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ARCHIVED -  Decision CRTC 94-279

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Decision

Ottawa, 6 June 1994
Decision CRTC 94-279
Your Channel Television Inc.
Across Canada - 931562300
YOU: Your Channel - Approved
Following a Public Hearing held in the National Capital Region, beginning 14 February 1994, the Commission approves the application by Your Channel Television Inc. for a broadcasting licence to carry on a national English-language programming undertaking (Specialty Television Service).
This service will be available to cable television affiliates across the country, on a modified dual-status basis for Class 1 licensees, and on a dual-status basis for Class 2 licensees, as explained in Public Notice CRTC 1994-59 which introduces this and the other decisions issued today, and in accordance with the distribution and linkage public notice that also accompanies these decisions (Public Notice CRTC 1994-60).
The Commission will issue a licence expiring 31 August 2000, subject to the conditions specified in the appendix to this decision and in the licence to be issued.
Ownership
A majority (80.01%) of Your Channel Television Inc. is owned by Atlantis Television Ventures Inc. (Atlantis), a Canadian television and film production and distribution company. Atlantis is ultimately controlled by Messrs. Edward Riley, MichaelMacMillan, Seaton McLean and Peter Sussman.
Nature of Service
Your Channel Television Inc. proposes to provide a service to be known as YOU: Your Channel, which will provide programming consisting of documentaries and information programming. The licensee's commitments related to programming categories are set out in a condition of licence in the appendix attached to this decision.
Programming
YOU: Your Channel describes its service as one that will offer useful, reliable and entertaining information and documentary programming in a thematic format that is not currently available. The Commission notes that YOU: Your Channel will differ markedly from existing broadcast services, since it will not offer drama, movies, spectator sports, news, current affairs or variety shows.
YOU: Your Channel's schedule will be structured around five different themes. "Habitat" will stress programming for the home and environment; "Bodyworks" will cover fitness, health and nutrition; "Food Plus" will include programs related to cooking and food; "Explorations" will deal with travel, adventure and nature; and "Relationships" will focus on parenting, child care, careers and personal relationships.
Each weekday, the licensee intends to feature, exclusively, programs related to one of the above-noted themes. The 24-hour broadcast day will consist of a six-hour block of programs, played four times each day. The programming in the midnight to 6 a.m. block will be restructured to create a 9 p.m to 11 p.m. prime time for Western viewers. Weekend programming on YOU: Your Channel will feature an all-Canadian "best of the week" format, with a mix of programs from each of the five thematic days.
The Commission is satisfied that the programming to be offered by YOU: Your Channel will create a distinctive service, and will therefore not have a significant impact on existing licensees.
Your Channel Television Inc. committed to provide a minimum level of 70% Canadian content over the first broadcast year and during the evening broadcast period. These levels will increase by 2.5% increments in the second and in each subsequent broadcast year. In the sixth year of the licence term, a level of 82.5% Canadian content throughout the day and in the evening hours will be attained. The licensee shall adhere to these commitments by condition of licence.
Also by condition of licence, the licensee will devote $16,008,000 to expenditures for Canadian programming in the second year of the licence term. In the third, fourth and fifth years of the licence term, the licensee will spend at least 65% of the previous year's gross revenues and, in the sixth year of the licence term, at least 71% of the previous year's gross revenues will be spent on Canadian programming. Some flexibility in the accounting of these expenditures is provided for in the conditions of licence attached to this decision.
The Commission notes the licensee's commitment to ensure that all original programming is "clearly Canadian". Such programming is described by the licensee as that with an identifiably Canadian focus, theme, perspective, attitude and context. The Commission also notes the licensee's commitment to distribute 390 hours of original, first-run Canadian programming from independent producers in the first year of operation, and to increase this amount over the licence term. The licensee's commitments to these amounts of original programming will result in a total of approximately $100 million flowing to independent producers over the licence term.
With regard to the use of independent producers, the Commission notes the commitment by Your Channel Television Inc. that no Atlantis productions will be distributed by the new service, and that all of the original Canadian content on the service in the first term of licence will be produced by Canadian independent producers.
The Commission also notes that annual contributions of $200,000 to a program development fund will provide a total expenditure of $1,200,000 over the licence term for program development.
Financial Matters
The application filed by the licensee included a business plan which is predicated on a specific subscriber fee where the service is carried as part of the basic service. The applicant also noted that its wholesale rate would fluctuate by system, depending upon the penetration of the tier on which it is carried. Accordingly, in its business plan, the licensee has assumed that the subscriber rate charged for the service when it is distributed on a high penetration discretionary tier will be "made whole". The Commission notes that the foregoing assumptions form the basis of the applicant's financial projections and programming commitments.
As part of its application, the licensee requested approval for a monthly wholesale subscriber rate, where carried as a part of the basic service, of $0.30 in the first year of operation, increasing by $0.01 per year in each subsequent year. At the hearing, the licensee agreed to accept a condition of licence that would stipulate a flat rate of $0.33 for the entire term of licence.
The Commission has instead approved a flat rate of $0.30 in each of the first five years of operation, for distribution as part of the basic service, increasing to $0.33 in the final year of the licence term. The authorized increase in the monthly wholesale subscriber rate reflects the licensee's commitment, noted above, to increased expenditures on Canadian programming over the licence term. The Commission is confident that the authorized rate will not compromise the licensee's ability to meet its programming commitments. The licensee shall adhere to the rates noted above, by condition of licence.
