ARCHIVED -  Public Notice CRTC 1998-123

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Public Notice CRTC 1998-123

Ottawa, 20 November 1998

Denial of a request by The Sports Network Inc. for an amendment to the Distribution and Linkage Requirements

Summary of the request and of the Commission's determination

1. In a letter dated 17 August 1998, The Sports Network Inc. (TSN) requested that the Commission amend the Distribution and Linkage Requirements set out in Public Notice CRTC 1997-151. The proposed amendment would confer "modified dual status" upon TSN's sports specialty service, instead of its present ''dual status", in respect of its carriage on both Class 1 and Class 2 broadcasting distribution undertakings (BDUs). The amendment would be effected by moving TSN from section 4 (e) of the Distribution and Linkage Requirements to section 5.

2. As explained in section 4 of the Distribution and Linkage Requirements, when a Class 1 or Class 2 BDU carries a specialty service having "dual status", such as TSN, it must distribute that service as part of the basic service, unless the specialty programming undertaking consents to its distribution on a discretionary tier.

3. In contrast, services having "modified dual status" must be distributed on a discretionary basis unless the BDU and specialty programming undertaking agree to distribution as part of the basic service.

4. The proposed amendment would give TSN the right to insist on distribution of its service by Class 1 and Class 2 BDUs on a discretionary basis. The service could be distributed as part of the basic service on any such system, but only with TSN's consent.

5. The Commission considers that it would be best to review the carriage status of specialty services as a group, within the context of a general review of the licensing and distribution framework for both existing and new specialty services. The Commission intends to undertake such a review in 1999. For this reason, as explained further below, it has decided to deny TSN's request at this time.

Discussion

6. In its 17 August 1998 letter, TSN stated that the Commission's 1987 decision to accord "dual status" to TSN and other specialty services was critical to their evolution. According to TSN, it was important that its service be carried on the basic service in its early years. It noted that there were only 294,600 extended basic (specialty tier) subscribers in 1987, as compared to ten years later when the number had increased to 6.5 million subscribers.

7. In the time since TSN's service was first designated as having "dual status" in 1987, the vast majority of its subscribers (92%) have come to receive the service as part of a discretionary tier. TSN also noted that the service has a penetration rate of 89% among English language cable households. TSN submitted that "dual status" for its service is no longer appropriate, and that the service should now be accorded "modified dual status" to reflect these changed circumstances.

8. The Commission intends to conduct a review of a number of important issues relating to access matters and to the licensing and distribution framework for pay and specialty programming services. The review of the carriage status of all specialty programming undertakings, including TSN, would be an integral part of this process.

9. In light of the above, the Commission considers that it would be inappropriate to review TSN’s carriage status at this time. The Commission intends to issue, early in 1999, a public notice seeking comment on issues relating to access and to the general licensing and distribution framework for both existing and new services.

10. In the meantime, the Commission understands that one or more large Class 1 licensees may have made or may be contemplating changes to their channel line-ups in order to accommodate new Canadian specialty services. Such changes could involve moving licensed specialty programming services from one discretionary tier to another, or from a discretionary tier to the basic service. In those cases where a BDU elects to remove a programming service from a tier, it is the Commission’s strong expectation that the licensee of the BDU pass on to its subscribers any net savings in the affiliation payments that it makes to the remaining program service providers within that tier.

Secretary General

This document is available in alternative format upon request, and may also be viewed at the following Internet site:
www.crtc.gc.ca

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