ARCHIVED - Broadcasting Decision CRTC 2002-304

Broadcasting Decision CRTC 2002-304

Ottawa, 11 October 2002

Craig Broadcast Systems Inc.
Winnipeg, Portage la Prairie, Brandon, Foxwarren, Melita and McCreary, Manitoba

Craig Broadcast Alberta Inc.
Calgary, Lethbridge, Edmonton and Red Deer, Alberta

Applications 2001-1309-3, 2001-1310-1, 2001-1307-7, 2001-1308-5
Public Hearing at Calgary
10 April 2002

Licence renewals for four Craig television stations

In this decision, and in Broadcasting Decisions CRTC 2002-305 to 2002-308 issued today, the Commission renews the broadcasting licences for television stations and transmitters in Manitoba and Alberta, of which Craig Broadcast Systems Inc. and Craig Broadcast Alberta Inc., respectively, are the licensees. (The two licensees are collectively referred to herein as Craig).

This decision addresses Craig's role as a multi-station ownership group within the conventional television broadcasting sector, reviews Craig's record as a licensee, and assesses Craig's plans and commitments for the upcoming licence term. This decision sets out the conditions of licence applicable to all of the Craig television stations for which the licences are renewed at this time. Additional conditions of licence applicable to the individual Craig stations are set out in the specific decisions related to each of them. All four of the stations have been granted seven-year licence terms, expiring 31 August 2009.

Introduction

1.

This decision approves licence renewals for television stations in Manitoba and Alberta, of which Craig Broadcast Systems Inc. (CBSI) and Craig Broadcast Alberta Inc. (CBAI), respectively, are the licensees. CBSI and CBAI are controlled by the family of the late Stuart A. Craig, and are referred to herein as Craig.

2.

In Building on Success - A policy framework for Canadian television, Public Notice CRTC 1999-97, 11 June 1999 (the Television Policy), the Commission set out its revised policies governing its regulation of Canada's private television broadcasters.

3.

As part of the Television Policy, the Commission announced that the renewal of all the conventional television licences held or controlled by a group would be considered by the Commission at the same time. A "group" was defined as more than one conventional television station owned or controlled by the same person or entity. This approach was adopted in order to reduce the administrative and cost burden for both broadcasters and the Commission, and provide an opportunity to make a strategic assessment of the contribution of all aspects of a licensee's operations to the broadcasting system. In implementing this change, the Commission stated that it wished to consider the group's corporate strategy and the method of implementing the strategy on each of the group's individual stations, when renewing the licences of those stations. The Commission also stated that commitments made by a group would be applied to individual stations within the group as either conditions of licence or expectations.

4.

The Commission recognizes that the licences of the conventional broadcasting undertakings which are before it had varying expiry dates. In light of its objectives to reduce administrative burdens and increase the efficiency of the licence renewal process, the Commission notes its appreciation of the actions of Craig in applying for early renewals for some of their conventional licences, so that new licence terms for all four stations might be coterminous. The Commission has decided to renew the licences for these four Craig conventional television stations for a term that will run from 1 December 2002 to 31 August 2009¹.

Group synergies and strategies

5.

Craig's Alberta conventional television stations that are the subject of this renewal decision are CKAL-TV Calgary and CKEM-TV Edmonton. In Manitoba, the licensee serves the Winnipeg market through CHMI-TV in Portage la Prairie and CKX-TV serves Brandon. Independent stations CKAL-TV, CKEM-TV and CHMI-TV are known as "A-Channel" in their respective markets, while CKX-TV is a CBC affiliate. Craig also owns a category 1 digital specialty channel known as MTV (Canada) (formerly known as Connect) and a number of category 2 digital specialty channels.

6.

In New television station for Toronto/Hamilton, Broadcasting Decision CRTC 2002-81, 8 April 2002 (Decision 2002-81) Craig's application for a licence to operate a conventional television station to serve Toronto, with a transmitter in Hamilton, was approved. When launched, the Toronto station will result in an increase in Craig's potential reach (the percentage of Anglophones across Canada with access to a Craig television station), from the current 17.7% to 42.1%. Craig's presence in Canada's largest market will bring significant economies of scale to Craig's television enterprises, as well as allowing it to benefit from increased operational synergies among its stations.

7.

In its renewal applications, Craig stated that operational synergies among the four western television stations include:

• sharing of human resources, payroll and other administrative costs,

• sharing of management resources for programming, legal, finance and sales,

• use of the "A-Channel" brand for CKAL-TV, CKEM-TV and CHMI-TV resulting in promotional and marketing efficiencies, and

• shared acquisition of programming for the A-Channel stations allowing for shared program promotion and sales opportunities.

8.

Craig is also of the opinion that its relationship with its digital specialty services will result in further administrative efficiencies, noting that the specialty services owned by Craig originate from, and are located in, the same building as CKAL-TV.

9.

