Communications Monitoring Report 2013: Canadians at the centre of the communications system

 

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2.0 Canadians at the centre of the communications system

The CRTC places Canadians at the centre of the communications system. It strives to ensure that Canadians have access to a world-class communication system as consumers, creators and citizens. This section presents data with respect to the three pillars: connect, protect and create.

 

What are the characteristics of the average Canadian household?

Based on the Statistics Canada 2012 Survey of Household Spending, in 2011, the average household income before tax in Canada was $77,300. It ranged from $63,100 to $66,900 for households east of Ontario and from $70,100 to $93,600 for households in and west of Ontario. Households in Alberta had the highest average household income before tax at 93,600, followed by households in Ontario at $83,100.

From an income quintile perspective, the bottom 20% of households, or the first quintile, had an average annual income of $17,300. This quintile had an average of 1.47 members per household and was the most mobile, with 25.6% of members having recently moved between 2010 and 2011. The highest income in this quintile was $27,900. The middle quintile had an average annual income of $60,600. It had an average of 2.57 members, 19.3% of which recently moved. The highest income in this quintile was $74,000. The top 20% of households had annual incomes in excess of $111,600. The average annual income was $179,700. This quintile had an average of 3.34 members per household and was the least mobile, with only 9.7% having recently moved.

2.1 Create

What are tangible benefits?

Tangible benefits are the significant and unequivocal financial contributions made to the broadcasting system by the purchaser of a radio or television service. These benefits yield measurable improvements to the broadcasting system generally as well as to the communities served by the service in question. They are incremental to the normal costs of doing business and, as with the transaction as a whole, are in the public interest.

The Commission uses a number of approaches to achieve the cultural, social, and economic objectives set out in the Broadcasting Act. One such instrument has been the establishment of various contribution and expenditure regimes.

In 2012, the broadcasting industry contributed $3.4 billion toward the achievement of these objectives.

This section presents contributions and expenditures made by broadcasters and BDUs to various regimes, as well as tangible benefits resulting from transactions. It also presents CPE made by television service providers.

Funding and expenditure regimes at a glance
($ millions)
2011 2012 Growth
Funding/
contribution
regimes
CCD reported by commercial radio and audio services 54 55 2.0%
BDU (creation and production of Canadian programming) 388 # 394 1.6%
LPIF 107 112 5.1%
Expenditures Television CPE 2,610 2,861 9.6%

a) Radio – Canadian content development (CCD)

Radio broadcasters make financial contributions to CCD in support of a number of initiatives that aid in the development and promotion of Canadian musical and spoken word content for broadcast. Most applicants make specific CCD commitments as part of applications for new licences and as tangible benefits at the time of the transfer of ownership and control of radio stations. Commercial and ethnic stations are subject to regulations requiring annual CCD payments.

These financial contributions serve to foster the development and promotion of Canadian talent, help advance the careers of emerging Canadian artists, and increase the supply of quality Canadian music in a variety of genres.

In the 2011-2012 broadcast year, commercial radio operators contributed $0.034 per revenue dollar to support CCD. In aggregate, they contributed over $55 million to the development of Canadian content, an increase of 2% over the previous period. Approximately 84% of the funds were a direct result of the conditions of licence issued to new radio stations and the change in ownership or control of existing ones.

The following chart illustrates the extent to which commercial radio stations supported the development of Canadian content.

Chart 2.1.1 CCD contributions by commercial radio stations (2011-2012 broadcast year)

This chart illustrates the extent to which commercial radio stations supported the development of Canadian content.  Last year, commercial radio stations’ revenues totalled $1,620 million (box A).  Of these revenues, commercial radio stations supported CCD by contributing $9.1 million in basic annual CCD contributions, $24.0 million to over-and-above contributions and $22.0 million in tangible benefits (box B).  These three processes supported various funds and initiatives including $10.5 million to FACTOR, $11.8 million to Radio Starmaker Fund, $2.5 million to MUSICATION, $1.5 million to Community Radio Fund and $28.8 million to other eligible initiatives (box C).  Ultimately, these contributions helped support Canadian artists, music industry associations, local music initiatives, new spoken word content, festivals and conferences, schools and educational institutions and other eligible CCD initiatives (box D).

 

Commercial radio broadcaster support CCD financially as a result of three regulatory processes:

Figure 2.1.1 CCD contributions by type of radio licence

This bar line chart shows the contributions for CCD by the type of radio licence from broadcast year 2007-2008 to broadcast year 2011-2012.  Change in ownership/control: 14, 21, 17, 18 and 22; licence renewals: 6, 11, 7, 8 and 9; new stations: 9, 20, 22, 28 and 24.

Source: CRTC data collection

Figure 2.1.2 CCD contributions by type of radio licence (percentage)

This bar line chart shows the contributions for CCD by the type of radio licence by percentage from broadcast year 2007-2008 to broadcast year 2011-2012.  Change in ownership/control: 49.3%, 40.1%, 36.3%, 33.2% and 39.9%; Licence renewals: 19.8%, 21.6%, 15.8%, 14.4%, 16.5%; New stations: 30.9%, 38.2%, 47.9%, 52.5% and 43.6%.

