|
Broadcasting Decision CRTC 2006-112
|
|
Ottawa, 30 March 2006 |
|
Shaw Pay-Per-View Ltd.
Across Canada |
|
Application 2004-1398-0
Broadcasting Public Notice CRTC 2005-55
7 June 2005 |
|
Shaw DTH-PPV – Licence amendments
|
|
The Commission approves the
application by Shaw Pay-Per-View Ltd. for amendments to the licence for
its general interest direct-to-home (DTH) pay-per-view programming
undertaking. With these amendments, the service, originally authorized
as a regional service for distribution by licensed DTH satellite
broadcasting distribution undertakings in western Canada, becomes a
national service offering both English- and French-language programming
that may be distributed across Canada by such undertakings. |
|
The application
|
1. |
The Commission received an application by
Shaw Pay-Per-View Ltd. (Shaw) for amendments to the licence for its
regional, direct-to-home (DTH) pay-per-view (PPV) programming
undertaking. Under the terms of its current licence, Shaw’s service may
only be distributed in British Columbia, Alberta, Saskatchewan,
Manitoba, Yukon, Northwest Territories and Nunavut. The licensee
requested that its licence be amended in order to permit national
distribution of its service by licensed DTH satellite broadcasting
distribution undertakings (BDUs). |
2. |
Shaw is a wholly-owned subsidiary of Shaw
Communications Inc. (SCI). SCI is a company with extensive holdings in
both the programming and distribution industries, including 100%
indirect ownership of Star Choice Television Network Incorporated (Star
Choice), licensee of a national DTH BDU. |
3. |
Shaw indicated that the primary purpose of
its application was to make its DTH PPV service available to the
national audience of its DTH distribution arm, Star Choice, thereby
enabling Star Choice to compete on an equitable basis with its primary
DTH competitor, Bell ExpressVu1,
which, Shaw noted, "is already served by a vertically-integrated DTH PPV
service." |
4. |
Shaw stated that, if its request for
national distribution were approved, it would make French-language PPV
programming available as part of its service, and that it would adhere
to the following conditions of licence: |
|
- The licensee shall maintain the channels in a ratio of French to
English of 1:3, with a minimum of 5 French-language channels in
addition to a French-language barker channel.
|
|
- With respect to French-language programming, the licensee shall,
through its agreements with the licensees of DTH distribution
undertakings, ensure that, in each broadcast year, the following is
made available by these licensees to their PPV subscribers:
|
|
- a minimum of 20 Canadian feature films in the original
French-language version, or dubbed in French, which have been
exhibited in theatres in French-language markets, including all new
Canadian feature films suitable for PPV exhibition that meet the
Industry code of programming standards and practices governing pay,
pay-per-view and video-on-demand services;
|
|
- a minimum of twelve French-language events targeting the
French-language market;
|
|
- yearly minimum percentages of Canadian programming as follows:
8% of feature film titles, and 20% of all program titles other than
feature films.
|
|
- With respect to French-language feature films, the licensee shall
remit 100% of the gross revenues earned by the licensee from the
exhibition of these films to distributors and providers, with a
minimum of 60% to the program providers.
|
|
- During the period from the commencement of operations as a
national service to 31 August of that broadcast year, the licensee’s
performance with respect to commitments regarding French-language
Canadian content in feature films and events will be assessed on a pro
rata basis.
|
5. |
Shaw’s application for the amendment of
its DTH PPV licence was announced in Broadcasting Public Notice CRTC
2005-55, 7 June 2005.
In the same notice, the Commission announced receipt of a second application
by Shaw, that being for the renewal and amendment of the licence for
its terrestrial PPV programming undertaking serving western Canada.
In its terrestrial PPV application, as in its DTH PPV application,
Shaw requested a licence amendment that would permit national distribution
of its service, and proposed conditions of licence pertaining to the
provision of French-language programming to PPV subscribers. The terrestrial
PPV application also included a request for an amendment to the licensee’s
Canadian programming expenditure requirements. |
6. |
The Commission set out its determinations
regarding the renewal of Shaw’s terrestrial PPV licence in Terrestrial
pay-per-view service – Licence renewal, Broadcasting Decision
CRTC 2006-23, 31 January 2006 (Decision
2006-23). |
|
Interventions
|
7. |
Shaw’s DTH PPV application was the subject
of interventions filed by Astral Media Inc. (Astral) and by Bell
ExpressVu. These parties had also filed interventions to the application
by Shaw for the renewal and amendment of its terrestrial PPV programming
undertaking licence noted above. |
8. |
Astral has ownership interests in the DTH
and terrestrial PPV services known as Viewer’s Choice and Canal Indigo.