With respect to the new Toronto station, Craig stated that the existing synergies would be greatly increased, including opportunities for co-operation between Western Canadian and Ontario producers, and an improved ability to purchase programming rights. Contingent upon the licence application for Toronto being approved, Craig also made significant additional commitments in this proceeding, including an additional $10 million in the form of licence fees and /or equity investments involving Western Canadian program producers.

Interventions

10.

The Commission received 35 interventions and two comments related to Craig's four licence renewal applications, and these have all been taken into account by the Commission in its deliberations. Thirty-four of the interventions, which included a total of 269 letters, were in support of Craig's applications.

11.

The Canadian Film and Television Production Association (CFTPA), the Alberta Motion Picture Industries Association (AMPIA), and the Directors Guild of Canada (DGC) supported the renewal of Craig's licences, but expressed concern with certain aspects of its renewal applications. These interveners objected to the fact that Craig's commitments for the exhibition of priority programming and funding support for western-based independent producers were conditional upon being granted a new television licence in Toronto. They contended that Craig should make appropriate exhibition and funding commitments, regardless of whether or not it received a licence for Toronto.

12.

In its comment, which neither supported nor opposed Craig's applications, the Global Television Network (Global) also took issue with the linkage of Craig's commitments to the Toronto licence. Global also cited Craig's shortfall in fulfilling its local programming commitments at CKAL-TV Calgary and CKEM-TV Edmonton during the current licence term, and its proposal to fulfil its commitment of $14.07 million in production funding by 31 August 2004, rather than 31 August 2003, the deadline set out as a condition of licence.

13.

In reply, Craig stated:

.the total resources available to the station group must be considered in determining the group's ability to make particular commitments. This is precisely why Craig proposed additional expenditure commitments to western Canadian production and 8 hours of priority programming across all of its stations if awarded a Toronto licence. A Toronto outlet would give Craig the ability to amortize costs over a larger number of stations and provide the strength to the Craig system that would enable it to make those commitments.

14.

Craig stated that while its non-news local reflection did not unfold exactly as planned, "there is no other broadcaster that has devoted the resources to non-news local reflection programming in Calgary and Edmonton that Craig has." With respect to the timing of its production funding commitments, Craig stated:

The original commitment of $14,000,000 to the drama fund as set out in our licence application was expressly stated to be spent over a seven year period. As the Alberta stations launched in September 1997, the seven year period expires in 2004.

15.

The only opposing intervention, by the National Broadcast Reading Service (NBRS), took issue with Craig's initial reluctance to make quantitative commitments regarding the provision of described programming for persons who are visually impaired. However, at the hearing, Craig made a quantitative commitment to described programming that the NBRS was willing to endorse. The details of this commitment, and the Commission's requirements for fulfilling it, are set out in the section of this decision entitled "Service to the visually impaired".

16.

Since the decision granting Craig the Toronto television licence was issued prior to the Calgary public hearing (Decision 2002-81), the licensee was able to confirm its exhibition and production funding commitments at the hearing with that knowledge. Details of these commitments and the Commission's requirements for fulfilling them are set out in the sections of this decision entitled "Priority programming" and "Regional production and reflection".

17.

The Commission's determinations with respect to the fulfilment of Craig's local programming and production funding commitments for the current licence term are set out in the sections of this decision entitled "Local reflection" and "Regional production and reflection".

18.

The concerns and requirements set out in those sections notwithstanding, the Commission was impressed with the numerous local residents, community groups and independent producers who appeared at the hearing to praise Craig for its involvement with, and commitment to, the cities it serves. The Commission commends Craig for the important connection it has made with these communities, and encourages the licensee to maintain this course.

Vertical integration

19.

Section 3(1)(i)(v) of the Broadcasting Act (the Act) states that the programming provided by the Canadian broadcasting system should "include a significant contribution from the Canadian independent production sector". In Licence renewals for the television stations controlled by CTV and Licence renewals for the television stations controlled by Global, Decisions CRTC 2001-457 and 2001-458, 2 August 2001,the Commission set outits expectation that independent Canadian production companies produce at least 75% of all priority programming aired on average over the broadcast year. The Commission defined an independent production company as one in which the licensee, and any company related to the licensee, owns or controls, directly or indirectly, in aggregate, less than 30% of the equity.

20.

The Commission's reason for applying these expectations was to ensure that production companies unaffiliated to the licensee have reasonable access to the licensee's programming schedule.

21.

In its appearance at the hearing, the CFTPA recommended that the expectations placed by the Commission on CTV and Global also be applied to Craig:

We also note that we have sought and gained support from the Commission for broadcaster commitment that 75 percent of priority programming be produced by independent producers. Given the current environment of consolidation expansion within the Canadian television industry, we believe that requiring this of the Craig stations ensures the diversity of stories and voices that will be available on these services, regardless of changing circumstances, over the next seven years.

22.

At the hearing, the Commission discussed with Craig the possibility of limiting the amount of priority programming to be produced by the licensee or any affiliated production company.