Source: CRTC data collection

Table 2.1.1 Summary of annual CCD contributions reported by radio licensees
($ thousands)
RADIO - CCD 2007-08 2008-09 2009-10 2010-11 2011-12 % annual increase / decrease
09/08 10/09 11/10 12/11
i) CCD contributions by new stations during the first licence term
FACTOR 983 1,582 2,014 2,719 2,615 61% 27% 35% -4%
MUSICACTION 306 697 552 791 563 128% -21% 43% -29%
CRFC1 - - - - 165 - - - -
Music industry associations1 - - 2,150 2,493 2,221 - - 16% -11%
Local music initiatives1 - - 7,120 7,485 9,106 - - 5% 22%
New spoken word content1 - - 420 1,139 545 - - 171% -52%
Music organizations1 2,886 5,187 N/A N/A N/A 80% N/A. N/A N/A
Performing arts groups1 3,126 8,957 N/A N/A N/A 186% N/A N/A N/A
Schools and educational institutions1 614 899 1,179 2,020 1,553 46% 31% 71% -23%
Radio Starmaker Fund/Fonds Radiostar 0 220 1,077 1,982 1,038
389% 84% -48%
Other eligible CCD initiatives 696 1,994 7,550 9,714 6,195 186% 279% 29% -36%
Total 8,611 19,537 22,061 28,342 24,002 127% 13% 28% -15%
ii) CCD contributions reported by radio licensees in the context of licence renewals
FACTOR 1,243 2,999 2,003 2,629 1,971 141% -33% 31% -25%
MUSICACTION 302 1,390 1,324 808 727 360% -5% -39% -10%
CRFC1 - - - - 617 - - - -
Music industry associations1 - - 647 823 966 - - 27% 17%
Local music initiatives1 - - 1,809 1,947 2,381 - - 8% 22%
New spoken word content1 - - 188 201 398 - - 7% 98%
Music organizations1 2,023 3,081 N/A N/A N/A 52% N/A N/A N/A
Performing arts groups1 1,264 1,850 N/A N/A N/A 46% N/A N/A N/A
Schools and educational institutions1 357 618 422 473 614 73% -32% 12% 30%
Radio Starmaker Fund/Fonds Radiostar 0 0 0 0 246 - - - -
Other eligible CCD initiatives 349 1,107 876 873 1,194 217% -21% 0% 37%
Total 5,538 11,045 7,269 7,754 9,115 99% -34% 7% 18%
iii) CCD contributions relating to changes in ownership and/or control
FACTOR 4,023 5,711 5,179 5,407 5,959 42% -9% 4% 10%
MUSICACTION 1,033 992 344 331 1,248 -4% -65% -4% 277%
CRFC1 - - - 346 727 - - - 110%
Music industry associations1 - - 440 1,044 567 - - 137% -46%
Local music initiatives1 - - 1,705 1,401 2,290 - - -18% 63%
New spoken word content1 - - 0 0 0 - - - -
Audio content initiatives1 - - - 135 135 - - - 0%
Music organizations1 2 65 N/A N/A N/A 3,382% N/A N/A N/A
Performing arts groups1 490 2,466 N/A N/A N/A 404% N/A N/A N/A
Schools and educational institutions1 114 379 274 207 216 233% -28% -24% 4%
Radio Starmaker Fund/Fonds Radiostar 8,093 10,508 8,167 8,801 10,499 30% -22% 8% 19%
Other eligible CCD initiatives 0 394 613 228 324
55% -63% 42%
Total 13,755 20,515 16,722 17,900 21,965 49% -18% 7% 23%
Total annual CCD contributions 27,904 51,097 46,053 53,996 55,083 83% -10% 17% 2%

1. The CCD categories collected were amended for the 2010-2011 annual return to more accurately reflect Broadcasting Public Notice 2006-158. Two new categories (Audio Content Initiatives & the Community Radio Fund of Canada) have been added to the table to more accurately reflect the initiatives being supported with Canadian Content Development funds.

Source: CRTC data collection

b) Radio – Tangible benefits

Table 2.1.2 Value of radio transactions and corresponding tangible benefits
RADIO
Tangible benefits
($ millions)
English-language services French-language services Total benefits
  # of Trans. Value of the transactions1 Benefits # of Trans. Value of the transactions1 Benefits
1 Jan. 08 to 31 Dec. 08 10 59.5 3.5 3 1.5 0.1 3.6
1 Jan. 09 to 31 Dec. 09 10 27.5 1.6 1 - - 1.6
1 Jan. 10 to 31 Dec.102 7 67.2 4.0 2 97.7 8.8 12.8
1 Jan. 11 to 31 Dec. 113 9 316.2 19.0 3 - - 19.0
1 Jan. 12 to 31 Dec. 12 5 80.4 4.8 2 1.5 0.1 4.9
Total  41 550.8 32.9  11 100.7 9.0 41.9
  1. Value determined by the Commission for the purpose of calculating tangible benefits.
  2. Total tangible benefits relating to the Corus/Cogeco (Broadcasting Decision 2010-942) radio ownership transactions totalled $8.8 million.
  3. The BCE/CTVglobemedia ownership transaction (Broadcasting Decision 2011-163) resulted in $17.5 million of radio-related tangible benefits.

Sources: CRTC Decisions and Administrative Approvals

c) Television – Programming expenditures

What is PNI?

The CRTC has defined programs of national interest (PNI) as including drama and comedy, long-form documentary, and specific Canadian award shows that celebrate Canadian creative talent. For French-language broadcasters, PNI also includes music video and variety programs. For the purpose of this report, the concept of PNI includes the broadcast of any programming that qualifies as PNI, including by those broadcasting undertakings that do not, at the time of this report, have a condition of licence requiring PNI expenditures or exhibition.

The Commission supervises and regulates the broadcasting system in order to fulfil the policy objectives of the Broadcasting Act. These include encouraging the development of Canadian expression and ensuring that each element of the Canadian broadcasting system contributes in an appropriate manner to the creation and presentation of Canadian programming.

As such, television service providers contributed $0.34 per revenue dollar in support of Canadian programming during the 2011-2012 broadcast year. CPE totalled $2.9 billion, 20% of which were spent on PNI.

The following chart illustrates the flow of moneys used to fund Canadian programming. A percentage of BDU subscriber revenues are used to fund discretionary (PPV, VOD, Pay and specialty) Canadian programming services, as well as local expression (community television), CMF, LPIF and various independent funds. Commercial television programming services (specialty, pay, and private OTA) and the CBC rely on funds generated by advertising. Government funding is also provided to the CMF, the CBC (via parliamentary appropriations) and various independent content providers.

Chart 2.1.2 Funding and spending by broadcasting entities to Canadian programming (2011 – 2012 broadcast year)

The following chart illustrates the flow of moneys used to fund Canadian programming. A percentage of BDU subscriber revenues are used to fund discretionary (PPV, VOD, Pay and specialty) Canadian programming services.  This amount totalled $2,623 million.  BDU subscriber revenues also funded local expression (community television), CMF, LPIF and various independent funds.  This amount totalled $506 million.  Commercial television programming services (specialty, pay, and private OTA) and the CBC rely on funds generated by advertising. Total TV advertising amounted to $3,469 million.  Government funding is also provided to the CMF, the CBC (via parliamentary appropriations) and various independent content providers.  As a result, programming services (PPV, VOD, Pay, specialty, CBC, private OTA, community and other services) aggregately spent $4,179 million on programming expenditures.  Canadian programming represented $2,861 million while non-Canadian programming represented $1,318 million.

