Broadcasting
Policy
Monitoring
Report
2006

Radio
Television
Broadcasting distribution
Diversity and social issues
New media

For additional copies of the report, please contact:

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Telecommunications Commission (CRTC)

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This publication can be made available in alternative format upon request.

Ce document est également disponible en français.

ISBN # BC9-1/2006E
0-662-43325-4

30 June 2006

Introduction

This is the seventh edition of the CRTC's Broadcasting Policy Monitoring Report, which provides an on-going assessment of the impact of CRTC regulations, policies and decisions¹ on the achievement of the objectives of the Broadcasting Act. The 2006 version continues to measure the performance of the Canadian broadcasting system. As in the past, we hope that this report will help to foster a more open and better-informed public discussion of broadcasting policy in Canada. The Commission invites parties to use the report to enrich their participation in our regulatory policy and licensing proceedings.

The 2006 edition updates the performance indicators and continues the trends outlined in previous reports. In addition, this year's report outlines the Commission's initiatives to streamline the decision making process and new service standards for processing certain types of broadcasting applications. The television section in the 2006 report provides an expanded review of the Commission's digital television policies and data on the availability of high definition services. The new media section in this year's report introduces data on the usage by Canadians of new technologies and devices.

The data and information used as the basis of the CRTC's policy monitoring is drawn from many sources. These sources include (1) information filed by participants in the normal course of the Commission's hearings and public proceedings; (2) information obtained from Statistics Canada; (3) audience measures from BBM and Nielsen Media Research; (4) the annual financial returns filed by licensees of the CRTC; (5) program-ming information filed as part of licensees' television program logs; (6) the Commission's ownership records and radio compliance monitoring results; (7) publicly available information, such as annual reports from publicly traded companies, CRTC decisions and public notices; and (8) research undertaken by the CRTC and CyberTRENDS, ComQUEST.

The report is sub-divided in to six sections: Overview, Radio, Television, Broadcasting distribution, Diversity and social issues and New media.

Interested parties are welcome to provide comments for improvements or additions to future editions of the report and can do so by forwarding them to the attention of the Secretary General, CRTC, Ottawa, K1A 0N2 or by using our Complaints and Inquiries form which is located on our website at www.crtc.gc.ca.

The Broadcasting Policy Monitoring Report is also available electronically at www.crtc.gc.ca/eng/publications.htm.

Table of contents

I. Overview

    A. The CRTC
    B. Diversity of programming in the Canadian broadcasting system
    C. Streamlining activities
        1. Streamlining the decision-making process
        2. Issuance of letters of approval for applications that do not require a public process
        3. 2006/07 Streamlining initiatives
        4. New service standards for processing certain types of broadcasting applications
    D. Competitive disputes
        1. Number and type of disputes
        2. Time taken to resolve disputes
    E. Adversiting revenue by media

II. Radio

    A. Radio tuning trends
    B. Ownership
        1. Total hours tuned to the largest private commercial radio operators
        2. Revenues of the top private commercial radio ownership groups
    C. Financial performance - Promoting a financially sound sector
        1. Commercial radio revenues
        2. Profits before interest and taxes (PBIT)
    D. Licensing of over-the-air radio stations
        1. Competitive licensing
    E. Canadian talent development
        1. Over-the-air radio stations
        2. Other commercial audio services
    F. Promoting the airplay of Canadian and French-language vocal music
    G. Popularity of formats
    H. Transitional digital radio
    I. Over-the-air ethnic radio
    J. Religious radio
    K. Native radio
    L. Community radio
    M. Campus radio
    N. Low-power radio
    O. Audio services delivered by broadcasting distribution undertakings
        1. Specialty audio services
        2. Pay audio programming services
    P. Multi-channel subscription radio services
    Q. The national public broadcaster
        1. Over-the-air radio stations
        2. Pay audio service
        3. Satellite subscription radio undertaking
    R. Commercial Radio Policy Review

III. Television

    A. Audience
        1. Average weekly hours by age group
        2. Average minute audience (AMA)
        3. Viewing share by Canadian and non-Canadian services by language and type of service
        4. Distribution of viewing by program genre
            a) English-language Canadian services
            b) French-language Canadian services
    B. Canadian television programming
        1. Canadian priority programming
        2. Incentives for original Canadian television drama
            a) Incentives for original French-language Canadian television drama
            b) Canadian English-language drama
    C. Financial performance
        1. English-language private services
        2. French-language private services
        3. Ethnic & third-language pay and specialty services
        4. CBC conventional television stations
    D. Eligible expenditures on Canadian programming (CPE)
        1. English-language commercial conventional television
        2. French-language commercial conventional television
        3. Pay, PPV and specialty services
    E. Tangible benefits resulting from the transfers of ownership or control of television broadcasting undertakings
    F. Canadian digital television services
        1. Over-the-air digital television services
        2. Digital pay and specialty services
        3. Migration of pay and specialty services from analog to digital distribution
        4. Licensing and distribution framework for Canadian pay and specialty services in high definition (HD) format
    G. Specialty, pay, PPV and VOD services
        1. Financial results for pay, PPV and specialty analog and digital services
        2. Companies with significant ownership interests in specialty, pay, PPV and VOD analog and digital services
    H. Ethnic programming services
        1. Over-the-air Ethnic television stations
            a) Montréal
            b) Toronto
            c) Vancouver
        2. Ethnic pay & specialty services
            a) Analog ethnic specialty services
            b) Category 2 digital ethnic pay & specialty services
        3. Non-Canadian third-language programming services eligible for distribution in Canada
    I. Native television services
    J. Religious television stations
        1. Over-the-air religious television stations
    K. The national public broadcaster
        1. Over-the-air conventional television stations
        2. Specialty services
    L. Community-based television
    M. Non-Canadian satellite services authorized in Canada

IV. Broadcasting distribution

    A. Promoting effective competition
        1. Subscriber levels of incumbent and alternative BDU delivery systems
    B. Ensuring a financially strong sector
        1. Revenues
        2. Profit before interest and taxes (PBIT) margins, Class 1 undertakings
        3. Return on investment - Class 1 undertakings
    C. Top Canadian distributors
    D. Promoting digital technology
    E. Ensuring contributions to Canadian programming and local expression
        1. Contributions to programming funds
        2. Total community channel expenses
        3. Number of systems maintaining a community channel

V. Diversity and social issues

    A. Official languages
    B. Diversity
        1. Services targeted to specific communities
        2. Private television broadcasters
        3. The Canadian Broadcasting Corporation (CBC)
        4. Private radio broadcasters
    C. Accessibility
        1. Access for persons who are deaf or hard of hearing
        2. Access for persons who are blind or whose vision is impaired
        3. National reading services
    D. Programming standards
        1. Complaints and enquiries
        2. Canadian Broadcast Standards Council (CBSC)
        3. Advertising Standards Canada (ASC)
        4. Cable Television Standards Council (CTSC)

VI. New media

    A. New media broadcasting undertakings
    B. Internet
        1. Computer ownership by Canadian households
        2. Internet access by Canadians
    C. Effect of Internet use and other new technologies on broadcast media

Glossary

I. Overview

A. The CRTC

• The Canadian Radio-television and Telecommunications Commission (CRTC) is an independent public authority in charge of regulating and supervising Canadian broadcasting and telecommunications. It serves the public interest and is empowered and governed by the Broadcasting Act, 1991 (the Act) and the Telecommunications Act. The CRTC also reports to Parliament through the Minister of Canadian Heritage. The Governor in Council may issue to the Commission directions of general application on matters with respect to the objectives of the broadcasting or regulatory policy.
• The Commission strives to strike a balance between its cultural, social and economic objectives, with the wants and needs of Canadian citizens, industry and various interest groups.
• One of the CRTC's mandates is to ensure that programming in the Canadian broadcasting system reflects Canadian creativity and talent, Canada's linguistic duality, multicultural diversity, the special place of Aboriginal people within our society and our social values.
• The CRTC also seeks to ensure that its policy directions for the Canadian broadcasting industry are keeping pace with emerging technologies.
• The Commission fulfils its broadcasting regulatory responsibilities by means of a number of inter-related activities, which include:
  • issuing, renewing and amending licences for broadcasting undertakings;
  • making determinations on mergers, acquisitions and changes of ownership in the broadcasting industry;
  • collaborating with the industry to resolve competitive disputes;
  • developing and implementing regulatory policies with a view to meeting the objectives of the Act;
  • monitoring, assessing and reviewing, where appropriate, regulatory frameworks to meet its policy objectives; and
  • monitoring the programming and financial obligations of broadcasting undertakings to ensure compliance with regulations and conditions of licence.

• A summary of the Commission's activities relating to the Canadian broadcasting industry during the 2005-2006 fiscal year is provided in CRTC Accomplishments 2005-2006¹.

B. Diversity of programming in the Canadian broadcasting system

• Section 3(1)(i) of the Act states, in part, that the programming provided by the Canadian broadcasting system should:

1. be varied and comprehensive, providing a balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes,
2. be drawn from local, regional, national and international sources, and
3. include educational programs and community programs.

• To implement this policy, the Commission endeavours to ensure that Canadians have access to a diversity of programming drawn from a variety of sources.
• The Canadian broadcasting system is comprised of private and public services that provide specialty and general interest Canadian and non-Canadian programming in English and French as well as Aboriginal, multicultural and third-languages. It also makes available a significant number of foreign services.
• The following tables provide a summary of the number of various types of television, radio and audio services that are available in the Canadian broadcasting system. A table summarizing the number of various types of Canadian broadcasting distribution undertakings is also provided.

Table 1.1: Diversity of television services available in Canada

Excludes rebroadcasters and exempt television services.
Also excludes network licences.
* Includes bilingual (English and French) and native services.
(1) Includes satellite to cable services.
(2) Includes only category 1 & 2 services launched prior to 3 May 2006.
(3) Number of services licensed as of 3 May 2006.
(4) Excludes Class 2 and 3 exempted BDU's.
(5) Carriage of authorized services is at the discretion of the broadcast distribution undertaking.
(6) Number of over-the-air transitional digital television approved as of 3 May 2006.
(7) Excludes private commercial religious stations.
Sources: CRTC APP1205 report dated 3 May 2006, CRTC decisions and CRTC Financial database system as of 31 August 2005

Table 1.2: Canadian radio and audio services

(1) Includes bilingual (English and French) and native services.
(2) Includes French-native services.
(3) Includes network licences.
(4) Authorized not yet licensed.
Excludes rebroadcasters and exempt radio services.
Sources: CRTC APP 1205 report (3 May 2006), CRTC Decisions

Table 1.3: Number of Canadian broadcasting distribution undertakings (BDUs)

Sources: Class 2 and 3 cable systems - September 2005, Mediastats; Class 1 cable, DTH, STV and MDS systems - CRTC APP1205 report dated 3 May 2006

• Most class 2 and 3 cable undertakings are eligible for exemption from licensing requirements.²

C. Streamlining activities

1. Streamlining the decision-making process

• In Streamlined processes for certain broadcasting applications, Broadcasting Circular CRTC 2006-1, 27 March 2006 (Circular 2006-1), the Commission announced measures to streamline and expedite the treatment of applications that are normally processed by either public notice or the administrative approach that do not entail a public process.
• The Commission recognized the need for a more timely disposition of priority applications given the rapid pace of innovation and increasing competition in the broadcasting industry. Circular 2006-1 indicated that, commencing 1 April 2006, the Commission's objective is to ensure that, within 15 working days of receiving an application for either a licence amendment that will be dealt with by public notice or an authorization that does not generally entail a public process, one of the following will be issued:

• a public notice announcing the application;
• a letter approving the application;
• a letter requesting clarification; or
• a letter returning an application that is deemed incomplete.