23.

Craig questioned the need for such a limitation, since it has no ownership interest in any production companies, and contended that such measures would be too restrictive, especially with respect to its planned regional and local priority programming.

24.

The Commission has considered the views of the licensee, but concludes that the licensee should be subject to the same expectations that apply to the larger station groups regarding the use of independent production. The Commission notes that regional priority programming offers opportunities for small and mid-sized production companies that high-end drama programs do not. As such, the smaller station groups have a role to play in providing smaller independent producers with access to the broadcasting system.

25.

Accordingly, the Commission expects Craig to ensure that Canadian independent production companies produce at least 75% of all priority programming broadcast on each of its stations. For the purpose of this expectation, an independent production company is defined as a production company in which the licensee, and any company related to the licensee, owns or controls, directly or indirectly, in aggregate, less than 30% of the equity.

26.

The Commission notes Craig's confirmation at the hearing that it is willing to enter into discussions with the CFTPA aimed at developing a terms of trade agreement with that organization. The Commission considers that such agreements between broadcasters and the CFTPA are to the benefit of all elements of the Canadian broadcasting system.

Priority programming

Quantitative requirements

27.

In its 1999 Television Policy, the Commission removed the traditional approach to placing specific requirements for the exhibition of drama, music and dance and variety programming on large broadcasting groups. In its place, the Commission announced that the largest multi-station group members would be required to broadcast a minimum of eight hours each week of "priority programming", in peak-time (7:00 p.m. to 11:00 p.m.). The Commission stated that, for smaller station groups such as Craig, it would discuss appropriate commitments for priority programming at the time of licence renewal.

28.

In the Television Policy, the Commission identified the following types of programs as eligible priority programs for the purpose of fulfilling the peak-time requirements:

• Canadian drama programs (category 7),

• Canadian music and dance, and variety programs (categories 8 & 9),

• Canadian long-form documentary programs (category 2b),

• Canadian regionally-produced programs in all categories other than news and information (categories 1, 2 and 3) and Sports (category 6), and

• Canadian entertainment magazine programs.

29.

The Commission stated that it expected broadcasters to address the needs and expectations of their audiences when planning programming for the peak-time period, and that it was convinced that greater flexibility in scheduling would expand opportunities for broadcasters to provide high-quality and diverse Canadian programming.

30.

In each of its applications, Craig set out plans to broadcast a minimum average of five hours each week of priority programming between 7:00 p.m. and 11:00 p.m. The licensee proposed, however, that if Craig were awarded a licence to serve Toronto, the weekly priority programming commitment for the four western stations would instead be eight hours. Craig also stated that at least one hour of the priority programming each week would be local or regional reflection, and proposed to maintain different priority programming schedules for the new Toronto television station and the four western stations.

31.

The Commission accepts the eight-hour commitment to weekly priority programming on the four Craig western stations. The level of priority programming on the four Craig stations in Manitoba and Alberta is the subject of a condition of licence, set out in the appendix to this decision. With respect to the application of this condition of licence to the first year of the licence term, the licensee may include in its calculation relevant programming transmitted since 1 September 2002.

32.

Further, the Commission notes Craig's commitments for separate priority programming schedules for the Western stations and the new Toronto station.

Regional production and reflection

33.

In the Television Policy, the Commission recognized the need for the Canadian broadcasting system to better reflect the different regions of the country in its peak time programming. It noted that, in spite of the strong desire among audiences for a better reflection of Canada's regions to the country as a whole, few of the currently popular Canadian drama programs are produced outside the major production centres of Toronto, Montréal and Vancouver.

34.

In order to encourage the production of regional programs, the Commission designated certain regional productions as eligible in fulfilling priority programming requirements. To qualify, a program must be other than news, information or sports (Categories 1, 2, 3 or 6), in which the principal photography occurs more than 150 km away from Montréal, Toronto or Vancouver.

35.

In fact, as a western-based broadcaster, Craig's funding support has traditionally been directed toward western-based independent producers, and it has a solid track record in this regard. At the hearing, the AMPIA praised Craig's record and its plans for the next licence term:

AMPIA commends A-Channel on its involvement in the production of 15 Alberta features as well as a number of documentary programs. They have allowed Alberta producers, directors and writers to tell their stories. AMPIA is also pleased that A-Channel in its submission has committed to one hour of local reflection each week and we hope some of this will be with independent producers.

36.

In addition, several producers based in western Canada appeared at the hearing in support of the licensee, citing the accessibility of Craig's decision-makers, and their willingness to work with small regional companies to fund independent productions.

37.

The Commission considers it reasonable that the licensee should commission priority programming predominantly from independent producers in Alberta, Manitoba and Ontario. At the same time, the Commission encourages Craig to commission priority programming from all regions of Canada, and expects the licensee to provide regional reflection, not only in its priority programs, but in all of its programming.

The A-Channel Production Fund

38.

