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ARCHIVED -  Broadcasting Decision CRTC 2002-386

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Broadcasting Decision CRTC 2002-386

See also: 2002-386-1

Ottawa, 28 November 2002

The Family Channel Inc.
Across Canada

Application 2002-0011-3
Public Hearing in the National Capital Region
6 May 2002

Licence renewal for Family

The Commission renews the licence for The Family Channel Inc. until 31 August 2009. It also amends the condition of licence concerning the formula used by the licensee for calculating its Canadian programming expenditures in order to include revenues derived from the distribution of its service by direct-to-home satellite services.

1.

The Commission renews the broadcasting licence issued to The Family Channel Inc. (FCI) for the national English-language pay television service known as Family, from 1 December 2002 to 31 August 2009, subject to the conditions specified in the appendix to this decision and in the licence to be issued.

2.

The Commission has no concerns with respect to the licensee's compliance with its conditions of licence during the current licence term.

3.

The Commission received numerous supporting interventions with regard to this application, and all have been taken into account by the Commission in its deliberations. The Canadian Film and Television Production Association (CFTPA), in its supporting intervention, asked the Commission to review the percentage of revenues formula that will be applied to Family over its next licence term. In addition, the CFTPA asked that the Commission ensure that all programming commitments be clearly set out in the conditions of licence, including the commitment to acquire 100% of its Canadian programming from Canadian independent producers from across Canada. These issues are discussed below.

4.

As announced in Broadcasting Notice of Public Hearing 2002-2, the licensee, in its licence renewal application, proposed to amend the formula used for calculating its Canadian programming expenditures to include revenues derived from the distribution of its service by direct-to-home (DTH) satellite services. This issue is discussed below.

Expenditures on Canadian programming

5.

Under its current condition, the licensee's requirements for expenditures on Canadian programming are based on the average number of subscribers in the previous broadcast year, excluding DTH satellite subscribers. In its licence renewal application, the licensee proposed revising the definition of revenues to include monies derived from the distribution of its service by DTH satellite services.

6.

In its intervention, the CFTPA noted that, since 1997, Family has been available to more subscribers because of its move to a high penetration discretionary tier. The CFTPA maintained that the percentage of revenues formula (the formula) used for projected Canadian program expenditures was appropriate for a purely discretionary pay television service but no longer reflected the reality of Family's distribution arrangements. The CFTPA therefore asked the Commission to review the formula to ensure that the licensee's obligations were consistent with services that achieve comparable distribution and audience.

7.

FCI replied that Family's move to a discretionary tier in Class 1 cable systems has benefited the independent production sector because Family's current distribution arrangements have significantly increased revenues upon which its required expenditure is based. Furthermore, the higher subscriber levels have made Family subject to the highest applicable percentage rate in the expenditure sliding scale. FCI stated that with the proposed inclusion of DTH revenues in the formula, Family expects to provide a greater contribution to the Canadian broadcasting system. FCI also noted that the current expenditure scale is consistent with the scales governing all pay television services.

8.

The Commission considers that the licensee's request will result in a significant increase in the level of the licensee's expenditures on Canadian programming. Accordingly, the Commission approves the request to amend Family's condition of licence to include DTH satellite subscribers. The revised condition is set out in the appendix.

Independent production

9.

As noted above, the CFTPA asked the Commission to ensure that Family's programming commitments are set out in its conditions of licence, including the commitment to continue to acquire 100% of its Canadian programming from Canadian independent producers.

10.

In its reply, the licensee stated that neither FCI, nor Astral Broadcasting Group Inc. (Astral), is affiliated with any producer or distributor. In addition, FCI noted that, as a pay licensee, Family is prohibited from broadcasting programming from affiliated producers according to section 3(2) of the Pay Television Regulations, 1990 (the Regulations).

11.

Given Family's lack of affiliation with any producer and the safeguards incorporated in the Regulations, the Commission concludes that there is no need to impose a condition of licence requiring Family to acquire 100% of its Canadian programming from Canadian independent producers.

Service to persons with hearing impairments

12.

The Commission is committed to improving service to viewers who are deaf or hard of hearing, and has consistently encouraged broadcasters to increase the amount of closed captioned programming they broadcast. The Commission generally requires all broadcasters to offer a minimum percentage of closed captioned programs consistent with the nature of their services.

13.

In this regard, the applicant stated that all of Family's original Canadian programming is closed captioned. Family stated that it plans to expand this commitment to the remainder of its programming schedule by providing closed captioning for at least 90% of all programs.

