Regional cable licensing behind schedule; administrative renewals to be issued

The CRTC’s plan to begin issuing regional cable licences this year in accordance with a new licensing model is behind schedule and won’t kick in until 2003. The commission has been quietly telling the industry in recent weeks that it will issue short-term administrative licence renewals to cable systems whose licences expire this year as it finalizes regulations to move to regional licensing. In order to implement regional licensing, the CRTC must first amend the Broadcasting Distribution Regulations. But a public notice detailing proposed amendments has yet to be issued for public comment, and likely won’t be ready for at least a couple of months, according to Claude Doucet, the CRTC’s director of distribution and competitive policy. "We’ve been trying to be very mindful of the comments that have been made about possible impacts on copyright and other things like that – mostly copyright and licence fees," he tells CCR. "We’ve tried to as much as possible draft a set of regulations that… will reflect those concerns and make sure we don’t cause any further ones." The CRTC concluded last May that it would implement a regional licensing model in part to help reduce the administrative burden on both itself and cable licensees. Under the model, a maximum of three cable licences would be granted for each cable operator in five licensing regions of the country – Public Notice 2001-59 and Public Notice 2000-163 (CCR, Dec. 21/00). One licence would be issued for Class 3 systems that aren’t exempted from licensing, one for Class 2s, and one for Class 1s. The commission agreed with the industry that before regional licensing could be adopted, some changes to its regulations, namely the Broadcasting Distribution Regulations, would be necessary.It added that changes could "be developed and implemented without undue difficulty" and that conversion to regional licensing should begin with the licence renewals considered in 2002. But that won’t happen given that proposed amendments to the regulations haven’t even gone out for public comment, a process that can take several weeks. The next batch of cable licences up for renewal expire at the end of August. In addition, questions still remain about how regional licensing will impact copyright payments made by cablecos. Cable operators must pay copyright royalties for the retransmission of distant television and radio signals, and for the use of musical works featured in the programming of pay and specialty television services. The cable industry had expressed concerns that regional licensing would dramatically increase the copyright royalty payments required of cable licensees. Specifically, it considered that, under a regional approach, many small cablecos would no longer qualify for preferential "small system" copyright rates and would be required to pay substantially higher royalties. In PN 2001-59, the commission stated that it would be up to the copyright collectives to update their royalty payment regimes to reflect the new regional licensing model. In fact, it’s the federal government that will ultimately have to change definitions for cable systems in regulations made pursuant to the Copyright Act. Those changes have yet to be made and it’s not even clear if they are necessary. "I’m not even sure whether we’ll need an amended regulation for the regional cable systems because they’re not mentioned anywhere in the existing regulations or the Act," says a source with a copyright collective. "So, it may be something that can be done administratively with the Copyright Board." The exemption of hundreds of Class 3 systems recently has reduced considerably the number of cable licences in existence – Broadcasting Decision 2002-45. "Class 3s were 1,700 of about 2,000 or so distribution licences," Doucet notes. "All we’re left with, really, are Class 1s, Class 2s and a couple of Class 3s."

Regional cable licensing behind schedule; administrative renewals to be issued

Broadcast | April 12, 2002

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