Shaw 2009 Annual Report Download - page 20

contributions to the LPIF and other payments or requirements with respect to the carriage and
delivery of local over-the-air television stations by cable and DTH services. The hearing in
connection with this proceeding was held in November 2009. Shaw argued that there is no
uncompensated signal value. A decision on the issues raised in the proceeding is expected early in
calendar 2010.
On September 17, 2009, the Governor in Council (Federal Cabinet) issued an Order in Council
requesting that the CRTC hold hearings on the implications and the advisability of implementing an
over-the-air television signal carriage compensation regime, and to issue a report to the Government
providing recommendations that take into account the impact that a signal carriage compensation
regime would have on consumers and affordable access to broadcast programming, and the impact
of any such regime on the communications industry as it adapts to the digital communications
environment. In response, the CRTC has initiated an additional proceeding to consider these issues,
to commence December 7, 2009.
Access rights
Shaw’s cable systems require access to support structures, such as poles, strand and conduits of
telecommunication carriers and electric utilities, in order to deploy cable facilities. Under the
Telecommunications Act the CRTC has jurisdiction over support structures of telecommunication
carriers, including rates for third party use. The CRTC is currently considering the rates for third
party use of telecommunication carrier support structures and could approve an increase in these
rates.
Part II fees
The CRTC collects several different fees from broadcast licensees, including fees collected under
Part II of the Broadcasting License Fee Regulations (the “Part II fees”). In 2003 and 2004, Part II
fees were challenged in the Federal Court on the grounds that the fees are taxes rather than
regulatory charges, and that regulations authorizing them are unlawful. In December 2006, the
Federal Court ruled that the Part II fees were an illegal tax. Both the Crown and the original
applicants to the Federal Court appealed the case to the Federal Court of Appeal, which on April 28,
2008 overturned the Federal Court and ruled that Part II fees are valid regulatory charges. Leave to
appeal the Federal Court of Appeal decision was granted on December 18, 2008 by the Supreme
Court of Canada and a hearing date of October 19, 2009 was set for the appeal.
On October 7, 2009, the Government of Canada and appellants in the Supreme Court of Canada
proceeding announced that they had entered into an agreement whereby parties to whom the Part II
fees applied agreed to discontinue their appeal to the Supreme Court (including the claim for the
recovery of Part II fees paid since 1998). The Government agreed that it will not seek amounts
owing by the industry to the end of the last fiscal year (2007, 2008 and 2009) which had not been
collected while the issue was being appealed in the Courts, and the Government will recommend
that the CRTC develop a new, forward-looking fee regime to replace the Part II fees that would be
capped at $100 million per year, indexed to inflation, for the broadcasting industry. The Notice of
Discontinuance was filed by appellants with the Supreme Court on October 7, 2009.
Digital Phone
Regulation of the incumbent local exchange carriers (“ILECs”), competitors of Shaw’s Digital
Phone business, is now largely governed by the current Government’s deregulatory initiatives.
Specifically, in December 2006, the Governor in Council directed the CRTC to “rely on market
forces to the maximum extent feasible as the means of achieving the telecommunications policy
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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2009