• The Commission is currently reviewing all of its application forms to ensure that they are consistant with its new streamlined approach and reflect current policy. Circular 2006-1 noted that the onus will be on applicants to submit a clear application that provides all of the relevant information, as requested in the application form. The Commission estimated that, in the absence of any significant or unresolved issues surrounding an application for a licence amendment processed by public notice or an application that does not require a public process, the expedited process established in Circular 2006-1 will reduce the current average processing time by approximately half.

2. Issuance of letters of approval for applications that do not require a public process

• The Commission announced in Circular 2006-1 that it will issue letters of approval, provided the applications do not raise any policy concerns and are consistent with previous decisions, for the following types of applications :

• extension of deadlines for the implementation of an authority;
• extension of deadlines for responding to a requirement made by the Commission in a decision for the filing of documentation or other information;
• changes to the authorized contours of over-the-air programming undertakings;
• changes to the authorized areas of licensed broadcasting distribution undertakings;
• changes to the programming services that licensed broadcasting distribution undertakings are authorized to carry; and
• changes to the broadcast day of television and specialty service undertakings.

• The Commission stated that, consistent with the process set out in Ownership applications granted approval, Broadcasting Public Notice CRTC 2003-50, 19 September 2003, it will announce the applications approved in this manner by issuing a public notice every two months.

3. 2006/07 Streamlining initiatives

• In Circular 2006-1, the Commission stated that it intends to examine streamlining initiatives relative to the public hearing process in the 2006/07 fiscal year. It indicated that these initiatives include the policy concerning the issuance of calls for radio applications and the processing of Category 2 applications.

4. New service standards for processing certain types of broadcasting applications

• In Introduction of service standards for certain broadcasting applications, Broadcasting Circular CRTC 2006-2, 5 April 2006, the Commission announced new service standards for applications for licence amendments and licence renewals currently processed by public notice, as well as applications processed using an administrative approach that does not entail a public process.
• The Commission will post quarterly and annual statistics on its website to disclose to the public its performance in meeting these service standards.
• The following table summarizes the new service standards, effective 1 April 2006, for the 2006-07 fiscal year. These standards apply only to applications received after 31 March 2006.

Table 1.4: Summary of services standards, effective 1 April 2006

(1) From the date of their receipt in the Commission

D. Competitive disputes

• The Broadcasting Directorate's competitive disputes team was created in 2000 to more effectively process and resolve disputes in an increasingly competitive broadcasting industry. The process and procedures used for resolving competitive and access disputes are outlined in Practices and procedures for resolving competitive and access disputes, Public Notice CRTC 2000-65, 12 May 2000.
• Disputes can generally be classified as follows: (1) disputes between broadcasting distributors and programming services concerning the terms of distribution, including wholesale rates; (2) disputes between competing broadcasting distributors over access to buildings and to the end-user; and (3) disputes between programmers regarding programming rights and markets served.
• The Commission employs alternative dispute resolution (ADR) techniques, including fact-finding meetings, mediation and staff opinions, to attempt to break deadlocks and assist parties to resolve their disputes. When these techniques are insufficient, the Commission may, where appropriate, render determinations on disputes by way of "final offer" or by way of an expedited written process.
• "Final offer" arbitration processes are typically conducted on a confidential basis, both to encourage candour on the part of the parties and to take into account that the matters in dispute often involve commercially sensitive information, the disclosure of which could cause harm that would outweigh any public interest benefit.
• In certain disputes that come before the Commission as allegations of undue preference or disadvantage, the complainant seeks a ruling by the Commission that the preference or disadvantage has material and serious consequences for the complainant and/or the Canadian broadcasting system, and that are contrary to the public interest. Cases involving such public issues are usually immediately placed on a public file.
• As a further means to hasten the resolution of broadcasting disputes, the Commission ha adopted procedures for the conduct of expedited public hearings. In Expedited procedure for resolving issues arising under the Broadcasting Act, Broadcasting Circular CRTC 2005-463, 18 April 2005, the Commission announced that, in order to expedite decisions on certain issues arising under the Broadcasting Act, panels of Commissioners will be struck to conduct public hearings to deal with such issues on an accelerated basis. These hearings complement the Commission's existing dispute resolution guidelines and tools and are similar to its procedures for resolving disputes arising under the Telecommunications Act.³
• On 23 March 2005, the Commission received a complaint by 6166954 Canada Inc. (6166954) against Shaw Cable (Shaw) pursuant to sections 9, 20 and 40 of the Broadcasting Distribution Regulations. On 5 May 2005, the Commission decided to conduct its second expedited hearing which was scheduled for 8 July 2005. On 5 July 2005, the Commission received a written confirmation from 6166954 indicating that it had withdrawn its complaint. Although the Commission was not privy to the agreement, it learned that a settlement had been reached following several rounds of discussions between the parties only a few days before the scheduled hearing.
• In recent years, the Commission has also increased the number of informal ADR interventions. Informal interventions are intended to assist in early detection and removal of obstacles to resolution between the disputing parties. Typically, these interventions take place prior to the filing of formal complaints or requests for dispute resolution and prior to the provision of any related documentation. Most of these interventions can be effectively conducted by telephone. The Commission started tracking this type of ADR activity in January 2005.

1. Number and type of disputes

Table 1.5: Number of dispute files received in 2005/06⁽¹⁾

(1) 1 April 2005 to 31 March 2006
(2) Section 9 of the Broadcasting Distribution Regulations
(3) Sections 12 to 15 of the Broadcasting Distribution Regulations

• Between 1 April 2005 and 31 March 2006, the Commission opened six new dispute files and closed nine.⁴ Of the four dispute files outstanding, one file has been suspended at the request of the parties, and the remaining three were received in or after December 2005.
• During the same period, the Commission also resolved five of the ten informal dispute interventions undertaken⁵. The remaining five informal dispute files have been suspended - three before March 31 and two were in early April 2006.

2. Time taken to resolve disputes

• The following table compares the average time taken to resolve disputes over each of the last four years. In arriving at these averages, it should be noted that some of the disputes were suspended, at the request of the parties, for various periods of time in order to permit the parties to negotiate. Time while suspended is not included in calculating time to closure.

Table 1.6: Fiscal year comparisons of the average number of
days to resolve disputes

Notes: Excludes informal interventions. Files commenced in one year but concluded in another are included in the calculation for the year of closure.
* The increase in the average times to resolution in this category was due to a number of complex "final offer" determination disputes that involved one or more CRTC staff mediation meetings and a subsequent written final offer stage.

• The majority of the new disputes, whether alleging undue preference or disadvantage or seeking staff assistance or Commission determinations on other matters, raised multiple issues and involved complex fact situations. Overall, the complexity of disputes submitted to the Commission continues to increase and most now include "policy" components. Neither factor is conducive to expedited processing by way of alternative dispute resolution techniques.

E. Advertising revenue by media

• The following table and pie chart outline the trends in advertising revenues by the different media.

Table 1.7: Advertising revenue by media ($ millions)

Source: Carat Expert, May 2006

• Radio advertising revenues increased 54% from 1997 to 2005 exceeding the total media advertising revenue increase of 49%. Television advertising revenues increased by 43% over the same period.

Chart 1.1: Share of advertising revenue by media, 2005

• The relative levels of advertising revenue earned by the different media have remained generally constant since 1997. For example, television advertising achieved a 35% share of the pie in 1997, as compared to 34% in 2005. Radio's levels have also remained constant achieving a 14% share in 1997 and 15% in 2005.

II. Radio

A. Radio tuning trends

Table 2.1: Per capita listening hours by age group

* In average hours
Source: MicroBBM surveys Fall 1999 to Fall 2005

• Overall weekly listening levels have decreased by roughly one hour and twenty-five minutes from 1999 to 2005. This decrease is most notable in the teen demographics and for adults aged from 18 to 34.
• The following table sets out the percentage of hours tuned to radio in an average week during the BBM Fall surveys from 1997 to 2005.

Table 2.2: Radio tuning share in an average week

Note: "Other" is principally over-the-air tuning to U.S. border stations. "Other" also includes tuning to Internet radio that is not attributed to Canadian over-the-air radio stations (0.3 tuning share, in 2005 - see table 6.7).

Source: BBM Fall 1997 to Fall 2005

• The total average weekly hours tuned to radio have remained relatively stable since 1997.
• AM radio continues to decline in total average hours tuned, while FM recuperates these hours.
• The following pie chart is based on Table 2.2 and demonstrates the dominance of FM radio in both the English- and French-language markets.

Chart 2.1: Radio tuning share in an average week,
5 a.m. to 1 a.m., BBM Fall 2005

• According to BBM (5 a.m. to 1 a.m., Monday to Sunday):
  • 92.1% of Canadians aged 12 and over listened to the radio for at least 15 minutes per week in Fall 2005, as compared to 94% in 1998.
  • In Fall 2005, the average hours tuned per listener was 20.7 hours per week, roughly the same number as in the previous year.
  • In Fall 2005, the average hours tuned per capita decreased by roughly 25 minutes to 19.1 hours per week.

B. Ownership

• In revising its ownership policy in Commercial Radio Policy 1998, Public Notice CRTC 1998-41, 30 April 1998 (the Commercial Radio Policy), the Commission focussed on developing a model that would allow for some consolidation, while taking into account the Commission's general concerns for preserving a diversity of news voices and maintaining competition.
• Tables 2.3 through 2.8 monitor ownership consolidation in the radio industry, providing revenue and tuning information for the largest radio operators.

1. Total hours tuned to the largest private commercial radio operators

Table 2.3: Tuning to the largest radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" following Table 2.8.
(2) Listening hours includes tuning to private commercial, multilingual and native stations.
(3) Listening hours includes tuning to public and private Canadian and U.S. stations.
Sources: BBM Fall 2003 to 2005 surveys, 5 a.m. to 1 a.m., all persons 12+; and CRTC financial database

• Although the tuning share by the largest radio groups has risen considerably from 54% in 1997 to 63% in 2005, their tuning share has remained about the same for the last three years.
• The five largest radio groups attracted 53% of Canadian audiences in 2005. In 1997, the ten largest radio groups attracted approximately the same audience.

Table 2.4: Tuning to the largest French-language radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" following Table 2.8.
(2) Listening hours include tuning to public and private Canadian French-language stations.
Sources: BBM Fall 2003 to 2005 surveys, 5 a.m. to 1 a.m., all persons 12+; and CRTC financial database

• Astral Media Inc. garnered 32% of the hours tuned to French-language radio in 2005 and 49% of French-language radio revenues.

Table 2.5: Tuning to the largest English-language radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" following Table 2.8.
(2) Listening hours include tuning to public and private Canadian English-language stations.
Sources: BBM Fall 2003 to 2005 surveys, 5 a.m. to 1a.m., all persons 12+; and CRTC financial database

2. Revenues of the top private commercial radio ownership groups

Table 2.6: Radio revenues of the largest radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" following Table 2.8.
(2) Includes private commercial networks and commercial ethnic radio stations.
Source: CRTC financial database

• The number of programming undertakings owned and controlled by the largest radio operators and their share of national revenue increased from 148 and 61% respectively in 1998, to 331 and 79% in 2005.

