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Broadcasting Decision CRTC 2003-124
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Ottawa, 25 April 2003
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Star Choice Television Network Incorporated
Across Canada
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Broadcasting Public Notice CRTC 2002-40
Application 2002-0333-1
26 July 2002
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Star Choice Television Network Incorporated - Licence amendment
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The Commission approves the application by Star Choice Television Network Incorporated to amend the licence of its national direct-to-home satellite distribution undertaking in order to permit it to engage in bulk billing.
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Introduction
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1.
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The Commission received an application by Star Choice Television Network Incorporated (Star Choice) to amend the licence of its national direct-to-home (DTH) satellite distribution undertaking in order to permit it to engage in bulk billing on the same basis as cable undertakings.
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2.
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In Decision CRTC 2001-521, 24 August 2001 (Decision 2001-521), the Commission addressed a complaint filed by Rogers Cable Inc., alleging that Star Choice had breached the terms of its DTH satellite distribution licence by entering into bulk billing arrangements with owners of various multiple-unit dwellings (MUDs) in and around Toronto.
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3.
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In Decision 2001-521, the Commission expressed concern that the inability of DTH providers to engage in bulk billing as cable companies currently do may place DTH providers at a competitive disadvantage in relation to other types of distribution undertakings.
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4.
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Accordingly, in Call for Comments - Bulk Billing by Direct-to-Home Satellite Distribution Undertakings, Public Notice CRTC 2001-96, 24 August 2001 (Public Notice 2001-96), the Commission expressed its preliminary view that the public interest would be best served by permitting DTH distributors to engage in bulk billing on the same basis as cable distributors. The Commission also requested comments on this position.
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5.
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In Bulk billing by direct-to-home satellite distribution undertakings, Broadcasting Public Notice CRTC 2002-7, 12 February 2002 (Public Notice 2002-7), the Commission announced that it would permit DTH distributors, upon application, to engage in bulk billing on the same basis as cable undertakings. The Commission invited DTH licensees to file applications for amendments that would remove the restrictions that prohibit them from engaging in bulk billing. Star Choice filed its application in response to this invitation.
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Interventions
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6.
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The Commission received interventions from Astral Broadcasting Group Inc. (Astral) and the Canadian Association of Broadcasters (CAB).
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7.
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Astral submitted that it is standard industry practice for a programming service to accept a reduction in its monthly remittance in an amount proportionate to the discount offered through bulk billing arrangements. Astral was of the view that Star Choice's ability to engage in bulk billing arrangements should be subject to a condition that would facilitate programmers' ability to verify the accuracy of bulk subscriber payments.
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8.
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Astral also recommended a condition that would require Star Choice to regularly provide programming services with information on MUDs that have bulk billing arrangements, including total units and total broadcasting revenue by complex, discount rate by unit, and the calculations that support remittances paid to programming services.
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9.
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In general, the CAB supported the same audit measures as those requested by Astral. The CAB requested that the Commission establish a means by which programming services could verify the accuracy of payments received from the distributor as a result of bulk billing agreements between a DTH undertaking and MUD operators. Moreover, the CAB was of the view that Star Choice's ability to engage in bulk billing arrangements should be subject to standard industry payment practices, such as maximum discount thresholds.
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The applicant's reply
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10.
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In reply, Star Choice stated that the terms of carriage, including discounts and audit rights, are normally negotiated between the parties to affiliation agreements and do not require new regulatory or licensing requirements. Star Choice also pointed out that, while the CAB's information disclosure request was general, Astral's request identified certain highly sensitive data that did not seem to assist programmers' verification of the compensation they are due. Star Choice argued that the interveners' proposals would create a competitive disadvantage for DTH undertakings since cable undertakings are not subject to the requirements requested by Astral and the CAB.
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11.
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Star Choice stated that it did not understand why the CAB believed it was necessary to impose a regulatory or licensing requirement when it is in the interest of Star Choice to negotiate amendments to its affiliation agreements with programmers to allow for the possibility of bulk billing discounts. Star Choice also pointed out that neither intervener suggested that Star Choice had derogated or would derogate from standard industry practices in negotiations with programmers. It further submitted that sufficient regulatory safeguards are in place under the Broadcasting Distribution Regulations to manage circumstances where programmers think that agreement terms are unfair.
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The Commission's conclusions
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12.
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The Commission considers that imposing the measures recommended by Astral and the CAB as a condition of licence would be treating cable undertakings and Star Choice differently, which was an issue addressed in Public Notice 2002-7. Moreover, it is satisfied that the existing regulatory safeguards, including sections 9 and 12 of the Broadcasting Distribution Regulations, are sufficient to ensure programmers fair and reasonable treatment regarding payments and audit rights. The Commission notes that the interveners did not address why such measures had to be strengthened.
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13.
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The Commission notes that, in New, national, direct-to-home satellite distribution undertaking - Approved, Decision CRTC 96-529, 27 August 1996, the Commission stated that Star Choice "will derive its revenues entirely from subscription fees, and will provide programming services exclusively to individual subscribers in all parts of Canada on a DTH basis."
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14.
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The Commission determined in Public Notice 2002-7 that the public interest would be best served by permitting DTH undertakings to engage in bulk billing on the same basis as cable undertakings.
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15.
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In light of the above, the Commission approves the application by Star Choice to engage in bulk billing on the same basis as cable undertakings.
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Secretary General
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This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: http://www.crtc.gc.ca
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Date Modified: 2003-04-25