8 March Ms. Diane Rhéaume Secretary-General Canadian Radio-Television & Telecommunications Commission Ottawa, Ontario K1A ON2

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1 8 March 2007 Ms. Diane Rhéaume Secretary-General Canadian Radio-Television & Telecommunications Commission Ottawa, Ontario K1A ON2 Re: Broadcasting Notice of Public Hearing CRTC , Item 19 - Application by Rogers Broadcasting Limited (Application No ) for a licence to operate a national pay audio programming undertaking to be known as Rogers Pay Audio Dear Ms. Rhéaume: I. Introduction 1. The Canadian Broadcasting Corporation/Radio-Canada ( CBC/Radio- Canada ) files the following intervention in response to the abovereferenced application by Rogers Broadcasting Limited ( Rogers ) for a licence to operate a national pay audio programming undertaking. 2. CBC/Radio-Canada is the licensee of Galaxie, a national pay audio programming undertaking that offers 45 channels of continuous music, without talk, to over 6 million broadcasting distribution undertaking ( BDU ) subscribers across Canada. 3. Subject to the comments below, this intervention supplements but does not replace the intervention filed by CBC/Radio-Canada on 5 October 2006 in response to Broadcasting Notice of Public Hearing CRTC CBC/Radio-Canada asks the Commission to take into account both interventions when making a determination with respect to the Rogers application. 4. CBC/Radio-Canada does not oppose this application but urges the Commission to ensure there is a level playing field among all pay audio services, and that the existing and very successful pay audio framework is not compromised by the modifications to this framework requested by the applicant.

2 2 5. Rogers has applied for a pay audio licence that is similar but not identical to the licences granted to existing pay audio licensees. The CBC/Radio- Canada s 5 October 2006 intervention identified four general areas of concern with respect to the Rogers application: the need for a uniform regulatory regime for all pay audio licensees; the proposed conditions of licence that would reduce pay audio Cancon levels, and include spoken word programming on up to 10% of channels; the distribution of pay audio services over multiple platforms; and the potential carriage of satellite subscription radio services by BDUs. 6. The last of these issues is now moot given that the Commission has established terms under which certain BDUs may carry satellite subscription radio services. 1 In respect of the remaining areas, CBC/Radio- Canada reaffirms its 5 October 2006 submissions. 7. In particular, CBC/Radio-Canada strongly reiterates the need for a uniform regulatory regime for all pay audio licensees. In addition, there is a clear need for regulatory safeguards to protect against preferential treatment in the distribution of pay audio services in a multi-platform world. In CBC/Radio-Canada s submission, if a uniform regime was not maintained and appropriate safeguards were not established, there would be an uneven playing field in this area. In such an environment Galaxie the only unaffiliated pay audio licensee would be especially disadvantaged. 8. In this intervention, CBC/Radio-Canada focuses on Rogers request to include talk programming in its proposed pay audio service. CBC/Radio- Canada opposes this request. II. Rogers Talk Proposal 9. Rogers proposes that it be permitted to dedicate up to 10% of its service to spoken word channels: As outlined above, we have developed and operate a number of spoken word format stations, especially in the all-news and all-sports category. However, to date, pay audio licensees have been precluded from offering spoken word programming channels. We believe a limited number of spoken word channels could enhance the content and 1 Broadcasting Decisions CRTC , ,