Table 2.7: Radio revenues of the largest French-language
radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" following Table 2.8.
(2) Includes network radio revenues.
Source: CRTC financial database

Table 2.8: Radio revenues of the largest English-language
radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" below.
(2) Includes private commercial network revenues.
Source: CRTC financial database

Notes to tables 2.3 to 2.8:

• The ownership structure reflects transactions authorised by the Commission during the broadcast year, not the closing date of the transaction.
• An undertaking's entire annual revenue is attributed to the organization that was deemed to be its owner as of 31 August.
• In some instances, the 2003 and 2004 results have been restated to reflect current data on file.
• Corus' 2005 results reflect the sale of CIZZ-FM and CKGY-FM Red Deer to Newcap.
• CHUM's 2005 results include the new Edmonton station as well as CFAX Victoria and CHBE-FM acquired from Seacoast Communications Group Inc.
• The 2005 results for Elmer Hildebrand include CHVN-FM Winnipeg. Golden West Broadcasting acquired effective control of this station from Christian Radio Manitoba Ltd.
• The 2005 results for Jim Pattison Industries include a new FM station in Red Deer.
• Newcap's 2005 results reflect the new CKWY-FM Wainwright station as well as the following five stations that were acquired through the transfer of ownership or control: CIZZ-FM and CKGY-FM Red Deer from Corus, CJUK-FM Thunder Bay from Big Pond Communications 2000 Inc. and CILR-FM and CKSA-FM Lloydminster from Sask-Alta Broadcasters Limited.
• Astral's results for 2003 reflect the transaction that was approved in Transfer of control of 3903206 Canada Inc., of Telemedia Radio Atlantic Inc. and of 50% of Radiomedia Inc. to Astral Radio Inc., Broadcasting Decision CRTC 2002-90, 19 April 2002, the acquisition of assets from Télémédia; but it should be noted that nine Astral stations were held in trust pending their sale: CKRS, CJRC, CHLN, CHLT, CKSM, CKTS, CKAC, CHRC and CFOM-FM as required by the Competition Bureau (Acquisition of radio assets in Quebec, Broadcasting Decision CRTC 2003-205, 2 July 2003).
• Astral's and Corus' results for 2005 reflect the transaction that was approved pursuant to Exchange of radio assets in Quebec between Astral Media Radio inc. and Corus Entertainment Inc., Broadcasting Decision CRTC 2005-15, 21 January 2005, in which Astral acquired five stations from Corus and Corus acquired eight stations from Astral.

C. Financial performance - Promoting a financially sound sector

• One of the Commission's objectives in developing the Commercial Radio Policy was to ensure a strong, well-financed radio industry that is able to achieve its obligations under the Act.

1. Commercial radio revenues

Table 2.9: Revenues - commercial radio - 1997 to 2005

Note: Includes network results; 1997 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

• For the nine-year period from 1997 to 2005, the number of FM radio stations reporting financial results has increased by 85%, or by 175 stations, while the number of AM stations has decreased by 35%, or by 95 stations.
• Over this same period, total revenues have increased by 53%. AM revenues have decreased by 4.5% while FM revenues have increased by 88.3%.

Chart 2.2: Revenues - English-language commercial radio stations

Note: Includes network results; 1997 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

• English-language FM radio revenues increased by 11.4% from 2004 to 2005. FM revenues have increased by an average of 8.0% per year over the past four years.
• English-language AM radio revenues increased by 2.0% from 2004 to 2005 and achieved 2001 revenue levels.
• Combined English-language AM and FM radio revenues increased by 9.0% from 2004 to 2005. This represents an average annual increase of 5.8% over the past four years.
• The number of English-language radio stations continues to increase annually. Roughly 55% of the new English-language FM stations reporting in 2005 were by licensees who had converted their AM frequencies to FM frequencies.

Chart 2.3: Revenues - French-language commercial radio stations

Note: Includes network results; 1997 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

• Revenues for French-language FM radio increased by 10.8% from 2004 to 2005. FM revenues have increased by an average of 7% per year over the past four years.
• Revenues for French-language AM radio decreased by 21.5% from 2004 to 2005. Over the last four years, revenues decreased by an average of 8.1% per year.
• Overall, total revenues for French-language radio increased by 7% from 2004 to 2005. French-language radio has experienced an average annual increase of 5.1% over the past four years.

Chart 2.4: Revenues - Ethnic commercial radio stations

Note: Includes network results; 1997 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

• Ethnic radio stations derive approximately 95% of their advertising revenues from local sources, compared to 77% for English-language and 66% for French-language stations.
• Total revenues for ethnic radio increased 11.5% from 2004 to 2005. A significant portion of this increase is due to two new FM radio stations (CJSA-FM Toronto and CKDG-FM Montréal) reporting for the first time in 2005. Total revenues achieved by ethnic radio stations have increased by an average of 5.4% per year over the past four years.

2. Profits before interest and taxes (PBIT)

Table 2.10: Commercial radio PBIT in Canada - 1997 to 2005

Note: Includes network results; 1997 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

Chart 2.5: PBIT margins - Commercial AM & FM radio stations

Note: Includes network results; 1998 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

Chart 2.6: PBIT margins - Commercial AM radio stations

Note: Includes network results; 1998 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

Chart 2.7: PBIT margins - Commercial FM radio stations

Note: Includes network results; 1998 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

D. Licensing of over-the-air radio stations

• The following table sets out the number of radio applications that have been approved by the Commission during the past three years by language and type of station.

Table 2.11: Number of new over-the-air radio stations approved from
1 January 2003 to 31 December 2005

Notes: Includes AM to FM conversions (often referred to as FM flip).
Excludes digital transitional radio.
"Other" includes not for profit, CBC/SRC, tourist, environment Canada, etc. radio stations
Source: CRTC APP1100 system and CRTC decisions

1. Competitive licensing

• In the 1998 Commercial Radio Policy,¹ the Commission determined that in order to encourage competition and choice it would no longer apply the criteria² outlined in the Radio Market Policy, Public Notice CRTC 1991-74, 23 July 1991 (the Radio Market Policy). The elimination of the Radio Market Policy combined with the revised common ownership policy has resulted in numerous competitive processes for new stations in markets across Canada.
• In Introductory statement - Licensing new radio stations, Decision CRTC 99-480, 28 October 1999 (Decision 99-480), the Commission outlined the factors that will generally be among those relevant to the evaluation of competitive applications. For Decision 99-480 the Commission also noted that the relative weight and significance of the factors would vary depending on the specific circumstances of the market concerned.
• The Commission also examines applications in terms of their furtherance of the objectives of the Act, particularly with respect to the production of local and regional programming.
• The following table reveals the factors that were noted in the Commission's decisions as contributing to the success of competitive applications decisions issued from 1 January 2003 to the 31 March 2006.

Table 2.12: Factors contributing to successful applications for radio
licences considered in competitive processes from
1 January 2003 to 31 March 2006

Legend: PN = Public Notice; PH = Public Hearing; Languages: e = English-language, f = French-language, e/n = English & Aboriginal, f/n = French & Aboriginal, m = 3^rd languages (other than English, French & Aboriginal); Type: C = Commercial, NC = Non-Commercial, N = Native, CO = Community, CC = Community based Campus, CI = Campus Instructional, MF = Musical format, SpMF = Specialty music format, Flip = Conversion of existing AM radio station to FM frequency, CBC1 = English-language CBC "Radio One" format, CBC2 = English-language CBC "Radio Two" format, SRC1 = French-language CBC "La première chaîne" format, SRC2 = French-language CBC "Espace musique" format.
(1) "Canadian content" refers to applications that proposed to exceed the minimum regulatory requirement for Canadian content.
Source: CRTC Broadcasting Public Notices (PN) and Decisions (noted in table)

E. Canadian talent development

• One of the methods the Commission uses to increase the amount of Canadian content is to require Canadian broadcasters to make financial contributions to Canadian talent development (CTD).

1. Over-the-air radio stations

• The Commission reviews contributions by radio licensees to CTD in the context of:

1. applications for new radio stations
2. renewal of radio licences
3. transfers of control or ownership (benefits)

a) Applications for new radio stations

• Between 1 January 2003 and 31 March 2006, the Commission licensed 46 new radio stations through competitive processes in markets across Canada. The successful applicants have committed over $29.8 million to CTD initiatives over their initial licence terms.
• In addition, there were 138 new radio licences or AM to FM flips granted without a competitive process between 1 January 2003 and 31 March 2006. These licensees committed a combined $1.9 million towards CTD initiatives.

b) Renewal of radio licences

• As part of their licence renewal applications, all licensees of private commercial radio stations are asked to make an annual financial commitment to CTD.
• In Contributions by radio stations to Canadian talent development - A new approach, Public Notice CRTC 1995-196, 17 November 1995, the Commission, in conjunction with the industry, established an approach that would ensure a minimum annual payment of $1.8 million to eligible third parties associated with CTD. In 2004-05, radio stations contributed $2.8 million towards CTD initiatives.

c) Transfers of control or ownership (benefits)

• As outlined in the Commercial Radio Policy, applicants for the transfer of ownership or control of commercial radio stations must make commitments that represent a minimum direct financial contribution to CTD of 6% of the value of the transaction. The Commission generally expects that three percent be allocated to the Radio StarMaker Fund/Fonds Radiostar³ music marketing and promotion fund, two percent to either FACTOR⁴ or MUSICACTION⁵ and one percent at the discretion of the purchaser to other eligible CTD initiatives.
• From the adoption of the Commercial Radio Policy to 31 March 2006, the Commission has approved 100 changes in ownership or control involving 377 radio stations.
• CTD commitments (benefits) from these transactions have totalled $95.2 million.

Table 2.13: Value of radio transactions and corresponding transfer benefits
for the period 1 May 1998 to 31 March 2006

* Value determined by the Commission for the purpose of calculating transfer benefits.
Source: CRTC Decisions and Administrative approvals

d) Annual CTD contributions reported by radio licensees

• The following table indicates the annual amounts contributed to CTD initiatives by radio licensees. Contributions are based on annual disbursements reported by licensees for the period 1 September to 31 August.

Table 2.14: Annual CTD contributions reported
by radio licensees ($000)

(1) Following an internal review, some of the contribution amounts have been reclassified and restated.
Source: CRTC Annual returns and financial database run 29 May 2006

2. Other commercial audio services

• Pay audio services are required to contribute a minimum of 4% of the previous year's annual gross revenues to CTD initiatives.
• Multichannel subscription radio services are required to contribute at least 5% of the gross annual revenues to CTD initiatives. This percentage rate increases to 6%, if the number of subscribers exceeds a certain level⁶. Half of these contributions must be directed to the development of Canadian French-language talent and the other half is to be directed to the development of Canadian English-language talent.

F. Promoting the airplay of Canadian and French-language vocal music

• The broadcasting of Canadian music is one of radio's vital contributions towards fulfilling the cultural goals set out in the Act.
• The Commercial Radio Policy increased the required minimum percentage of Canadian popular musical (category 2) selections broadcast each week from 30% to 35% for commercial AM and FM radio stations.
• Although the Commercial Radio Policy maintained the minimum level of French-language vocal category 2 music selections to be aired during each broadcast week at 65%, it introduced the requirement that at least 55% of vocal category 2 music broadcast Monday through Friday between 6 a.m. and 6 p.m. be in the French language.
• These requirements have since been incorporated into the Radio Regulations, 1986 (Radio Regulations), as amended from time to time.
• The Radio Regulations also requires that at least 10% of the traditional and special interest music (category 3) selections broadcast each week be Canadian. Given the limited number of category 3 commercial stations, the Commission reviews Canadian content levels for these stations on a case-by-case basis at licence renewal.
• The following table provides the percentage of radio stations that were in compliance with their Canadian content and French-language vocal music requirements in 2005. The results are based on a limited sample of stations analyzed from 1 January 2005 to 31 December 2005 and are not necessarily representative of the radio industry as a whole.

Table 2.15: Canadian content and French-language
vocal music

* Includes CBC / SRC and community AM, FM and network radio stations.
Source: CRTC, Evaluation of licence renewal applications from 1 January 2005 to 31 December 2005

• The Commission's approach to radio licensees found in non-compliance is outlined in Practices regarding radio non-compliance, Circular No. 444, 7 May 2001.