Figure 2.1.3 Television CPE, by type of service, 2012, $2.9 billion

This pie chart shows total CPE as a percentage of total CPE reported by the television sector in 2012. Total CPE reported is $2.9 billion: $1,373 million or 48.0% is related to specialty and pay services; $16 million or 0.6% is related to Pay-per-view and Video-on-demand services; $662 million or 23.1% is related to private commercial conventional television; $734 million or 25.6% is related to CBC conventional television; and $76 million or 2.7% is related to other public and not-for-profit conventional television services.

Source: CRTC data collection

Figure 2.1.4 Television programming expenditures, PNI v. Canadian v. non Canadian, 2012

This pie chart shows total television programming expenditures for PNI, Canadian and non Canadian programming as percentage of total programming expenditures reported by the television sector in 2012. PNI: 14%; Canadian programming (excluding PNI): 54%; Non Canadian programming: 32%.

Source: CRTC data collection

Table 2.1.3 Programs of national interest expenditures ($ millions)
Programming category 2011 2012 Growth
Private television Long-form documentary 15.5 16.5 6.5%
Drama 58.3 58.9 1.2%
Award shows 4.0 1.5 -62.5%
Total private television PNI 77.9 76.9 -1.3%
% of total 13.7% 13.3%
CBC Long-form documentary 39.2 36.0 -8.2%
Drama 141.0 158.4 12.3%
Award shows 5.9 8.3 40.7%
Total CBC PNI 186.2 202.7 8.9%
% of total 32.7% 35.0%
Specialty and pay services Long-form documentary 121.9 102.1 -16.2%
Drama 182.5 193.9 6.2%
Award shows 1.2 3.5 191.7%
Total specialty and pay PNI 305.6 299.5 -2.0%
% of total 53.7% 51.7%
Total Long-form documentary 176.6 154.6 -12.5%
Drama 381.8 411.2 7.7%
Award shows 11.1 13.3 19.8%
Total PNI 569.5 579.1 1.7%
% of total 100% 100%

Source: CRTC data collection

Figure 2.1.5 Programming expenditures per revenue dollar

This bar line chart shows programming expenditures per revenue dollar for non Canadian programming, PNI and Canadian programming (excluding PNI) for years 2011 and 2012.  Non Canadian programming: $0.20, $0.20; PNI: $0.09, $0.09; Canadian programming (excluding PNI): $0.32, $0.35.

Source: CRTC data collection

d) Television – Tangible benefits

Table 2.1.4 Value of television transactions and corresponding tangible benefits for the period 1 Jan 2008 to 31 December 2012
($ millions) English-language services French-language services Total benefits
# of Trans. Value of the transactions1 Benefits # of Trans. Value of the transactions1 Benefits
1 Jan. 08 to 31 Dec. 08 7 180.1 17.4 4 31.92 0.2 17.6
1 Jan. 09 to 31 Dec. 09 7 54.8 5.8 0 - - 5.8
1 Jan. 10 to 31 Dec.103 3 2,086.4 183.4 0 - - 183.4
1 Jan. 11 to 31 Dec. 114 5 2,254.0 224.2 0 - - 224.2
1 Jan. 12 to 31 Dec. 12 4 106.0 18.6 0 - - 18.6
Total 26 4,681.3 449.4 4 31.9 0.2 449.6
  1. Value determined by the Commission for the purpose of calculating tangible benefits. This table includes only transactions subject to the Commission’s tangible benefits policy. Transactions not affecting effective control of a licensed broadcasting undertaking, including corporate reorganisations, are not counted.
  2. Applicant was prepared to commit $1 M in tangible benefits; however, the Commission exempted the applicant from paying the tangible benefits due to unprofitable operations (Broadcasting Decision 2008-129).
  3. The Canwest/Shaw ownership transaction (Broadcasting Decision 2010-782) resulted in $180.2 million in tangible benefits.
  4. The BCE/CTVglobemedia ownership transaction (Broadcasting Decision 2011-163) resulted in $221.8 million of television-related tangible benefits. For the purpose of this analysis, the entire value of the television assets and associated benefits were included in the English-language services category.

Sources: CRTC Decisions and Administrative Approvals

e) BDU – Contribution and expenditure regimes

During the 2011-2012 broadcast year, approximately 6% of the BDU revenues were directed to various funds such as CMF, or to local expression.

Figure 2.1.6 Contributions to the CMF, LPIF, other independent funds, and expenditures on local expression (community channels) reported by BDUs ($ millions)

This line clustered-column on 2 axes chart depicts the BDU contributions to the Canadian Media Fund (CMF), Local Programming Improvement Fund (LPIF), other independent funds, and expenditures on community channels in millions of dollars for each of 2008 to 2012 broadcast years. Contributions to CMF: 165.8, 180.5, 189.1, 205.8 and 208.5; Contributions to LPIF: 0, 0, 100.7, 106.6 and 112.0; Contributions to other independent funds: 44.0, 52.6, 56.8, 62.3 and 62.0; Expenditures on community channels: 115.6, 123.4, 126.5, 119.8 and 123.7; Total combined contributions and expenditures:  325.4, 365.5, 473.1, 494.4 and 506.2

Source: CRTC data collection

Figure 2.1.7 Contributions to the creation and production of Canadian programming by BDUs

This bar line chart shows contributions to the creation and production of Canadian programming by BDUs as a percentage for years 2010, 2011 and 2012.  Contributions to CMF: 40%, 42% and 41%; Contributions to LPIF: 22%, 22% and 22%; Expenditures on local expression: 27%, 24% and 24%; Contributions to other independent funds: 11%, 12% and 12%.

Source: CRTC data collection

Table 2.1.5 LPIF – Contributions and number of recipients
Year Contributions
($ millions)
Number of recipients LPIF funding as a percentage of total recipients’ revenues (excluding the CBC/SRC)
Licensees Stations
2009-2010 100.7 16 79 10.8%
2010-2011 106.7 16 80 10.8%
2011-2012 112.1 16 80 11.1%

Source: CRTC data collection

Figure 2.1.8 LPIF distribution by region

This bar line chart shows the distribution of LPIF by region as a percentage for years 2010, 2011 and 2012.  Prairies:  23.8%, 22.8% and 23.1%; Ontario: 24.7%, 24.5% and 24.3%; Québec: 21.2%, 21.4% and 20.8%; Atlantic: 18.9%, 19.8% and 20.2%; British-Columbia and Territories: 11.4%, 11.4% and 11.6%.

