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ARCHIVED -  Decision CRTC 94-282

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Decision

Ottawa, 6 June 1994
Decision CRTC 94-282
Linda Rankin (OBCI)
Across Canada - 931501100
"Lifestyle Television" - Approved
Following a Public Hearing held in the National Capital Region, beginning on 14 February 1994, the Commission, by majority vote, approves the application by Linda Rankin on behalf of a company to be incorporated, 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 provisions set out in the distribution and linkage public notice accompanying these decisions (Public Notice CRTC 1994-60).
The Commission will issue a licence expiring 31 August 2000, to be subject to the conditions specified in the appendix to this decision and in the licence to be issued.
This authority will only be effective and the licence will only be issued at such time as the Commission receives documentation establishing that the company has been incorporated in accordance with the application in all material respects.
Ownership
The company to be incorporated will be controlled by Moffat Communications Limited (Moffat) (65%), which is in turn ultimately controlled by Mr. Randall L. Moffat of Winnipeg. Moffat is the licensee of several television stations in Manitoba, and through ownership of Winnipeg Videon Incorporated, is also the owner of eight cable television undertakings in Manitoba, Saskatche- wan and Ontario. The Commission notes that operations of the new service will be located in Winnipeg.
Nature of Service
The licensee proposes to provide a service, to be called Lifestyle Television, which will deliver information and entertainment programming of particular interest to women. The foreign programming broadcast on Lifestyle Television will have a particular emphasis on programs acquired from sources other than U.S. The service will operate on a 20-hour day, from 6:00 a.m. to 2:00 a.m.
Certain of the licensee's commitments related to programming categories and the origination of programs have been specified as conditions of licence, as set out in the attached appendix.
Programming
The Commission is satisfied that Lifestyle Television represents a genre of programming not currently available to Canadian viewers. Although mass appeal programming with a traditionally female audience does exist, there is a lack of information programming created with the specific needs of women in mind. This proposal also responds directly to several important policy objectives expressed on numerous occasions by the Commission, namely, the need for more positive portrayals of women in programming, less stereotyping, and the need for more on-air representation of women, especially when presented as experts and commentators. In addition, through its monitoring of employment equity issues, the Commission has often expressed concern regarding the need for more women in the broadcasting industry, a concern that Lifestyle Television is committed to address in a positive manner.
The Commission is satisfied that there is a demonstrable demand for the distinctive programming to be provided by Lifestyle Television, and has no concern with respect to its potential impact on existing services.
At the hearing, one intervener noted that "women and girls watch television differently than men and boys; they watch it for different reasons... they use what they see on television differently". Because of these differences, the licensee asserted that the influence of a female perspective in the production of a program makes a difference in how a female audience responds to that program. Since the creative control of few programs or programming services is exercised by women, the licensee and a number of interveners argued that women are the largest underserved audience segment in Canada.
To ensure a female perspective in its programming, Lifestyle Television has planned for the involvement of women in key decision-making roles, as hosts, as interviewers, as directors and as producers. All dramatic series and a majority of films will feature female protagonists.
The plans for the involvement of women will be particularly important in the development of "The Signature Services". This group of programs will have a significant daily presence on Lifestyle Television, and will consist of a variety of news and information programs designed, created, researched, filmed and edited by women.
In support of the programming plans for Lifestyle Television, the licensee's employment equity plans specify that at least 60% of the Lifestyle Television workforce will be female, and that Lifestyle Television will encourage program suppliers to participate in training opportunities. The mandate of Lifestyle Television includes the provision of a work plan that supports and develops women's creative, managerial and executive abilities, together with support structures and policies to enhance women's careers while they balance home and community responsibilities.
The Commission notes the licensee's proposed initiatives in the field of employment equity and encourages its plans to promote equitable representation in on-air staff positions and in voice-overs of commercial messages it produces. The Commission will review the implementation of the plans at the time of licence renewal.
The Commission has taken into account the licensee's statement that at least 70% of the programming on Lifestyle Television will be informational, that no more than 30% will be drama or entertainment programming, and that its goal is to bring new programming product to the marketplace.
With respect to acquired programs, the licensee stated that it will select programming that is non-
violent and that portrays competent and intelligent women in a variety of roles.
With a view to further differentiating the new service from existing television services, the Commission notes the licensee's statement at the hearing that it plans to utilize untapped resources of programming from countries such as Britain, Mexico, and Australia.
Lifestyle Television committed to provide a minimum level of Canadian content of 70% over the broadcast year, with at least 60% during the evening broadcast period. The licensee shall adhere to these commitments by condition of licence. Also by condition of licence, Lifestyle Television shall devote to expenditures on Canadian programming at least $9,055,000 in the second year of the licence term and in each subsequent year, at least 41% of the previous year's gross revenues.
Some flexibility in the accounting of these expenditures is provided for in the conditions of licence attached to this decision.