G. Popularity of formats

• Charts 2.8 and 2.9 show the percentage of tuning to Canadian English- and French-language radio stations by format. These charts also indicate the number of Canadian stations that were broadcasting in these formats. The information used is based on BBM Fall 2005 data and excludes tuning to Internet, ethnic, bilingual and U.S. stations.

Chart 2.8: English-language station formats - BBM Fall 2005⁷

Chart 2.9: French-language station formats - BBM Fall 2005⁸

H. Transitional digital radio

• The Commission issued A policy to govern the introduction of digital radio, Public Notice CRTC 1995-184, on 29 October 1995.
• As of 1 May 2006, the Commission has granted 76 licences for transitional digital radio programming undertakings. Of these licences, 57 have been issued to existing commercial radio programming undertakings, one to a stand-alone ethnic radio programming undertaking and 18 to existing CBC stations.

Table 2.16: Markets with transitional digital radio
stations in Canada⁽¹⁾

(1) Numbers of stations approved but not necessarily on air.
(2) Based on BBM Radio Markets.
(3) Includes a stand-alone ethnic digital radio station located in Toronto.
Source: CRTC APP 1205 report (1 May 2006)

I. Over-the-air ethnic radio

• The Commission revised its ethnic broadcasting policy in Ethnic broadcasting policy, Public Notice CRTC 1999-117, 16 July 1999 (Ethnic Policy). The primary goal of this policy is to ensure access by Canadians to ethnic programming to the maximum extent practicable, given resource limitations. As one way of furthering this objective, the Commission has licensed over-the-air ethnic radio broadcasters that specialize in providing ethnic programming.
• Ethnic radio stations are required to devote not less than 60% of the broadcast week to ethnic programming⁹ and at least 50% of all programming broadcast must be third-language programming¹⁰.
• The Commission is of the view that a primary responsibility of over-the-air ethnic radio stations should be to serve and reflect their local community. Licensees are expected to report on past and future local programming initiatives at the time of licence renewal.
• Ethnic stations are also required to serve a range of ethnic groups in a variety of third-languages. This approach allows for the provision of service to groups that would not otherwise be able to afford their own single-language service. However, where many distinct ethnic groups are served in the overall market, individual stations may be permitted to provide more hours of service to fewer groups.
• As of 20 April 2006, there were 21 private commercial over-the-air ethnic radio stations authorised to broadcast in Canada. The following is a listing ethnic radio stations by market. The listing also indicates the minimum number of distinct ethnic groups that each station is required to serve in each broadcast week, the minimum number of languages in which they must broadcast as well as certain unique conditions that were imposed to ensure diversity of the programming.

Vancouver

• CHKG-FM is required to broadcast a minimum of 100 hours of ethnic programming per week. It is required to provide programming directed to a minimum of 20 cultural groups in a minimum of 15 different languages. It is not authorized broadcast any programming directed to the Chinese community during weekdays between 6 a.m. and 3 p.m.
• CHMB is required to broadcast ethnic programming directed to a minimum of 12 cultural groups in a minimum of 12 different languages. The station is also required to provide programming directed to Aboriginal people.
• CJRJ is required to provide programming directed to a minimum of 11 cultural groups in a minimum of 17 different languages. All of the station's programming must be devoted to ethnic programming and at least 95% of its programming must be in third-languages. At least 73% of programming must be in the Hindustani and Punjabi languages. This station is not permitted to broadcast in a Chinese language.
• CJVB is required to provide programming directed to a minimum of 23 cultural groups in a minimum of 23 different languages.
• CKYE-FM is required to provide programming directed to a minimum of 15 cultural groups in a minimum of 15 different languages. Not less than 90% of its programming must be ethnic, all of which must be in third languages. Not less than 75% of the ethnic programming must be in the Punjabi, Hindi and Urdu languages. This station is not permitted to broadcast in a Chinese language.

Edmonton

• CKER-FM is required to broadcast ethnic programming directed towards not less than 19 distinct ethnic groups, in not less than 19 different languages.

Calgary

• CHKF-FM is required to provide ethnic programming directed to a minimum of 10 ethno-cultural groups in a minimum of 19 different languages.

Winnipeg

• CKJS is required to broadcast ethnic programming directed towards not less than 19 cultural groups, in not less than 16 different languages. The station must broadcast a minimum of 73 hours 30 minutes of ethnic programs.

Toronto

• CIRV-FM is required to provide programming directed to a minimum of 9 cultural groups in a minimum of 9 different languages.
• CHIN-FM is required to provide programming directed to a minimum of 23 cultural groups in a minimum of 20 different languages.
• CHIN is required to provide programming directed to a minimum of 23 cultural groups in a minimum of 17 different languages.
• CHKT is required to provide programming directed to a minimum of 14 cultural groups in a minimum of 15 different languages.
• CJSA-FM is required to provide programming directed to a minimum of 16 cultural groups in a minimum of 22 languages. The station must devote a minimum of 90% of the programming broadcast to ethnic programs. At least 48% of all ethnic programs must be in the Tamil, Hindi and Filipino languages. A minimum of 80% of the programming broadcast must be in a third language.
• CIAO is required to provide programming directed to a minimum of 12 cultural groups in a minimum of 13 different languages.
• CJMR is required to provide programming directed to a minimum of 11 cultural groups in a minimum of 15 different languages. The station must limit the broadcast of brokered ethnic programming to a maximum of 62% of the broadcast week.
• In Ethnic AM radio station in Toronto, Broadcasting Decision CRTC 2006-117, 4 April 2006, the Commission approved an application by Canadian Hellenic Toronto Radio Inc. for a new commercial ethnic AM radio station in Toronto. The new station will direct its programming primarily to the Toronto area's Greek-speaking community and will also provide ethnic programming in Armenian, Romanian, Serbian and Bulgarian, as well as in English. This station will be required to provide programming directed to a minimum of 5 cultural groups in a minimum of 6 languages. The station must also devote a minimum of 88% of the programming to third-language programs.

Montréal

• CFMB is required to provide programming directed to a minimum of 19 cultural groups in a minimum of 18 different languages.
• CJWI is a French-language ethnic station. The station must devote not less than 90% of its programming to French-language ethnic programming, targeting the Haitian, Latin-American and African communities. The remaining 10% must be in a third language.
• CKDG-FM is required to provide programming directed to a minimum of 6 cultural groups in a minimum of 8 languages. The station must devote a minimum of 70% of the programming to ethnic programs. A minimum of 60% of the programming must be in third languages.
• In Ethnic AM radio station in Montréal, Broadcasting Decision CRTC 2006-82, 15 March 2006, the Commission approved an application by 9015-2018 Québec inc. (doing business under the name of Radio Moyen Orient du Canada) for a broadcasting licence to operate a new ethnic commercial AM radio station in Montréal. The applicant proposed a service primarily intended for Arab communities in Montréal. The station is required to provide programming directed to a minimum of 10 cultural groups in a minimum of 4 languages.

Ottawa

• CJLL-FM is required to provide ethnic programming directed towards not less than 37 cultural groups, in not less than 20 different languages in each broadcast week. The station must broadcast a minimum of 94% of ethnic programs. At least 92% of programming must be in third languages.

J. Religious radio

• The Commission's policy on religious broadcasting is set out in Religious Broadcasting Policy, in Public Notice CRTC 1993-78, 3 June 1993.
• The Commission's approach to religious broadcasting is based on the following principles:
  • Recognition of alternative values: the policy recognizes the legitimate needs and interests of those who wish to receive various kinds of religious programming.
  • Importance of balance: licensees are required to provide balance on matters of public concern and the Commission considers that religion is a matter of public concern. Balance means that a reasonably consistent listener will be exposed to a spectrum of differing views on issues of public concern within a reasonable period of time.
• As of 3 May 2006, there were 67 radio stations licensed to broadcast in a religious spoken word format or in a religious music format. Of these 67 stations, 25 are French-language, 41 are English-language and one is third language.

K. Native radio

• Native radio is governed by the Native Broadcasting Policy, Public Notice CRTC 1990-89, 20 September 1990. The policy framework is designed to improve the quality and quantity of access by Aboriginal broadcasters to the Canadian broadcasting system.
• These undertakings play a distinct role in fostering the development of Aboriginal cultures and, where possible, the preservation of ancestral languages.
• The greatest concentration of activity in Aboriginal broadcasting involves community-based radio stations in small remote locations.
• There are two types of Native radio stations:
  • Type A: A Native radio station is a Type A station if, at the time the licence is issued or renewed, no other commercial AM or FM radio licence to operate a station in all or any part of the same market is in force.
    As a result of Exemption order respecting certain native radio undertakings, Public Notice CRTC 1998-62, 9 July 1998, Type A stations are no longer required to hold a broadcasting licence from the Commission.
  • Type B: A Native radio station is a Type B station if, at the time the licence is issued or renewed, at least one other commercial AM or FM radio licence to operate a station in all or any part of the same market is in force. There are currently 47 Type B Native radio stations and six native network radio licences.
• Advertising is not the principal source of revenue for Native radio stations.

Table 2.17: Revenues and PBIT margins for Type B
Native radio stations

Notes: 1998 to 2004 figures have been updated to reflect current August 31 aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

L. Community radio

• The Community radio policy, Public Notice CRTC 2000-13, 28 January 2000 (Community Radio Policy), states that the primary objective for community radio stations is to provide a local programming service that differs in style and substance from the services provided by commercial stations and the CBC. Programming provided by community radio stations should be relevant to the communities served, including official language minorities, adding diversity to the broadcasting system by increasing program choice in both music and spoken word.
• A community radio station is owned and controlled by a not-for-profit organization, the structure of which provides for membership, management, operation and programming primarily by members of the community at large. In addition to advertising revenues, community radio stations also receive revenues from fundraising, grants, and other sources.
• There are three kinds of community radio stations: Type A, Type B and Developmental. A community station is a Type A station if, at the time of licensing, no radio station other than the CBC is operating in the same language in all or part of the same market. A community station is a Type B station if, at the time of licensing, there is at least one station, other than the CBC, operating in the same language in all or part of the same market. Developmental community stations are generally licensed for three years at which time they are expected to have filed an application with the Commission for a regular community radio licence, or to cease operations.
• As of 3 May 2006, there are 45 Type A, 48 Type B and eight Developmental community stations. Of the Type A community stations, 34 are French-language, 10 are English-language and one is bilingual. Of the Type B community stations, 25 are French-language, 22 are English-language and one is multicultural. There are seven English-language and one bilingual Developmental community stations.

Table 2.18: Revenues and PBIT margins of Type A
community radio stations

Notes: 1998 to 2004 figures have been updated to reflect current August 31 aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

Table 2.19: Revenues and PBIT margins of Type B
community radio stations

Notes: 1998 to 2004 figures have been updated to reflect current August 31 aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

M. Campus radio

• As stated in Campus radio policy, Public Notice CRTC 2000-12, 28 January 2000, there are two types of campus radio stations; community-based campus and instructional. A community-based campus station's programming is primarily produced by volunteers who are either students or community members. The primary objective of an instructional campus station is the training of professional broadcasters.
• There are currently 53 campus stations licensed across Canada: 41 community-based campus stations, nine instructional and three Developmental campus stations.
• Of the community-based campus stations, five are French-language and 36 are English-language.
• The majority of campus radio revenues come from sources other than advertising, for example, revenues from the educational institution with which they are associated, grants, the local community and fundraising.

Table 2.20: Revenues for campus radio stations

Notes: 1998 to 2004 figures have been updated to reflect current August 31 aggregate results.
Minor variance are due to rounding.
Source: CRTC financial database.

N. Low-power radio

• The licensing policy for low-power radio is set out in Policy framework for community-based media, Broadcasting Public Notice CRTC 2002-61, 10 October 2002. This policy includes a definition of markets where low-power frequencies will be deemed to be scarce, circumstances where a call for competing applications may occur and a priority system for assessing competing low-power radio applications.
• The following table sets out the number of low- and very low-power radio stations in Canada by type as of 31 March 2006.