Source: CRTC data collection

Figure 2.1.9 LPIF distribution by ownership group

This bar line chart shows the distribution of LPIF by ownership group as a percentage for years 2010, 2011 and 2012.  Rogers:  1.1%, 1.0% and 1.0%; Shaw: 8.7%, 7.6% and 6.4%; CBC/SRC: 34.1%, 38.3% and 42.3%; Quebecor: 6.5%, 6.1% and 5.8%; Bell Media: 23.6%, 22.3% and 21.3%.

2.2 Connect

a) Connections

What are connections?

“Connection” refers to a subscription to one or more of the following four basic services: Local telephone service, Internet access service, wireless service, and broadcast distribution services such as cable, DTH, or IPTV.

Pay telephone service is excluded from this analysis. However, the 68 000 pay telephones operated by the large incumbent telephone companies represent approximately 5.4 pay telephones per 1,000 households. Of these, approximately 10% have TTY capability.

The average number of communications connections per household increased from 4.2 in 2008 to 4.5 in 2012, resulting in an annual growth rate of 2.0%. This was driven by growth in:

  1. Wireless or cellular connections per household which increased by 4.4% annually, from 1.7 in 2008 to 2.0 in 2012;

  2. Internet connections per household which increased by 1% annually, from 0.7 to 0.8; and

  3. BDU connections per household which increased by 0.7% annually, from 0.8 to 0.9.

The growth in connections per household was partially offset by a 2.5% decline in local telephone connections per household, from 1.0 in 2008 to 0.89 in 2012.

Table 2.2.1 Number of household connections (millions)
2008 2009 2010 2011 2012 CAGR
2008-2012
Local and access 13.0 12.7 12.6 12.2 11.9 -2.2%
Percentage growth 0.5 -2.3 -0.9 -2.7 -2.7
Internet 9.8 10.1 10.4 10.7 11.0 2.9%
Percentage growth 5.6 2.6 3.1 2.9 3.0
Wireless1 22.1 23.8 25.8 27.4 27.9 6.0%
Percentage growth 9.0 7.8 8.5 6.0 1.8
BDU 11.0 11.2 11.5 11.9 12.0 2.2%
Percentage growth 2.0 2.3 2.7 2.9 1.0
Total connections 55.9 57.8 60.3 62.1 62.8 3.0%
Percentage growth 4.9 3.4 4.4 2.9 1.1
Average connections per household 4.2 4.3 4.4 4.5 4.5 2.0%
Percentage growth n/a 3.2 2.3 1.1 2.0
  1. Includes residential and business connections

Source: CRTC data collection

Figure 2.2.1 Residential connections, by type of connection

This bar line chart shows the residential connections by type of connection from 2008 to 2012.  Local and access: 23.3, 22.0, 20.9, 19.6 and 18.9; Internet: 17.5, 17.5, 17.2, 17.2, 17.5; Wireless: 39.5, 41.2, 42.8, 44.1 and 44.4; BDU: 19.7, 19.4, 19.1, 19.0 and 19.1.

Source: CRTC data collection

b) Telephone penetration rates

Since 2009, telephone penetration rates, which measure the extent to which households subscribe to telephone service (which includes both wireline and wireless telephone services), have remained constant at 99.3 subscribers per 100 households. However, during that period, the number of households with wireline telephone service has declined from 89.3 to 86.6 subscribers per 100 households, whereas households with wireless service have increased from 77.2 to 79.4.

Wireless penetration was highest in Alberta at 88.5 subscribers per 100 households, followed by British Columbia at 83.6. In both cases, this exceeded their respective wireline penetration rates.

The 20% of Canadian households with the lowest household income had a telephone penetration rate of 97.3, the lowest among all the quintiles. They had the highest telephone penetration rate among those that had only wireline service (40.0) and among those that had only wireless telephone service (21.3). As household income increased, the number of wireless-only and wireline-only households decreased because they tended to have both wireline and wireless services.

Table 2.2.2 Provincial telephone penetration rates – Wireline and wireless subscribers per 100 households, 2011
Province Wireline Wireless Wireline and/or wireless Wireline only Wireless only
British Columbia 82.1 83.6 98.8 15.2 16.7
Alberta 82.0 88.5 99.9 11.4 17.9
Saskatchewan 85.7 82.4 99.9 17.5 14.2
Manitoba 85.4 79.2 99.7 20.5 14.3
Ontario 87.6 81.3 99.4 18.1 11.8
Quebec 88.5 70.4 99.3 28.9 10.8
New Brunswick 87.9 75.3 98.6 23.3 10.7
Nova Scotia 89.4 77.7 99.3 21.6 9.9
Prince Edward Island 86.5 77.8 99.7 21.9 13.2
Newfoundland and Labrador 93.1 79.5 99.4 19.9 6.3
Canada 86.5 79.4 99.3 19.9 12.8

Source: Statistics Canada - Survey of household spending

Table 2.2.3 Canadian telephone penetration rates – Wireline and wireless subscribers per 100 households
Year Wireline Wireless Wireline and/or wireless Wireline only Wireless only
2002 97.0 51.6 98.7 47.1 1.7
2003 96.3 53.9 98.8 44.9 2.5
2004 96.2 58.9 98.9 40.0 2.7
2005 94.0 n/a 98.8 n/a 4.8
2006 93.6 66.8 98.6 31.8 5.0
2007 92.5 71.9 98.8 26.9 6.3
2008 91.1 74.3 99.1 24.8 8.0
2009 89.3 77.2 99.3 22.1 10.0
2010 89.1 78.2 99.3 21.1 10.2
2011 86.5 79.4 99.3 19.9 12.8

Sources: Statistics Canada Affordability Study (2002 - 2007), Survey of Household Spending (2008 - 2011)

Table 2.2.4 Canadian telephone penetration rates by income quintile – Wireline and wireless subscribers per 100 households
Income quintile/year Wireline Wireless Wireline and/or wireless Wireline only Wireless only
First 2010 82.2 54.9 97.3 42.4 15.1
2011 76.0 57.3 97.3 40.0 21.3
Percentage change -7.5 4.4 0.0 -5.7 41.1
Second 2010 85.7 71.1 99.7 28.6 14.0
2011 86.0 72.3 99.8 27.5 13.8
Percentage change 0.4 1.7 0.1 -3.8 -1.4
Third 2010 89.3 82.0 99.8 17.8 10.5
2011 85.1 85.3 99.7 14.4 14.6
Percentage change -4.7 4.0 -0.1 -19.1 39.0
Fourth 2010 93.1 89.7 99.9 10.2 6.8
2011 91.3 89.8 99.9 10.1 8.6
Percentage change -1.9 0.1 0.0 -1.0 26.5
Fifth 2010 95.3 93.5 100.0 6.5 4.7
2011 94.1 92.0 100.0 8.0 5.9
Percentage change -1.3 -1.6 0.0 23.1 25.5
All households 2010 89.1 78.2 99.3 21.1 10.2
2011 86.5 79.4 99.3 19.1 12.8
Percentage change -2.9 1.5 0.0 -5.7 25.5

Source: Statistics Canada - Survey of household spending

c) Residential communications service prices

What’s in a basket?

