Discretionary services may air programming from any of the CRTC's defined categories, although no more than 10% of programming per month may be devoted to live professional sports. Discretionary services may be authorized to offer multiplex channels.[4]
The CRTC previously licensed specialty television services into one of three categories, which determined their regulatory obligations (such as the types of programming they may offer, and whether they are allowed to compete with other specialty television services), and how they may be distributed by television providers—known legally as broadcast distribution undertakings (BDUs).
Category A services: a category established in 2011 that encompassed the legacy "analog" specialty and premium television channels licensed prior to the establishment of digital cable and satellite (such as MuchMusic),[5] and "Category 1" digital specialty services. Digital BDUs were required to offer all Category A-licensed channels as part of their services. Category A services were licensed within specific scopes, and subject to "genre protection": no other specialty services were allowed to directly compete with a Category A service. As a consequence, Category A licenses carried more stringent obligations on their owners, such as stricter thresholds for the exhibition of specific types of programming and Canadian content.[6][7][8]
Category B services (formerly "Category 2"): digital specialty services that were licensed to carry narrower, niche formats in comparison to Category A-licensed channels. BDUs were not obligated to offer all Category B services, and negotiated with their distributors for carriage. Category B services were allowed to compete between each other, but no Category B service was allowed to directly compete with a Category A service.[6][7][8]
Category C services encompassed "competitive Canadian specialty services operating in the genres of mainstream sports and national news", which had been given an exemption from the genre protection rules in 2009 that allowed them more flexibility in programming and formats.[9][10][11]
Reforms and discontinuation of genre exclusivity rules
As part of "Let's Talk TV", a CRTC initiative to reform Canada's broadcasting industry, the Commission announced in 2015 that it would phase out its previous "genre protection" rules, which forbade services with Category B licenses from directly competing with those with Category A licenses. The Commission felt that these restrictions were "no longer needed to ensure programming diversity between services", as "[they] limited programming services to offering certain types of programming and precluded other services from offering that programming." As part of these changes, the CRTC began transitioning all pay and specialty services to standardized conditions of license.[7][8][4][12]
In November 2016, per a request by DHX Media, the previous premium television designation (which was designed for pay television services such as The Movie Network, and restricted the carriage of commercial advertising, but allowed them to offer multiple feeds consistent with their scope of service) was also removed, merging them into the discretionary services category and allowing them to, if they choose, transition to advertising-supported formats.[4] The standard conditions of license were thus amended to allow discretionary services to offer multiplex channels if approved as a condition of license.[4]
Category A services were those which had mandatory distribution by all licensed broadcast distribution undertakings. They consisted of the channels that were licensed before the emergence of digital cable, as well as the narrow tier of digital services which were originally licensed as "Category 1" (must-carry) when digital cable was first introduced.
Services with less than 200,000 subscribers that would otherwise meet the definition of a discretionary service, and services which air 90% of their programming in a "third language (a language other than English, French, or those of Canadian aboriginal peoples), are exempted from formal licensing by the CRTC. They must still comply with standard conditions of license published by the CRTC, maintain a file with the Commission, and, if this is the basis of their exemption, pursue an application for licensing if they exceed 200,000 subscribers.[13][14]
