How small is small? The CRTC considers regulatory exemptions for Class 3 cablecos

The CRTC has taken the first step to loosening the reins on cablecos with a Dec. 7 proposal to exempt Class 3 systems from regulation. That same day it also issued a broader public notice –2000-164 – asking for comments on how it can go further in reducing the administrative burden on other cable operators and itself, without compromising cultural objectives under the Broadcasting Act. With competition in the broadcast distribution market now taking hold, the commission believes the time is ripe to let market forces prevail, at least where warranted. Earlier this year, it received proposals from the Canadian Cable Television Association (CCTA) and the Canadian Cable Systems Alliance (CCSA) on how to proceed. Deregulating small cablecos was considered a good first start. In PN 2000-162, the CRTC proposes to exempt cablecos with fewer than 2,000 subscribers that serve communities with less than 10,000 people. This proposal would free the CRTC from regulating 85 per cent of cable licensees. Those companies represent less than 9 per cent of all subscribers. But the cable industry wants the CRTC to go even further. The CCTA says small operators should be free to package their services as the market demands. It wants Class 2 licensees to be exempt from all regulations, except "must carry" rules for the basic tier, a preponderance of Canadian signals, and the five per cent gross revenue contribution to Canadian programming. Rules governing simultaneous substitution and some rate increases could still apply to Class 1 systems with less than 20,000 subscribers, under the CCTA proposal. Others have suggested that in today’s market, a system with as many as 50,000 subscribers is not big in light of the investment required for future services such as high-speed Internet access, digital cable and IP telephony. The CCSA wants the commission to increase subscriber thresholds for defining classes of licence, and exemptions for Class 2 and 3 licensees not affiliated to one of the country’s four largest multiple system operators. At least one small operator says any new regulatory approach should consider the density of licensed territories. Mountain Cablevision serves 33,000 subscribers in Hamilton and 7, 000 subscribers on seven communities outside of the urban area. Les Boris, VP of Mountain Cable, says the new rules should take into consideration what it costs licensees to serve communities with small populations, and why certain rules – like those requiring simultaneous substitution – are expensive and technically difficult for smaller operators. He says he supports rules that will give his company more freedom to compete. "Smaller rural operators are getting decimated," he told CCR. "They have no packaging flexibility. Many of them are suffering up to 34 per cent subscriber loss." Written interventions to both public notices are due Jan. 16.

How small is small? The CRTC considers regulatory exemptions for Class 3 cablecos

News | 12/21/2000 5:00 am EST

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