Table 2.22: Number of originating low- and very low-power
radio stations in Canada, by type

Source: CRTC Decisions

O. Audio services delivered by broadcasting distribution undertakings

1. Specialty audio services

• In New licensing framework for specialty audio programming services, Broadcasting Public Notice CRTC 2002-53, 12 September 2002, the Commission recognized the scarcity of over-the-air frequencies by offering an opportunity for a range of new discretionary specialty audio programming services distributed through other means.
• Specialty audio services are defined as audio programming services that are radio undertakings, other than licensed over-the-air services, delivered by BDUs and are specialized with respect to their content and/or target audience.
• There is no limit to the amount of advertising that may be broadcast on these services. There is also no carriage guarantee.
• As of 19 April 2006, the Commission has approved eight specialty audio services (one regional and seven national) targeting three ethnic communities and four Christian communities.

2. Pay audio programming services

• In 1995,¹¹ following a competitive process, the Commission approved two national pay audio programming services; namely Galaxie and Max Trax. These services offer 30 channels of commercial-free music. Each channel is devoted to a specific type of music, including classical, contemporary Christian, jazz, rap, rock, etc.
• Galaxie and Max Trax are carried on a discretionary basis by major distributors across Canada. Subscriber revenue is the only revenue source for these services.

P. Multi-channel subscription radio services

• In Introduction to Broadcasting Decisions CRTC 2005-246 to 2005-248: Licensing of new satellite and terrestrial subscription radio undertakings, broadcasting Public Notice CRTC 2005-61, 16 June 2005, the Commission set out the licensing framework for satellite subscription radio services and announced approval of three national subscription radio undertakings that provide a package of radio channels to subscribers for a monthly fee.
• The programming of two of the authorized services, Canadian Satellite Radio Inc. (CSR) and SIRIUS Canada Inc. (Sirius Canada), is delivered primarily by satellite with terrestrial transmitters as required to fill the gaps in coverage. Each of these North American satellite based services provides a mix of Canadian and non-Canadian produced channels. The CSR and Sirius Canada services were launched in December 2005.
• The programming of the third authorized service (an undertaking to be operated by CHUM) will be delivered entirely by terrestrial transmitters and all channels will be Canadian-produced. At the time of the writing of this report, the services had not yet been launched.

Q. The national public broadcaster

• The CBC is Canada's national public broadcaster. As such, pursuant to section 3(1)(l) of the Act, it should provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains.

1. Over-the-air radio stations

• The CBC operates four national radio network services: Radio One and Radio Two in English, and La Première Chaîne and Espace musique in French. Additionally, the CBC provides a unique radio service in Canada's North, broadcasting in English, French and eight Aboriginal languages. The CBC also operates Radio-Canada International, an international short-wave radio service.
• CBC radio services broadcast commercial-free and are funded by the federal government.

2. Pay audio service

• The CBC owns and operates the national pay audio service Galaxie. The revenues of this bilingual service are derived entirely from subscriber revenues.

3. Satellite subscription radio undertaking

• The CBC is also a partner¹² in the satellite radio service SIRIUS Canada, which was launched in December 2005.

R. Commercial Radio Policy Review

• The Commercial Radio Policy 1998, Public Notice CRTC 1998-41, 30 April 1998 (Commercial Radio Policy) had the following three major objectives:
  • to ensure a strong, well-financed radio industry that is better poised to achieve its objectives under the Act and to meet the challenges of the 21^st century;
  • to ensure pride of place for Canadian artists; and
  • to ensure that a French-language presence in radio broadcasting is maintained.
• In order to ensure the fulfillment of these objectives, the Commercial Radio Policy introduced a number of new regulatory measures. The Commission also indicated that it would review its approach to commercial radio in five years time.
• In 2003, the Commission decided to postpone this review until the subscription radio licensing process had been completed. That process was completed in June 2005.
• In Review of the Commercial Radio Policy, Broadcasting Notice of Public Hearing CRTC 2006-1, 13 January 2006, the Commission invited written comments from interested parties and announced that it would hold a public hearing beginning on 15 May 2006.
• In addition to reviewing the effectiveness of the measures implemented in the existing Commercial Radio Policy, this review provided an important opportunity for all interested parties to express their views as to what policy framework would be necessary for commercial radio stations to maintain healthy, successful business in the face of growing competition, while still meeting the objectives of the Act.
• In particular, the appropriate strategic responses to broad challenges relating to the likely impact of other audio technologies, such as satellite radio, Internet radio, podcasting, file sharing and down-loading, on commercial radio and the music industry were discussed.
• The Commission also explored the possibility of the creation of new policies that would assist the commercial radio sector in:
  • making effective contributions to Canadian artists through airplay of Canadian music, French-language vocal music, and contributions to CTD that are commensurate with the financial health of the sector;
  • providing listeners with a greater diversity of musical genres, and airplay for a greater variety of Canadian artists in both official languages;
  • reflecting the multicultural and multiracial nature of Canadian society and the special place of Aboriginal peoples within society;
  • providing listeners with an appropriate amount of locally produced news and information; and
  • assisting the transition to digital transmission, as well as exploiting new and emerging platforms in a manner that furthers the objectives of the Act.

III. Television

A. Audience

1. Average weekly hours by age group

• The following tables provide the average weekly viewing hours by age group for the 2001-02 to 2004-05 broadcast years, using BBM national metered data for all persons 2+, Monday to Sunday, 2 a.m. to 2 a.m.

Table 3.1: Per viewer¹ average weekly viewing hours by age group

Source: BBM Television Databook 2005-2006

Table 3.2: Per capita² average weekly viewing hours by age group

Source: BBM Television Databook 2005-2006

• Neilsen Media Research data indicates that the per capita average weekly viewing hours for all persons 2+ in 2003-04 and 2004-05 were 26.5 and 25.7 respectively.

2. Average minute audience (AMA)

• The following chart sets out the AMA for each day of the week and during the peak viewing period of 7 p.m. to 11 p.m.

Chart 3.1: Weekly average minute audience by day
BBM metered data for all persons 2+
2004-05 broadcast year
Monday to Sunday, 2 a.m. to 2 a.m.

Source: BBM InfoSys, 2004-05 TV Season, August 30, 2004 to August 28, 2005

• Sunday continues to be the most popular television viewing day of the week.

3. Viewing share of Canadian and non-Canadian services by language and type of service

Table 3.3: BBM Metered data - 2002-03, 2003-04 and
2004-05 broadcast years⁽¹⁾ for all persons 2+
Monday to Sunday, 2 a.m. to 2 a.m.

Note: Minor variances are due to rounding
(1) Broadcast years: 2002/03: September 1, 2002 to August 31 2003; 2003/04: September 1, 2003 to August 29, 2004; 2004/05: August 30, 2004 to August 28, 2005.
(2) Includes cable services such as CPAC, real estate, TV Guide, The Shopping Channel, Shaw Community Cable, CPAC-F, Télé-Annonce, provincial services such as Access, Knowledge, Ontario Legislature, SCN, TVO, Ass. Nat. and TFO.
(3) A change in methodology occurred as of August 30, 2004, when the wireless, passive Portable People Meter (PPM) technology replaced existing wired meter service (PMT) for Quebec (Franco), and diaries for the Montreal (Franco) market. Please note that when analyzing the 2004-2005 data for Quebec (Franco), VCR was not measured, but will be included beginning September 2006.
Source: InfoSys, BBM metered data

• In all provinces excluding Quebec, Canadian English language private conventional services achieved a 29.4% share of total viewing in 2005, a level consistent with the previous few years. The downward trend in viewing to these services has levelled off since 2000-01.
• In all provinces excluding Quebec, Canadian English-language pay and specialty services, including digital, achieved a 37.6% viewing share in 2005. The trending is still going up, but at a slower pace, for viewing to pay and specialty services.
• In Quebec, the SRC improved its viewing share to 13.4% in 2005, while Canadian private French-language conventional services decreased their share slightly to 37%. Pay and specialty services, including digital, improved their position to 30%.
• The total Canadian services viewing share continues to rise on an annual basis both within Quebec and for all regions excluding Quebec.

4. Distribution of viewing by program genre³

• The following charts reveal the trends in viewing to English- and French-language Canadian television services by program genre. These charts provide the average number of weekly viewing hours to Canadian and non-Canadian programming using BBM metered audience data for the 2003/04 (September 1, 2003 to August 29, 2004) and 2004/05 (August 30, 2004 to August 28, 2005) broadcast years.
• The charts indicate the relative popularity of each genre as well as the viewing of Canadian versus non-Canadian programming offered by Canadian services. Charts 3.2 and 3.6 provide overall viewing trends for all English- and French-language Canadian services. Charts 3.3, 3.4, 3.5, 3.7, 3.8 and 3.9 provide a further breakdown of the viewing trends between Canadian private conventional services, CBC/SRC conventional services and Canadian pay and specialty services.

a) English-language Canadian services

Chart 3.2: Viewing of Canadian and non-Canadian programs distributed
by English-language Canadian television services by program origin and
genre - BBM metered data - 2003/04 and 2004/05 broadcast years -
2 a.m. to 2 a.m. - persons 2+ - average weekly hours (000,000)

Based on Canadian services with available program level data that incorporates country of origin and program genre

• The chart reveals the continued popularity of drama/comedy programming broadcast by English services.
• The viewing of Canadian programs on English services differs significantly between genres. Viewing of news and analysis & interpretation programming is predominantly to Canadian programs. In contrast, viewing of drama/comedy programming is predominantly to non-Canadian programs.
• The overall viewing of Canadian programs on Canadian English-language services in 2004/05 broadcast year was 42% of the total viewing.

Chart 3.3: Viewing of Canadian and non-Canadian programs
distributed by Canadian English-language private conventional
services by program origin and genre - BBM metered data -
2003/04 and 2004/05 broadcast years - 2 a.m. to 2 a.m. -
persons 2+ - average weekly hours (000,000)

Based on Canadian services with available program level data that incorporates country of origin and program genre

• The overall viewing of Canadian programs on English-language private conventional services in 2004/05 broadcast year was 34% of the total viewing.
• Viewing to Canadian drama/comedy programs represented 10% of the total viewing to the genre in 2004-05.

Chart 3.4: Viewing of Canadian and non-Canadian programs
distributed by English-language CBC conventional services by
program origin and genre - BBM metered data - 2003/04 and
2004/05 broadcast years - 2 a.m. to 2 a.m. - persons 2+ -
average weekly hours (000,000)

Based on Canadian services with available program level data that incorporates country of origin and program genre

Chart 3.5: Viewing of Canadian and non-Canadian programs
distributed by English-language Canadian pay and specialty
services by program origin and genre - BBM metered data -
2003/04 and 2004/05 broadcast years - 2 a.m. to 2 a.m. -
persons 2+ - average weekly hours (000,000)

Based on Canadian services with available program level data that incorporates country of origin and program genre

• The overall viewing of Canadian programs on English-language pay and specialty services in 2004/05 broadcast year was 45% of the total viewing.
• The viewing of Canadian drama/comedy programming in 2004/05 was 31% of total viewing to drama/comedy programming.

b) French-language Canadian services

Chart 3.6: Viewing of Canadian and non-Canadian programs
distributed by French-language Canadian television services by
program origin and genre - BBM metered data - 2003/04 and
2004/05 broadcast years - 2 a.m. to 2 a.m. - persons 2+ -
average weekly hours (000,000)

Based on Canadian services with available program level data that incorporates country of origin and program genre

• Drama/comedy programming is the most popular genre on French-language services, followed by news and analysis & interpretation programming.
• For French services, viewing is predominantly to Canadian programs in all genres, with the exception of drama/comedy programs where the viewing is mostly to non-Canadian programming.

