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ARCHIVED -  Decision CRTC 2000-461

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Decision CRTC 2000-461

Ottawa, 14 December 2000

Alliance Atlantis Broadcasting Inc., on behalf of a company to be incorporated, to be known as Health Network Canada Inc.

Across Canada — 200010629

14 August 2000 Public Hearing
National Capital Region

 

 

Health Network Canada - a new specialty channel

 

On 24 November 2000, the Commission made a decision to issue a licence for a new national English-language Category 1 specialty television service to be called "Health Network Canada" (Health Network). The Commission noted at that time that reasons, terms and conditions of the new licence would follow at a later date.

 

Health Network will be devoted to programming related to health, wellness and medicine. As noted in Public Notice CRTC 2000-171 issued today, Health Network and 20 other new digital specialty services will be made available to subscribers by all distributors who offer programming to the public using digital technology and by some cable operators who serve smaller markets using analog technology. The licence, when issued, will expire 31 August 2007.

 

No existing Canadian television service offers health-related programming on a full-time basis. Health Network will bring added diversity to the Canadian broadcasting system with a unique and attractive television service of practical benefit to Canadians. In Public Notice 2000-171, the Commission discusses the general criteria for the approval of this and other applications for new specialty services.

 

The licensee of Health Network will be controlled by Alliance Atlantis Broadcasting Inc., the parent company of a variety of successful existing Canadian specialty services, including Showcase, History Television, Life Network, HGTV Canada and the Food Network Canada. A minority interest will be held by WebMD International LLC (IJV) whose parent company operates WebMD, which the licensee stated is the most widely consulted health care website on the Internet.

 

Terms and conditions of licence common to all of the new Category 1 specialty services are set out in an appendix to Public Notice 2000-171. Conditions specific to this application can be found in the appendix to this decision.

 

 

Programming

 

Nature of service

Health Network will provide a national English-language specialty television service devoted entirely to useful, practical, reliable and entertaining programming related to health, wellness and medicine. Accordingly to the licensee, the the new channel will be compelling and compassionate television that provides current, credible and innovative health and medical information relevant to Canadian viewers. It will be supportive of viewers living longer, happier, more active and productive lives. The program categories identified by Health Network as forming the service's content are set out in a condition of licence found in the appendix to this decision.

The new channel will offer programming dedicated to educating, informing and involving Canadians in the pursuit of knowledge that will contribute to a healthier life. It will provide programs that address the health needs of all demographic groups, and information about both conventional and alternative medical treatments. It will provide information, analysis and ongoing national debates about healthcare. Health Network will also address health issues and concerns as they relate to the changing cultural makeup of Canada, offering programs of interest to specific ethnic groups.

Health Network will offer Canadian programs that range from personal stories and experiences to documentaries about the convergence of technology and medicine. To ensure that the service is responsive to Canadian needs, it will draw on the resources of an advisory board made up of distinguished Canadians from various health-care fields.

 

Contributions to diversity

 

The Health Network will offer intensive and focused info-entertainment programming related to health, wellness and medical matters. No mainstream or existing specialty television service currently carries more than a limited amount of such programs. In this way, the Health Network will offer increased and valuable diversity to the Canadian broadcasting system as a whole.

 

Canadian content

 

The licensee made a commitment to broadcast a minimum of 60% Canadian content from 6 a.m. to midnight, and from 6 p.m. until midnight in the first year of the licence term. In each of the second, third and fourth years, the minimum will be 63% during both the broadcast day and the evening. In years five and six, the minimums will be 65%, and in year seven, Canadian content will be 70% during both the full broadcast day and the evening. Conditions of licence setting out the licensee's commitments to the levels of Canadian content to be broadcast in each year of the licence term are contained in the appendix to this decision.

 

 

Following discussions at the hearing, the licensee further committed to broadcast a minimum of 172 hours of original Canadian programming in the first year of the licence term, increasing gradually to a minimum of 200 hours of original Canadian programming in the seventh year of the licence term.

 

Canadian programming expenditures

 

Beginning in the year following the first year of operation, the licensee will expend a yearly minimum of 51% of its gross advertising, infomercial and subscription revenues on Canadian programming for broadcast on Health Network. The licensee estimates that, in accordance with this formula, it will spend almost $39 million over the licence term, to acquire or produce Canadian programs. A formula for the calculation of the amounts required is set out in a condition of licence, found in the appendix to this decision.

 

Independent production

 

The licensee has made a commitment that at least 35% of all original Canadian programming on the Health Network will be acquired from independent producers. The Commission notes the licensee's commitments, and as set out in Public Notice 2000-171, all Category 1 services will be subject to a standard condition of licence in this regard.

 

Interactivity

 

Over the last few years, the Internet has emerged as a key destination for those seeking up-to-date medical information. The licensee stated that one of the most widely consulted health care websites on the Internet is known as WebMD, which has ownership links with the U.S. television service Health Network, and to the new service. Through these ownership synergies, the Health Network will be able to offer web-based interactivity, with additional information about the topics featured on the channel. Viewers will be able to access background statistics, case studies, signs and symptoms of disease, medicine usage and dosage information, potential side effects, and names and addresses of local medical centres.

