Canadian Radio-television and Telecommunications Commission
Symbol of the Government of Canada

CRTC unveils a new group-based television regulatory policy

OTTAWA-GATINEAU, March 22, 2010 — The Canadian Radio-television and Telecommunications Commission (CRTC) today introduced a new framework that will give English-language private television broadcasters greater flexibility to offer high-quality programs that are of interest to Canadians.

“The new approach to licensing on the basis of ownership groups reflects the trend of media convergence,” said Konrad von Finckenstein, Q.C., Chairman of the CRTC. “Our framework will enable the large groups to attract viewers to their different television services while encouraging the creation of original Canadian programs. In doing so, we are providing the industry with flexibility to adapt to the new reality of increased consumer choice in a digital world.”

Consolidation in the industry has resulted in large groups controlling both conventional television stations and specialty services. The CRTC’s approach will take into account a group’s total revenues when setting obligations related to the objectives of the Broadcasting Act.

Group-based policy

In 2011, the CRTC will hold licence-renewal hearings for the largest English-language private ownership groups. The largest groups are: CTVglobemedia Inc., Canwest Television Limited Partnership and Rogers Communications Inc.

This approach will permit the CRTC to introduce new requirements to encourage and support the creation of Canadian programs.

The CRTC will propose that the three largest ownership groups spend at least 30 per cent of their gross revenues on Canadian programming. However, they will be able to shift resources among their English-language conventional television stations and specialty services to meet this obligation.

Value of local television programming

As part of its framework, the Commission has set out a market-based solution to allow private local television stations to negotiate with cable and satellite companies. Each television station would have the option of entering into negotiations to establish a fair value for the distribution of their programs.

“The current dispute between conventional broadcasters and distributors threatens the overall integrity of the broadcasting system,” said Mr. von Finckenstein. “Broadcasters and distributors have a symbiotic relationship. The time has come for them to put their differences aside and work together to ensure the continuation of conventional television, which Canadians clearly value.”

During its proceeding, the CRTC received conflicting legal opinions as to whether it has the authority to implement a negotiation regime. Given that this issue is vital to the future of conventional television, the Commission has initiated a reference to the Federal Court of Appeal seeking clarification on its jurisdiction under the Broadcasting Act. The CRTC has asked the Court to consider its request on an expedited basis.

Transition to digital television

The Commission also launched a proceeding to ensure an orderly transition to digital television for consumers. Local television stations in major markets, as well as provincial and territorial capital cities, must complete the switchover by August 31, 2011.

In particular, the CRTC is seeking comments on:

  • the number of Canadians that could potentially lose access to free local television as a result of the transition
  • the size, type and manner of administering a subsidy program for over-the-air viewers, should such a program be authorized
  • the provision of a free package of local and regional television stations
  • measures to educate consumers, and
  • the establishment of a trial market ahead of the transition date.

Additional sources of revenue

The Commission will allow video-on-demand services to insert commercial advertising in programs acquired from Canadian English- and French-language broadcasters. This will provide the broadcasting system, and conventional broadcasters in particular, with an important new source of revenues.

However, the CRTC will keep its current policy restricting the sale of advertising in the local availabilities of programs broadcast by foreign pay and specialty services. This time, usually two minutes per hour, will continue to be used primarily for the promotion of Canadian programs.

In addition, the Local Programming Improvement Fund will be maintained in its current form. As a result, cable and satellite companies will continue to contribute 1.5 per cent of their gross broadcasting revenues to support local television programming in markets with a population of less than one million. The CRTC will conduct a comprehensive review of the Fund during the 2011–2012 broadcast year.

French-language broadcasters

Next year, the Commission will consider appropriate measures for the French-language market when it reviews the licence obligations of TVA Group Inc. and V Interaction.

Canadian Broadcasting Corporation

The CBC’s unique mandate and needs within the Canadian broadcasting system will be discussed in the context of the next licence renewal for the public broadcaster’s English- and French-language television services.