Chart 3.7: Viewing of Canadian and non-Canadian programs distributed
by Canadian French-language private conventional services by program
origin and genre - BBM metered data - 2003/04 and 2004/05
broadcast years - 2 a.m. to 2 a.m. - persons 2+ -
average weekly hours (000,000)

Based on Canadian services with available program level data that incorporates country of origin and program genre

• The overall viewing of Canadian programs on French-language private conventional services in 2004/05 broadcast year was 69% of the total viewing.
• Viewing to Canadian drama/comedy programs represented 26% of the total viewing to the genre in 2004-05.

Chart 3.8: Viewing of Canadian and non-Canadian programs distributed
by Canadian French-language SRC conventional services by program
origin and genre - BBM metered data - 2003/04 and 2004/05
broadcast years - 2 a.m. to 2 a.m. - persons 2+ -
average weekly hours (000,000)

Based on Canadian services with available program level data that incorporates country of origin and program genre

Chart 3.9: Viewing of Canadian and non-Canadian programs distributed
by Canadian French-language pay and specialty services by program
origin and genre - BBM metered data - 2003/04 and 2004/05
broadcast years - 2 a.m. to 2 a.m. - persons 2+ -
average weekly hours (000,000)

Based on Canadian services with available program level data that incorporates country of origin and program genre

• The overall viewing of Canadian programs on French-language pay and specialty services in 2004/05 broadcast year was 49% of the total viewing.
• The viewing of Canadian drama/comedy programming in 2004/05 was 34% of total viewing to drama/comedy programming.

B. Canadian television programming

1. Canadian priority programming

• In the Television Policy, the Commission indicated that one of its goals in developing the policy is to "ensure quality Canadian programs at times when Canadians are watching."
• The Television Policy states that the Commission wishes to ensure the availability of a sufficient number of hours of diverse Canadian programming in order to attract audiences during peak viewing periods (7 p.m. to 11 p.m.).
• In the Television Policy, "under-represented" Canadian programming (drama, music and dance, and variety programs) was redefined as "priority programming" and expanded to include long-form documentaries, regionally-produced programs and entertainment magazine programs.
• The Television Policy also requires that the largest multi-station ownership groups offer as a minimum, in each broadcast year, an average of eight hours per week of Canadian priority programming during the 7 p.m. to 11 p.m. peak viewing period. This requirement is in addition to any benefit commitments made by these broadcasters in connection with transfers of ownership or control. Currently, CTV, Global, TVA and CHUM⁴ meet the Commission's definition of largest multi-station ownership groups.
• The 150% dramatic time credit that previously could be applied against regulated Canadian content requirements was also discontinued for the largest multi-station ownership groups. In its place, the Commission introduced a 150% priority programming time credit for Canadian drama programs that receive the full ten Canadian key creative points and a 125% time credit for Canadian drama programs that receive between six and nine points. The broadcasters can apply these time credits against their minimum eight-hour per week priority programming requirement.⁵
• The majority of the television stations controlled by CTV and Global were renewed in 2001.⁶ TVA's network television licence and its mother station CFTM-TV Montréal were also renewed in 2001.⁷ TVA's five regional stations were renewed in 2004.⁸ In its renewal decisions, the Commission indicated that it would be monitoring and evaluating Canadian priority programming scheduling practices and related audience levels, in order to test whether the goals of the Television Policy were being achieved.
• The 2001 renewal decisions for TVA and CTV also outlined significant transfer benefits related to priority programming that the groups were required to fulfill during their next licence term:
  • In Transfer of effective control of CTV Inc. to BCE Inc., Decision CRTC 2000-747, 7 December 2000, the Commission required the licensee to broadcast a minimum of 175 hours of original Canadian priority programming over the licence term (in addition to the base level of eight hours per week), and a minimum total incremental expenditure of $140 million over the licence term on the benefits-related priority programming.
  • In Transfer of effective control of TVA to Québecor Média inc., Decision CRTC 2001-384, 5 July 2001, the Commission required the licensee to expend a minimum of $39.8 million of the benefits on priority programming, incremental to a base level of priority programming expenditures as outlined in the decision.
• The priority programming benefits for both TVA and CTV commenced in the 2001/2002 broadcast year.

a) Scheduling of Canadian priority programs during the peak viewing period

• Charts 3.10 and 3.11 set out the number of hours of Canadian priority programming scheduled during the peak viewing period of 7 p.m. to 11 p.m. by CFTO-TV (CTV) Toronto, CIII-TV (Global) Toronto, and CFTM-TV (TVA) Montréal for each of the 2000/01 to 2004/05 broadcast years.
• The charts also indicate the hours of Canadian priority programs scheduled by CITY-TV (CHUM) Toronto for the 2004/05 broadcast year. CHUM joined the ranks of the largest multi-station ownership groups in November 2004.
• The results are based on the revised definitions of priority programming that came into effect on 1 September 2000.
• The following chart sets out the number of drama/comedy priority programming hours broadcasted by each of the stations
• The number of hours broadcast that also qualified for the additional 50% or 25% drama/comedy time credits is also highlighted in this chart.

Chart 3.10: Number of hours of drama/comedy priority programming
broadcasted annually - 7 p.m. to 11 p.m.

Note: Reflects hours broadcast from September 1^st to August 31^st.
Source: Licensee and CRTC Logs (October 2005)

• The following chart sets out the number of hours of Canadian priority programming, other than drama/comedy, broadcasted by the stations.

Chart 3.11: Number of hours of non-drama/comedy Canadian priority
programming broadcasted annually - 7 p.m. to 11 p.m.

Note: Reflects hours broadcast from September 1^st to August 31^st.
Source: Licensee and CRTC Logs (October 2005)

2. Incentives for original Canadian television drama⁹

• The Commission considers that a healthy and successful Canadian broadcasting system must include popular drama programs that reflect Canadian society and project Canada's stories onto the world stage. It is through television drama that most Canadians participate in their national culture and share in the evolution of social values and stories of human passion. Drama can, and should, reflect Canadians of every background and culture to each other.
• In May 2003, the Commission began a process intended to encourage the production and broadcast of original Canadian drama programming during peak viewing hours. To this end, the Commission introduced drama incentive programs for both English-language and French language television drama.
• The Commission intends to review these incentive programs on an on-going basis to determine if adjustments are required. Given the lead time required to plan and produce drama programming, the Commission is of the view that it is too early to reach conclusions on the effectiveness of the current package of incentives.
• Each licensee participating in these incentive programs is required to file annual reports detailing the use of these incentives. The first reports, with the 2004-05 broadcast year results, were filed with the Commission on 30 November 2005.¹⁰ Global, Alliance Atlantis, Corus, CTV, TVA TQS and CHUM have submitted reports.

a) Incentives for original French-language Canadian television drama

• In Incentives for French-language Canadian television drama, Broadcasting Public Notice CRTC 2005-8, 27 January 2005 (Public Notice 2005-8), the Commission set out a program of incentives that is designed to maintain a proper balance of original Canadian French-language drama, including a minimum number of high-cost programs or series, broadcast by French-language television licensees during the peak viewing period of 7 p.m. to 11 p.m.
• In Public Notice 2005-8, the Commission set out the general criteria of eligibility for six types of original French-language Canadian drama programming. Each type carries a different reward in terms of the number of additional minutes of advertising permitted.
• TVA and TQS conventional television stations are also required to broadcast a minimum number of hours of eligible drama programming before they can access any additional advertising minutes provided under this incentive program.
• In 2004-05 broadcast year, TVA and TQS reported 133.5 hours of original drama programming that met the eligibility criteria. This resulted in 125 minutes of additional advertising available to the participants. The participants reported having used 62.5 of these advertising minutes.

b) Canadian English-language drama

• In Incentives for English-language Canadian television drama, Broadcasting Public Notice CRTC 2004-93, 29 November 2004 (Public Notice 2004-93), the Commission set out its program of incentives designed to increase the production and the broadcast of, the viewing to, and the expenditures on, high-quality, original Canadian English-language drama programming.
• In Viewing and expenditure for English-language Canadian television drama - Call for comments, Broadcasting Public Notice CRTC 2005-81, 10 August 2005 (Public Notice 2005-81) and in Viewing and expenditure incentives for English-language Canadian television drama, Broadcasting Public Notice CRTC 2006-11, 27 January 2006 (Public Notice 2006-11) the Commission set out targets for the viewing and expenditure components of the Commission's drama incentives.

i) Incentive 1: Incentives to increase the production and broadcast of high quality original hours of Canadian English-language drama programming

• The purpose of these incentives is to increase the production and broadcast of high-quality original hours of Canadian English-language drama programming.
• These incentives relate to the production and broadcast of three types of original drama programming, each carrying a different reward in terms of the number of additional minutes of advertising permitted. CTV, Global and CHUM conventional television stations are also required to broadcast a minimum 26 hours of eligible drama before accessing additional advertising minutes.
• In 2004-05 broadcast year, participating conventional and specialty services reported 153.5 hours of original drama programming that met the eligibility criteria resulting in 3 hours and 16 minutes of additional advertising available to the participants. Participants reported having used just under 2 hours of these additional advertising minutes.

ii) Incentive 2: Incentive to increase the viewing to Canadian English-language drama on Canadian English-language services

• The objective of this incentive is to increase the viewing to English-language Canadian drama on Canadian English-language services as a percentage of all drama viewing on Canadian English-language services.
• In order to qualify for additional advertising minutes, each service is required to achieve annual viewing targets. For broadcasters taking advantage of the incentive for original drama production (Incentive 1), if their viewing levels meet or exceed the annual targets set by the Commission, then the licensee is permitted to broadcast an additional 25% of the total advertising permitted pursuant to Incentive 1.
• The targets for English-language specialty services have been established for individual services, based on the 2003-04 viewing levels for each service. Participating services are required to increase total viewing levels by 1.5% annually over a five-year period.
• The target objective established for English-language private conventional television services is to increase the total Canadian drama viewing hours on private conventional television services from 9.2% in 2003-04 to 16.5% in 2008-09.
• The following table provides viewing results for drama/comedy¹¹ programming achieved by the largest English-language conventional groups in Canada for the 2003-04 and 2004-05 broadcast year. The table also shows 2004-05 viewing target levels.

Table 3.4: Viewing to Canadian drama/comedy in the Toronto, Vancouver
and Calgary markets, by ownership group for all persons 2+,
6 a. m. to 6 a. m., 2003-04 and 2004-05 broadcast years
Nielsen Media Research metered data

Notes: Excludes viewing to drama programs where the country of origin was not identified - less than 1% of total hours.
* Owned and operated conventional television stations
** The 2003-04 percentage of average weekly viewing excludes CHUM's Calgary station CKAL-TV, which was acquired late 2004.

iii) Incentive 3: Incentive to increase the expenditures on Canadian English-language drama by private English-language conventional services

• The objective of this incentive is to increase the spending on English-language Canadian drama by the English-language private conventional television industry from 3.3%, the 2003-04 level, to 6% of total revenues, over a five-year period.
• Broadcasters taking advantage of the incentives for original drama production are able to recoup part of their expenditures on drama through additional advertising minutes. Where their expenditure increases meet or exceed the target set by the Commission, the licensee is permitted to broadcast an additional 25% of the total advertising permitted pursuant to incentive 1.
• Excluded from these calculations are expenditures on drama programs relating to commitments made at the time of licensing, ownership transfer benefits and CTF "top-up" funding.
• The following table set outs the annual Canadian drama expenditure targets along with the 2003-04 base year and 2004-05 first year results for the largest individual ownership groups.