14.

Accordingly, the licensee is required, by condition of licence, to provide closed captioning for not less than 90% of all programs aired during the broadcast day, by no later than 1 September 2007, and for the remainder of the licence term.

15.

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

16.

The Commission also expects the licensee to focus on improving the quality, reliability and accuracy of the captioning it provides, and to work with representatives of the deaf and hard of hearing community to ensure that its captioning continues to meet their needs.

Service to persons with visual impairments

17.

"Audio description" and "described video" are methods of improving the service that television broadcasters provide to persons with visual impairments. 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 to ensure that people who have visual impairments can receive the information.

18.

Described video, or video description as it is also known, consists of narrative descriptions of a program's key visual elements that enable people who have visual impairments 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 could require significant capital expenditures to upgrade a licensee's transmission facilities.

19.

The Commission notes the increasing amount of described programming available for acquisition due in part to the requirements imposed on the television stations operated by Global Television Network Inc., CTV Television Inc., TVA Group Inc., CHUM Limited and Craig Broadcast Systems Inc. concerning the provision of such programming.

20.

In correspondence with FCI, the Commission requested the licensee's views on implementing audio description and described video. The Commission considers it reasonable to expect the operators of the pay and specialty services whose licences are being renewed at this time to take steps to respond to the needs of viewers who have visual impairments.

21.

Accordingly, the Commission expects the licensee to:

  • provide audio description, defined as the provision of basic voice-overs of textual or graphic information displayed on screen, wherever appropriate;
  • undertake the necessary upgrades to permit the broadcast of described programming, for example, via the SAP channel;
  • acquire and broadcast the described versions of a program wherever possible; and
  • take the necessary steps to ensure that its customer service responds to the needs of viewers who have visual impairments.

22.

In addition, and consistent with the approach adopted for the new Category 1 services, the Commission encourages the licensee to provide, at a minimum, one hour per month of described programming in the period between 1 December 2002 and 31 August 2003, and to increase this monthly minimum by at least one hour in each subsequent broadcast year of the new licence term.

Cultural diversity

23.

Section 3(1)(d)(iii) of the Broadcasting Act stipulates that the Canadian broadcasting system should "through its programming and the employment opportunities arising out of its operations, serve the needs and interests, and reflect the circumstances and aspirations, of Canadian men, women and children, including equal rights, the linguistic duality and multicultural and multiracial nature of Canadian society and the special place of Aboriginal peoples within that society". The Commission notes that in July 2002, Astral filed its corporate plan for cultural diversity which includes Family.

24.

The Commission expects the licensee to:

  • endeavour, through its programming and employment opportunities, to reflect the presence in Canada of cultural and racial minorities and Aboriginal peoples;
  • ensure that the on-screen portrayal of such groups is accurate, fair and free of stereotypes;
  • support 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
  • adhere to the corporate cultural diversity plan developed by Astral and submitted to the Commission in July 2002.

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 2002-386

 

Conditions of licence for Family

 

Nature of service

1.

The programming provided by the licensee shall have as its target audiences only children, youth to age 17, and families in conjunction with such children and youth.

2.

The licensee shall not provide, on Family, any programming with an "Adult", "Restricted" or equivalent rating from the Ontario Film Review Board.

3.

The licensee shall not distribute programming from the following categories as set out in Item 6 of Schedule I to the Pay Television Regulations, 1990: news (category 1), religion (category 4), education (category 5) and sports (category 6).

 

Exhibition of Canadian programs

4.

During each semester of this licence term, the licensee shall devote not less than 25% of the total time during which programming is distributed on Family and 30% of the total time between 6:00 p.m. and 10:00 p.m. (prime viewing hours) to the distribution of Canadian programs.

 

In the calculation of time devoted to the distribution of Canadian programs under this condition, a 150% credit shall be awarded for a new Canadian production distributed by Family that:

 

a) is scheduled to commence and be completed within prime viewing hours, as defined above, and

 

b) in the case of a new Canadian production intended for children, is scheduled to be completed prior to 9:00 p.m. Family will receive a new Canadian production programming credit for each subsequent showing during the time periods specified above of such a production within a two-year period from the date of first showing by the licensee.

