Following the CRTC’s approval on May 1, 2013, we closed the portion of the multi-part agreement with Shaw to buy 100 % of Mountain Cable, and advanced $398 million, according to the terms of the agreement. We will require Industry Canada approval to close the spectrum portion of the transaction. In February 2012, the Supreme Court of Canada upheld a lower court decision that ISPs cannot be regulated under the Broadcasting Act, related to the CRTC’s authority to levy a tax from ISPs like Rogers to fund the creation and promotion of Canadian “webisodes”. The result is that ISPs, when offering connectivity to television and movie websites, are not considered to be acting as broadcasters and cannot be regulated under the Broadcasting Act. In November 2012, the Supreme Court ruled that the CRTC did not have the authority to implement the value for signal regime outlined in Broadcasting Decision 2010-167, consistent with our recommendations. As a result, broadcasters will continue to charge rates to broadcasting distribution undertakings under the existing regulatory framework. The CRTC considers group-based (conventional and discretionary specialty) licence renewal applications for major media companies. The Rogers group includes the City and OMNI conventional television stations and specialty channels G4 Canada, Outdoor Life Network, The Biography Channel (Canada) and FX (Canada). In July 2011, the CRTC renewed the group’s licence for three years, expiring on August 31, 2014. The terms of the renewal recognize the group’s differences from the three other large English-language Canadian broadcast groups (Bell Media, Corus Entertainment and Shaw Media). Conventional television stations have to agree to the carriage of their local signals into distant markets. BDUs that want to carry time-shifted US signals must therefore get the consent of each of the three large English-language networks besides CBC (CTV, Global and City) to carry their signals in those time zones. We are currently negotiating with various distributors regarding carriage of distant signals. On April 30, 2013, we acquired control of theScore after receiving final regulatory approval from the CRTC. theScore, which we have rebranded to Sportsnet 360, was Canada’s third largest specialty sports channel. As part of the transaction, we received a 10 % interest in Score Media’s digital media assets, which were spun out into a separate entity called Score Digital. In January 2013, we announced a multi-part strategic transaction with Shaw to acquire Mountain Cable (Shaw’s cable system in Hamilton, Ontario), and to secure an option to purchase Shaw’s Advanced Wireless Services spectrum holdings in 2014. As part of the agreement, we sold our one-third equity interest in the TVtropolis special channel to Shaw. In October 2013, the CRTC initiated its planned review of the telecommunications essential services rulings it released in March 2008. The review will culminate with a public hearing expected in November 2014. In November 2011, the CRTC released Telecom Regulatory Policy 2011- 703, rejecting additional wholesale charges based on specific end-user traffic volumes. Instead, it put in place a monthly usage-based wholesale fee based on the capacity of the facility connecting the facilities-based wholesaler and the reselling ISP. The new rate structure, which came into effect in February 2012, includes a usage charge, a fixed monthly access fee per end user of the reselling ISP and one-time installation and maintenance fees. In February 2013, the CRTC released its decisions on seven applications to review and vary the November 2011 CRTC decisions about regulated wholesale Internet service prices. The decisions increased our wholesale rates, but the increase was not as high as we had asked for. In February 2011, the CRTC initiated a proceeding to review its previous decisions about the pricing of wholesale Internet services, where reselling ISPs would have to pay additional charges when their end users exceeded specific bandwidth caps. The CRTC is expected to launch a regulatory proceeding to explore new approaches at the same time it issues its report to the Government. A public hearing is expected to be held in September 2014 and a decision expected by early 2015. The Consultation will likely look at the regulatory treatment of over-the-top video services and the evolution of competitive services within the regulated system. Comments were due on November 22, 2013. On November 14, 2013, the Government ordered the CRTC to report by April 30, 2014 on the steps it will take to maximize Canadians’ ability to subscribe to pay and specialty services on a pick-and-pay basis. The Government asked that the report: On October 24, 2013, the CRTC launched a broad-based public consultation on the subject of television. The consultation covered three broad themes, asking what consumers think about: MANAGEMENT’S DISCUSSION AND ANALYSIS Television S ervices Distribution New Media Proceeding Follow-Up Review of Broadcasting Regulations MEDIA Licence Renewals Distant S ignals Regulatory Approval of Recent Acquisitions CRTC Review of Wholesale Telecommunications S ervices Regulatory Approval of Recent Acquisition 70 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT CRTC Review of Wholesale Internet S ervice Pricing and Usage- Based Billing GLYPH<129> consider the effect on consumers and their ability to access affordable discretionary TV services GLYPH<129> consider the effect on industry participants (i.e. programmers, distributors and producers) GLYPH<129> ensure that the majority of services received by Canadians remain Canadian and that distributors continue to give priority to the carriage of Canadian services. GLYPH<129> whether they have enough information to make informed choices and seek solutions if they are not satisfied. GLYPH<129> the reception of television programming from service providers and other sources GLYPH<129> the television programming available to them