Telephone basket

The TPI reflects the price changes experienced by a household for a basket of telephone services. The basket of telephone services reflects a weighted average of consumer expenditures on basic local service, other local services (such as options and features), and long distance, installation, and repair services. However, the TPI does not include Internet service expenditures.

Cable, satellite, and IPTV basket

The BDU price index reflects the price changes experienced by a household for a basket of cable television services. The basket includes both ‘Basic’ and ‘Extended’ cable services. Basic cable service is the minimum service to which all customers must subscribe. Extended cable service is the most popular package of additional channels. The index does not account for bundling discounts.

The price of communications services generally increased in 2012. The price of baskets of telephone service, cable, satellite and IPTV distribution services, and Internet access services exceeded the rate of inflation, as measured by the change in the CPI. In 2012, inflation increased 1.5% whereas the price of a basket of telephone services increased 2.0%, a basket of cable, satellite, and IPTV distribution services increased 5% and a basket of Internet service prices increased 4.3%.

Since 2005, however, the average annual increase in the price of telephone and Internet services was below that of inflation. Over this period, the average annual price increases for telephone and Internet services were 1.8% and 1.2% respectively compared to the 1.8% increase in inflation. The average annual price increase for traditional video distribution services was 5.1%.

Figure 2.2.2 Price indices [TPI, BDU (cable and satellite, including pay television), Internet access services, and CPI]

This line chart shows the following price indices from 2002 to 2012 Consumer price index (CPI): 100, 102.8, 104.7, 107, 109.1, 111.5, 114.1, 114.4, 116.5 119.9, 121.7; Telephone price index (TPI): 100, 100.2, 100.6, 101, 100.9, 101.6, 105.9, 106.5, 111.2, 112.3 and 114.6; Cablevision and satellite services (including pay television) index: 100, 104.8, 108.8, 112.5, 116.8. 122.7, 128.7, 135.8, 143.4, 151.4 and 159.0; Internet access services index: 100, 99.1, 99, 97.1, 96.7, 97.5, 95.8, 94.8, 95.8, 100.9 and 105.2.

Source: StatsCanada

d) Basic local residential landline telephone service prices

The major centres

The major centres are Vancouver, Victoria, Calgary, Edmonton, Saskatoon, Regina, Winnipeg, Toronto, Ottawa-Gatineau, London, Kitchener-Waterloo, St. Catharines-Niagara, Windsor, Oshawa, Montréal, Québec, Fredericton, Halifax, Charlottetown and St. John’s

These centres represent 59% of Canada’s residential local lines.

In 2005, the average monthly price of basic local telephone service, which consists of dial-tone, touch tone, 911, and message relay service and access to long distance, in the major centres in Canada, was $22.90. The price varied from a low of $19.71 in Regina to a high of $25.90 in Vancouver.

By 2012, the average monthly price of basic local service, in the major centres in Canada was $28.25. The price varied from a low of $24.34 in Regina to a high of $32.04 in Victoria. Since 2005, the average annual increase in the price of basic local telephone service was 2.9%. When the service was bundled with Internet, BDU, or wireless services, consumers were able to realize, on average, an additional $4 discount. However, in a number of cases, consumers had to enhance their basic local service to include additional features such as voice mail, call display, etc. to qualify the service for bundling. The additional cost of these features increased the price of the service by approximately $3 to $10. Only a small number of competitors offered basic local service. They generally included features, such as call display or voice mail, with their local service offering. In 2012, there were approximately 10 million residential subscriptions containing bundled services.

Table 2.2.5 Local residential telephone service prices in major centres ($/month)
Province Major centre Basic local service (2005) Basic local service (2012) Annual change
(2005-2012)
British Columbia Vancouver 25.90 31.22 2.7%
Victoria 24.10 32.04 4.2%
Alberta Calgary 24.00 31.51 4.0%
Edmonton 24.00 31.16 3.8%
Saskatchewan Saskatoon 19.71 25.69 3.9%
Regina 19.71 24.34 3.1%
Manitoba Winnipeg 25.43 31.18 3.0%
Ontario Toronto 22.97 28.67 3.2%
Ottawa  – Gatineau 22.97 27.62 2.7%
Hamilton 22.17 29.03 3.9%
London 22.17 28.81 3.8%
Kitchener  – Waterloo 22.17 28.70 3.8%
St. Catharines  – Niagara 22.17 29.15 4.0%
Windsor 22.17 28.95 3.9%
Oshawa 22.17 28.97 3.9%
Quebec Montréal 22.97 24.99 1.2%
Québec 22.17 24.63 1.5%
New Brunswick Fredericton 22.30 26.28 2.4%
Nova Scotia Halifax 25.19 25.38 0.1%
Prince Edward Island Charlottetown 24.75 25.71 0.5%
Newfoundland and Labrador St. John's 21.65 26.06 2.7%
National Major centres 22.90 28.25 2.9%

Sources: CRTC data collection and company tariffs

Table 2.2.6 Number of subscriptions with bundled services (millions)
2008 2009 2010 2011 2012 CAGR
2008-2012
Number of subscriptions with bundles 5.8 7.5 8.8 9.4 10 16.9%
Annual growth 15.1% 30.4% 17.1% 6.4% 6.3%

Source: CRTC data collection

Consumers who shopped around for local telephone service were able to realize greater savings. Companies utilizing VoIP technology were generally offering local service at 2005 prices or lower.

e) Wireless telephone service prices

In 2012, the average price of wireless service in Vancouver, Toronto and Montreal generally decreased between 3% and 10%, according to a study by Wall Communications Inc. that was commissioned by the CRTC and Industry Canada. New entrants had lower prices for the same basket of wireless services than the established carriers. However, the price difference between these two groups of carriers decreased. Established carriers generally decreased their prices in 2012 while the new entrants either increased their prices or did not match the reductions of the established carriers. The established wireless carriers, as a group, generally reduced their prices between 4% and 10% while the new entrants either reduced their prices by up to 10% or increased them by 7%, depending on the city served and the service offered.