In Applications by Craig Broadcast Systems Inc. proposing new, independent, English-language television services in Alberta - Approved; competing applications by CanWest Alberta Television Inc. - Denied, Decision CRTC 96-731, 1 November 1996, (Decision 96-731) which granted the licences for CKAL-TV and CKEM-TV, Craig committed to the establishment of the "A-Channel Drama Fund", which was renamed the "A-Channel Production Fund" in 2001 (the Production Fund). The commitment called for a combined $14.07 million from the two new stations, to be spent over the course of the licence term on Canadian long-form drama. A minimum of $11,835,000 of the total expenditure would go to independent Alberta producers, for the production of entertainment programming in the categories of drama, music and variety.

39.

In the renewal applications for CKAL-TV and CKEM-TV considered herein, the licensee stated that contributions to the fund during the current licence term have totalled $3,184,746, and contributions to script and concept development for drama programming have been $201,656, for a total of $3,386,402. The discrepancy between the initial projections made in the 1996 applications for the A-Channel stations and the actual expenditures were explained by Craig as being due to the difference between amounts committed to projects and the amounts actually expended on completed projects.

40.

While acknowledging the shortfall in the expenditure commitment, the licensee stated that, due to its relatively small size, it could not fully fund large projects. Rather, it makes licence fee commitments to projects that must complete their funding from other sources. If a project were unable to secure additional funding and, therefore, not proceed to completion, the monetary commitment made by Craig would not result in an actual expenditure.

41.

At the hearing, Craig committed to contribute to the Production Fund the remaining amount required under the terms of the original licences, by 31 August 2003. The Commission notes Craig's commitment. However, the Commission remains concerned that a significant portion of the licensee's original commitment has been deferred until the last two years of the licence term. A condition of licence related to the fulfilment of this commitment is set out in the appendix to this decision.

42.

In addition to the funding commitments set out above, Craig committed to an additional $10 million in expenditures for productions primarily by Alberta and Manitoba producers during the licence term. This would take the form of licence fees or equity investments, would represent incremental spending, and was contingent upon the awarding of the Toronto licence. The licensee also committed $1 million for script and concept development.

43.

At the public hearing, the applicant submitted financial projections which indicated that the fulfilment of these commitments would commence in 2004, the second year of the next licence term, with annual expenditures of $2,200,000 over a 5-year period.

44.

AMPIA suggested that Craig should file annual reports on its independent production activities. Such reports would include the amounts committed for, and actually spent on: project development, licences, equity (including how much was recouped each year, and the amount spent annually on administration). AMPIA also recommended that, as a condition of licence, the $10 million fund be spent at a rate not less than 15% a year in a five-year licence term, and not less than 10% annually during a seven-year term.

45.

The Commission accepts Craig's commitments as set out above. Conditions of licence related to the licensee's financial commitments are set out in the appendix to this decision. The conditions include requirements that a minimum of 15% of the committed expenditures be made annually, that the licensee report, concurrent with the annual returns, on all expenditures, and that the licensee report on the methods and benchmarks used to demonstrate that these expenditures are incremental.

Script and concept development

46.

The Commission considers that program development expenditures provide the cornerstone for the development of creative talent among television producers. As such, these expenditures have been characterized as the broadcast industry's research and development funding in respect of its drama and long-form documentary production activities. The Commission therefore accepts Craig's commitment to expend $1 million on script and concept development for Western Canadian producers over the course of the coming licence term. A condition of licence related to this commitment is set out in the appendix to this decision.

Scheduling of priority programming

47.

In its application, Craig stated that its approach to the presentation of Canadian dramatic and other priority programming is to schedule it at times when it is most likely to attract audiences:

We typically schedule such programs evenly throughout the week Monday to Friday, as well as during the weekend, in peak viewing times.

48.

However, in schedules filed with its applications, almost half of Craig's priority programs are currently aired on Saturday night, the lowest viewing night of the week, and three nights have no Canadian programs scheduled during peak time. In support of this practice, Craig argued that broadcasting priority programs at times when competition from foreign programming is weakest results in larger audiences for Canadian programs.

49.

The Commission notes that the first principle set out in the Television Policy is to "ensure quality Canadian programs at times when Canadians are watching." The Commission recognizes that developing a successful television programming schedule is a complex art, and that licensees must take many factors into account when creating one.

50.

However, it reiterates its desire that Canadian programs be available when large numbers of Canadians watch television, both on a weekly and on a seasonal basis. It intends to monitor both Craig's scheduling practices for Canadian priority programs, and the audience levels that such programs obtain, over the upcoming licence term, in order to assess whether the goals of the Television Policy are being achieved.

Diversity of priority programming

51.

As part of this proceeding, Craig stated that its programming vision includes a broad range of programming genres not currently represented in the broadcasting system, and that diversity of ownership allows for the evolution of innovative approaches to programming.

52.

