not propose to change and therefore are not the subject of the proposals set out in Broadcasting Notice of Consultation 2009-84. In particular, the amendments relating to the number of U.S. 4+1 signals and to the deletion of duplicate programming were made solely in order to eliminate the requirement that certain signals be received by SRDUs, and do not modify the essence of these respective provisions. 15. In light of the above, the Commission amends the requirements set out in the