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Decision
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Ottawa, 1 March 1988
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Decision CRTC 88-131
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Canadian Broadcasting Corporation
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St. John's, Port Rexton, Placentia, Marystown, St. Albans, Fermeuse, St. Mary's, Elliston, Little Hearts Ease, Wesleyville, Clarenville, North West Brook, St. Jones Within, Glovertown, Gambo/Middle Brook, Wellington, Trinity/Wareham, Musgravetown, Hickman's Harbour, Random Island, Lumsden, Cartwright, Harbour Breton, Belleoram, Hermitage, Ramea, St. Vincent's, Bay L'Argent, St. Lawrence, Harbour Mille, St. Bernard's, Swift Current, Port Blandford, Fortune, Lord's Cove, Lamaline, Lawn, Petty Harbour, Ferryland, Trepassey, Riverhead, Sunnyside, Grand Falls, Baie Verte, Buchans, St. Anthony, Millertown, Fogo Island, Carmanville, Conche, Mount St. Margaret, Fox Harbour, Musgrave Harbour, Port Hope Simpson, Springdale, Ming's Bight, Seal Cove, Coachman's Cove, Pacquet, Brent's Cove, Harbour Round, Fleur de Lys, La Scie, Roddickton, Hampden and Baie Verte, Newfoundland - 871705000
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Corner Brook, Stephenville, Irishtown, Bonne Bay, Port-aux-Basques, St. Andrews, Cow Head, Trout River, Portland Creek, Hawkes Bay, Harbour Le Cou, Rose Blanche, Gillams, Lark Harbour, York Harbour and Deer Lake, Newfoundland - 871706800
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Following a Public Hearing in St. John's, Newfoundland on 16 September 1987, the Commission renews the broadcasting licences for CBNT St. John's and its rebroadcasters and for CBYT Corner Brook and its rebroadcasters from 1 September 1988 to 31 August 1993, subject to the conditions of licence specified in the appendices to this decision and in the licences to be issued.
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The CBC also submitted applications to amend the broadcasting licences for the above-noted undertakings by deleting a condition of licence respecting commercial activities in Newfoundland, as set out in Decision CRTC 82-665 dated 30 July 1982. While the Commission is of the opinion that the re-imposition of this condition is necessary in order that there will continue to be fair competition for local advertising dollars in Newfoundland, it has allowed an amendment to paragraph b) of the condition with respect to the CBNT licence, to permit the licensee to increase its sales force in St. John's by a total of one person. This amendment is reflected in Appendix I to this decision. The present condition of licence, which will continue to apply in its entirety to CBYT Corner Brook, is set out in Appendix II to this decision.
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The CBC last appeared before the Commission for consideration of applications to renew its broadcasting licences for the St. John's and Corner Brook undertakings in October 1979. Decision CRTC 80-128 dated 21 February 1980 renewed the licences of CBNT and CBYT and their rebroadcasting stations from 1 October 1980 to 30 September 1984. The licences were subsequently renewed administratively on several occasions and the current licences expire 31 August 1988.
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Renewal
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At the September hearing in St. John's, the Commission stated that, in the context of reviewing the CBC's plans and strategies for the five-year period beginning 1 September 1988, it intended to address among other issues: local news, public affairs and documentary programming, and the involvement of the licensee in the local community; the promotion and development of local talent; the development and broadcasting of attractive Canadian entertainment programming; the acquisition of programs from Canadian independent producers and the development of co-productions with other broadcasters; and the scheduling of Canadian programs. The Commission also stated its intention to review each station's policies on a number of social issues identified in the television licence renewal application form.
