ARCHIVED - Broadcasting Decision CRTC 2013-475

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Route reference: 2013-19

Additional references: 2013-19-1, 2013-19-3 and 2013-19-4

Ottawa, 6 September 2013

HGTV Canada Inc.
Across Canada

Application 2012-1090-6, received 30 August 2012
Public hearing in the National Capital Region
23 April 2013

D.I.Y. Network – Licence renewal

The Commission renews the broadcasting licence for the national, English-language specialty Category B service D.I.Y. Network from 1 October 2013 to 31 August 2016.

The Commission also approves the inclusion of D.I.Y. Network in the Shaw Media group.

The application

1. Shaw Media Inc. (Shaw), on behalf of HGTV Canada Inc., filed an application to renew the broadcasting licence for the national, English-language Category 2[1] specialty programming undertaking d.i.y. network.[2]

2. Shaw also requested the inclusion of D.I.Y. Network in the Shaw Media group, the licences of which were renewed and approved by the Commission in Broadcasting Decision 2011-445. Shaw indicated that D.I.Y. Network launched on 19 October 2009 and currently has over one million subscribers.

3. The Commission received a number of interventions relating to this application. The public record for this proceeding can be found on the Commission’s website at www.crtc.gc.ca under “Public Proceedings.”

Commission’s analysis and decisions

4. After examining the application in light of applicable regulations and policies, the Commission considers that the issues it must address relate to the following:

Inclusion of the service in the Shaw Media group

5. In Broadcasting Regulatory Policy 2010-167 (the group-based policy), the Commission established a comprehensive framework for the group-based licensing of private television services affiliated with large English-language Canadian broadcasting ownership groups. Subsequently, the Commission implemented this policy with the Shaw Media group of services in Broadcasting Decisions 2011-441 and 2011-445. The group-based licensing approach provides an ownership group with the flexibility to meet expenditure requirements, such as Canadian programming expenditure (CPE) and programs of natural interest (PNI) requirements, as a group rather than as individual services. For instance, the CPE requirements of one service could be met by expenditures made by another service that is part of the same group. Alternatively, CPE could be made on larger-scale productions that would be broadcast on multiple services and expenditures could be allocated across any of the services that are part of the group.

6. In regard to Shaw’s request to include D.I.Y. Network in the Shaw Media group, the Commission finds that the service meets the Commission’s criteria. Accordingly, the Commission approves Shaw’s request to include D.I.Y. Network in the Shaw Media group.

CPE requirement

7. Shaw did not propose a minimum CPE requirement for D.I.Y. Network. Instead, it proposed that the Commission establish a CPE level for the service based on the service’s actual 2012 CPE or on its average spending on Canadian programs over two complete broadcast years of data (i.e., the average of its actual 2012 and 2013 CPE).

8. In the group-based policy, the Commission considered that a specialty Category B service that is controlled by a designated group and that serves more than one million subscribers would be subject to a CPE requirement. The CPE requirement would be determined at the licence renewal of the service, using as a base the actual spending by the service over the previous three years.

9. The Commission notes that CPE requirements are calculated as a percentage of previous years’ revenues and are based on the actual spending by the services over the previous three years. Given that D.I.Y. Network launched in the 2009-2010 broadcast year, the Commission has calculated a CPE requirement for that service based on two years of operation (2011 and 2012) as proposed by Shaw rather than the normal period of three years. The Commission notes that the average CPE for 2011 and 2012 was 4%. Accordingly, given its approach on establishing a CPE requirement for Category B services, the Commission considers that a minimum CPE requirement of 4% for D.I.Y. Network is appropriate. A condition of licence to that effect is set out in the appendix to this decision.

10. The Commission notes that including D.I.Y. Network in the Shaw Media group and applying the above CPE will result in an increase to the overall required CPE of the Shaw Media group in the current licence term.

PNI expenditure requirement

11. Shaw proposed that D.I.Y. Network be subject to the same minimum 5% expenditure requirement for PNI as the various television services belonging to the Shaw Media group.

