COPYRIGHT REGULATIONS

Definition of Small Retransmission Systems Regulations

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REGULATIONS
Copyright Act

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REGULATIONS DEFINING SMALL RETRANSMISSION SYSTEMS FOR THE PURPOSE OF SUBSECTION 70.64(1) OF THE COPYRIGHT ACT

1. These Regulations may be cited as the Definition of Small Retransmission Systems Regulations.

2. In these Regulations,

"licence" means a licence issued under paragraph 9(1)(b) of the Broadcasting Act authorizing the licensee to carry on a broadcasting receiving undertaking that distributes programming services to premises by means of signals that are retransmitted by cable or Hertzian waves;

"licensed area" means the area within which a licensee is authorized, under its licence, to provide services;

"premises" means

(a) a dwelling, including a single-unit residence or a single unit within a multiple-unit residence, or

(b) a room in a commercial or institutional building. SOR/94-754, s. 1.

3. (1) Subject to subsections (2) to (4) and section 4, for the purpose of subsection 70.64(1) of the Copyright Act, "small retransmission system" means a cable retransmission system, or a terrestrial retransmission system utilizing Hertzian waves, that retransmits a signal, with or without a fee, to not more than 2,000 premises in the same licensed area.

(2) For the purpose of subsection (1), where a cable retransmission system is included in the same unit as one or more other cable retransmission systems, the number of premises to which the cable retransmission system retransmits a signal is deemed to be equal to the total number of premises to which all cable retransmission systems included in that unit retransmit a signal.

(3) For the purpose of subsection (2), a cable retransmission system is included in the same unit as one or more other cable retransmission systems where

(a) they are owned or directly or indirectly controlled by the same person or group of persons; and

(b) their licensed areas are each less than 5 km distant, at some point, from at least one other among them, and those licensed areas would constitute a series of contiguous licensed areas, in a linear or non-linear configuration, were it not for that distance.

(4) Subsection (2) does not apply to a cable retransmission system that was included in a unit on December 31, 1993. SOR/94-754, s. 1.

4. The definition set out in subsection 3(1) does not include a cable retransmission system that is a master antenna system located within the licensed area of another cable retransmission system that retransmits a signal, with or without a fee, to more than 2,000 premises in that licensed area. SOR/94-754, s. 1.

Description

Under section 70.64 of the Copyright Act, as amended by the Canada-United States Free Trade Agreement Implementation Act, the Governor in Council is empowered to define "small retransmission systems" for the purpose of implementing a compulsory licensing regime for the retransmission of Canadian and U.S. radio and television signals by cable systems and other retransmitters. The regime will require the payment of royalties for the retransmission of "distant signals" only.

Under the provisions of the Copyright Act, the Copyright Board is responsible for approving the tariffs for the retransmission of "distant signals". The Copyright Act requires the Board when approving these tariffs to ensure that there is a preferential rate for "small retransmission systems". The regulation defines a "small retransmission system" as one serving 1,000 or fewer premises in the same community and will ensure that Master Antenna (MATV) systems will be treated in the same fashion as the cable system in the area in which they operate.

Alternatives Considered

There are no alternatives to the adoption of regulations since the Act requires regulations to be made to define a "small retransmission system".

Consistency with Regulatory Policy and Citizens' Code

The regulations are consistent with the Regulatory Policy and Citizens' Code of Regulatory Fairness in that they are designed to ensure that the smallest cable systems and other small retransmission systems are not burdened disproportionally by the introduction of the retransmission compulsory licence regime. Most such systems operate in remote and isolated areas of the country or have significantly higher operating costs because of the absence of the economies of scale enjoyed by larger systems; also, they generally rely more heavily on distant signals.

While these Regulations were not included in the Federal Regulatory Plan, early notice was provided by the tabling of a prior version of these Regulations with the Legislative Committee on Bill C-130 in August, 1988.

Anticipated Impact

The persons most directly affected by the retransmission regime are cable television companies and other retransmitters of radio and television signals, and the rights owners of the copyright works contained in those signals. Subscribers to small retransmission systems may also be indirectly affected by way of higher monthly service fees in 1990 as a result of the regime, although these Regulations should serve to limit the impact on subscribers served by these systems and thus avoid any reduction in the number of signals they receive.

The total cost of the regime to the industries affected, and the relief granted to small systems by virtue of these Regulations, cannot be determined at this time because of the nature of the compulsory licence regime, which envisages a tariff-setting process before the Copyright Board.

Consultation

Comments were received from 15 groups, organizations and companies representing retransmitters, rights owners and consumers, and from two provincial government departments on the regulations prepublished in the Canada Gazette Part I on March 4, 1989. Most of the submissions supported the definition of 1,000 or less premises served. However, a submission received from a group of U.S. border broadcasters retransmitted by cable and satellite in Canada objected to the principle that copyright owners would be forced to give a subsidy to small retransmission systems at preferential rates. On the other hand, the Canadian Cable Television Association (CCTA) and the Consumers Association of Canada suggested raising the threshold to 6,000 or less premises while the British Columbia Ministry of Regional Development proposed that instead of using a numerical "premises served" test, the regulation should adopt the Canadian Radio-television and Telecommunications Commission (CRTC) definition of a Part III cable licensee. In light of these comments, the government has decided to leave the threshold at 1,000 or less premises served.

Most of the comments received also pointed out that the regulation would needlessly and unfairly entitle Master Antenna Television (MATV) systems operating in urban areas to preferential rates. Such comments were received from retransmitters such as the CCTA who pointed out the potential for unfair competition this would create, and from rights owners who objected to the lack of a sound public policy basis for granting MATV systems in urban areas a preferential rate. The government has therefore decided to remove this anomaly by amending the definition so that MATV systems will be treated in the same fashion as the cable system in the area in which they operate.

Compliance Mechanism

The nature of these Regulations is strictly definitional. Once adopted, it will be for the Copyright Board to determine whatever benefits or liabilities may flow from the regulations.