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During the course of the hearing, the CBC elaborated upon its extensive efforts to provide a diverse and comprehensive regional and local programming service in the province of Newfoundland. In this regard, Mr. James Byrd, Director of Television for Newfoundland, stated that the CBC has established certain priorities for its local programming initiatives. First are those he characterized as news and information programs, covering items of local/ regional, national and international concern. Second are the mandated programs - documentaries, features and profiles on Newfoundland's resource-based industries; followed by children's programs, drama, variety shows and community programming. As noted by Mr. Byrd:
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On the news and information programming side, ... in terms of both quantity and quality, we provide a first-class service ... On the performance side [variety, drama and entertainment] we have met the objectives we have set for ourselves. In terms of quantity, we have not been able to meet the objectives which either the Commission would like to see us meet or which we, ourselves, would prefer to meet had we the resources to do it.
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Consistent with the CBC's mandate, the Corporation has a responsibility to provide programs designed to serve its local audience, not only in terms of news and information, but also in broadcasting programs that provide interested parties with the opportunity to express themselves on matters of community concern. It also has a responsibility to develop, for a wider public, programs that express the artistic and creative resources of the region. In this regard, the Commission notes the CBC's efforts to reflect the interests and activities of its viewing audience with the production of programs such as an annual telethon for the Children's Hospital in St. John's, produced in conjunction with the local cable company, and a series on Newfoundland artists, co-produced with Memorial University.
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The Commission acknowledges that the CBC has undertaken to produce many programs that promote local and provincial talent, including MUN Music Recitals, Country Session, Skipper and Company, Stars of the Music Festival and the Arts Council Awards. Concerning the promotion of other types of talent, the Commission notes the CBC's efforts to develop performing artists and production talent through the production of drama programs.
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The Commission commends CBNT in particular for its considerable achievements in terms of its contributions to network programming as well as its success in regional program exchanges, despite budgetary restrictions in recent years. Amongst CBNT's contributions to programming at the network level, the Commission notes the drama series "Pigeon Inlet", as well as such variety programs as "Sexton and Malone" and "Codco". At the regional exchange level, the Commission notes the reciprocal programming this station undertakes with other CBC stations across the country. The Commission further notes the collaboration between CBNT and the CBC's stations in Corner Brook and Goose Bay for the coverage of local events across the province and for broadcasting special programming of regional interest.
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In summarizing CBNT's production activities at both the regional and network levels, Mr. Byrd submitted that no other regional station had played as big a role in providing programming to CBC television stations across the country. To substantiate his point, he noted that 80 of CBNT's local productions had been televised in the past year and that an additional 70 will be broadcast this season.
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The Commission acknowledges CBNT's active participation with the Canadian independent production industry in the development of locally-oriented drama productions, particularly since the commencement of Telefilm Canada's Broadcast Program Development Fund in July 1983. The Commission notes the CBC's total commitment to date of $200,000 in development funds for such projects, which have been combined with approximately $2 million from Telefilm Canada and $750,000 to $800,000 from private investors, to yield approximately $3 million worth of quality Canadian programming originating from Newfoundland. The CBC outlined the fifteen projects currently underway in this area, elaborating on CBNT's involvement in each project.
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Independent program producers are a vital Canadian resource and the Commission encourages CBNT to continue its efforts in this regard and recognizes its exemplary initiative in developing this type of production activity in Atlantic Canada.
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In its renewal applications, the CBC proposed levels of local production that were, in the case of CBNT, two hours less than the amount contained in the Promise of Performance approved in 1980 and, for CBYT, close to six hours less than the amount authorized. In response to the Commission's concern with regard to these reductions, a representative of the CBC explained that, in fact, these stations will actually be providing a higher amount of locally-produced hours than indicated in the Promises of Performance, because the typical weekly program schedules, as submitted with the applications, do not take into account any of the special programs broadcast by CBC Newfoundland, the local productions that are broadcast nationally, or the co-production projects noted above.
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A representative of the CBC stated in this regard at the hearing:
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...the programming objective with respect to St. John's ... is a floor rather than a ceiling from our point of view ... As an article of faith, we are saying we would like to do more and ... whatever resources we have got will go into the production of Canadian and Newfoundland programming.
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The Commission is satisfied that CBNT's and CBYT's commitments to develop, produce and schedule a wide range of quality programming more than compensate for the proposed reduction in local productions.
