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ARCHIVED -  Decision CRTC 99-110

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Decision

Ottawa, 21 May 1999

Decision CRTC 99-110

Radiomutuel inc. - Canal Z

Across Canada - 199713095

7 December1998 Public Hearing in Montréal

Summary

The Commission approvesa new French-language specialty television service called "Canal Z, aux limites du savoir," (Canal Z) to be available to distribution undertakings across Canada. This service will be devoted to programs focusing on science and technology and computer science. The licence will expire on 31 August 2005.

This new service will enhance the Canadian broadcasting system by the distinct nature of its programming aimed at a young audience, the quality of the proposed programs and the licensee's experience in the operation of specialty programming services. The Commission took into account the licensee's contribution to the development of Canadian programming, as well as the anticipated partnerships, which will provide undeniable support to French-language creators and the French-language independent production industry.

In French-language markets, Canal Z will be offered on a discretionary tier consisting solely of French-language services, including at least this service and the three other services approved today (decisions CRTC 99-109, 99-111 and 99-112). In the other markets, it will be offered on a discretionary basis unless the licensee agrees with the distribution undertaking to have it distributed on the basic service.

Programming

Nature of service

1. The licensee is proposing a service of programs focusing on science and technology, the earth and its secrets, space exploration, the paranormal and science fiction, lifestyles, and computer science. The programs will appeal to the general viewing audience, but will particularly target viewers between 18 and 34 years of age. This service will be an interesting addition to the array of services approved today because of the relatively young age of its target viewing audience and the diversity of its programs. At the hearing, Radiomutuel inc. stated that Canal Z is [translation] "the first service to have most of its original production dedicated to computer science, the Internet, video games and multimedia."

2. Consistent with the application, the licensee shall, by condition of licence, offer a national French-language specialty television service devoted exclusively to programs drawn from categories 2 (Analysis and interpretation), 5b (Education - Informal), 7a (Ongoing dramatic series), 7c (Special, mini-series or made-for-TV feature films) and 11 (Human interest), as set out in Schedule I to the Specialty Services Regulations, 1990. Further, by condition of licence, the licensee shall not distribute any feature films drawn from category 7d (Feature films, theatrical releases).

3. The daily schedule will consist of four blocks of six hours: one block of original programs and three blocks of repeat programs. The service will be on the air 24 hours a day, 7 days a week.

4. Furthermore, the licensee stated that it will hold exchanges with ZDTV, an American specialty service dealing in computer science, technology and the Internet, in order to gain access to valuable information worldwide. The licensee also expects to establish a partnership with Québec Science magazine for the purpose of developing French-language content accessible to Canal Z and the Internet surfers visiting the service's website.

Canadian content

5. The licensee made a commitment to broadcast a minimum of 60% Canadian content from 6 a.m. to midnight, and a minimum of 50% from 6 p.m. to midnight. The licensee is required to adhere to this commitment by condition of licence.

Canadian programming expenditures

6. Consistent with the approach outlined by the Commission in Public Notices CRTC 1992-28, 1993-93 and 1993-174 concerning requirements for Canadian programming expenditures, the licensee is required to expend a minimum of $5,424,000 on the acquisition of and/or investment in Canadian programs in the broadcast year following the first year of operation, as defined in the condition of licence set out in the attached appendix. Further, in each subsequent broadcast year, the licensee shall expend on Canadian programs a minimum of 48% of the previous year's gross revenues derived from the operation of the service. It is a condition of licence that the licensee adhere to the Commission's requirements respecting Canadian program expenditures. The Commission has provided for some flexibility in the accounting of these expenditures in the applicable condition of licence set out in the appendix to this decision.

7. Furthermore, the service will make extensive use of the independent production sector. The licensee has agreed to spend more than $23 million on independent productions over the service's first seven years of operation, including $2,730,000 million in the first year.