Finally, the current licences of broadcasters will be extended until August 31, 2011, under their existing terms and conditions.

Broadcasting Regulatory Policy CRTC 2010-167

Broadcasting Order CRTC 2010-168

Broadcasting Notice of Consultation CRTC 2010-169

The CRTC

The CRTC is an independent public authority that regulates and supervises broadcasting and telecommunications in Canada.

Reference document:

Broadcasting Notice of Consultation CRTC 2009-411

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Additional information on the group-based framework

The Canadian Radio-television and Telecommunications Commission (CRTC) has developed a new regulatory framework to reflect the changes that have occurred in the communications environment. In particular, consolidation in the broadcasting industry has resulted in a few large ownership groups controlling both conventional television stations and pay and specialty services.

Starting in 2011, the CRTC will hold licence-renewal hearings for the largest English-language private ownership groups: CTVglobemedia Inc., Canwest Television Limited Partnership and Rogers Communications Inc.

Proceeding in this manner will enable the CRTC to examine how their services, grouped together, can most effectively contribute to the objectives of the Broadcasting Act, including the creation and broadcast of Canadian programs.


Creation of Canadian programs

The Commission will introduce measures to encourage the creation of high-quality Canadian television programs. During the next licence renewals, the CRTC will propose that the large private ownership groups spend at least 30 per cent of their gross revenues on Canadian programming. This would establish a floor that is comparable to the amount these ownership groups spent on Canadian productions between 2007 and 2009.

To meet this obligation, ownership groups will have the flexibility to allocate:

  • 100 per cent of their required expenditures for specialty services to other eligible specialty services or to conventional television stations, and
  • 25 per cent of the required expenditures for conventional television stations to specialty services.

This approach recognizes the challenges facing conventional broadcasters, while ensuring that each element of the broadcasting system contributes to the production and broadcast of Canadian programs. Ownership groups will be able to pool their resources to create compelling programs, such as high-quality drama series, for broadcast on whichever channels have the greatest audiences.


Programs of national interest

Moreover, the Commission will place an added emphasis on the production of programs that are of national interest and require regulatory support, defined as:

  • drama and comedy series
  • documentaries, and
  • award shows that promote Canadian culture.

These programs are often expensive and challenging to produce, yet are the main vehicles for telling Canadian stories. They should be made available on multiple platforms to as many viewers as possible.

The CRTC is therefore proposing that ownership groups spend at least 5 per cent of their gross revenues on programs of national interest, which they can broadcast on the platforms of their choice. The CRTC is also proposing that 75 per cent of these funds be allocated to programming created by independent producers.


Exhibition of Canadian programs

Canadians are increasingly viewing broadcasting content at their convenience and on multiple platforms. In light of this shift in consumer habits, the Commission is moving to a regulatory approach that emphasizes the creation of Canadian programs rather than prescribing where and when they should be shown.

The CRTC has eliminated the quotas requiring broadcasters to air Canadian programs drawn from specific categories. This requirement, which is also known as priority programming, was intended to ensure the production and exhibition of programs that are under-represented in the broadcasting system. In the new framework, programs of national interest, such as drama and documentaries, will be supported through minimum spending requirements.

In addition, the Canadian content exhibition requirement for English- and French-language conventional television stations will be lowered from 60 per cent to 55 per cent during the broadcast year. However, the CRTC recognizes that Canadians watch conventional television in higher numbers during the evenings. It will therefore continue to require that 50 per cent of the shows aired between 6 p.m. and midnight must be Canadian.

Exhibition requirements for specialty services will continue to be set on a case-by-case basis.


Exceptions to the group-based approach

News and sports services will continue to be considered separately. They currently rank among the services that produce and exhibit the most Canadian programs. Their inclusion in a group-based approach, and the ability to shift resources to them, could give some private ownership groups an unfair competitive advantage.

Pay-per-view and video-on-demand services will also be excluded from the group-based framework due to the different nature of these services.