With regard to Canadian programs, the Commission also notes the licensee's commitments to ensure that at least 80% of Canadian programming is either acquired from, or produced in co-operation with, independent producers, that 83% of expenditures on Canadian programming will be spent on new, independent productions, and that $781,000 will be allocated over the licence term for program development expenditures.
Financial Matters
The Commission notes that the application filed by the licensee included a business plan, based in part on the assumption of a specific subscriber fee, calculated on the expected number of subscribers 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 basic service wholesale subscriber rate of $0.10 in the province of Quebec in the first two years of operation, increasing by $0.01 per year in each subsequent year. Outside of the province of Quebec, the licensee requested a basic service wholesale rate of $0.35 in the first two years, increasing thereafter by $0.01 per year.
At the hearing, the licensee agreed to accept a condition of licence that would stipulate a flat rate of $0.35 for carriage as part of the basic service outside the province of Quebec, for the entire term of licence. Accordingly, by condition of licence, the authorized maximum wholesale rates for Lifestyle Television shall be $0.10 in the province of Quebec and $0.35 elsewhere, for the entire term of licence. The Commission is confident that the authorized rate will not compromise the licensee's ability to meet its programming commitments.
By condition of licence, and as committed to by the licensee, paid advertising on Lifestyle Television will be restricted to a maximum of eight 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 Lifestyle Television 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 commitment by the licensee to establish the Lifestyle Foundation, a separately incorporated body to be controlled and operated by a separate board of trustees. This foundation will serve as an advisory board to Lifestyle Television, and will administer funds for program development, training, internships and research. Lifestyle Television will finance the administrative expenses of the Lifestyle Foundation, and will provide it with additional funding representing 0.75% of the licensee's gross revenues each year.
The Commission also notes Lifestyle Television's commitment to spend $300,000 for closed captioning and to provide 2,500 hours of closed captioned programming (including repeat plays) in the first year of operation. By the last year of the licence term, annual expenditures on closed captioning will have increased to the level of $425,000, representing the captioning of 3,250 hours of programming (including repeats).
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.
As noted at the outset of this decision, Moffat owns several cable undertakings in three provinces. In the public notice which introduces this decision, the Commission notes that several applicants for new specialty licences that also own cable television undertakings made commitments to the Commission that, should they be granted a specialty television licence, no preferential treatment would be accorded that service on their cable undertakings.
Although no such commitment was made by Moffat, it did state at the hearing that it believed that the ACCESS COMMITMENT of the CCTA (also discussed in Public Notice CRTC 1994-59) provides adequately for the mediation of any dispute related to preferential treatment that might arise. Notwithstanding that statement, the Commission expects the licensee not to give any preferential treatment to Lifestyle Television over other pay television or specialty programming services on cable undertakings controlled by Moffat.
Allan J. Darling
Secretary General
Linda Rankin (OBCI)
Across Canada - 931501100
APPENDIX / ANNEXE
Conditions of Licence for Lifestyle Television
For the purpose of measuring compliance with Conditions of Licence 1, 2, 3(a) and 3(b) set out below, the first broadcast year of the licence term will be deemed to commence on 1 September 1994.
1. (a) At least 90% of the programming provided by the licensee shall be drawn from Category 2 - Analysis and Interpretation, Category 5(b) - Informal Education, Category 7 - Drama, Category 8(a) - Music and Dance other than a music video clip, Category 9 - Variety and Category 11 - Human Interest.
 (b) At least 25% of the foreign programming over the broadcast day will be from sources other than the U.S.
 (c) At least 25% of the foreign programming from 6:00 p.m until midnight will be from sources other than the U.S.
2. The licensee shall devote not less than 70% of the broadcast year and not less than 60% of the evening broadcast period to the distribution of Canadian programs.
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 to31 August 1996, expend on the acquisition of and/or investment in Canadian programs not less than $9,055,000;
(b) from 1 September 1996 to 31 August 1997, and for each subsequent broadcast year, expend on the acquisition of and/or investment in Canadian programs not less than 41% of the previous year's gross revenues.
(c) In each year of the licence term, 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 licensee term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underspending.
(d) 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).
 e) Notwithstanding the above, during the licence term, the licensee shall expend 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 subsection (b) and (d), the licensee shall not distribute more than eight minutes of advertising material during each clock hour.
 (b) In addition to the eight 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 the licensee shall charge each exhibitor of this service outside of the province of Quebec a maximum wholesale rate of $0.35 per subscriber per month, where the service is carried as part of the basic service.
 (b) From the date of commencement of service, the licensee shall charge each exhibitor of this service in the province of Quebec a maximum wholesale rate of $0.10 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.
Dissenting opinion by Mr. Yves Dupras, Québec regional Commissioner, to Decision CRTC 94-282
In my view, the proposal of Lifestyle Television did not provide sufficient diversity to the overall offering to warrant being granted a licence.