ARCHIVED -  Decision CRTC 97-559

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Decision

Ottawa, 26 September 1997

Decision CRTC 97-559

The Partners of Viewer's Choice Canada, a general partnership, on behalf of a corporation to be incorporated
Across Canada - 199704995 - 199705003

Acquisition of assets

1. Following a Public Hearing in the National Capital Region beginning on 19 August 1997, the Commission approves the application for authority to transfer the assets of the English-language pay-per-view service and the English-language direct-to-home pay-per-view service from the Partners of Viewer's Choice Canada (a general partnership of Netstar Enterprises Inc., Rogers Pay-Per-View Inc. and TMN Networks Inc.), to a corporation to be known as Viewer's Choice Canada Inc. The new corporation will have shareholdings identical to that of the partnership. TMN Networks Inc. will hold 50.1% while Rogers Pay-Per-View Inc. and NetStar Enterprises Inc. will each hold 24.95%.

2. The Commission will issue licences to Viewer's Choice Canada Inc., expiring 31 August 2001 in the case of the pay-per-view undertaking, and 31 August 2002 in the case of the direct-to-home pay-per-view undertaking, upon surrender of the current licences issued to the Partners of Viewer's Choice Canada. The licences will be subject to the same conditions as those in effect under the current licences, as well as to any other condition specified in the appendices to this decision and in the licences to be issued.

3. The Commission notes that this licensee is subject to the Employment Equity Act that came into effect on 24 October 1996 (1996 EEA), and therefore files reports concerning employment equity with Human Resources Development Canada. As a result of a consequential amendment to the Broadcasting Act, the Commission no longer has the authority to apply its employment equity policy to any undertaking that is subject to the 1996 EEA.

This decision is to be appended to each licence.

Laura M. Talbot-Allan
Secretary General

This document is available in alternative format upon request.


APPENDIX I

The following conditions of licence are applicable to the English-language pay-per-view service licensed to Viewer's Choice Canada Inc.

For the purposes of these conditions, the licence term is deemed to have commenced on 28 February 1995.

1. The licensee shall distribute on its programming undertaking, in each broadcast year, a minimum of 12 Canadian feature films (including all new Canadian features that are suitable for PPV and meet the Pay Television Programming Standards and Practices Code), and a minimum of four Canadian-based events.

2. The licensee shall retain control at all times over the scheduling of films and events exhibited on the cable television undertakings operated by its affiliates, and shall, in each broadcast year, maintain a minimum Canadian to non-Canadian ratio of 1:20 for first-run film titles, and 1:7 for events, on each channel used for their exhibition.

3. The licensee shall remit to the rights holders of all Canadian films and to the rights holders of two Canadian-based events, in each broadcast year, 100% of the net revenues earned from the exhibition of these Canadian films and two Canadian-based events.

4. The licensee shall contribute to the Fund to Underwrite New Drama (FUND), for FUND's equity investment in Canadian films, the sum of $6,500,000 or 5% of the licensee's net revenues, whichever amount is greater, over the licence term.

5. (a) The licensee shall not distribute any film or video production with respect to which Astral Communications Inc. (Astral) has carried on activities other than financing or distribution.

(b) Where Astral has carried on financing or distribution activities with respect to a film or video production, the licensee shall not distribute that film or video production unless all actual production and creative control, apart from such financial approvals as are normally required in such circumstances, remains the full responsibility of an independent Canadian production company.

6. Notwithstanding the distribution and linkage requirements referred to in subsection 10(2) of the Cable Television Regulations, 1986, the service provided by the licensee shall not be linked with any non-Canadian discretionary service, and the licensee shall not enter into any affiliation agreement with cable affiliates that do not incorporate this prohibition against linkage.

7. The licensee shall adhere to the guidelines on gender portrayal, set out in the Canadian Association of Broadcasters' Sex-Role Portrayal Code for Television and Radio Programming as amended from time to time and accepted by the Commission.

8. The licensee shall adhere to the Pay Television and Pay-Per-View Programming Code Regarding Violence, as amended from time to time and accepted by the Commission.

Definitions

In these conditions:

"broadcast year" means the period from 1 September to 31 August and each twelve-month period thereafter beginning on 1 September.

