Telus requires BDU licence to provide VOD service, cable industry tells CRTC

Telephone company Telus Corp. should not be allowed to provide a video-on-demand service in a massive Toronto condominium complex unless and until it applies for and receives a broadcast distribution licence, according to the Canadian Cable Television Association (CCTA). Industry observers say the issue represents an interesting test case for the CRTC. In an April 11 intervention to Telus’ application for a VOD licence, the CCTA says it’s questionable whether Telus can operate a VOD service as it intends without obtaining a distribution licence. "To conclude otherwise would effectively result in programming undertakings being able to establish ‘mini-cable’ systems in multiple unit dwellings without having either to be licensed as a distribution undertaking or to satisfy the criteria of an existing exemption order," the CCTA writes in its six-page submission filed with the CRTC. Telus is seeking a licence to provide a VOD service to residents in CityPlace, a condo development currently under construction in downtown Toronto (CCR, Apr. 12/02). When construction is completed in 2010, the complex will comprise about 7,000 residential condominium units in 18 high-rise towers. Telus does not believe that it needs a broadcast distribution undertaking (BDU) licence to provide its VOD service to residents of CityPlace. It was questioned by the CRTC on the issue in a deficiency question as part of its VOD licence application process. The commission will no doubt pursue the issue further at a public hearing beginning May 6 to consider the application. Telus argues that it does not meet the definition of "distribution undertaking" as set out in the Broadcasting Act. It argues that it does not need a BDU licence because it will not be receiving and retransmitting broadcast signals received off-air or otherwise from other programming services. It adds that because it will be using a separate, stand-alone digital network for its VOD service, it will be able to establish a direct billing relationship with end-users without having to sign an affiliation agreement with a BDU. The CCTA does not oppose Telus’ application for a VOD licence, citing the CRTC’s policy of licensing competing VOD services. However, it maintains that Telus should be required to have a BDU licence. "CCTA submits that Telus will be functioning as a BDU and should be required to be licensed as such," the CCTA writes. "It plans to distribute programming over a distribution network that will carry both VOD and high-speed Internet services; it will provide the set-top box necessary to obtain both the VOD service and the non-programming services; and it will bill for the VOD programs selected by the subscribers and for the rental of the box. These are functions typically undertaken by a distributor and they demonstrate that Telus will in fact be operating in a manner akin to a distribution undertaking."

Telus requires BDU licence to provide VOD service, cable industry tells CRTC

Broadcast | April 25, 2002

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