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Another issue explored at the hearing was the considerable level of non-Canadian programming broadcast in the Saturday morning portion of the program schedule. The CBC stated that budgetary and other resource limitations prevent it from changing the current levels at the present time. Attributing these levels to an attempt by the Corporation to balance its overall weekly schedule, Mr. Byrd further explained:
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We still have an obligation ... as a public broadcaster in this province, to remember that there are still parts of this province that only get the CBC and, if we do not put on things like "Fame" and "Star Trek" once in a while, those people never get to see some of those shows ... we can never lose sight of that either.
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While it has taken note of the rationale provided in this respect, the Commission expects CBNT to develop programming practices that will result in an improved balance between the Canadian and foreign programs broadcast as part of its Saturday morning schedule.
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With regard to a number of issues of public concern that were discussed at the Public Hearing, such as advertising directed to children and guidelines on sex-role stereotyping, Appendix III sets out the specific conditions of licence to which the Commission requires CBNT and CBYT to adhere.
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With respect to closed captioning for the hearing impaired, the Commission reminds the CBC of the expectation in this regard set out in Decision CRTC 87-140, renewing the CBC's television network licences, that the CBC provide an average of 15 hours per week of closed captioned network programming.
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When questioned on the subject of violence in television programming, the CBC noted that as a matter of policy it takes care to restrict the depiction of gratuitous violence in both its drama and information programming. Stating that the depiction of violence is not an issue in Newfoundland, a representative of CBNT noted that the station does insert warnings at the beginning of any programs it considers to be of a violent nature.
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The Commission notes the numerous interventions submitted in response to these renewal applications from a wide cross-section of the licensee's community of viewers, including government officials, community service groups and local Chambers of Commerce. All indicated their support for the continuation of the valuable service provided by the licensee. In particular, the Commission acknowledges the interventions submitted by a number of local production companies, attesting to the vital role that the licensee has played in the development of the independent production industry.
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With respect to the application for the renewal of CBYT Corner Brook, the Commission received interventions from the City of Corner Brook and from the Corner Brook Performing Arts Centre, expressing concern that the undertaking could be subject to further reductions in terms of local programming and the possibility of closure of the station. The CBC responded at the hearing to these interventions by stating that it has no intention of ceasing the production of locally-originated programming at its Corner Brook station:
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... the CBC does not have any plans, is not developing any plans and is unlikely to develop any plans in the foreseeable future to eliminate Corner Brook.
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Condition on Commercial Activities
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In Decision CRTC 80-128, the Commission noted the intervention by Newfoundland Broadcasting Company Limited (NTV), objecting to CBC commercial activities in Newfoundland. In that decision the CRTC stated:
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The Commission proposes to attach a condition to those licences requiring the CBC to cease broadcasting local advertising in Newfoundland within twelve months or whenever existing sales contracts expire.
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Following consultation with the Corporation, in Decision CRTC 82-665, the Commission imposed a condition of licence on both CBNT and CBYT with respect to the CBC's commercial activities. It allowed for the solicitation and broadcasting of local commercials on television in Newfoundland, subject to certain conditions designed to ensure that the CBC's commercial rates are fair and competitive, that policies concerning rates, discounts and conditions of sale are strictly observed and that its overall commercial practices in Newfoundland are consistent with CBC practices across the country. (See Appendix II for the text of this condition of licence).
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In the present applications, the CBC is requesting to delete this condition of licence on the grounds that it should be free to function in the marketplace without special consans que ses activités commerciales ne straints on its commercial activities. As explained by representatives of the Corporation at the hearing:
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...almost every government has asked us to get more revenue and, in recent years, every government seems to be reducing the amount of [our] Parliamentary grant. And ... one can draw the obvious conclusion that they would like us to have more revenue from the private sources we have and less from the Parliamentary vote as a percentage.