Table 2.2.7 Canadian wireless monthly service rates ($) – incumbents v. new entrants

Baskets
Vancouver Toronto Montréal Average
2011 2012 Change 2011 2012 Change 2011 2012 Change 2011 2012 Change
Level 1 Basket (low-volume use, 150 minutes per month)
Incumbents 34.53 30.38 -12.0% 34.38 32.05 -6.8% 34.80 30.65 -11.9% 34.57 31.03 -10.2%
New entrants 24.43 22.09 -9.6% 22.95 23.72 3.4% 28.08 29.58 5.3% 25.15 25.13 -0.1%
Percentage Differential -29 -34 -33 -26 -19 -3 -27 -27
Level 2 Basket (average use, 450 minutes, and 200 text per month (2011) and 300 text per month (2012)
Incumbents 51.82 44.41 -14.3% 51.48 44.41 -13.7% 50.87 44.68 -12.2% 51.39 44.5 -13.4%
New entrants 35.55 38.10 7.2% 38.37 37.07 -3.4% 44.68 40.18 -10.1% 39.53 38.45 -2.7%
Percentage Differential -31 -14 -25 -17 -12 -10 -23 -14
Level 3 Basket (high-volume use, 1,200 minutes, 200 text (2011), 300 text (2012) and 1GB data per month)
Incumbents 98.82 95.03 -3.8% 98.82 94.36 -4.5% 99.22 94.63 -4.6% 98.95 94.67 -4.3%
New entrants 55.20 53.30 -3.4% 56.80 50.53 -11.0% 75.45 69.95 -7.3% 62.48 57.93 -7.3%
Percentage Differential -44 -44 -43 -46 -24 -26 -37 -39

Source: Price comparison study conducted for the CRTC in 2012 and 2013 by Wall Communications Inc.; see Appendix 4 for a summary of the assumptions and methodologies used.

f) Consumers’ expenditures on communications services

What do communications services expenditures include?

Communications services include local telephone (including custom calling features, and installation and repair), long distance, Internet, wireless, and BDU services.

Sales tax is excluded from the analysis of communications expenditures.

Canadians increased their expenditures on communications services from $182 per month per household in 2011 to $185 in 2012, resulting in a 2.5% increase. The increase was largely due to higher spending on wireless and Internet services which increased 10.7% and 3.4%, respectively. This was largely due to increased consumption of wireless data and increased demand for higher broadband Internet speeds.

However, Canadians reduced their spending on landline telephone service from $37.66 per month per household to $34.86, resulting in a 7.1% reduction. Consumers are reducing their consumption of landline telephone service. Contributing factors include, but not limited to, adoption of wireless services and elimination of their second landline telephone service. In 2012, there were, on average, two wireless subscriptions per household.

In 2012, Canadian households tended to spend the least on Internet services, which represented 16.7% of their expenditures on communications services, compared to 36.4% on wireless services. Households in the lowest quintile tended to allocate most of their communications expenditures to cable and DTH services ($35.54 per month per household) followed by wireless service ($32.92); whereas those in the highest quintile favored cell phone services ($107.08) followed by cable and DTH ($70.00).

Table 2.2.8 Household communications expenditures as a percentage of annual income, by quintile, 2011
Characteristics Lowest quintile (income less than $27,875 Second quintile $27,875 to $48,426) Third quintile ($48,426 to $74,032) Fourth quintile ($74,032 to $111,639) Highest quintile (income over $111,639) Total
Average annual income $17,312 $37,937 $60,559 $90,855 $179,659 $77,269
Members per household 1.47 2.10 2.57 2.90 3.34 2.48
Percentage recently changed address  
(2010-2011)
25.6% 20.4% 19.3% 14.5% 9.7% 17.9%
Communications expenditures as a percentage of income 8.4% 4.7% 3.6% 2.8% 1.7% 2.8%

Sources: Statistics Canada - Survey of household spending,

Table 2.2.9 Monthly household communications expenditures, by service and by quintile ($/month)
Service
($/month/household)
Lowest quintile Second quintile Third quintile Fourth quintile Highest quintile All classes
Wireline telephone 2011 33.91 33.51 37.01 42.56 42.39 37.66
2012 29.06 33.05 34.28 37.18 40.73 34.86
Percentage change -14.3 -1.4 -7.4 -12.6 -3.9 -7.4
Wireless 2011 31.58 43.33 58.25 73.00 98.50 60.92
2012 32.92 48.58 67.92 80.42 107.08 67.42
Percentage change 4.2 12.1 16.6 10.2 8.7 10.7
Internet 2011 18.45 25.47 31.80 34.65 39.28 29.95
2012 21.42 26.49 33.03 35.64 40.32 30.95
Percentage change 16.1 4.0 3.9 2.9 2.6 3.3
Cable and
DTH
2011 37.99 45.76 52.09 59.35 67.11 52.42
2012 35.55 46.93 51.79 55.95 70.00 52.02
Percentage change -6.4 2.6 -0.6 -5.7 4.3 -0.8
Total communications 2011 121.75 148.03 179.26 209.60 247.34 180.95
2012 118.94 155.04 187.02 209.18 258.14 185.25
Percentage change -2.3 4.7 4.3 -0.2 4.4 2.4

Sources: Statistics Canada - Survey of household spending, CRTC data collection and staff analysis

g) Telecommunications contribution and subsidy regime

In 2012, as part of the social and economic objectives of the Telecommunications Act, approximately 10% of residential telephone lines in high-cost serving areas were subsidized. TSPs contributed $132 million towards the achievement of basic service objectives.

Figure 2.2.3 Subsidy paid to LECs and the revenue-percent charge

This bar line chart shows the subsidy received by LECs in millions of dollars from 2008 to 2012:  209, 182,165, 154 and 132.  Contribution rates for the same period are also provided: 0.87%, 0.81%, 0.73%, 0.66% and 0.63%.

