Use of licence exemptions will cut paperwork for small cablecos and CRTC

The head of Canadian Cable Television Association (CCTA) says the CRTC has made an important first step by effectively deregulating Class 3 cable systems, and should now turn its attention to easing the burden for mid-sized systems. On May 29, the commission announced that cable systems with fewer than 2,000 subscribers and their own head end will no longer require a licence and will be exempt from the Broadcasting Distribution Regulations – PN 2001-59. "It’s really only when you get to the Class 2s that you get into the substantive areas that we have been proposing," says CCTA president and CEO Janet Yale. "Class 2s are subject more to carriage rules and the tiering and linkage arrangements and so on (than Class 3s). And these are the systems that, in addition to the Class 3s, are really feeling the effect of DTH competition." Companies like Westman Communications and some parts of the Eastlink Cable Systems, for example, have so few customers, says Yale, that it’s hard to justify the expenditures needed to upgrade to two-way high-speed Internet and digital. "The commission didn’t think that these systems need any kind of relief. It’s the small independents from 2,000 to 20,000 who all need some assistance," she told CCR. The CRTC appears willing to consider the idea. The decision says it would "monitor the impact of the new exemption for very small cable systems and its move to regional licensing before implementing any further changes." Under the exemption ruling, Class 3 systems can grow up to 10 per cent, or up to 2,200 subscribers, before having to apply for a Class 2 licence. The exemption doesn’t apply to new Class 3s entering a territory already served by an existing Class 1 or Class 2 system. Class 3 systems must still offer basic service packages, must make sure most of their services are Canadian, distribute at least one CBC signal in each official language, abide by rules for prohibited programming, and follow regulations dealing with the distribution of French-language services (CCR Feb. 28/01). But they can now pick up their signals directly from a U.S. satellite provider, rather than using Canadian satellites. As well, small systems will no longer have to pay licence fees. CRTC chair David Colville explains that cable systems could lose their exempt status and be re-subjected to licensing if they do not comply with the rules. Copyright concerns Some Class 3 systems were concerned they would no longer qualify for reduced rates because the tariffs they pay for programming under the Copyright Act are tied to small system licences. The CRTC has indicated it will work with Canadian Heritage to ensure the Copyright Act is amended so that their status as small systems for the purpose of copyright doesn’t change. Concerned about the ability to collect royalties from non-licensed systems, the Copyright Collective of Canada (CCC), the Copyright Broadcasters Rights Agency (CBRA), the Canadian Film and Television Production Association (CFTPA) and the Canadian Association of Broadcasters (CAB) suggested the CRTC maintain a registry of exempt Class 3 systems. The CRTC indicated that it would not establish and maintain such a registry, given the various rights collectives would be using it, but it did say it would cooperate with parties interested in setting one up. The CRTC also announced plans for regional licensing, which will see a maximum of three cable licences (one licence for Class 3s who don’t apply for exemption, Class 2s and Class 3s) granted for each operator in five licensing regions of the country (CCR, Dec. 21/00). The change also triggered concerns by the CCTA that copyright payments for Class 2s could rise as a result of the new licensing approach. The CRTC stated, however, it was up to the copyright collectives to update their royalty payment regimes to reflect the new regional licensing model. Regional licensing will not be implemented until licence renewals in 2002. The CRTC will issue a public notice soon on the issue.

Use of licence exemptions will cut paperwork for small cablecos and CRTC

Broadcast | June 7, 2001

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