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The CBC also cited a marked improvement in the Newfoundland economy over the course of the present licence term. Claiming that it was restricted by this condition of licence from adequately tapping potential revenues, the CBC argued that the amount available for advertising in Newfoundland is continuing to grow. In terms of impact on other broadcasters in the market, a representative of the CBC stated:
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... we would admit to ... having some negative impact in the short term on our competition, in the sense not that we may decrease [their] revenue, but perhaps decrease the rate at which it will grow. In the long term, I don't think it would [have] any impact at all.
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With respect to paragraph (b) of the advertising condition as set out in Appendix II, Mr. Gerald Pelot noted the constraint this places on the CBC in its attempts to provide service to a growing number of clients. Noting that its sales force is less than half of that of its competitor at the present time, Mr. Pelot argued that an increase in CBNT's sales staff by at least one person in the immediate future would be necessary if the station is to operate on an equal footing with CJON-TV.
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At the hearing, an intervention was presented by NTV, licensee of CJON-TV and CHOZ-FM in St. John's. NTV stated its opposition to the deletion of the existing advertising condition on CBNT's and CBYT's licences and asked the Commission to prohibit all local advertising by CBC in the province.
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Citing closures of its own stations in Corner Brook and Grand Falls as consequences of what it termed unfair competition brought about by the CBC's pricing practices in the province, NTV requested that the Commission establish a condition similar to that proposed in Decision CRTC 80-128, requiring the CBC to withdraw from local selective selling.
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Also indicating their opposition to the proposed amendments were Western Broadcasting Ltd., licensee of CKWK Corner Brook; N.A.B.E.T., on behalf of its members employed by NTV; and Humber Valley Broadcasting Co. Ltd., licensee of several radio undertakings in Western Newfoundland and Labrador.
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In examining the issue of the solicitation of local advertising by an applicant, the Commission recently reiterated its policy in Decision CRTC 87-332 in the following terms:
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The Commission believes that the establishment of broadcasting services in a community should, wherever possible, be a reciprocal matter. Where an applicant proposes to seek local commercial revenue from a community, [it] should also be prepared to provide some service to the community in the way of locally-produced, locally-oriented programming.
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Further considerations the Commission takes into account include the economic strength of the given market and the impact that allowing solicitation of such advertising would have on existing local broadcasting services.
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In the present case, the Commission recognizes the significant extent to which the CBC has undertaken and is committed to continue to undertake to produce locally-oriented programming of high quality that reflects the concerns, interests and activities of its viewers. It further notes the degree to which the licensee encourages the participation of community members in the production of such programming.
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With respect to the impact on existing broadcasting undertakings, the Commission notes that NTV has consistently taken a greater share of local advertising revenues than the CBC between 1981 and 1986 and that CBC's share of the local advertising market has declined slightly over the last three years.
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Further, the Commission notes that in terms of rate structure for local advertising, the CBC submitted that NTV has a competitive advantage over it, with NTV's rates established at approximately half of the amount charged by the CBC in Newfoundland. A representative of the Corporation stated at the hearing:
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The last rate card which I have seen ... and we have been advised that it is still in force ... would indicate that on their [CJON-TV's] ROS, we would be approximately twice as expensive ... The last rate we have seen for CJON appears to be about $60 a spot ... [and our comparable rate would be] $110.
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In conclusion, the Commission is of the view that the re-imposition of paragraphs a) and c) through f) is necessary in order to provide a mechanism that will continue to ensure that there will be fair competition for local advertising dollars, particularly since the CBC maintains that it has very recently adopted a new sales policy to implement these principles. The Commission therefore denies the request to delete this condition of licence. It has, however, decided to amend paragraph b) for the undertaking serving St. John's only, by allowing the addition of one salesperson.
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In this regard, the Commission is satisfied that the benefits to the programming plans of CBNT outweigh any possible disadvantages resulting from the amount of additional revenue that may accrue from this measure. Given that the amount of advertising revenue that CBNT extracts from the local market is already modest in comparison with that of its competitor, CJON-TV, the Commission is of the view that this amendment to the existing condition of licence will have negligible impact on existing broadcasting licensees.
