ARCHIVED -  Decision CRTC 95-589

Decision

Ottawa, 24 August 1995

Decision CRTC 95-589

Westcom TV Group Ltd.

Calgary, Drumheller and Banff, Alberta - 941004400

Licence renewal for CICT-TV Calgary and its transmitters CICT-TV-1 Drumheller and CICT-TV-2 Banff

Following a Public Hearing held in Winnipeg beginning on 5 June 1995, the Commission renews the broadcasting licence for the television programming undertaking consisting of the independent station, CICT-TV Calgary and its transmitters CICT-TV-1 Drumheller and CICT-TV-2 Banff, from 1 September 1995 to 31 August 2002, subject to the conditions in effect under the current licence as well as to those conditions specified in the appendix to this decision and in the licence to be issued.

Local reflection

On 24 March 1995, the Commission issued Public Notice CRTC 1995-48 in conjunction with the release of decisions renewing the licences of privately-owned, English-language television stations in British Columbia, Ontario and Quebec. In that public notice, the Commission reiterated the importance of the principle of local reflection and reminded television licensees that they have a special responsibility to serve the public within the particular geographic areas they are licenced to serve.

(i) Local news

During the current licence term, Westcom surpassed its commitment to broadcast an average of 12 hours 30 minutes of original local news each week. For the new licence term, the Commission expects the licensee to adhere to the commitment made in its licence renewal application to broadcast, at a minimum, an average of 11 hours 30 minutes of original local news weekly.

(ii) Other local programming

In its licence renewal application, Westcom stated that CICT-TV reflects Calgary's diverse cultures through community programs, promotions and telethons. CICT-TV also broadcasts locally-produced children's programs such as "Kidstreet" and "Monty's Travelling Reptile Show".

Expenditures on Canadian programming

During the current licence term, Westcom was required, by condition of licence, to adhere to its projected first-year (1989-1990) expenditures on Canadian programming, at a minimum, and to adjust such expenditures in subsequent years in accordance with a formula linked to the station's advertising revenues. Westcom's expenditures on National Hockey League (NHL) rights and the production costs for the broadcast of hockey games make up a large portion of CICT-TV's Canadian programming expenditures. In its licence renewal application, Westcom projected that its expenditures on sports programming for the broadcast year 1994-1995, the last year of the current licence term, would remain at essentially the same level as was spent in the two preceding years, despite a curtailed 1994-1995 hockey season. For this reason, the Commission raised with the licensee its concern that CICT-TV's actual programming expenditures for 1994-1995 might fall well short of the projected figure, and that this, in turn, might have serious implications with respect to the licensee's compliance with its condition of licence on Canadian programming expenditures.

In response to questioning at the hearing, Westcom confirmed that its projected expenditures on sports programming for 1994-1995 had been inflated. Westcom explained that it had made these projections in May and June 1994, at which time it could not have foreseen the long dispute that eventually ensued between the NHL's players and team owners. The licensee stated, however, that actual spending increases on other types of Canadian programming offset the decrease in its spending in sports programming. At the Commission's request, the licensee submitted revised projections for its programming expenditures for 1994-1995, subsequent to the hearing. Having reviewed these figures, the Commission is satisfied that Westcom's projections are reasonable and that the licensee is operating in compliance with its condition of licence on Canadian programming expenditures.

In its licence renewal application, Westcom asked the Commission to decrease the base amount that would be used in the formula to determine CICT-TV's required levels of expenditures on Canadian programming in the first, and in each subsequent year of the new licence term. Westcom requested this adjustment because of the uncertainty of its ongoing negotiations with the NHL for the broadcast of hockey games during the new licence term. The licensee also requested authority to transfer up to 20% of its annual expenditure requirements under the formula to investments in Canadian under-represented programming.

As announced in Public Notice CRTC 1995-48, the Commission has adopted a policy, according to which the licensees of most private English-language television stations earning over $10 million in total annual advertising revenues and network payments are being offered the option of either adhering to a condition of licence on Canadian programming expenditures similar to the existing condition, or adhering to a condition of licence requiring the licensee to exhibit a specific number of hours of Canadian drama (category 7), music (category 8) and variety programming (category 9) during the evening broadcast period for each year of the new licence term. The options and the Commission's policy rationale are described more fully in that public notice.

At the hearing, the licensee advised the Commission that it would agree to adhere, during the new licence term, to a condition of licence requiring the exhibition of a specific number of hours each week of Canadian drama, music and variety programming during the evening broadcast period, rising from 5 hours 30 minutes in year one, to 7 hours in year seven. The condition of licence is set out in the appendix to this decision.

Since Westcom has chosen to follow the second option set out in Public Notice CRTC 1995-48, no further action is required with regard to the licensee's requests to reduce the base amount of the CICT-TV's expenditure formula for the new licence term, or to transfer eligible expenditures under the formula to investments.

Investment in under-represented programming

The Commission notes Westcom's commitment to invest an average of $1.67 million annually, for a total of $11.7 million over the licence term, in under-represented programming. The Commission strongly encourages the licensee to allocate a significant proportion of theseinvestments to the Alberta independent production community.

Program development

The Commission reminds the licensee of the Commission's expectations set out in Public Notice CRTC 1989-27 dated 6 April 1989 and entitled "Overview: Local Television for the 1990s" regarding the important role that local television stations play in program development. In this regard, the Commission notes the licensee's commitment to contribute an average of $100,000 to program development during each year of the new licence term.