Sources: CRTC data collection and decisions

2.3 Protect

Complaints

Consumer contact and complaints are one of the considerations used to assess the extent to which the regulatory frameworks are effective. The CRTC has established mechanisms to address a variety of complaints.

Table 2.3.1 Number of contacts by public
2008-09 2009-10 2010-11 2011-12 2012-13
Broadcasting related enquiries1 7,131 5,747 6,261 5,829 6,358
Broadcasting complaints1 11,851 12,740 10,813 12,419 11,507
Telecommunications complaints2 N/A N/A N/A N/A 13,433
  1. For the 12-month period: 1 April to 31 March.
  2. For the 12-month period: 1 January to 31 December.

Source: CRTC Correspondence Tracking System (The Rapids tracking system counts multiple contacts from the same client on the same complaint as separate units, therefore the actual number of complaints received should be slightly lower.)

a) Programming of high standard

The Commission deals with programming complaints related to public and community broadcasters, as well as non-CBSC members, and with issues that are outside the parameters of the codes administered by the CBSC. Of the complaints received by the Commission, approximately 35% were referred to the CBSC.

Figure 2.3.1 Number of broadcasting complaints received and referred to the CBSC

This bar line chart shows the number of broadcasting complaints received by the CRTC and referred to the CBSC from 2008-2009 to 2012-2013.  Received by the CRTC: 2,013, 478, 1,024, 977 and 948; Referred to the CBSC: 792, 128, 465, 304 and 331.

Source: CRTC Correspondence Tracking System. (The Rapids tracking system counts multiple contacts from the same client on the same complaint as separate units. The actual number of complaints received should therefore be slightly lower.)

Table 2.3.2 Broadcasting complaints by sector, by issue
Market
Sector
Type of
complaint
2008-09 2009-10 2010-11 2011-12 2012-13
Complaints
received
Referrals
to
CBSC
Complaints
received
Referrals
to
CBSC
Complaints
received
Referrals
to
CBSC
Complaints
received
Referrals
to
CBSC
Complaints
received
Referrals
to
CBSC
Radio Abusive comment 26 10 11 - 35 5 38 3 64 32
Adult content 19 11 8 3 13 5 14 6 9 3
Alcohol advertising 6 - - - - - 1 - 4 -
Gender portrayal 1 1 - - - - 5 4 1 -
Offensive comment 397 308 89 30 220 100 258 95 283 135
Offensive language 40 23 24 8 296 266 22 9 50 14
Conventional television Abusive comment 39 5 5 1 26 - 30 2 30 6
Adult content 111 47 84 34 52 8 56 11 71 12
Alcohol advertising 17 1 4 - 4 - 8 - 18 3
Gender portrayal 5 2 - - 2 - 9 - 5 1
Offensive comment 455 61 107 6 135 22 217 43 233 62
Offensive language 51 20 34 14 41 19 29 3 32 8
Television violence 85 24 40 9 84 14 76 14 54 8
Specialty channels Abusive comment 10 - 2 - - - 1 - 5 2
Adult content 82 39 32 14 31 10 23 12 16 9
Alcohol advertising 1 - 1 - - - - - 2 1
Gender portrayal - - - - - - 1 - 1 1
Offensive comment 212 202 12 2 19 5 161 87 44 23
Offensive language 32 23 7 2 13 6 7 5 11 7
Television violence 20 14 14 5 21 5 18 10 13 3
Pay television and pay-per-view services Abusive comment - - - - - - - - - -
Adult content 402 1 4 - 32 - 3 - 2 1
Alcohol advertising - - - - - - - - - -
Gender portrayal - - - - - - - - - -
Offensive comment 2 - - - - - - - - -
Offensive language - - - - - - - - - -
Television violence - - - - - - - - - -
Subscription radio (Satellite) Abusive comment - - - - - - - - - -

Source: CRTC Correspondence Tracking System. (The Rapids tracking system counts multiple contacts from the same client on the same complaint as separate units. The actual number of complaints received should therefore be slightly lower.)

Figure 2.3.2   Percentage of broadcasting complaints by sector, 2012-2013

This pie chart shows the total number of broadcasting complaints as a percentage by sector in 2012-2013.  Radio: 43%; conventional television: 47%; specialty channels: 10%; pay television and pay-per-view services: 0%; subscription radio (satellite): 0%.

Source: CRTC Correspondence Tracking System. (The Rapids tracking system counts multiple contacts from the same client on the same complaint as separate units. The actual number of complaints received should therefore be slightly lower.)

What is the CBSC?

The CBSC is an independent, non-governmental organization created by the CAB to administer standards established by its members, Canada's private broadcasters. The Council's membership includes more than 760 private sector radio and television stations, specialty services and networks from across Canada, programming in English, French and third languages. More information about the CBSC can be found at the Canadian Broadcast Standards Council website.

The CBSC administers specific codes of broadcast conduct and provides a means of recourse for members of the public regarding the application of the standards set out in the following codes:

Table 2.3.3 Complaints handled by the CBSC
2007-08 2008-09 2009-10 2010-11 2011-12
Files handled by the CBSC 1,498 1,781 2,035 8,870 2,462
Referred by the CRTC 979 1,045 761 496 452

Source: CBSC annual reports

What is the ASC?

ASC is the national not-for-profit advertising self-regulatory body.

The Canadian Code of Advertising Standards is regularly updated to ensure it is current and contemporary – keeping pace with consumer and societal expectations. Additional information on the ACS can be found at the Advertising Standards Canada website.

The ASC responds to complaints by consumers and special interest groups regarding advertising with respect to all media subject to the Canadian Code of Advertising Standards, the principal instrument of advertising self-regulation. In addition, ASC undertakes pre-clearance functions in five industry categories based on applicable legislation, regulations, and/or industry codes and guidelines.

Viewers and listeners may request that the Commission consider their complaints at first instance, or where they are not satisfied with the results of the self-regulatory process.

Between April 2012 and 31 March 2013, the Commission received 6,358 broadcasting complaints. Most of the complaints (47%) were related to conventional television, followed by those related to radio (43%).

Table 2.3.4 Complaints handled by the ASC
2008 2009 2010 2011 2012
Complaints received by ASC 1,119 1,228 1,200 1,809 1,310
Complaints about television ads 528 546 526 686 559
Percent of total complaints received 47% 44% 44% 38% 43%
Complaints about radio ads 56 64 67 85 55
Percent of total complaints received 5% 5% 5% 5% 4%
Complaints about Internet ads na na na na 280
Percent of total complaints received 21%

Source: Ad complaints reports

b) Loud television commercials

Where are the new technical standards related to loudness?

