News Release

May 29, 2001

CRTC MAKES LIFE EASIER FOR SMALL CABLE COMPANIES

OTTAWA-HULL — The Canadian Radio-television and Telecommunications Commission (CRTC) has introduced two new initiatives for the licensing and regulation of cable system distributors. These changes will reduce the administrative burden both for cable operators and the Commission.

"It’s a first step," says CRTC Chairman David Colville, "in updating our approach to licensing and regulating cable systems. These changes will streamline the process for both cable operators and the Commission."

The first initiative will affect cable systems serving small and rural communities with fewer than 2,000 subscribers. Provided they meet certain criteria, the small cable operators will now be exempt from licensing and no longer be affected by the Broadcasting Distribution Regulations or other regulations.

These changes mean that these cable operators will no longer have to apply for licence renewals every seven years (or sooner) or pay licence fees. The exemption will allow these small cable systems to focus their energies on responding to increasing competition from both direct-to-home (DTH) satellites and multipoint distribution systems (MDS) with better and more diverse communications services.

These exempt cable companies would be allowed to grow up to 10 per cent more -- that is they could have up to 2,200 subscribers before having to apply for a Class 2 licence.

However, the Commission still expects these companies to comply with certain rules. They must offer basic service packages and ensure that most of the services they offer are Canadian. They must also abide by broadcast rules for prohibited programming and follow regulations dealing with providing specialty services in the official languages to their communities.

The second initiative deals with a new system of regional licensing for cable operators. In each region, licensees will be issued a maximum of three licences to cover each of the three classes of cable licences.

The Commission’s actions were sparked by the recent trend toward ownership consolidation and regionalization of operations. This has created an environment where many cable systems have more
than one licence and own more than one system. Often they own many in adjacent areas.

"By exempting small cable operators and moving to regional licensing, we are aiming to reduce the regulatory burden and provide more flexibility, particularly for the small players," Colville explains.

In implementing these changes, the Commission has taken steps to address concerns expressed by the interested parties. For example, to help deal with the issue of copyright, Commission staff would be willing to work with copyright officials to assess whether changes to copyright regulations and royalty payment regimes are needed before these initiatives are put in place.

The Commission considers these initiatives a first step in updating its approach to licensing and regulating all cable systems. It will monitor developments in the industry before considering further changes.

The Commission is asking for input on the proposed exemption order. Those wishing to make comments should file their suggestions by August 27^th, 2001. Comments may be submitted by writing to the Secretary General, CRTC, Ottawa, Ontario, K1A 0N2; or by fax at (819) 953-0795. You can also e-mail your comments to us at procedure@crtc.gc.ca.

For more in depth information about the policy refer to the reference documents or visit the Commission’s web-site at www.crtc.gc.ca.

Reference documents: Public Notice CRTC 2001-59
                                 Public Notice CRTC 2001-26
                                 Public Notices CRTC 2000-162, 2000-162-1
                                 Public Notices CRTC 2000-163, 2000-163-1
                                 Public Notices CRTC 2000-164, 2000-164-1

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General Inquiries:
   Ottawa, Ontario K1A 0N2
   Tel: (819) 997-0313, TDD: (819) 994-0423, Fax: (819) 994-0218
   Toll-free # 1-877-249-CRTC (2782), eMail: info@crtc.gc.ca 
   TDD - Toll-free # 1-877-909-2782
Media Relations:
   Denis Carmel, Tel: (819) 997-9403, eMail: denis.carmel@crtc.gc.ca 

Copies of today’s documents are available through our Internet site (http://www.crtc.gc.ca) or by contacting the public examination room of any CRTC office. These documents are available in alternative format upon request.

Date Modified: 2001-05-29

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