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Any resultant improvement in CBNT's local television advertising revenue should, in the Commission's view, enable the CBC to improve its financial status in light of the Corporation's budgetary constraints and enable CBNT to continue to provide the residents of Newfoundland with a diverse and comprehensive regional and local programming service.
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Fernand Bélisle
Secretary General
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APPENDIX I
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Conditions for CBNT St. John's
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It is a condition of licence that:
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1. the CBC may continue to solicit and broadcast local commercials on television in Newfoundland on the condition that:
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a) CBC rates charged for commercials will be fair and competitive with the private sector, and will be based on current industry criteria such as cost-per-thousand and/or cost-per-rating point;
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b) during the licence term, the CBC may expand CBNT's sales force by the addition of a single sales person;
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c) rates, discounts and conditions of sale as formally authorized and published will be strictly observed;
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d) the CBC will ensure that its commercial practices in Newfoundland are consistent with those in other parts of the country;
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e) the CBC will not vary its discount prices in Newfoundland from the framework consistently applied to all its stations;
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f) the Run-of-Schedule discount plan which applies uniformally to all CBC local sales operations, may be subject to minor adjustments from time to time in Newfoundland but will not substantially change character or impact.
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2. The weekly television program schedules for the evening broadcast period which are under the direct control of the licensee (CBNT) shall include only Canadian programming, or outstanding foreign programming other than programs scheduled primarily for commercial reasons.
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APPENDIX II
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Conditions for CBYT Corner Brook
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It is a condition of licence that:
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1. the CBC may continue to solicit and broadcast local commercials on television in Newfoundland on the condition that:
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a) CBC rates charged for commercials will be fair and competitive with the private sector, and will be based on current industry criteria such as cost-per-thousand and/or cost-per-rating point;
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b) the CBC will not expand its sales force for the purpose of increasing its proportional share of the television advertising market in Newfoundland;
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c) rates, discounts and conditions of sale as formally authorized and published will be strictly observed;
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d) the CBC will ensure that its commercial practices in Newfoundland are consistent with those in other parts of the country;
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e) the CBC will not vary its discount prices in Newfoundland from the framework consistently applied to all its stations;
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f) the Run-of-Schedule discount plan which applies uniformally to all CBC local sales operations, may be subject to minor adjustments from time to time in Newfoundland but will not substantially change character or impact.
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2. The weekly television program schedules for the evening broadcast period which are under the direct control of the licensee (CBYT) shall include only Canadian programming, or outstanding foreign programming other than programs scheduled primarily for commercial reasons.
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APPENDIX III
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Conditions of licence for each of the licences of CBNT St. John's and CBYT Corner Brook
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1. The licensee shall operate this broadcasting undertaking as part of the English-language television network operated by the Canadian Broadcasting Corporation.
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2. It is a condition of licence that the licensee make available in the vertical blanking interval closed captioning for persons with impaired hearing.
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3. The licensee shall adhere to the CBC guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission. Until such time as the Commission has approved the revised CBC guidelines, the CBC shall adhere to its current guidelines on sex-role stereotyping (as set out in Part C of Appendix A to Public Notice CRTC 1986-351 dated 22 December 1986) and, as a minimum, to the CAB's guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.
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4. The licensee shall adhere to the standards for children's advertising set out in the Corporation's Advertising Standards Policy C-5 dated 4 June 1986 and entitled "Advertising Directed to Children Under 12 Years of Age", as amended from time to time and approved by the Commission, provided that the policy meets as a minimum the standards set out in the CAB's Code on Broadcast Advertising to Children, dated 1 October 1987 (French version revised in January 1988), as amended from time to time and approved by the Commission.
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Further, the licensee shall not broadcast any commercial message during any child-directed programming or any child-directed commercial message between programs directed to children of pre-school age. For the purpose of this condition, programs directed to children and scheduled before 12:00 noon during school-day morning hours will be deemed to be programs directed to children of pre-school age.
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