3 3 effectiveness of the music channels on our service. Thus, we are seeking the Commission s authority to dedicate up to 10% of our total service offering to spoken word channels In CBC/Radio-Canada s submission the inclusion of talk channels in Rogers proposed pay audio service would blur the distinction between pay audio and satellite subscription radio and conventional radio. This distinction was emphasized by Rogers affiliate, Rogers Cable Communications Inc. (Rogers Cable), in its application to carry satellite subscription radio services and was accepted as important by the Commission in its decision approving such carriage: 19. In response, Rogers submitted that, in Licensing of four new pay audio programming undertakings, Public Notice CRTC , 20 December 1995 (Public Notice ), the Commission determined that a competitive environment was appropriate for the pay audio services because they were discretionary in nature, and adopted an open-entry licensing model for these services. Rogers further argued that pay audio services and SSR services have distinct qualities that enable them to compete effectively for cable listeners. According to Rogers, pay audio services appeal to subscribers who want to receive music programming without any spoken word content, while the SSR services appeal to subscribers who want a wider range of audio services that include news and sports as well as music. 33. The Commission also notes that, by condition of licence, the pay audio services must fulfil their Canadian content requirements entirely through music programming, because they are not permitted to broadcast spoken word programming, with the exception of identification of musical selections, promotion of the service, and programming directed to children. In contrast, the SSR services have greater flexibility in that they can broadcast both spoken word and music programming. 36. In particular, the Commission finds that distribution of the SSR services, which provide over 100 channels combining music and spoken-word programming, would offer Rogers subscribers a wider range of audio programming than the pay audio services alone, which on their own provide about 40 channels of music only. 3 2 The Rogers application at page 7. 3 Broadcasting Decision CRTC

4 4 11. CBC/Radio-Canada further notes that TELUS Communications Inc. (TELUS) made a similar distinction in its application to carry satellite subscription radio services on its BDU service: 11. The same is true of pay audio and satellite radio services. Pay audio services are mainly jukebox-like music services. All uninterrupted music all the time. They differ substantially from the personality-driven satellite radio services which offer a mix of talk, sports, news and music. Both offer distinct choice to consumers Rogers is asking the Commission to eliminate the distinction that Rogers Cable, TELUS and the Commission itself considered so important in the context of BDU carriage of satellite subscription radio services. 13. CBC/Radio-Canada submits that there is no justification for eliminating this distinction and that to do so would undermine the very success and uniqueness of the existing pay audio framework. Indeed, if this request is granted, there would no longer be any meaningful distinction between the types of services offered by pay audio and satellite subscription radio. 14. In the submission of CBC/Radio-Canada the significant and negative implications of Rogers request make it abundantly clear what the response should be to that request. It should be denied. 15. There is no policy or other rationale which would justify Rogers proposal to include talk in a pay audio service. The recognized distinction between pay audio and satellite subscription radio services should be maintained. III. Conclusion 16. Rogers has applied for a pay audio licence, subject to licence conditions which differ from the existing regulatory regime for pay audio. CBC/Radio- Canada does not oppose the Rogers application provided that a uniform regulatory regime continues to be applied to all pay audio licensees, that the existing and very successful pay audio framework is not undermined by this application, and that regulatory safeguards are established to ensure that Rogers does not receive preferential treatment with respect to access to other distribution platforms such as wireless and high-speed Internet services. 17. With respect to Rogers proposal for more flexible licence conditions, CBC/Radio-Canada believes the existing pay audio regime has proven to be very successful and does not need to be modified, except to make a minor adjustment to the Canadian content requirements so as to permit the introduction of ethnic channels with a 7% Canadian content obligation. The 4 26 June 2006 Application of TELUS Communications Inc.

5 5 existing Canadian content requirements would continue to apply to all other Canadian channels since experience has demonstrated that these requirements are achievable. 18. Finally, CBC/Radio-Canada opposes Rogers request that it be permitted to include talk channels in its proposed pay audio service. The distinction between pay audio and satellite subscription radio services should be maintained. Otherwise, it would be necessary to revisit both the Commission s decision to permit BDU distribution of satellite subscription radio services, as well as the licence conditions applicable to these two classes of licensee. 19. CBC/Radio-Canada appreciates the opportunity to provide these additional comments on the application by Rogers for a licence to operate a national pay audio programming undertaking. CBC/Radio-Canada request to appear at the oral hearing. Yours truly, Bev Kirshenblatt Senior Director, Regulatory Affairs P.O. Box 3220, Station C Ottawa, ON K1Y 1E4 cc: Mr. Alain Strati Rogers Broadcasting Limited *** End of Document ***

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