"net revenue" means gross revenue received from the distribution of all programming on the licensee's service less any amount retained by the cable affiliate or other distribution affiliate for the carriage of programming distributed by the licensee.

"remit" means actual cash outlay.


APPENDIX II

The following conditions of licence are applicable to the English-language, direct-to-home pay-per-view service licensed to Viewer's Choice Canada Inc.

For the purpose of the following conditions, the licence term is deemed to have commenced on 20 December 1995.

1. The licensee shall adhere to the Pay Television Regulations, 1990, with the exception of paragraphs 3(2)(d), (e) and (f). The definition of "licensee" contained in subsection 2(1) is not applicable.

2. The licensee shall ensure that commercial messages contained in the programming it assembles for distribution by licensed DTH distribution undertakings are restricted to those contained in the live feed of out-of-market programming in the category of sports.

3. The licensee shall not sell, or accept compensation for, any commercial message on the service.

4. Except as may otherwise be authorized by the Commission upon application, the licensee shall not distribute programming, other than filler programming, that is produced by the licensee after today's date, or that is produced by a person related to the licensee after the later of today's date and the day on which the person becomes related to the licensee.

5. The licensee shall not enter into an affiliation agreement with the licensee of a DTH distribution undertaking, unless the agreement incorporates a prohibition against the linkage of the Viewer's Choice Canada Inc. service with any non-Canadian discretionary service.

6. 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 pay-per-view subscribers:

a) a minimum of 12 Canadian feature films (including all new Canadian feature films that are suitable for pay-per-view and meet the Pay Television Standards and Practices Code),

b) a minimum of four Canadian-based events,

c) a minimum 1:20 ratio of Canadian to non-Canadian first-run film titles, and

d) a minimum 1:7 ratio of Canadian to non-Canadian events.

7. The licensee is required to ensure that, during the period between the date the service commences and 31 August 1996, the Canadian content of the films and events within the overall service, as made available by the licensees of affiliated DTH distribution undertakings to their pay-per-view subscribers, respects the requirements specified in the licence condition respecting Canadian content (Number 6). With regard to that condition's requirements under a) and b), compliance will be assessed on a pro-rated basis.

8. In the broadcast year commencing 1 September 1996, and in each subsequent broadcast year, the licensee shall remit to the rights holders of two Canadian-based events, 100% of the revenues earned by the licensee from the exhibition of these two events.

9. The licensee shall remit to the rights holders of all Canadian films, 100% of the revenues earned by the licensee from the exhibition of these films.

10. The licensee shall contribute to the Fund to Underwrite New Drama (FUND), for FUND's equity investment in Canadian films, a minimum of 5% of the gross annual revenues earned by its DTH PPV programming undertaking in the following manner. The licensee is required to remit its first contribution no later than 45 days following the end of the month in which it commences operations; contributions thereafter shall take the form of monthly instalments remitted within 45 days of month's end and representing a minimum of 5% of that month's gross revenues.

11. The licensee shall ensure that the gross PPV revenues earned by any feature film are equally split three ways among itself, the licensee of the DTH distribution undertaking, and the rights holder.

12. The licensee shall not acquire exclusive or other preferential rights to pay-per-view programming exhibited as part of its service.

13. The licensee shall purchase non-proprietary distribution rights for feature films from Canadian distributors. This includes any production other than the exceptions specified in the current Investment Canada policy, which defines proprietary rights as those where the world-wide distribution rights to the program are owned by the licensor, or where the licensor has provided not less than one-half of the cost of the creation of the film.

14. The licensee shall adhere to the guidelines on gender portrayal, set out in the Canadian Association of Broadcasters' Sex-Role Portrayal Code for Television and Radio Programming as amended from time to time and accepted by the Commission.

15. The licensee shall adhere to the Pay Television Programming Standards and Practices Code, as amended from time to time and accepted by the Commission.

16. The licensee shall adhere to the Pay Television and Pay-Per-View Programming Code Regarding Violence, as amended from time to time and accepted by the Commission.

Definitions

"broadcast year" means the period from 1 September to 31 August and each twelve-month period thereafter beginning on 1 September.

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