Table 3.5: Canadian drama expenditures⁽¹⁾ expressed as a
percentage of gross revenues for the largest
conventional television ownership groups

(1) Excludes expenditures on drama programs relating to commitments made at the time of licensing, ownership transfer benefits and CTF "top-up" funding.
(2) Public notice 2005-81 and 2006-11.
(3) CJNT-TV Montreal, an ethnic station is not included in these calculations.
(4) Excludes CKX-TV Brandon and CHMI-TV Portage LaPrairie, CKEM-TV Edmonton and CKAL-TV Calgary stations which were acquired late 2004.

C. Financial performance

1. English-language private services

Chart 3.12: Revenues of English-language private conventional
television and pay, PPV & specialty services

Notes: Private conventional television includes revenues from ethnic conventional television stations, as a significant portion of their revenues are derived from English-language programs. In this, and future reports, the financial results of ethnic and third-language pay and specialty services are reported separately. Bilingual services are combined with English-language Pay, PPV and specialty services. Private conventional television and Pay, PPV and specialty revenues have been updated to reflect current August 31 aggregate results.
Source: CRTC financial database

• Pay, PPV and specialty revenues continue to increase steadily. The number of English-language services more than doubled from 1996 to 2002, increasing from 19 to 41 services. In 2002, an additional 46 English-language digital services reported first year results. The number of digital services increased to 50 in 2004 and 53 in 2005.
• Specialty television services have a revenue stream from both advertising and subscription. In 2005, 44% of their revenues were derived from advertising revenues. Pay and PPV services, on the other hand, rely entirely on subscription revenues.

Chart 3.13: Revenues of English-language private conventional
television services by ownership group

Source: CRTC financial database

• Based on conventional stations owned or controlled by the ownership group on August 31^st of each year. Ownership is based on the date of the approving Decision, not the official closing date of the transaction. The station's entire annual revenue is attributed to the ownership group that was deemed to be its owner as of 31 August.
• CHUM acquired the CKVU-TV Vancouver¹² station and launched CIVI-TV Victoria¹³ in 2001. Revenues for these stations are included in 2002. CHUM also acquired CKEM-TV Edmonton, CKAL-TV in Calgary, CHMI-TV Portage LaPrairie and CKX-TV Brandon television stations from Craig¹⁴ in November 2004. Revenues for these four stations are included in 2005.
• CTV revenues for 2001 and 2002 include the CTV network plus CTV stations, less the network payments to CTV affiliates. Revenues for the CFCF-TV Montréal station are included in 2002.
• The Commission approved the transfer of effective control of Craig's Alberta and Manitoba conventional television stations to CHUM¹⁵ and its Toronto conventional television station to Quebecor Media¹⁶ in November 2004.
• Large private conventional television ownership groups continue to account for approximately 95% of the total revenues reported by private English-language conventional television stations. This percentage has remained roughly the same since 1998.
• CTV owns and operates twenty-one English-language conventional television stations and a satellite-to-cable service. It also has affiliation agreements with three private independently owned television stations. Its network operation reaches approximately 99%¹⁷ of English-speaking Canadians. CTV also holds a 40% voting interest in TQS Inc. TQS Inc. owns and operates eight French-language Canadian conventional television stations.
• CanWest Global owns and operates nineteen English-language conventional television stations as well as an independent conventional ethnic station located in Montréal. Its network operation reaches more than 94%¹⁸ of English-speaking Canadians.
• CHUM owns and operates 12 English-language conventional television stations located in Ontario (six), Manitoba (two), Alberta (two) and British Columbia (two). CHUM's combined stations reach approximately 85%¹⁹ of English-speaking Canadians.

Chart 3.14: Aggregate PBIT²⁰ margins of English-language
private conventional television & pay, PPV and
analog specialty services

Notes: Private conventional television includes ethnic conventional television stations, as a significant portion of their revenues are derived from English-language programming. In this, and future reports, the financial results of ethnic and third-language pay and specialty services are reported separately. Bilingual services are combined with English-language Pay, PPV and specialty services. Private conventional television and Pay, PPV and specialty results have been updated to reflect current August 31 aggregate results.
In 2003, CTV sold six of its conventional television stations to the CBC (CKNC-TV, CFCL-TV, CJIC-TV, CHNB-TV, CKBI-TV and CKOS-TV). Two new conventional television stations (OMNI-2 Toronto and Channel M, CHNM-TV Vancouver) began reporting in 2003. CKXT-TV Toronto began reporting in 2004.
Source: CRTC financial database

• The drop in profitability in 1998 for conventional television stations was due to five new services reporting first year losses. A large one-time write-off by one of the large broadcasters also contributed to the downturn.
• The number of pay, PPV and specialty services has been climbing steadily over the past several years. The introduction of 11 new analog services in 1998 caused the aggregate PBIT margin decrease in 1998 and 1999.
• The 2005 pay, PPV & specialty results reflect $499 million in profits from the analog services with a PBIT margin of 31%. The increase in profitability from 25% in 2004 to 31% in 2005 is in part due to the National Hockey League lockout in the 2004-05 broadcast year. This significantly decreased the expenditures on sports programming by specialty services such as TSN and Rogers SportsNet.²¹
• Not included in this chart are digital pay and specialty services that reported $47 million losses in 2005. Pay, PPV and specialty digital and analog services achieved a combined PBIT margin of 26% in 2005.

2. French-language private services

Chart 3.15: Revenues of French-language private conventional
television & analog, pay, PPV and specialty services

Note: Excludes bilingual services.
Source: CRTC financial database

• Revenue growth for French-language private conventional stations averaged 4% per year from 1996 to 2002. Revenues increased by 8%, 3% and 3% in 2003, 2004 and 2005 respectively. The number of stations has remained unchanged since 1993.
• French-language pay, PPV and specialty services have achieved strong revenue growth. Since 1996, the number of these services has increased from seven to 25 in 2005. In 2005, one digital category 2 and three digital category 1 services reported first-year revenues totalling $1.3 million.
• Total 2005 advertising revenues reported by French-language pay, PPV and specialty services decreased by $1.2 million or 1% from the previous year. This decrease was largely due to the impact of the National Hockey League lockout that occurred in the 2004-05 broadcast year.
• 64% of the French-language specialty services revenues are derived from subscription revenues.

Chart 3.16: Revenues of French-language private conventional
television services by ownership group

Note: Based on conventional stations owned or controlled by the ownership group on August 31st of each year. Ownership is based on the date of the approving Decision, not the official closing date of the transaction. The station's entire annual revenue is attributed to the ownership group that was deemed to be its owner as of 31 August.
Source: CRTC financial database

• Quebecor and Cogeco accounted for 92% of the total revenues reported by private French-language conventional television in 2005.
• TVA is the largest private French-language conventional television broadcaster in Canada. In addition to the network, TVA owns and operates six television stations, including CFTM-TV Montréal and CFCM-TV Québec. It also has affiliation agreements with four private independently owned television stations and it holds a 45% ownership interest in two of these stations. The TVA service has been licensed for national distribution since 1998.
• TQS owns and operates eight French-language television stations (five TQS & three SRC affiliate stations) located in the province of Quebec. It also operates TQS, a French-language television network originating in Montréal.

Chart 3.17: Aggregate PBIT margins of private French-language
conventional television & pay, PPV and analog specialty services

Source: CRTC financial database

• In 2002, the number of French-language specialty services increased from 16 to 17 with the addition of ARTV.
• The pay, PPV and specialty results in 2005 reflect $91 million in profits before interest and taxes with a PBIT margin of 25%. The increase in profitability from 21% in 2004 to 25% is in part due to the National Hockey League lockout in the 2004-05 broadcast year which significantly reduced the programming expenditures of the sports specialty service RDS.²²
• Not included above, the digital services reported first-year PBIT losses of $5.5 million. The combined PBIT margin of analog and digital French-language services was 23% in 2005.

3. Ethnic & third-language pay and specialty services

Chart 3.18: Revenues of ethnic and third-language
pay and specialty services

Source: CRTC financial database

• Ethnic and third-language pay and specialty revenues continue to increase. The number of analog ethnic specialty services increased from three to five from 1996 to 1999. In 2002, an additional 3 ethnic and third-language digital services reported first year results. The number of ethnic digital services reporting in 2003 and 2004 was 4, which increased to 17 in 2005.

Chart 3.19: Aggregate PBIT²³ margins of ethnic and third-language
pay and specialty analog services

Source: CRTC financial database

• The 2005 pay and specialty results reflect $11.8 million in profits from the analog services with a PBIT margin of 24%.
• Not included in this chart are the digital services that reported PBIT losses of $455 thousand in 2005. The combined PBIT margin for third-language analog and digital pay, PPV and specialty services was 20% in 2005.

4. CBC conventional television stations

Chart 3.20: Advertising revenues: CBC conventional television
stations (owned & operated)

Source: Annual financial return filed with the CRTC

• The advertising revenues of CBC's English-language conventional television stations decreased by $90 million or 40% in 2005 compared to 2004.
• The advertising revenues of CBC's French-language conventional television stations represented 23% of the total advertising dollars achieved by the CBC and French-language private conventional television stations in 2005. In 1996, its share was 29%.

D. Eligible expenditures on Canadian programming (CPE)²⁴

1. English-language commercial conventional television

Table 3.6: Private commercial conventional television

Note: 2001 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

Table 3.7: CBC television

Notes: Excludes indirect and facility cost allocations. 2001 to 2004 expenditures have been restated to reflect revised reporting of programming expenditures.
* "Sports" and "Total" programming expenditures for 2005 are confidential.
Source: CRTC financial database

2. French-language commercial conventional television

Table 3.8: Private commercial conventional television and SRC

Source: CRTC financial database

3. Pay, PPV and specialty services

• Effective 2004-05 broadcast year, pay and specialty licensees started reporting CPE by programming category.

Table 3.9: Pay, PPV and specialty analog and digital services

* Includes bilingual services.
Source: CRTC financial database

E. Tangible benefits resulting from the transfers of ownership or control of television broadcasting undertakings

• When considering applications to transfer ownership or control of a television undertaking, the Commission generally expects significant benefits to be offered to the community in question or to the Canadian broadcasting system as a whole. Since competing applications are not solicited, the onus is on the applicant to demonstrate that the application filed is the best possible proposal under the circumstances and that the benefits proposed in the application are commensurate with the size and nature of the transaction.
• The principal components of the Commission's policies with respect to benefits resulting from the transfer of ownership or control are set out in Application of the Benefits Test at the Time of Transfers of Ownership or Control of Broadcasting Undertakings, Public Notice CRTC 1993-68, 26 May 1993. In The Television Policy, the Commission amended its tangible benefits policy with respect to transfers of ownership or control involving television broadcasting undertakings. This amendment requires applicants to make commitments to clear and unequivocal tangible benefits representing financial contributions of at least 10% of the value of the transaction.
• The following table shows the number of English-language and French-language transfers of ownership or control of television broadcasting undertakings from 11 June 1999 to 31 March 2006.

Table 3.10: Value of television transactions and corresponding transfer
benefits for the period 11 June 1999 to 31 March 2006

* Value determined by the Commission for the purpose of calculating transfer benefits.

F. Canadian digital television services

• Digital television (DTV) is a technology based on the Advanced Television Systems Committee transmission standard (A/53). The standard has been adopted for use in Canada and is designed to replace the current analog NTSC broadcast system that has been in use in North America for over half a century. The Commission's policies are intended to encourage the transition of the Canadian broadcasting system from analog to digital and high definition technology.
• While the Commission envisages a largely voluntary and market-driven transition to digital television, it recognizes the need to provide regulatory certainty and encouragement during the transition period. It has instituted regulatory frameworks for the licensing and distribution of digital over-the-air services in 2002 and 2003 respectively and in 2006 established the regulatory framework relating to the licensing and carriage of high definition pay and specialty services.