Craig outlined its plans to include in its schedule a prime time variety show and long-form documentaries, as well as more non-traditional programming.

53.

The Commission notes that one of the objectives identified in the Act is the fostering of increased diversity in the programming provided by the broadcasting system. Therefore, it encourages the licensee to follow through on its vision to provide innovative programs not currently offered.

Dramatic programming credit

54.

For the purpose of calculating the amount of priority programming that is broadcast in fulfilment of the above-noted conditions of licence, Craig stated that it would be willing to accept the new dramatic programming credit announced in Definitions for new types of priority programs; revisions to the definitions of television content categories; definitions of Canadian dramatic programs that will qualify for time credits towards priority programming requirements, Public Notice CRTC 1999-205, 23 December 1999.

55.

The Commission reminds the licensee that it is no longer entitled to claim the dramatic programming credit set out in the appendix to Recognition for Canadian Programs, Public Notice CRTC 1984-94, 15 April 1984, and appendices I and II to Certification for Canadian programs - a revised approach, Public Notice CRTC 2000-42, 17 March 2000.

Local reflection

Past performance

56.

Following a competitive process, inDecision 96-731, the Commission awarded licences to Craig to operate television stations in Calgary (CKAL-TV) and Edmonton (CKEM-TV). In that decision, the Commission set out the expectation that Craig would broadcast on each of the two stations a minimum average of 17 hours of original local news during each broadcast week, and a weekly average of 14.5 hours of local programming other than news.

57.

Craig stated that, during the existing licence term, the 17 hour weekly minimum level of news had been exceeded by approximately 3 hours per week, on both the Calgary and the Edmonton station.

58.

With respect to the 14.5 hour expectation for local non-news programming, however, the licensee stated that, over the first four years of the existing licence term, it has fallen short of the expected level, broadcasting 9.5 hours per week on CKEM-TV and 8 hours per week on CKAL-TV. The licensee noted that in the current broadcast year (2001-2002), it is broadcasting 15 hours per week of non-news and 22 hours per week of first-run news, for a total of 37 hours per week of local programming on each station.

59.

The licensee stated that the shortfall in non-news local programming was the result of a decision to devote more resources to local news, leading to the cancellation of a proposed current affairs program. Craig also abandoned plans for local children's programming, due to the erosion of that market by specialty services.

60.

The Commission recognizes that the licensee exceeded its commitments for local news, but notes that Craig did not fulfil its overall local programming commitments for Calgary and Edmonton, and views this shortfall with concern, especially as these commitments were key factors in awarding the licences in a competitive process.

61.

In Licence renewal for CHMI-TV Portage La Prairie/Winnipeg; and relief from the expectation that CHMI-TV not solicit local advertising in Winnipeg - Approved, Decision CRTC 95-634, 29 August 1995, the Commission noted the commitment by Craig that it would broadcast on CHMI-TV a minimum weekly average of 15 hours 4 minutes of original local news programming. The Commission is satisfied that the commitment has been fulfilled.

62.

In Licence renewal for CKX-TV and its transmitters, Decision CRTC 95-637, 29 August 1995, the Commission expected Craig to fulfil its commitment to broadcast on CKX-TV a minimum weekly average of 16 hours 45 minutes of original local news programming. The licensee stated that this expectation was met throughout the licence term, except when the CBC network broadcast coverage of the 1996 Olympics.

Commitments for the new licence term

63.

In the Television Policy, the Commission announced that at the time of licence renewal for conventional local television stations, licensees would no longer be required to make quantitative commitments with respect to local news programs, although licensees would be required to demonstrate how they would meet the demands, and reflect the particular concerns, of their local audiences, whether through local news or other local programming.

64.

As part of its applications, Craig proposed significant reductions in the current local programming commitments at all four stations. On both CKAL-TV and CKEM-TV, Craig proposed to reduce local programming from 31.5 hours to 16 hours each week, at CHMI-TV the planned reduction was from 15 to 10 hours per week, and CKX-TV's local programming would fall from 16.75 to 6 hours each week.

65.

At the hearing, Craig emphasized its strength in local programming and its desire to build on this strength, stating:

We believe that our role is to fill the void left by the larger players who have focussed their resources on national priorities. We provide exemplary service to the cities we serve, and in Manitoba, to our rural areas. But we go beyond that: we get into the communities and neighbourhoods. This is what makes us different.

66.

After extensive discussion at the hearing, Craig altered its original proposals, and instead undertook to maintain its existing local programming commitments for the A-Channel stations. On CKAL-TV and CKEM-TV, the local programming would be made up of 22.5 hours of news and 9 hours of non-news, and on CHMI-TV the local programming commitment would be not less than 15 hours per week. CKX-TV's commitment to local programming would decrease to not less than 6 hours per week.

67.