French-language broadcasters

The Commission’s new regulatory policies address issues that are particularly relevant to the English-language market. This approach is consistent with the Broadcasting Act, which recognizes that “English- and French-language broadcasting, while sharing common aspects, operate under different conditions and may have different requirements.”

.In 2011, the CRTC will hold public hearings to review the licence obligations of V Interaction (formerly known as TQS) and to renew the licences of the TVA Group Inc. The CRTC intends to use that opportunity to discuss the most appropriate approach for the French-language market.



Additional information on the transition to digital television

Canada is in the process of converting its over-the-air television transmitters from analog to digital. The transition will provide significant advantages to Canadians. Consumers will have access to a sharper picture and better sound quality, including high-definition programming. The government has also decided to make channels 52 to 69 available for public safety uses and wireless services.

The Canadian Radio-television and Telecommunications Commission (CRTC) previously determined that the transition must be completed by August 31, 2011. In today’s decision, the CRTC maintained this deadline for major Canadian markets as well as provincial and territorial capital cities.

However, some flexibility has been granted to television stations in smaller markets that may want to delay the transition. As long as they are not using channels 52 to 69, these stations will be allowed to continue broadcasting in analog for the present time.

These stations serve approximately 17 per cent of the Canadian population. They are encouraged to make the transition so that their viewers can also benefit from free access to digital television.


New proceeding

The Commission has initiated a proceeding to ensure an orderly transition for consumers.

In markets where the transition is mandatory, viewers who do not subscribe to cable or satellite services and do not have a digital TV will be affected. For example, if a local television station in a mandatory market decides to cease broadcasting over the air, and instead send its signal directly to cable or satellite companies, all non-subscribers will lose their local signals.

Similarly, a number of people residing outside mandatory markets could be affected, depending on the choices made by local television stations.

In light of this, the Commission is seeking comments from interested parties on:

  • the number of Canadians that could potentially lose access to free local television as a result of the transition
  • the size, type and manner of administering a subsidy program for over‑the‑air viewers, should such a program be authorized
  • the provision of a free package of local and regional television stations
  • measures to educate consumers, and
  • the establishment of a trial market ahead of the transition date.

Mandatory markets

The Commission has defined mandatory markets as:

  • provincial and territorial capital cities
  • markets with a population over 300,000, and
  • markets with a population under 300,000 where there is more than one local television station.

As a result, local television stations in the following markets must upgrade their equipment to allow for digital transmission:

British Columbia: Vancouver and Victoria
Alberta: Calgary, Edmonton, Lloydminster and Lethbridge
Saskatchewan: Regina and Saskatoon
Manitoba: Winnipeg
Ontario: Toronto*, London, Windsor, Kitchener and Thunder Bay
Quebec: Montreal, Quebec, Trois-Rivières, Sherbrooke, Rivière-du-Loup, Saguenay and Rouyn-Noranda/Val d’Or
New Brunswick: Saint John, Moncton and Fredericton
Nova Scotia: Halifax
Prince Edward Island: Charlottetown
Newfoundland and Labrador: St. John's
Yukon: Whitehorse
Northwest Territories: Yellowknife
Nunavut: Iqaluit
National Capital Region (Ottawa-Gatineau)
*Barrie and Hamilton are included in the Toronto market since their stations compete in that market.


Additional information on the large English-language private ownership groups

Consolidation in the broadcasting industry has resulted in a few large ownership groups controlling both conventional television stations and pay and specialty services. Below is a preliminary list of broadcasting services and Internet portals belonging to the three largest groups: CTVglobemedia Inc., Canwest Television Limited Partnership and Rogers Communications Inc.