12. As part of the group-based policy, the Commission established a minimum group expenditure requirement of 5% on PNI. The Commission notes that Shaw’s proposal is consistent with the Commission’s determinations set out in the group-based policy and in Broadcasting Decisions 2011-441 and 2011-445. Consequently, the Commission approves Shaw’s proposal that D.I.Y. Network be subject to a 5% expenditure requirement for PNI. A condition of licence to that effect is set out in the appendix to this decision.

The licence term

13. Shaw proposed an expiry date of 31 August 2016 for D.I.Y. Network so that its licence expires at the same time as the licences for the other services belonging to the Shaw Media group. However, Shaw stated that it would prefer that the licence for D.I.Y. Network expire on 31 August 2018, should the Commission deny its request to include the service in the Shaw Media group.

14. In light of the Commission’s determinations set out above, the Commission approves Shaw’s request for a three-year licence term for D.I.Y. Network so that its licence expires at the same time as the other services included in the Shaw Media group. As a result, the broadcasting licence for D.I.Y. Network will expire 31 August 2016.

Other matters

15. Aside from the matters addressed above and the standard conditions of licence, expectations and encouragements set out in Broadcasting Regulatory Policy 2010-786-1, Shaw indicated that it wished for D.I.Y. Network to continue to adhere to the terms and conditions in effect under its current licence.

16. Accordingly, the Commission imposes on D.I.Y. Network the standard conditions of licence, expectations and encouragements applicable to specialty Category B services in addition to the requirements in effect under the current licence, as set out in the appendix to this decision.

Conclusion

17. In light of the above, the Commission renews the broadcasting licence for the national, English-language specialty Category B service D.I.Y. Network until 31 August 2016. The terms and conditions of licence are set out in the appendix to this decision.

18. The Commission reminds the licensee that it must fulfill all outstanding tangible benefits as set out in Broadcasting Decisions 2007-429, 2010-782 and 2013-175.

Program logs

19. Section 7(2) of the Specialty Services Regulations, 1990 states that, except as otherwise provided under a condition of its licence, a licensee shall furnish to the Commission, within 30 days after the end of each month, the program log or machine-readable record of its programming for the month.

20. The Commission reminds the licensee that according to these regulations, the logs shall at all times be kept in an acceptable form, which means that they must be accurate, exact and precise.

21. The Commission will provide an annual assessment of the licensee’s compliance with its regulatory requirements. This evaluation will be sent to the licensee before the end of the broadcast year following the year being evaluated. This will allow the licensee to verify that it is in compliance with its requirements for the year being evaluated.

22. It is important that Shaw Media Inc. ensure that its program logs are accurate throughout the year because the Commission will not re-evaluate the licensee’s compliance for the year in question.

Secretary General

Related documents

*This decision is to be appended to the licence.

Appendix to Broadcasting Decision CRTC 2013-475

Terms, conditions of licence, expectations and encouragements for the specialty Category B service D.I.Y. Network

Terms

The licence will expire 31 August 2016.

Conditions of licence

1. The licensee shall adhere to the conditions set out in Appendix 1 to Standard conditions of licence, expectations and encouragements for Category B pay and specialty services – Corrected Appendices 1 and 2, Broadcasting Regulatory Policy CRTC 2010-786-1, 18 July 2011, as amended from time to time.

2. In regard to the nature of service:

(a) The licensee shall provide a national, English-language specialty Category B service devoted to programs that offer Canadians an interactive television experience and that provides immediate access to detailed step-by-step instructions, in-depth demonstrations and tips for do-it-yourself projects.

(b) The programming shall be drawn exclusively from the following program categories set out in Item 6 of Schedule I to the Specialty Services Regulations, 1990 as amended from time to time:

2  (a) Analysis and Interpretation
    (b) Long-form documentary
5  (a) Formal education & pre-school
    (b) Informal education/Recreation & Leisure
10 Game shows
11 (a) General entertainment and human interest
    (b) Reality television
12 Interstitials
13 Public service announcements
14 Infomercials, promotional and corporate videos

3. Except as provided for in conditions of licence 4 and 8 and in accordance with A group-based approach to the licensing of private television services, Broadcasting Regulatory Policy CRTC 2010-167, 22 March 2010, the licensee shall in each broadcast year devote to the acquisition of or investment in Canadian programming 4% of the previous year’s gross revenues of the undertaking.