Also by condition of licence, and as committed to by the licensee, paid advertising on YOU: Your Channel will be restricted to a maximum of twelve minutes per hour, with some flexibility for the placement of advertising material in longer programs. All paid advertising material distributed shall be national advertising.
Based on all of the evidence available to the Commission, it is satisfied that YOU: Your Channel will provide significant diversity to viewers, that there is strong consumer demand for such a service, and that it is a financially viable undertaking.
Other Matters
The Commission notes the licensee's commitment to spend 1% of its annual gross revenues on closed captioning of original Canadian programs, and encourages the licensee to use that amount to caption as many hours as possible. The Commission reminds the licensee that Telefilm Canada administers a fund that provides financial assistance for captioning projects, and that other program funds for the same purpose are also available. The Commission also notes the licensee's intention to acquire captioned programming to the greatest extent possible.
The Commission expects the licensee to meet the commitments noted above regarding closed captioned programming, and encourages the licensee to exceed these commitments over the licence term.
The licensee has stated that it would have a comprehensive employment equity plan in place by the time this decision is published. The Commission will review the licensee's performance in implementing this plan at the time of licence renewal. The Commission encourages the licensee to promote equitable representation in on-air staff positions and in voice-overs of commercial messages produced by the licensee.
Allan J. Darling
Secretary General
APPENDIX / ANNEXE
Conditions of Licence for YOU: Your Channel
For the purpose of measuring compliance with Conditions of Licence 1, 2, 3, and 5 set out below, the first broadcast year of the licence term will be deemed to commence on 1 September 1994.
1. 100% of the programming provided by the licensee shall be drawn from Category 2 - Analysis and Interpretation, Category 5(b) - Informal Education, and Category 11 - Human Interest.
2. From the date of commencement of service until 31 August 1995, the licensee shall devote not less than 70% of the broadcast year and not less than 70% of the evening broadcast period to the distribution of Canadian programs. In each subsequent broadcast year, the Canadian content for the year and for the evening broadcast period shall increase by a 2.5% increment, reaching a level of 82.5% in the sixth year of operation, both for the year and for the evening broadcast period.
3. In accordance with the Commission's position on Canadian programming expenditures as set out in Public Notice CRTC 1993-93 and 1993-174, the licensee shall:
 (a) from 1 September 1995 to 31 August 1996, expend on the acquisition of and/or investment in Canadian programs not less than $16,008,000;
 (b) from 1 September 1996 to 31 August 1997, and in each of the two subsequent broadcast years, expend on the acquisition of and/or investment in Canadian programs not less than 65% of the previous year's gross revenues; and
 (c) from 1 September 1999 to 31 August 2000, the licensee shall expend on the acquisition of and/or investment in Canadian programs not less than 71% of the previous year's gross revenues.
 (d) During the broadcast year commencing 1 September 1995 and in each subsequent broadcast year excluding the final year, the licensee may expend an amount on Canadian programming that is up to five percent (5%) less than the minimum required expenditure for that year set out in or calculated in accordance with this condition; in such case, the licensee shall expend in the next year of the license term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underspending.
 (e) In any year of the licence term, including the final year, the licensee may expend an amount on Canadian programming that is greater than the minimum required expenditure for that year set out in accordance with this condition; in such case, the licensee may deduct:
  i) from the minimum required expenditure for the next year of the licence term, an amount not exceeding the amount of the previous year's overspending; and
  ii) from the minimum required expenditure for any subsequent year of the licence term, an amount not exceeding the difference between the overspending and any amount deducted under paragraph (i) above.
(f) Notwithstanding the above, during the licence term, the licensee shall spend on Canadian programming, at a minimum, the total of the minimum required expenditures set out in or calculated in accordance with the licensee's conditions of licence.
4. (a) Subject to subsections (b) and (d), the licensee shall not distribute more than twelve minutes of advertising material during each clock hour.
 (b) In addition to the twelve minutes of advertising material referred to in subsection (a), the licensee may distribute, during each clock hour, a maximum of 30 seconds of additional advertising material that consists of unpaid public service announcements.
 (c) The licensee shall not distribute any paid advertising material other than paid national advertising.
 (d) Where a program occupies time in two or more consecutive clock hours, the licensee may exceed the maximum number of minutes of advertising material allowed in those clock hours if the average number of minutes of advertising material in the clock hours occupied by the program does not exceed the maximum number of minutes that would otherwise be allowed per clock hour.
5. (a) From the date of commencement of service until 31 August 1999, the licensee shall charge each exhibitor of this service the wholesale rate of $0.30 per subscriber per month, where the service is carried as part of the basic service.
 (b) From 1 September 1999 until 31 August 2000, the licensee shall charge each exhibitor of this service the wholesale rate of $0.33 per subscriber per month, where the service is carried as part of the basic service.
6. The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) "Sex-Role Portrayal Code for Television and Radio Programming", as amended from time to time and approved by the Commission.
7. The licensee shall adhere to the provisions of the "Broadcast Code for Advertising to Children", published by the CAB, as amended from time to time and approved by the Commission.
8. The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's "Voluntary Code Regarding Violence in Television Programming", as amended from time to time and approved by the Commission.
For the purpose of these conditions, the terms "broadcast day", "broadcast month", "broadcast year", "clock hour" and "evening broadcast period" shall have the same meanings as those set out in the Television Broadcasting Regulations, 1987; and "paid national advertising" shall mean advertising that is purchased at a national rate and receives national distribution on the service.