 

Expenditures on Canadian programs

5.

a) During the period 1 December 2002 to 31 August 2003, the licensee shall expend, on the acquisition or investment in Canadian programming, a percentage that is not less than the percentage shown in the table below, of 75%1 of its revenues for the broadcast year ending 31 August 2002. For the broadcast year beginning 1 September 2003 and in each subsequent broadcast year during the term of this licence, the licensee shall expend, on the acquisition of or investment in Canadian programs, a percentage of its revenue for the previous broadcast year that is not less than the percentage shown in the table below:
 

Average total number of residential, bulk, direct-to-home (DTH) satellite and Satellite Master Antenna Television subscribers (SMATV) in the previous broadcast year

 

 

Percentage of revenues

 

300,000 or less

20%

 

300,001 - 350,000

22%

 

350,001 - 400,000

25%

 

400,001 - 450,000

26%

 

450,001 - 500,000

27%

 

500,001 - 550,000

28%

 

550,001 - 600,000

29%

 

600,001 and over

30%

 

b) In any broadcast year of the licence term, including the partial broadcast year ending 31 August 2003 but excluding the final broadcast year, the licensee may expend an amount on Canadian programming that is up to 5% less than the minimum required expenditure for that broadcast year as set out and calculated in accordance with this condition of licence. Should the licensee avail itself of this flexibility in any broadcast year including the partial broadcast year ending 31 August 2003, it shall expend in the next broadcast year of the licence term, in addition to the minimum required expenditure for that broadcast year, the full amount of the previous year's underspending.

 

c) In any broadcast year of the licence term, including the partial broadcast year ending 31 August 2003, the licensee may expend an amount on Canadian programming that is greater than the minimum required expenditure for that year as set out and calculated in accordance with this condition of licence; in such case, the licensee may deduct

 

i) from the minimum required expenditure for the next broadcast year of the licence term, an amount not exceeding the amount of the previous broadcast year's overspending; and

 

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

 

d) Notwithstanding the above, during the licence term, the licensee shall expend on Canadian programming, at a minimum, the total of the minimum required expenditures as set out and calculated in accordance with this condition of licence.

6.

In each broadcast year of the licence term, the licensee shall expend not less than 5% of its total expenditures on Canadian programs, on script and concept development.

7.

In making the calculations required for the purposes of conditions of licence 5 and 6, only actual cash outlays shall be taken into account.

8.

In each semester, the time devoted to the distribution of programs obtained from "The Disney Channel" shall comprise not more than 60% of the total time during which programming is distributed on Family.

 

Closed captioning

9.

The licensee shall achieve a minimum captioning level of 90% for all programming aired during the broadcast day, beginning not later than 1 September 2007 and continuing throughout the remainder of the licence term.

 

Gender portrayal

10.

The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' Sex-Role Portrayal Code for Television and Radio Programming, as amended from time to time and approved by the Commission.

 

Depiction of violence

11.

The licensee shall adhere to the Pay Television and Pay-Per-View Programming Code Regarding Violence, as amended from time to time and approved by the Commission.

 

Definitions

 

In these conditions:

 

"acquisition" means to acquire exhibition rights for the licensed territory, excluding overhead costs.

 

"broadcast year" means the period from 1 September to 31 August and each twelve-month period thereafter beginning on 1 September.

 

"new Canadian production" means:

 

a) a Canadian dramatic production

 

i) which exceeds 75 minutes in duration and in relation to which all financial expenditures made by the licensee were made prior to the commencement of principal photography or taping and in which principal photography or taping was completed after 1 January 1985; and

 

ii) which is intended for children and which exceeds 22:30 minutes in duration and in relation to which all financial expenditures by the licensee are made prior to the completion of principal photography or taping; and

 

b) which qualifies as Canadian content in accordance with the criteria for Canadian program recognition set out in the appendix to Recognition for Canadian programs, Public Notice CRTC 1984-94, 15 April 1984.

 

"expend" and "expenditure" both mean actual cash outlay.

 

"investment" means an equity investment or advance on account of an equity investment, but does not include overhead costs or interim financing by way of a loan.

 

"revenue" means revenue from residential, bulk and SMATV subscribers and DTH satellite subscribers as well as any return on an investment in programming.

 

"script and concept development expenditures" means those expenditures, excluding overhead costs, that are incurred prior to the commencement of pre-production and before the financing of the project is in place. Spending on programs that are assured of going to air at the time of the expenditure is not considered as script and concept development expenditures.

 

"semester" means each six-month period beginning 1 September and 1 March.

1 75% represents the 9-month period from 1 December 2001 to 31 August 2002

Date Modified: 2002-11-28