Advertising

8. Consistent with the licensee's plans, Canal Z may distribute a maximum of 12 minutes of national advertising, plus a maximum of 30 seconds of unpaid public service announcements, in each clock hour of the broadcast day. Some flexibility for the placement of advertising material in longer programs is provided. Conditions of licence to this effect are set out in the appendix to this decision.

Ownership

9. Canal Z is the exclusive property of Radiomutuel inc., which is one of the leading broadcasting groups in Quebec and which serves most regions through its networks and the radio stations that it operates. Further, Radiomutuel inc. is the sole or joint licensee of three French-language specialty services: Canal Vie (100%), MusiquePlus (50%) and Musimax (50%).

Method of distribution

10. Canal Z will be delivered via satellite to all broadcasting distribution undertakings across the country. The conditions for distribution are explained in Public Notice CRTC 1999-89, in the preamble to this decision, and also in Public Notice CRTC 1999-90 concerning distribution and linkage, which accompanies the decisions released today.

11. In French-language markets, Class 1 licensees and Class 2 licensees that distribute this service must distribute it on a discretionary basis only, in a tier consisting solely of French-language programming services. This tier must include, at a minimum, Canal Histoire, Canal Fiction and Canal Évasion, which are also approved today.

12. In other markets, Class 1 and Class 2 licensees may offer the service on a modified dual-status basis.

13. With respect to distribution on a discretionary tier, especially in francophone markets, the Commission notes that, in its business plan, the licensee proposed a wholesale rate of $0.75. The Commission expects the licensee to negotiate with distributors and that such negotiations will permit the licensee to implement its plans and to broadcast programming of the quality contemplated in its application, according to its business plan. The Commission will monitor the situation closely.

Implementation

14. This approval is subject to the condition that the service shall be in operation by 10 January 2000 or, where in the interim the applicant applies to the Commission and shows the Commission that it cannot begin operating the service before that date and that an extension is in the public interest, within such additional time as the Commission shall approve in writing. The licence shall not be issued unless the service is implemented by 10 January 2000 unless the Commission grants an extension.

15. The Broadcasting Distribution Regulations require a distribution undertaking to provide sixty (60) days' notice to the programming services affected by a channel realignment. The Commission accordingly expects the licensee to inform the distribution undertakings at least
ninety (90) days before the date on which Canal Z begins broadcasting.

Other matters

Closed captioning

16. The Commission notes the licensee's commitment to distribute 2,910 hours of closed captioned programming for the deaf and hearing impaired during the first year of operation, which represents 33% of its programming, and to increase this gradually to a level of 3,670 hours in the seventh year, which represents 42% of its programming. The licensee will spend $592,000 for closed captioning during the licence term.

17. The Commission expects the licensee to adhere to its commitments. The Commission also encourages the licensee to exceed these commitments over the licence term and to monitor the quality of captions during exhibition.

18. The Commission notes that, from the start of operations, the licensee will have a telecommunication device for the deaf (TDD) and will ensure that the TDD number is well publicized.

Dubbing

19. As for the French-language dubbing of Canadian acquired programs, the Commission notes that the applicant will allocate $10,472,000 during the first seven years of operation; it expects this dubbing to be done in Canada.

Employment equity

20. The Commission notes that this licensee is subject to the Employment Equity Act that came into effect on 24 October 1996 (1996 EEA), and therefore files reports concerning employment equity with Human Resources Development Canada. As a result of a consequential amendment to the Broadcasting Act, the Commission no longer has the authority to apply its employment equity policy to any undertaking that is subject to the 1996 EEA.

Conclusion

21. The Commission is satisfied that Canal Z will offer attractive, high-quality French-language programs that will contribute to the enrichment and diversity of the Canadian broadcasting system. The licensee's commitments and its proposed partnerships, as well as its use of the expertise of local creators, will promote the development of French-language content and Canadian content. In approving this application, the Commission is satisfied with the complementary nature of the service proposed and is further satisfied that the expertise of the licensee, as well as the resources available to it, will ensure success. In this regard the Commission notes Radiomutuel inc.'s performance in establishing and operating specialty programming services.