ATSC Recommended Practice A/85: Techniques for Establishing and Maintaining Audio Loudness for Digital Television. The ATSC is the international organization that establishes technical standards for digital television which are used by North American broadcasters. These can be found at Advanced Television Systems Committee website.

Prior to 2011, thousands of Canadians voiced their frustration with loud television commercials and urged the CRTC to compel the broadcasting industry to solve the problem. In response to these concerns, the CRTC required Canadian broadcasters and television distributors (e.g., cable, satellite, and IPTV providers) to follow a new technical standard to ensure that commercials are broadcast at a similar volume to regular programming. New regulations came into force on 1 September 2012.

Canadian broadcasters are now responsible for ensuring that the loudness of their programming is compliant with the new technical standards. For their part, distributors must not change the loudness of programming as it passes through their networks. Distributors are also responsible for the loudness of programming in all foreign services, including U.S. channels.

Figure 2.3.3 Number of loudness inquiries received by the CRTC

This bar line chart shows the number of loudness inquiries received by the CRTC on a monthly-basis from September 2012 to May 2013.  Inquiries: 291, 214,145,103,111, 86, 110, 81 and 57; Forwards: 19, 19, 12, 6, 11, 7, 9, 4 and 1.

Source: CRTC

Since the introduction of the new regulations in September 2012, the volume of monthly complaints received by the Commission decreased from 291 complaints in September 2012 to 57 complaints in May 2013. Many of these inquiries were from Canadians who provided sufficient information for the Commission and the industry to investigate their complaint. The Commission directed the industry to investigate 88 cases of possible non-compliance. It deemed 28 of these cases to be instances of non-compliance. Although this process has identified some instances of non-compliance, the majority of these investigations concluded that commercials were, in fact, compliant with the regulations. This highlights the fact that the perception of loudness is based on many factors, including the nature of the programming, and that Canadians may perceive a commercial to be louder than regular programming even though the two are broadcast at a similar volume.

The Commission directed broadcasters and BDUs to submit a report confirming that they had taken the necessary steps to control the loudness of commercials as of 1 September 2012. The majority of broadcasters and BDUs have demonstrated, through the compliance reports submitted by the industry, that they have installed equipment to control and monitor the loudness of programming, changed internal procedures, and provided training to their staff. They have also implemented other contractual and quality control measures to ensure the compliance of their programming. Television distributors have also implemented procedural changes and trained their staff to ensure the loudness of programming from Canadian broadcasters is not changed as it passes through their networks.

Compliance issues have been generally related to foreign programming, local availabilities, and early implementation issues. Non-compliant parties have responded by improving processes, installing equipment and securing compliant content. The Commission has and will continue to take action with non-compliant companies to ensure full industry compliance with the regulations and to ensure that the necessary steps have been taken to avoid future instances of non-compliance.

c) Telecommunications complaints

What is the CCTS?

The CCTS is an independent organization dedicated to working with consumers and the TSPs to resolve complaints relating to telecommunications services.

The CCTS is responsible for complaints related to services for which the Commission no longer approves rates.

The Commission and the CCTS receive 25.4 thousand complaints about telecommunications services. Of these, 52% were processed by the Commission and 48% by the CCTS. Complaints about wireless services were the most common (39%), followed by telemarketing (20%) and Internet (13%).

The underlying issues in these complaints were billing errors (42%), contract disputes/terms of service (16%) and service delivery/provision of service (12%).

Table 2.3.5 Telecommunications complaints received by the CRTC, 2012-2013
CRTC Billing Quality of Service Provision of service Terms of service Total Complaints per 10,000 residential  NAS or subscriber*
Telemarketing 4,944 - - - - 4,944 4.2
Incumbent telephone companies 273 1,722 480 244 189 2,908 4.2
Wireless 334 1,813 197 145 273 2,762 1.0*
Internet 199 320 254 204 74 1,051 1.0*
Telecommunications 311 326 48 59 26 770 0.6
Competitive local exchange carriers 37 265 117 80 48 547 1.1
Alternative providers of long distance 13 168 18 15 24 238 0.2
VoIP 23 102 27 37 24 213 0.2
Total 6,134 4,716 1,141 784 658 13,433 n.a.

Source: CRTC

Table 2.3.6   Summary of issues raised in telecommunications complaints handled by the CCTS, 2011-2012
Billing error Contract dispute Service delivery1 Credit management Total
Wireless services 3,928 2,162 942 189 7,221
Local exchange and VOIP 873 523 606 43 2,045
Internet access 945 526 651 38 2,160
Long distance 342 81 126 10 559
Directory assistance 1 1
White page directories
Operator services
Total 6,089 3,292 2,325 280 11,986

1. Includes installation, repair and maintenance

Source: CRTC

d) DNCL - Telemarketing

Since 2008, Canadians have been able to register their telephone numbers on the National DNCL at no cost to reduce the number of unwanted telemarketing calls and faxes they receive. The National DNCL is a key part of the CRTC's Unsolicited Telecommunications Rules. These rules include the Telemarketing Rules, National DNCL Rules, and Automatic Dialing and Announcing Device Rules (the Rules). Telemarketers and organizations enlisting their services have the responsibility to familiarize themselves with these rules and to follow them.

For the period 1 April 2012 to 31 March 2013 the CRTC imposed monetary penalties or other payments for violations of the Rules totalling $0.4 million. To date, since its inception, administrative monetary penalties imposed and other payments total $4.5 million.

Table 2.3.7   National DNCL key statistics
2011 2012 2013
Number of registrants (millions) 9.5 10.7 11.5
Percent change 13.9 12.9% 7.7%
Telemarketer access 8,478 9,396 10,228
Percent change na 10.8% 8.9%
Number of complaints (thousands) na 133.7 148.8
Percent change na 11.3%
Number of complaints (per 1000 registrants) na 12.5 12.9
Percent change na 3.3%

Source: CRTC

Figure 2.3.4 Number of registrations on the National DNCL

This bar line chart shows the number of registrations (in millions) on the National DNCL from 2010 to 2013.  Number of registrants:  8.3, 9.5, 10.7 and 11.5; Percentage change (as a second axis): 14%, 13% and 8%.

Source: CRTC

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