 

In addition to background information, the website will offer audience members opportunities to join discussion groups, purchase books about featured topics or ask questions during live programs.

 

While interactive elements of the new service will initially be web-based, the licensee has plans for television-based interactivity when technically feasible.

 

Ownership and synergies

 

The licensee of the Health Network will be Health Network Canada Inc., a company to be incorporated that will be controlled by HCN Holdco Inc. (HCN) (80%). The remaining 20% of the voting interest in the licensee will be held by WebMD International LLC (IJV). HCN is in turn owned by Alliance Atlantis Broadcasting Inc. (Alliance Atlantis) (80%) and IJV (20%). Alliance Atlantis is one of the largest and most integrated entertainment companies in Canada. Its operations include feature film and television production, domestic and international distribution, film financing, film exhibition and specialty broadcasting. IJV is a joint venture of News Corporation, the owner of The Health Network U.S. specialty service, and Healtheon-WebMD, which owns a health care website.

The ownership position of Web MD International LLC in the new service will provide a strong partner with considerable programming, Internet and interactive experience.

Filing requirements

This authority will only be effective and the Commission will only issue the licence when the applicant has clearly demonstrated that it is a "qualified corporation" as defined in the Direction to the CRTC (Ineligibility of non-Canadians) and is eligible to hold a licence. Consequently, the applicant is required to file all relative incorporation documents (certificate and articles, by-laws, etc.), copies of the programming supply agreement; unanimous Shareholders' Agreement, management agreement or any other pertinent agreement, for review and approval by the Commission.

Other matters

Rate

The licensee proposed a monthly wholesale rate of $0.30, per subscriber.

Service to the hearing-impaired

For the convenience of audience members with hearing impairments, the licensee will install a TTY (teletypewriter), and has made a commitment to ensure that 10% of all programming in the first three years of operation will be closed captioned. That minimum will increase each year, and in the seventh year of the licence term, at least 90% of all programming on the Health Network will be closed captioned. The Commission notes these commitments, and expects the licensee to fulfil them.

Service to the visually-impaired

With respect to the provision of descriptive video service (DVS) for visually-impaired persons, the licensee stated that "as we begin transmitting our digital service, we will be in a position to begin experimenting with alternative uses of the digital data stream. We have in the past experimented with Descriptive Video on "Showcase" and will continue to do so as the subscriber demand dictates."

 

 

 

The Commission requires the Health Network to be technically equipped to deliver described video programming and to fulfil the commitments included in the application. In addition, the Commission encourages the licensee to provide audio description of visual information wherever possible, and to provide described video programming as outlined in Public Notice 2000-171.

 

Employment equity

 

The Commission notes that this licensee will be subject to the Employment Equity Act that came into effect on 24 October 1996 and therefore will file reports concerning employment equity with Human Resources Development Canada.

 

Conclusion

 

The Health Network Canada will be an attractive and potentially vital service for Canadian television audiences as evidenced by the support shown for this application in interventions submitted by the University of Toronto Faculty of Medicine and the College of Family Physicians of Canada. The licensee has extensive experience in the launching and successful operation of specialty services in Canada, and has access to great expertise in health-related programming through its partnerships.

 

Secretary General

 

 

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

 

 

Appendix to Decision CRTC 2000-461

 

The licence for the national English-language programming undertaking (specialty television service) known as Health Network Canada will be subject to the following conditions, as well as those set out both in Public Notice CRTC 2000-171, and in the licence to be issued.

 

Nature of service

 

1. (a) The licensee shall provide a national English-language Category 1 specialty television service devoted entirely to useful, practical, reliable and entertaining programming related to health, wellness and medicine.

 
  1. The programming must be drawn exclusively from the following categories, as set out in Schedule I to the Specialty Services Regulations, 1990:

2a

Analysis and interpretation

11

General entertainment and human interest

2b

Long-form documentary

12

Interstitials

3

Reporting and actualities

13

Public service announcements

5b

Informal education/recreation and leisure

14

Infomercials, promotional and corporate videos

 

Exhibition of Canadian programs

 

2. In each broadcast year or portion thereof, the licensee shall devote to the distribution of Canadian programs the following percentages of the broadcast day and the evening broadcast period:

   

Broadcast day

Evening broadcast period

 

Year one:

60%

60%

 

Year two:

63%

63%

 

Year three:

63%

63%

 

Year four:

63%

63%

 

Year five:

65%

65%

 

Year six:

65%

65%

 

Year seven:

70%

70%

 

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, except as amended below:

 

(a) In each broadcast year following the first year of operation, the licensee shall expend on Canadian programs not less than 51% of the previous broadcast year's gross advertising, infomercial and subscription revenues;

 

 

 

(b) In each broadcast year following the first year of operation, excluding the final year, the licensee may expend an amount on Canadian programs that is up to ten percent (10%) 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;

 

(c) In each broadcast year following the first year of operation, 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.

 

(d) 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.

 

Definition

 

The term "broadcast day" shall have the same meaning as that set out in the Television Broadcasting Regulations, 1987.

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