In view of the licensee's failure to meet the level of local programming set out as an expectation for the current licence term, for the new licence term, the Commission requires, by condition of licence, that CKAL-TV and CKEM-TV each broadcast not less than 31.5 hours of local programming during each broadcast week. For the purpose of this condition, local programming is defined as station productions or programming that reflects the particular needs and interests of local residents, and that is produced by (in the case of CKAL-TV) Calgary-based independent producers, or, (in the case of CKEM-TV) Edmonton-based independent producers.

68.

The Commission notes the licensee's commitment for the new licence term that it will broadcast not less than 15 hours each week of local programming on CHMI-TV.

69.

As part of the current application to renew the licence of CKX-TV, Craig proposed to reduce the local programming at Brandon to 6 hours per week. The licensee stated that such a level was a reasonable commitment, given CKX-TV's uncertain status as a CBC affiliate, and the significant loss of audience in Brandon to direct-to-home (DTH) services. The licensee stated at the hearing:

Given our record of providing outstanding local service to this community for nearly 50 years, we hope that it is evident to you that we will do everything reasonably possible to continue this legacy and that the six hour minimum assumes the most dire of circumstances.

70.

The Commission notes that CBC affiliation payments currently represent 25% of the revenues for CKX-TV, and that those payments will shortly be eliminated. The Commission therefore accepts the licensee's commitment to broadcast not less than 6 hours of local programming each week on CKX-TV, and notes the licensee's assurance that it will retain current levels of local programming if at all possible.

Cultural diversity

71.

As part of its applications, Craig stated that its commitment to cultural diversity is demonstrated through its:

• on-air personnel and programming that reflects the diversity of the communities served,

• encouragement of community involvement, including participation in and sponsorship and promotion of multicultural events on-air, and

• corporate commitment to diversity.

72.

Craig stated that it provides training for personnel involved in staff selection, to ensure awareness of cultural factors that can influence interview outcomes, and also trains personnel in human rights and cultural awareness. The licensee noted that it encourages the production and acquisition of programs that highlight diversity, and ensures that its programming reflects a balanced presentation of different cultures and points of view. In particular, Craig noted its long-standing support for programs such as "The Sharing Circle", which celebrates Canada's aboriginal people, third-language programs such as "Svitohliad", a Ukrainian-language news magazine, and the "Chinese Business Hour".

73.

With respect to community involvement, Craig noted that it encourages all of its employees to be involved in their communities through charities, festivals and service groups. It also donates personnel and air-time to encourage the participation of all groups in the community.

74.

Craig also set out its corporate commitment to diversity, noting first that it has completed a plan of action, to be implemented by station Operations Managers, to ensure that employees are representative of the communities they serve. In addition, Craig has formed an Employment Equity Committee that assists in monitoring initiatives and provides feedback on employee surveys, action plans and employment systems reviews.

75.

At the hearing, Craig identified a number of ways in which it determines the interests and needs of the cultural groups within the communities it serves. The licensee stated that it has established links throughout the communities it serves and through the people it has hired, in addition to research through focus groups and public opinion surveys, adding:

.on a weekly basis.we contact different cultural organizations that we've created relationships with and check up on them and find out how we're doing with our response in the community, and a lot of time, what more can be done.

We've really benefited as a newsroom from having multicultural groups represented in our workforce, both in front of the camera and behind the camera, because it truly is a link to those communities.

76.

Craig indicated that it would be prepared to submit to the Commission a formal corporate cultural diversity plan. The licensee also confirmed that it intends to participate in the joint industry/community task force on cultural diversity, and that it would be prepared to commit financial resources to that endeavour if necessary.

77.

In its 1999 Television Policy the Commission stated that it:

.will expect all conventional television licensees (at licensing or licence renewal), to make specific commitments to initiatives designed to ensure that they contribute to a system that more accurately reflects the presence of cultural and racial minorities and Aboriginal peoples in the communities they serve. Licensees are expected to ensure that the on-screen portrayal of all minority groups is accurate, fair and non-stereotypical.

78.

The Commission is satisfied with Craig's efforts to date in promoting cultural diversity, particularly in the areas of community involvement and feedback, employee training, and on-air reflection. It also expects Craig to adhere to its commitment to participate in the industry-community task force on cultural diversity initiated by Representation of cultural diversity on television - Creation of an industry/community task force, Public Notice CRTC 2001-88, 2 August 2001, and its stated willingness to commit financially to that task force.

79.

The Commission further expects Craig to adhere to its commitment to submit, within three months of the date of this decision, a detailed plan that includes specific commitments relating to corporate accountability, reflection of diversity in programming, and community involvement as they relate to presence and portrayal of cultural diversity. The Commission considers that this plan should include specific initiatives whose purpose is to ensure that the diversity of Canadian society is reflected fairly and consistently in the programming that Craig presents.

Corporate accountability

80.

The Commission considers that the elements set out below will help ensure that the corporate culture of Craig supports the reflection of cultural diversity in the programming that Craig presents. In this section of its plan, the licensee should:

• Set goals toward creating a corporate culture that supports a programming service reflective of Canada's cultural diversity, including its Aboriginal reality.