22. The Commission acknowledges and has considered the interventions submitted with respect to this application.

Secretary General

This decision is to be appended to the licence. It is available in alternative format upon request, and may also be viewed at the following Internet site:

www.crtc.gc.ca

Appendix to Decision CRTC 99-110

Conditions of licence for "Canal Z, aux limites du savoir"

Nature of the service

1. (a) The licensee shall provide a national French-language television specialty service that is dedicated entirely to science and technology, the earth and its secrets, space exploration, the paranormal and science fiction, lifestyles and computer science;

(b) The programming must be drawn exclusively from the following categories: 2 (Analysis and interpretation) 5b (Education - Informal), 7a (Ongoing dramatic series), 7c (Special, mini-series or made-for-TV feature films) and 11 (Human interest), as set out in Schedule I to the Specialty Services Regulations, 1990;

c) The licensee shall not distribute any feature films drawn from category 7d (Feature films, theatrical releases).

Exhibition of Canadian programs

2. In each broadcast year, the licensee shall devote to the distribution of Canadian programs not less than 60% of the broadcast day and not less than 50% of the evening broadcast period.

Expenditures on Canadian programs

3. In accordance with the Commission's position on Canadian programming expenditures as set out in Public Notices CRTC 1992-28,1993-93 and 1993-174:

(a) In the broadcast year following the first year of operation, the licensee shall expend on Canadian programs not less than $5,424,000;

(b) In each subsequent broadcast year, the licensee shall expend on Canadian programs not less than 48% of the previous broadcast year's gross revenues derived from the operation of the service;

(c) In the broadcast year following its first year of operation, and in each subsequent broadcast year, excluding the final year, the licensee may expend an amount on Canadian programs 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 licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underexpenditure;

(d) In the broadcast year following the first year of operation, and in each subsequent broadcast year, where the licensee expends an amount on Canadian programs that is greater than the minimum required expenditure for that year set out in or calculated in accordance with this condition, 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 overexpenditure; and

(ii) from the minimum required expenditure for any subsequent year of the licence term, an amount not exceeding the difference between the overexpenditure and any amount deducted under paragraph (i) above.

(e) Notwithstanding paragraphs (c) and (d) above, during the licence term, the licensee shall expend on Canadian programs, at a minimum, the total of the minimum required expenditures set out in or calculated in accordance with the licensee's condition of licence.

Advertising

4. (a) Subject to subsections (b), (d) and (e), the licensee shall not distribute more than twelve (12) 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 national paid 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;

(e) In addition to the twelve minutes of advertising material referred to in subsection (a), the licensee may broadcast partisan political advertising during an election period;

(f) For the purpose of this condition, advertising material does not include a promotion for a Canadian program to be broadcast by the licensee, notwithstanding that a sponsor is identified in the title of the program or is identified as a sponsor of that program, where the identification is limited to the name of the sponsor only and does not include a description or representation of the products or services or any attributes of the sponsor's products or services.

Rate

5. From the date of commencement of service, the licensee shall charge each distributor of this service a maximum wholesale rate of $0.50 per subscriber per month, when the service is distributed as part of the basic service.

Adherence to industry codes

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 CAB's Broadcast Code for Advertising to Children, 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.

Definitions

For the purposes of these conditions of licence, all time periods shall be calculated according to the eastern standard time; the terms "broadcast day", "broadcast year," "evening broadcast period" and "clock hour" shall have the same meanings as those set out in the Television Broadcasting Regulations, 1987; "broadcast week" shall have the same meaning as that set out in the Radio Regulations, 1986; "first year of operation" shall mean the first broadcast year in which Canal Z is in operation for a period exceeding 90 days, excluding any free trial period; and "paid national advertising" shall mean advertising material as defined under the Specialty Services Regulations, 1990 and that is purchased at a national rate and receives national distribution on the service.