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ARCHIVED -  Decision CRTC 92-829

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Decision

Ottawa, 23 December 1992
Decision CRTC 92-829
Cablecasting Limited
Calgary (part of), Airdrie and Cochrane, Alberta; Winnipeg (part of), Manitoba, The City of York and parts of Toronto, Manitouwadge, Marathon, Nipignon/Red, Rock, St. Thomas, Strathroy, Terrace Bay, Tillsonburg, Wawa and White River, Ontario - 900426400 - 920427200 - 920428000 - 920429800 - 920527900
Following a Public Hearing in the National Capital Region beginning on 21 September 1992, the Commission approves the applications for authority to transfer effective control of Cablecasting Limited (Cablecasting) through the transfer of all of the issued shares of CL Systems Limited (CL Systems), which is the majority shareholder of Cablecasting, from David R. Graham (99.9%) and R. Bambrough (0.1%), together with the balance of shares (4.6%) of Cablecasting not owned by CL Systems, to Shaw Cablesystems Ltd. (Shaw).
Cablecasting is the licensee of the cable distribution undertaking serving parts of Calgary, Airdrie and Cochrane, Alberta. It is also the parent company of Till-Cable T.V. Limited, licensee of the cable distribution undertaking serving Tillsonburg, Ontario; Thames Cablevision Inc. serving Strathroy, Ontario; Allview Cable Service serving St. Thomas, Ontario; Graham Cable TV/FM serving the City of York and parts of Toronto; Lakeshore Community Television Limited serving Terrace Bay, White River, Red Rock, Nipigon, Marathon, Manitouwadge and Wawa, Ontario; and Greater Winnipeg Cablevision Limited serving Winnipeg and area. In total, these undertakings represent approximately 320,000 subscribers.
Shaw currently operates cable distribution undertakings serving approximately 550,000 subscribers in 44 communities in British Columbia, Alberta, Saskatchewan, Ontario and Nova Scotia.
The purchase price for the shares is $307,500,000. Based on the evidence filed with the applications, the Commission has no concerns with respect to the availability or the adequacy of the required financing.
Because the Commission does not solicit competing applications for authority to transfer effective control of broadcasting undertakings, the onus is on the applicant to demonstrate to the Commission that the application filed is the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature. As a first test, the applicant must demonstrate that the proposed transfer will yield significant and unequivocal benefits to the community served by the broadcasting undertaking and to the Canadian broadcasting system as a whole, and that it is in the public interest.
In particular, the Commission must be satisfied that the benefits, both those that can be quantified in monetary terms and others that may not easily be measured in terms of dollar value, are commensurate with the size of the transaction and take into account the responsibilities to be assumed, the characteristics and viability of the undertakings in question, and the scale of the programming, management, financial and technical resources available to the purchaser.
The Commission has assessed the benefits package identified by the applicant as flowing from this transaction and, in general, is satisfied that it is significant and unequivocal, and that approval of these applications is in the public interest. Among the proposed tangible benefits, the Commission notes in particular Shaw's commitment to invest $10,000,000 over five years in children's programming. Such a substantial programming commitment is unusual in a cable transaction, and the Commission commends Shaw for its initiative in this regard.
The Commission expects the applicant to ensure that all of the $31,000,000 in proposed expenditures included in the benefits package are made in accordance with the schedule outlined in the applications.
With respect to the Lakeshore Community Television Limited systems in Terrace Bay, White River, Red Rock, Nipigon, Marathon, Manitouwadge and Wawa, Ontario which are regulated pursuant to Parts I and III of the regulations, the Commission reminds the purchaser of its longstanding policy that subscribers should not be required to pay higher fees merely because the ownership or control of a cable television system has changed hands.
With respect to the remainder of the systems affected, which are regulated pursuant to Parts I and II of the regulations, the Commission considers Shaw's undertaking that the costs associated with the commitments outlined in this decision will not form part of any fee filing under subsections 18(6) and 18(8) of the Cable Television Regulations, 1986 to be an important element of these applications.
In CRTC Public Notice 1992-59 entitled "Implementation of an Employment Equity Policy", dated 1 September 1992, the Commission noted that, in the context of applications for licence renewal, for a new licence, or for authority to transfer ownership or control, the applicants should henceforth be prepared to describe their plans and policies related to employment equity.
At the hearing, when questioned on its performance in the field of employment equity, Cablecasting agreed that there was an imbalance in its managerial positions. For example, Cablecasting indicated that all of its senior management positions were filled by males. It also indicated that, of the nine males and six females in the middle management category, only two were drawn from visible minorities. In the semi-professional category, Cablecasting indicated that there were 11 males and four females. In that group of 15 people, there was one disabled person and one person from a visible minority group.
Shaw agreed at the hearing that, whereas the current performance of the Shaw organization in this regard may be above average among its industry group, an aggressive plan would have to be developed by Shaw to correct the corporate imbalance in Shaw's employment equity situation that would result from its assumption of ownership of Cablecasting's cable interests.
In view of the above, the Commission requires Shaw to develop and implement an effective plan of action to ensure that adequate employment equity practices are followed on a corporate-wide basis. The Commission will revisit these matters at the time of the renewals of the various cable distribution undertakings.
The Commission acknowledges the intervention to these applications submitted by the Professional Property Managers Association. The Commission is satisfied with the applicant's response.
The Commission also acknowledges the interventions in support of these applications submitted by Home Theatre, North Eastern Cablevision Ltd., the Cable Television Association of Alberta, Gemini Journal Executive, Viewer's Choice Canada and WIC Western International Communications Limited.
Allan J. Darling
Secretary General