• Identify a senior executive who will be accountable for diversity practices and ensuring that management becomes more reflective of Canada's multicultural reality.

• Set clear goals for station managers so that their stations reflect the diversity that exists in their communities.

• Ensure that all managers receive appropriate training.

• Ensure that regular opportunities are provided for staff assessment of progress made toward the reflection of diversity, as well as for identification of future challenges.

• Set out the licensee's plans for hiring and retention of visible minorities, as well as training in this area that it will provide to staff.

Reflection of diversity in programming

81.

The licensee's plan should address the presence of people from diverse backgrounds, both in programming that the licensee produces and in programming that the licensee acquires. As well, the plan should address the way that cultural minority groups including Aboriginal peoples are portrayed in programming. More specifically, with respect to news programming, the licensee should identify mechanisms to assess progress in the following areas:

• The use of people from minority groups as sources regardless of whether the issue being discussed is particularly related to a minority community.

• Ensuring that stories about ethnic communities do not appear solely within the context of coverage of cultural celebrations or reporting of negative stories.

• Ensuring that on-air personalities reflect the diversity of the community that the station serves.

• Ensuring that reporters and journalists from minority communities are not assigned exclusively to covering stories of principal concern to cultural groups.

82.

The plan should also address how the portrayal and presence of cultural minorities will be incorporated into all stages of the production and acquisition of non-newsprogramming, including decisions about which programs will be broadcast. For instance, the plan should address how the licensee will ensure that:

• Those responsible for casting make a concerted effort to hire visible minority actors in leading and recurring roles.

• Those persons responsible for script development ensure that minorities are not portrayed in a stereotypical manner.

• Programming from independent producers reflects the presence and accurate portrayal of visible minorities.

Community involvement

83.

The plan should set out mechanisms that the licensee will put in place to ensure that it receives effective input and feedback from its community with respect to the reflection of cultural diversity, including Aboriginal cultures, in its programming.

Annual reports

84.

Employment equity

85.

Because these licensees are subject to the Employment Equity Act and file reports with Human Resources Development Canada, their employment equity practices are not examined by the Commission.

Service to the hearing impaired

86.

In the past, closed captioning requirements for private English-language conventional television stations have differed depending on revenues. Consistent with its recent practice, the Commission explored with the licensee as part of this process the possibility that each of the Craig stations would be subject to the same requirements for closed captioning of programming.

87.

Craig indicated that it would be prepared to caption 90% of all programming and 100% of all news on CKAL-TV, CKEM-TV and CHMI-TV, as conditions of licence, but that such a requirement for CKX-TV would be onerous. The licensee stated:

CKX now captions all scripted portions of its newscasts, but simply cannot afford to real time caption the unscripted portions. CKX is currently facing daunting financial challenges which are compounded by the carriage of distant signals in the Brandon market and the uncertainty surrounding our relationship with the CBC.

88.

At the hearing, Craig stated that it would be prepared to accept a condition of licence that CKX-TV caption 90% of all programming and 100% of scripted news.

89.

In light of the above-noted commitments by the licensee, the Commission has decided that it is reasonable to require CKAL-TV, CKEM-TV and CHMI-TV to caption 90% of all programming that they broadcast, including all news (category 1) programming, beginning 1 December 2002. The Commission is imposing these requirements as a condition of licence for each of these stations. The imposition of a condition of licence emphasizes the importance that the Commission places on commitments with respect to closed captioning and does not reflect any concern with Craig's performance in meeting previous requirements. The Commission reminds the licensee that closed captioning obligations include live feeds.

90.

In the case of CKX-TV Brandon, the Commission notes that a significant portion of CKX-TV's program schedule is provided by the CBC, and notes that in Licences for CBC English-language television and radio renewed for a seven-year term, Decision CRTC 2000-1, 6 January 2000, it required the CBC to ensure that at least 90% of the programming distributed nationally is closed captioned in each year of the licence term. The Commission also notes that this station earns less than $10 million in annual advertising revenues and network payments. The Commission finds that requirements for closed captioning on CKX-TV should reflect this station's more modest circumstances.

91.

Accordingly, the Commission has decided that it is reasonable to require, by condition of licence, that the licensee caption 90% of all programming on CKX-TV, beginning 1 September 2004. In addition, consistent with Craig's commitment, the Commission expects the licensee to caption 100% of all scripted news throughout the licence term. The Commission further advises Craig that, at the time of the next licence renewal for CKX-TV, it intends to examine the appropriateness of increasing captioning requirements to include all news programming. Accordingly, the Commission expects Craig, by that time, to be captioning 100% of all news programming on CKX-TV.

92.

The Commission notes that the 90% obligation is based on the recognition that requiring 100% captioning at all times may not be reasonable or appropriate. Thus, the obligation is designed to cover unforeseen circumstances (such as late delivery of captions, technical malfunctions, or the lack of availability of captions for programs acquired outside of North America), or programming where captioning may not be feasible, such as third language programming.