4. The licensee may count expenditures made for the acquisition of or investment in Canadian programming by one or more specialty services or conventional television stations from the Shaw Media group in the same broadcast year towards fulfilling the requirement in condition of licence 3 as long as these expenditures are not used by those specialty services or conventional television stations towards fulfilling their own Canadian programming expenditure requirement.

5. Except as provided for in conditions of licence 6, 7 and 8 and in accordance with A group-based approach to the licensing of private television services, Broadcasting Regulatory Policy CRTC 2010-167, 22 March 2010 (Broadcasting Regulatory Policy 2010-167), the licensee shall in each broadcast year devote to the acquisition of or investment in programs of national interest, as defined in paragraphs 71 to 73 of Broadcasting Regulatory Policy 2010-167, 5% of the previous year’s gross revenues of all specialty services and conventional television stations from the Shaw Media group.

6. The licensee may count expenditures made for the acquisition of or investment in programs of national interest by one or more specialty services or conventional television stations from the Shaw Media group in the same broadcast year towards fulfilling the requirement in condition of licence 5 as long as these expenditures are not used by those specialty services or conventional television stations towards fulfilling their own programs of national interest expenditure requirements.

7. At least 75% of the expenditures in condition of licence 5 must be made to an independent production company.

8. In regard to Canadian programs:

(a) In each broadcast year of the licence term, excluding the final year, the licensee may expend an amount on Canadian programming and/or on programs of national interest that is up to 5% less than the minimum required expenditure for that year calculated in accordance with conditions of licence 3 and 5, respectively; in such case, the licensee shall expend in the next broadcast year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year’s under-expenditure.

(b) In each broadcast year of the licence term, excluding the final year, where the licensee expends an amount for that year on Canadian programming or programs of national interest that is greater than the minimum required expenditure, the licensee may deduct that amount from the minimum required expenditure in one or more of the remaining years of the licence term.

(c) Notwithstanding paragraphs (a) and (b), during the licence term, the licensee shall expend on Canadian programming and programs of national interest, at a minimum, the total of the minimum required expenditures calculated in accordance with conditions of licence 3 and 5.

9. The licensee shall adhere to a terms of trade agreement with the Canadian Media Production Association.

10. The service renewed hereby is designated as a Category B service.

For the purposes of these conditions of licence:

“broadcast day” means the period of up to 18 consecutive hours, beginning each day not earlier than six o’clock in the morning and ending not later than one o’clock in the morning of the following day, as selected by the licensee, or any other period approved by the Commission.

an “independent production company” is defined as a Canadian company carrying on business in Canada with a Canadian business address, that is owned and controlled by Canadians, whose business is the production of film, videotape or live programs for distribution and 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.

“Shaw Media group” includes the service D.I.Y. Network as well as those services identified as contributing to the group Canadian programming expenditures and programs of national interest expenditures in Appendix 1 to Shaw Media Inc. – Group-based licence renewals, Broadcasting Decision CRTC 2011-445, 27 July 2011

Expectations

The standard expectations applicable to this licensee are set out in Appendix 1 to Standard conditions of licence, expectations and encouragements for Category B pay and specialty services – Corrected Appendices 1 and 2, Broadcasting Regulatory Policy CRTC 2010-786-1, 18 July 2011, as amended from time to time.

Encouragements

The standard encouragements applicable to this licensee are set out in Appendix 1 to Standard conditions of licence, expectations and encouragements for Category B pay and specialty services – Corrected Appendices 1 and 2, Broadcasting Regulatory Policy CRTC 2010-786-1, 18 July 2011, as amended from time to time.

Footnotes

[1] As set out in Broadcasting Public Notice 2008-100, effective 31 August 2011, Category 2 services were renamed Category B services.

[2] The licence was administratively renewed until 30 September 2013 as a result of Broadcasting Decision 2013-469.

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