Fulfilment of transfer of control benefits

In Decision CRTC 89-769 dated 28 September 1989, the Commission approved an application for authority to transfer control of CICT-TV (formerly CFAC-TV) to Westcom from Selkirk Communications Limited, via Maclean Hunter Limited. At that time, the licensee promised a benefits package totalling $11,905,000 in direct expenditures and $1,145,000 in indirect expenditures. In its licence renewal application, the licensee stated that, while it had fulfilled all of the commitments promised as part of the ownership transaction, it completed some of the projects at a lower cost than what it had originally projected. The licensee argued that the Commission should evaluate the benefits on "what was done, not what it cost to do".

The Commission, however, requires licensees, not only to carry out all of the initiatives promised as benefits in ownership transactions, but also to fulfil the total expenditure commitments associated with these initiatives. In this regard, the Commission reminds the licensee of the policy statement first set out in Public Notice CRTC 1989-109, and reiterated in Public Notice CRTC 1992-42, that "when processing applications for authority to transfer ownership, the Commission will require the full monetary commitment to be implemented within the proposed timeframe.

" In the present case, Westcom submitted a list to the Commission following the hearing, specifying additional projects that it had undertaken during the current licence term. Westcom explained that, with the savings realized on the acquisition of capital items promised as part of the ownership transaction, it was able to purchase additional capital items such as an ENG microwave truck, a Beta VTR and editor, and lighting console and set, which have enhanced CICT-TV's news programming.

The Commission is satisfied that the additional capital purchases qualify as benefits and, therefore, considers that the licensee has fulfilled the obligations of the benefits package promised as part of the ownership transaction approved in Decision CRTC 89-769.

Service to the deaf and hard of hearing

Consistent with its policy approach for closed captioning announced in Public Notice CRTC 1995-48, the Commission requires the licensee, from 1 September 1998 to the end of the term of this licence, to caption all local news programming, including live segments, using either real-time captioning or another method capable of captioning live programming.

The Commission also requires the licensee to close caption not less than 90% of all programming during the broadcast day, by the end of the licence term.

Employment equity

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled "Implementation of an Employment Equity Policy", the Commission announced that the employment equity practices of broadcasters would be subject to examination by the Commission. The Commission notes the licensee's particular initiative in increasing its support of visible minorities and encourages the licensee to continue its efforts in the area of employment equity.

Intervention by the Canadian Association of Broadcasters

The Canadian Association of Broadcasters (CAB) submitted an intervention regarding the applications heard at the Winnipeg hearing for the licence renewal of private, television stations earning over $10 million in annual advertising revenues and network payments. In its intervention, the CAB addressed its concerns regarding Public Notice CRTC 1995-48. Among other things, the CAB questioned the Commission's decision that licensees earning over $10 million in annual advertising revenues and network payments and who are, therefore, given the choice of Option A or Option B in meeting their responsibility to contribute to Canadian programming, must make their choice by 1 September 1995 and adhere to that choice throughout the new licence term. The CAB requested that the Commission introduce a period of grace that would allow stations which have chosen Option A on 1 September 1995 to change, within three years, to Option B through a simple "declaration" to the Commission. The intervener argued that, in order to create competitive, Canadian programming under the weekly hours option, "smaller" stations or "stand-alone" stations would "need time to marshal support with other stations and sort out who their future programming partners will be".

The Commission notes that, of the total number of television stations that would be given the choice between Option A and Option B at the time of their licence renewals, only four would fall within the CAB's definition of a "smaller" or "stand-alone" station, namely CKCO-TV Kitchener, CFCF-TV Montréal, CFRN-TV Edmonton and CKY-TV Winnipeg. They are all affiliates of the CTV Television Network and will receive a significant amount of entertainment programming from the network.

The Commission also notes that the entertainment programming exhibited by licensees to satisfy the condition of licence may be either produced by or acquired from other sources. Licensees, therefore, have a variety of options available to them to meet the condition of licence.

Given the amount of programming that is required of these licensees, the variety of options available to them to provide it, and the fact that all are earning over $10 million in annual advertising revenues and network payments, the Commission is not convinced that these stations lack the resources to provide the level of entertainment programming required under Option B.

Accordingly, the Commission will continue to require television licensees earning over $10 million in annual advertising revenues and network payments, and whose licences are being renewed this year, to advise the Commission of their selection before 1 September 1995 and to adhere to their choice throughout the entire new licence term.

Other interventions

The Commission acknowledges the numerous interventions submitted in support of the application to renew CICT-TV's licence. The Commission also acknowledges the three interventions filed in opposition to this application and is satisfied with the licensee's responses thereto.

Allan J. Darling
Secretary General

APPENDIX / ANNEXE

Conditions of licence for CICT-TV Calgary and its transmitters CICT-TV-1 Drumheller and CICT-TV-2 Banff

1. The licensee shall broadcast in the evening broadcast period (between 6:00 p.m. and midnight) the following average number of hours per week of Canadian drama, music or variety programming in each year of the licence term:

 1995-1996 5:30 hours
 1996-1997 6:00 hours
 1997-1998 6:00 hours
 1998-1999 6:00 hours
 1999-2000 6:30 hours
 2000-2001 6:30 hours
 2001-2002 7:00 hours

For the purpose of the above condition, the categories drama, music and variety are defined as set out in Schedule I of the Television Broadcasting Regulations, 1987.

2. In addition to the 12 minutes of advertising material permitted by subsection 11(1) of the Television Broadcasting Regulations, 1987, the licensee may broadcast infomercials as defined in Public Notice CRTC 1994-139 and in accordance with the criteria contained in that public notice, as amended.

3. 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 accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC).

4. 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 accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC.

5. The licensee shall adhere to the provisions of the CAB's "Broadcast Code for Advertising to Children", as amended from time to time and accepted by the Commission.