In Astral’s view, approval of Shaw’s request for authority to distribute
its DTH PPV service across Canada would have a negative financial impact
on Canal Indigo and Viewer’s Choice. |
9. |
Astral also submitted that the conditions
of licence proposed by Shaw with respect to its provision of
French-language programming would be inconsistent with the current
conditions of licence and other requirements imposed on other general
interest PPV services. Specifically, Astral contended that Shaw’s
commitment to the provision of a minimum Canadian content level of 20%
for all program titles other than feature films was a "much lower"
requirement than the minimum ratio of 12 Canadian French-language events
for every 20 non-Canadian French-language events required of Canal
Indigo and of Bell ExpressVu’s terrestrial and DTH PPV undertakings, and
that Shaw should thus be required to maintain a 12:20 ratio for Canadian
to non-Canadian French-language events. |
10. |
In its intervention, Bell ExpressVu did not
object in principle to Shaw’s application, but raised a concern with
respect to the 5:1 rule set out in section 18(14) of the Broadcasting
Distribution Regulations (the Regulations). Under this rule, each
Class 1, Class 2 and DTH BDU licensee must distribute at least five
unrelated Category 2 services for each related Category 2 service it
distributes. For the purpose of this rule, a Category 2 service includes
any PPV service, the distribution of which started on or after
1 February 2001. Bell ExpressVu’s concern stemmed from the fact that
Shaw’s DTH PPV service launched prior to that date and is therefore not
subject to the 5:1 rule. According to Bell ExpressVu, this gives Shaw’s
DTH PPV service a competitive advantage over other PPV services that are
subject to the 5:1 rule. |
|
Licensee’s replies
|
11. |
In response to Astral’s intervention and
its concerns about the competitive impact that approval of Shaw’s
application might have on Canal Indigo and Viewer’s Choice, Shaw noted
that Astral was the only intervener seeking to limit additional
competition in the provision of DTH PPV services. At the same time, Shaw
noted Astral’s acknowledgment that the Commission’s introduction of
competition in the PPV industry had been "based initially on the
specific policy directions contained in the 1995 Direction issued by the
Government with respect to DTH PPV services2."
According to Shaw, denial of its present application, as called for by
Astral, would be inequitable, given the licence that Bell ExpressVu
holds for a national DTH PPV undertaking. Shaw added that denial would
be contrary to the Direction, and would be "at odds with the existing
and increasing scope of competition within the Canadian broadcasting
system as a means of [bringing] choice and value to Canadians." |
12. |
Shaw also responded to Astral’s claim that
the applicant’s proposed condition of licence related to the provision
of Canadian French-language event programming differs from the
conditions that currently apply to Canal Indigo and to Bell ExpressVu’s
DTH and terrestrial PPV undertakings. Shaw noted that its commitment to
ensure, in each year, that a minimum of 20% of all French-language
program titles, other than feature films, are Canadian, was made in
response to a Commission request during the deficiency process, and that
the commitment was identical to the requirement imposed by condition of
licence on Bell ExpressVu’s national terrestrial PPV undertaking. |
13. |
In response to Bell ExpressVu’s
intervention, Shaw submitted that the intervener’s concern was not
related to the present application, but rather to the applicability of
the Regulations. Shaw maintained that there is no basis for applying the
5:1 rule to its service and that the present application is not the
proper process to raise this issue. |
|
Commission’s analysis and determinations
|
14. |
In Introductory statement to Decisions
CRTC 2000-733 to 2000-738:
Licensing of new video-on-demand and pay-per-view services, Public
Notice CRTC 2000-172,
14 December 2000, the Commission reaffirmed that its approach
is to foster fair competition and an increased reliance on market
forces. The Commission considers that granting Shaw the authority
to offer its DTH PPV service across Canada will enable the licensee
to be fully competitive with other PPV services that are licensed
to operate on a national basis. Furthermore, in the Commission’s view,
authorizing the national distribution of Shaw’s DTH PPV service may
enable the licensee to generate more gross revenues and consequently
increase its contributions to Canadian program production. Accordingly,
the Commission approves the request by Shaw for amendments
to the broadcasting licence for its DTH PPV programming undertaking
in order to permit its distribution across Canada. |
15. |
In the appendix to this decision, the Commission
has imposed conditions of licence that reflect Shaw’s commitments
relating to French-language programming. The requirements set out
in the conditions of licence include minimum levels of French-language
programming, minimum percentages of Canadian French-language programming,
minimum ratios of French-language to English-language channels, and
a requirement that the licensee remit 60% of the gross revenues earned
from the exhibition of French-language Canadian films to the programming
providers. The Commission considers that these conditions are sufficient,
and that it is not necessary to impose a 12:20 ratio for Canadian
to non-Canadian French-language events on Shaw’s DTH PPV service.