93.

The Commission expects Craig to focus on improving the quality, reliability and accuracy of captioning on each of its stations, and to work with representatives of the deaf and hard of hearing community to ensure that its captioning continues to meet their needs at a consistently high level of quality.

Service to the visually impaired

94.

"Audio description" and "video description" or "described video" are methods of improving the service that television broadcasters provide to the visually impaired. Audio description involves the provision of basic voice-overs of textual or graphic information displayed on the screen. A broadcaster providing audio description will, for example, not simply display sports scores on the screen, but also read them aloud so that persons who are visually impaired can receive the information.

95.

Video description, or described video as it is also known, consists of narrative descriptions of a program's key visual elements so that the people who are visually impaired are able to form a mental picture of what is occurring on the screen. These descriptions can be provided on the Secondary Audio Programming (SAP) channel. Not all broadcasters are currently equipped to deliver a SAP signal. Thus, the introduction of described video via the SAP channel requires significant capital expenditures to upgrade a licensee's transmission facilities.

96.

With respect to audio description, Craig stated that its current practice at all of its stations is to provide audio descriptions of important graphic information such as sports scores, weather reports, and phone numbers, and that it is committed to continuing this practice. The Commission expects Craig to continue to provide audio description where appropriate. It further expects the licensee to take the necessary steps to ensure that the services provided by its various television stations respond to the needs of visually impaired audiences.

97.

With respect to described video programming, in response to an intervention by the NBRS, Craig made a commitment to broadcast a minimum level of 2 hours each week of described priority programming in the second year of the licence term, increasing to 4 hours each week beginning in the fourth year of the licence term, of which at least 50% would be original programming.

98.

The Commission is satisfied that Craig's commitments to described Canadian priority programming are consistent with commitments made by other multi-station groups. Consistent with its approach in previous television renewal decisions, the Commission has decided to impose conditions of licence regarding the provision of described video programming. Craig may count toward fulfilment of this requirement a maximum of one hour per week of described video programming that is directed to children and is broadcast at an appropriate viewing time for children. In the Commission's view, this would be consistent with the flexibility extended to smaller multi-station groups under the Television Policy, to provide programming that is distinct from that offered by larger groups.

99.

Accordingly, it is a condition of each licence that the licensee broadcast, between 7:00 p.m. and 11:00 p.m., an average of two hours per week of described video programming during the second and third years of the licence term, and beginning in the fourth year and for the remainder of the licence term, an average of four hours per week of described video programming. As part of these conditions, all of the described programming must be Canadian, and priority programming as defined in Public Notice 1999-205, and at least 50% of the required hours must be original broadcasts. The licensee may count toward fulfilment of these conditions a maximum of one hour per week of described video programming that is directed to children and is broadcast at a viewing time appropriate for children. The text of this condition is set out in the appendix to this decision.

100.

The Commission notes the growing amount of described video programming that is available for acquisition, particularly from U. S. sources. It expects Craig to acquire and broadcast the described versions of programs wherever possible.

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 Broadcasting Decision CRTC 2002-304

Conditions of licence applicable to all Craig television stations

a)  The licensee shall broadcast, at a minimum, in each broadcast year, an average of eight hours per week of Canadian programs in the priority program categories between 7:00 p.m. and 11:00 p.m., from Monday to Sunday. As defined in Broadcasting Public Notice CRTC 1999-205, the priority program categories are:

Canadian drama programs; Canadian music and dance and variety programs; Canadian long-form documentaries; Canadian regionally-produced programs in all categories other than News and information and Sports; Canadian entertainment magazine programs.

In addition to the 12 minutes of advertising material in any clock hour in a broadcast day 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.

In fulfilling this condition, a minimum of 50% of the required hours must be original broadcasts. Further, the licensee may broadcast up to one hour per week of described children's programming at an appropriate children's viewing time.

a) Incremental to the expenditures referred to in condition of licence 4 above, the licensee shall, commencing in 2004 and over the ensuing four broadcast years, expend $10 million in the form of licence fees and equity investments, and $1 million in script and concept development funding for Western Canadian producers. A minimum of 15% of these expenditures must be committed annually.

b) In regard to the incremental nature of these expenditures, the licensee shall file for approval with the Commission by 12 November 2002, a proposed methodology and benchmark by which "incremental" can be properly assessed. Concurrent with the annual returns, the licensee shall submit audited annual reports, setting out details of the commitments and actual expenditures on both an annual and a cumulative basis.

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. 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.

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.

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. 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.

¹ In Broadcasting Decision CRTC 2002-239, 22 August 2002, the Commission granted a three-month administrative renewal for CKEM-TV Edmonton, CKAL-TV Calgary, CHMI-TV Portage La Prairie/Winnipeg and CKX-TV Brandon, from 1 September 2002 to 30 November 2002.