Note: DT = digital transmitter

CTV
Conventional services


Province

City

Name

British Columbia

Vancouver

CIVT-TV

CIVT-DT

Victoria

CIVI-TV Victoria

Alberta

Calgary

CFCN-TV

CFCN-DT

Lethbridge

CFCN-TV-5

Edmonton

CFRN-TV

Saskatchewan

Saskatoon

CFQC-TV

Yorkton

CICC-TV

Prince Albert

CIPA-TV

Regina

CKCK-TV

Manitoba

Winnipeg

CKY-TV

Ontario

Toronto

CFTO-TV

CFTO-DT

CTV Network

Scarborough

CTV Network

Sault Ste. Marie

CHBX-TV

Sudbury

CICI-TV

Timmins

CITO-TV

Ottawa

CJOH-TV

CHRO-TV-43

Kitchener

CKCO-TV

North Bay

CKNY-TV

London

CFPL-TV

Pembroke

CHRO-TV

Wheatley

CHWI-TV

Barrie

CKVR-TV

New Brunswick

Moncton

CKCW-TV

Saint John

CKLT-TV

Nova Scotia

Sydney

CJCB-TV

Halifax

CJCH-TV

Atlantic Provinces

 

Atlantic Satellite Network


Other services


Specialty services

ESPN Classic Canada

RDS

Réseau Info Sports (RIS)

The NHL Network

TSN

Business News Network (BNN)

CTV News Channel (CTV Newsnet)

Discovery HD

MTV Canada

The Comedy Network

travel +escape

Animal Planet

Discovery Civilization Channel

The Discovery Channel Science & Technology

Book Television

Bravo!

Cablepulse

CourtTV Canada

Fashion Television Channel

MTV2

MuchLoud

MuchMoreMusic

MuchMoreRetro

MuchMusic

MuchVibe

PunchMuch

Space: The Imagination Station

Star!

Learning and Skills Television
of Alberta Limited

ACCESS - The Education Station

TV Land Canada ULC

TV Land

Internet Portal

Ctv.ca


Canwest
Conventional services


Province

City

Name

British Columbia

Vancouver

CHAN-TV

CHAN-DT

Kelowna

CHBC-TV

CHKL-TV

Kamloops

CHKM-TV

Prince George

CIFG-TV

Alberta

Calgary

CICT-TV

CICT-DT

Lethbridge

CISA-TV

Edmonton

CITV-TV

CITV-DT

Red Deer

CITV-TV-1

Saskatchewan

Regina

CFRE-TV

Saskatoon

CFSK-TV

Manitoba

Winnipeg

CKND-TV

Ontario

Toronto

CIII-TV-41

CIII-DT-41

Quebec

Montreal

CKMI-TV-1

New Brunswick and PEI

Saint John

CIHF-TV-2

Nova Scotia

Halifax

CIHF-TV



Other services


Specialty services

Showcase

History Television

Slice

Historia

Série +

HGTV Canada

Food Network

The Independent Film Channel Canada

Girls TV

Showcase Action

Showcase Diva

ZTV

Parent TV

ONE: The Body, Mind and Spirit Channel Inc.

Fine Living

Military Television

Dusk (formerly Scream)

BBC Kids

BBC Canada

Discovery Health Network

Mystery

Men TV

Internet Portal

Globaltv.com



Rogers
Conventional services


Province

City

Name

British Columbia

Vancouver

CHNM-TV

CHNM-DT

CKVU-TV

CKVU-DT

Alberta

Calgary

CJCO-TV

CKAL-TV

Edmonton

CJEO-TV

CKEM-TV

Manitoba

Portage/La Prairie

CHMI-TV

Ontario

Toronto

CFMT-TV

CFMT-DT

CITY-TV

CITY-DT

CJMT-TV

CJMT-DT



Other services


Specialty services

Baseball TV

G4TechTV

Outdoor Life Network

Rogers Pay Audio

The Biography Channel

Setanta Sports Canada

Rogers Sportsnet

CPAC

TVTropolis

Video-on-demand

Rogers on Demand

New media

i Media

Cable distribution

Ontario, New Brunswick and Newfoundland

Internet portal

Rogersondemand.com