The Commission also notes that the French-language programming requirements
imposed on Shaw’s DTH PPV service by these new conditions of licence
are consistent with those that it recently imposed on Bell ExpressVu’s
DTH PPV programming undertaking in Direct-to-home pay-per-view
service – Licence renewal, Broadcasting Decision CRTC 2006-22,
31 January 2006. |
16. |
With respect to Bell ExpressVu’s intervention,
and as noted by the Commission in Decision 2006-23,
the Regulations, including the 5:1 rule, were adopted following an
extensive public process. The 5:1 rule was established to ensure that
new, unrelated services would be treated fairly by distributors. Given
that Shaw’s DTH PPV service was distributed prior to 1 February
2001, the Commission is satisfied that it is appropriate that the
service not be subject to the 5:1 rule. Furthermore, the Commission
is not persuaded that it is necessary to review this provision of
the Regulations. |
17. |
A third intervention, namely that submitted
by the Alberta Motion Picture Industry Association (AMPIA), had been
filed to both the present application and to Shaw’s other application
pertaining to the renewal and amendment of its terrestrial PPV licence.
As noted by Shaw in its reply to the AMPIA intervention, the concerns
expressed by the intervener related solely to Shaw’s request, put
forward as part of its terrestrial PPV application, for an amendment
to its Canadian programming expenditure requirements. The AMPIA intervention
and the Commission’s determinations with respect to that particular
amendment are dealt with in Decision 2006-23. |
|
Secretary General |
|
This decision is to be appended to the
licence. It is available in alternative format upon request, and may
also be examined in PDF format or in
HTML at the following Internet site: http://www.crtc.gc.ca
|
|
Appendix to Broadcasting Decision CRTC 2006-112
|
|
National general interest direct-to-home (DTH) pay-per-view (PPV)
television service known as Shaw DTH PPV
|
|
Conditions of licence pertaining to the provision of French-language
programming
|
|
1. The licensee shall maintain the channels
in a ratio of French to English of 1:3, with a minimum of 5
French-language channels in addition to a French-language barker
channel. |
|
2. With respect to French-language
programming, the licensee shall, through its agreements with the
licensees of DTH distribution undertakings, ensure that, in each
broadcast year, the following is made available by these licensees to
their PPV subscribers: |
|
a) a minimum of 20 Canadian feature films in the original
French-language version, or dubbed in French, which have been
exhibited in theatres in French-language markets (including all new
Canadian feature films suitable for PPV exhibition that meet the
Industry code of programming standards and practices governing pay,
pay-per-view and video-on-demand services);
|
|
b) a minimum of 12 French-language events; and
|
|
c) the following minimum percentages of Canadian programs: 8% of
feature film titles, and 20% of all program titles other than feature
films.
|
|
3. The licensee shall remit 100% of the
gross revenues earned by the licensee from the exhibition of
French-language Canadian films to distributors and providers, with a
minimum of 60% to the program providers. |
|
4. During the period from the commencement
of operations as a national service to 31 August of that broadcast year,
the licensee’s performance with respect to commitments regarding
French-language Canadian content in feature films and events will be
assessed on a pro rata basis. |
|
Footnotes:
|