1. Over-the-air digital television services

• In A licensing policy to oversee the transition from analog to digital over-the-air television broadcasting, Broadcasting Public Notice CRTC 2002-31, 12 June 2002 (Public Notice 2002-31), the Commission set out a policy framework for the licensing of over-the-air digital television (DTV) services. The policy framework is based on a voluntary, market-driven transition model, without mandated deadlines as well as the principle that digital technology will be treated as a replacement for analog technology.
• Transitional DTV licensees are allowed to broadcast a maximum of 14 hours per week of high definition programming that is not duplicated on the analog version of the service. A minimum of 50% of this unduplicated high-definition programming must be Canadian and all of the unduplicated programming must be in high definition television (HDTV) format.
• Additionally, the Commission encourages transitional DTV licensees to ensure that two-thirds of their schedules are available in HDTV format by 31 December 2007.²⁵
• In The regulatory framework for the distribution of digital television signals, Broadcasting Public Notice CRTC 2003-61, 11 November 2003 (Public Notice 2003-61), the Commission sets out, among other things, the regulatory framework that governs the distribution of over-the-air digital broadcasting services. In general, a broadcast distribution undertaking's regulatory obligations and authorities to distribute digital signals will match those that currently apply to the distribution of the analog version of these services. The Commission will require distribution undertakings to carry the primary signal of Canadian over-the-air digital television signals identified in sections 17, 32 and 37 of the BDU Regulations, except as otherwise provided under a condition of licence.
• In Public Notice 2003-61, the Commission also determined that a cable BDU may apply to be relieved of the obligation to distribute analog signals, once 85% of its subscribers have the ability to receive digital services by means of digital television receivers or set-top boxes.
• The following table lists the 22 originating stations and four rebroadcasters that currently hold transitional digital television licences.

Table 3.6: Over-the-air transitional digital television ⁽¹⁾

(1) Number of stations approved but not necessarily in operation.
E: English; F: French; O/E: Multi/English; R: Rebroadcaster
Source: CRTC APP 1205 (3 May 2006)

2. Digital pay and specialty services

• In Licensing framework policy for new digital pay and specialty services, Public Notice CRTC 2000-6, 13 January 2000, and in Revised procedures for processing applications for new digital Category 2 pay and specialty television services, Broadcasting Public Notice CRTC 2004-24, 8 April 2004, the Commission set out a framework for licensing digital Canadian pay and specialty programming services. This framework established two categories of digital services that are designed to enhance diversity and choice for Canadian viewers:
  • Category 1 services: These services have digital carriage privileges and genre protection to support them during the uncertain early digital rollout period. Only a limited number of specialty services were licensed as category 1 services.
  • Category 2 services: These services are not assured digital carriage and do not have genre protection. Applicants that meet the basic licensing criteria and are not directly competitive with any analog pay or specialty, or category 1 services are licensed.
    
    In order to expand the diversity and the range of Canadian television services available to underserved third-language ethnic communities, the Commission revised its approach when considering broadcasting licence applications proposing new third-language ethnic Category 2 pay and specialty services.²⁶

3. Migration of pay and specialty services from analog to digital distribution

• In Digital migration framework, Broadcasting Public Notice CRTC 2006-23, 27 February 2006, the Commission set out the framework that will guide the migration to a digital distribution environment for those pay and specialty services that were approved under the analog licensing framework.
• The Commission's goal was to develop a framework that would ensure an orderly transition from the current highly structured technological and regulatory environment to an environment characterized by a more market-driven approach. In designing this framework, the Commission also sought to achieve the following objectives:
  • encourage the transition to digital and eventually high definition distribution;
  • permit BDUs to take advantage of the flexibility of digital distribution, to the benefit of consumers;
  • help ensure that, during the transition, analog programmers can reasonably expect to operate within their business plans, in order to continue to meet their programming obligations and the objectives of the Act, including objectives related to linguistic duality;
  • design an approach that recognizes the unique challenges and characteristics of the French-language market and services;
  • introduce a more simplified regulatory regime, where appropriate; and
  • harmonize the obligations of different types of BDUs.
• The Commission foresees the transition as taking place over three stages. Cable BDUs are currently in the first stage of this transition, characterized by their distribution of analog as well as digital services. The second stage would be characterized by the absence of analog services. Instead, BDUs would offer a mix consisting predominantly of low definition digital services with some high definition services. In the third stage, high definition digital services will predominate. These latter two stages will occur at different times for different BDUs, and each stage will have its own regulatory obligations.

4. Licensing and distribution framework for Canadian pay and specialty services in high definition (HD) format

• In Regulatory framework for the licensing and distribution of high definition pay and specialty services, Public Notice CRTC 2006-74, 15 June 2006, the Commission announced its HD licensing and distribution policy framework for Canadian pay and specialty services. The policy proceeding was initiated by Call for comments on a proposed framework for the licensing and distribution of high definition pay and specialty services, Broadcasting Public Notice CRTC 2004-58, 6 August 2004 that set out a proposed policy framework in some detail. The framework was based where appropriate on the principles set out in Public Notices 2002-31 and 2003-61.
• The framework is based on a hybrid approach under which existing pay and specialty services who wish to launch a high definition service could choose between a light-handed approach with few privileges or a more traditional regulatory regime and submit their applications for HD authorities accordingly - a licence amendment for the first, a new licence for the second.
• HD authorities granted by licence amendment would be subject to certain restrictions. For example, carriage arrangements would have to be negotiated with distributors, the term of the authority would be limited to three years and the programming of the analogue and HD replacement services would have to be comparable, that is, not less than 95% of the video and audio components would have to be the same.
• New HD-transitional licences would be issued to services that offer the benchmark amounts of high definition programming. These licences would confer carriage rights and the current genre protections. A limited amount of separate HD programming would also be allowed.
• In general, the licensing and distribution policy is intended to encourage the transition of the Canadian broadcasting system to high definition technology. It does so by providing a mechanism for the licensing of transitional high definition pay and specialty services that will permit easy entry for the new technology.
• The policy also encourages broadcasting distribution undertakings (BDUs) to carry high definition services by permitting flexibility in the packaging of such services, and provides regulatory certainty by setting out the details of the distribution policy for the new high definition services, including the distribution and linkage rules, the carriage of non-Canadian high definition signals, and provisions governing technical quality and simultaneous substitution.
• As of 1 May 2006, the Commission has approved, by way of licence amendment, four analog specialty, two pay and ten category 2 specialty services for distribution in the HD format.
• In the spring 2006, it is estimated that there were at least 321,393 subscribers to discretionary HD services²⁷ in Canada.

a) Availability of HD services

• The following tables indicate the number of HD services available from Canadian programming distributions and the average hours per week of HD Canadian programming offered by Canadian programming services.

Table 3.12: Number of high definition services offered by BDUs

Table 3.13: High definition offering of Canadian programming

Source: Information provided by the licensees.

G. Specialty, pay, PPV and VOD services

Specialty services (Specialty Services Regulations, 1990)

• There are 49 Canadian analog specialty services: 28 English-language, 14 French-language, two bilingual (English & French) and five third-language.²⁸
• There are also 18 category 1 digital specialty services: 15 English-language²⁹ have been in service since the Fall 2001 and three French-language³⁰ services were launched in Fall 2004. These services were approved following a competitive hearing and were licensed on a one-per-genre basis in 2000.
• Category 2 digital specialty services are licensed on a more competitive, open-entry basis. The Commission continues to approve additional category 2 services. As of 3 May 2006, licences have been issued to over 200 category 2 specialty services, including 105 English-language, 13 French-language, 75 ethnic or third-language and eight bilingual. Approximately 75 of these services, 47 English-language, 25 third-language and three French-language, have been launched.

Pay services (Pay Television Regulations, 1990)

• Five English-language and one French-language pay television services were licensed prior to 1995.
• In May 2006³¹, the Commission approved a new national English-language general interest pay service.
• The Commission has also licensed 24 digital category 2 pay services.

Pay-Per-View (PPV) services (Pay Television Regulations, 1990)

• There are five (terrestrial) pay-per-view services: three English-language, one bilingual (English and French) and one French-language.
• There are six direct-to-home (DTH) pay-per-view services: four English-language, one bilingual (English and French), and one French-language.

Video-on-demand (VOD) services (Pay Television Regulations, 1990)

• As of 3 May 2003, there were 13 licensed video-on-demand programming undertakings.

1. Financial results for pay, PPV and specialty analog and digital services

• The following tables show the 2004 and 2005 financial results³² for individual specialty, Pay and PPV analog and digital services.

Table 3.14: Financial results for specialty analog and
digital services - English-language services

4 Country Canada (Land and Sea) 718 2,743 58 2.1% 2,173 -1,298 -59.7%

5 CTV Travel (Travel TV) 648 3,927 612 15.6% 2,964 -756 -25.5%

6 Discovery Health (Health Network Canada) 936 4,185 -4,104 -98.1% 3,292 -3,080 -93.6%

7 Fashion Television: The Channel 789 3,422 -148 -4.3% 2,992 -332 -11.1%

8 iChannel (Issues Channel, The) 713 2,406 -1,729 -71.9% 2,290 -1,859 -81.2%

9 Independent Film Channel, The 1,111 5,270 -4,426 -84.0% 3,996 -2,974 -74.4%

10 MenTV 793 3,773 -494 -13.1% 3,331 -868 -26.1%

11 Razer (MTV Canada/Connect) 804 7,174 -12,149 -169.3% 5,582 -2,095 -37.5%

12 Mystery (13th Street) 991 4,651 420 9.0% 3,857 -376 -9.8%

13 One: Canada's Mind, Body and Spirit Channel (Wisdom: Canada's Mind, Body and Spirit Channel) 907 3,612 49 1.4% 3,021 -487 -16.1% 14 OutTV (PrideVision) 1,105 -118 -10.7%

15 G4TechTV (techtv/ZDTV Canada) 807 4,457 94 2.1% 3,720 103 2.8%

Total digital category 1 56,213 -23,523 -41.8% 47,657 -17,023 -35.7%

Digital category 2 services

1 Animal Planet 1,204 3,862 248 6.4% 2,913 -651 -22.4%

2 AOV Movie 2 72 -105 -145.4%

3 BBC Canada 931 5,198 -1,733 -33.3% 3,937 -2,256 -57.3%

4 BBC Kids 990 3,762 -2,270 -60.3% 1,672 -3,659 -218.9%

5 BPM:TV (The Dance Channel) 507 669 -287 -42.8% 566 -332 -58.7%

6 Court TV Canada (Law & Order Channel) 1,083 5,161 1,081 21.0% 4,554 434 9.5%

7 DejaView (Pop TV) 875 3,575 -188 -5.3% 2,786 -542 -19.5%

8 Discovery Civilization 809 2,594 -378 -14.6% 1,895 -1,110 -58.6%

9 Discovery Kids 887 2,656 -271 -10.2% 2,261 -458 -20.3%

10 Drive In Classics 789 2,261 217 9.6% 2,021 110 5.5%

11 ESPN Classics (Classic Sports) 572 1,888 -492 -26.0% 1,653 -1,196 -72.4%

12 Fox Sports World 667 2,733 -1,591 -58.2% 2,190 -2,538 -115.9%

13 green channel, the 45 -510 -1,146%

14 Hustler Channel (TEN-Channel 1) 36 2,008 286 14.3% 918 -280 -30.5%

15 Jazz 86 228 -2,157 -948.0% 153 -2,815 -1,843%

16 Leafs TV (Maple Leaf Channel) 107 927 -3,438 -371.0% 1,900 -4,060 -213.7%

17 Lonestar (Adventure) 869 3,750 760 20.3% 2,854 -50 -1.8%

18 Love1 1 50 -41 -81.4%

19 Luxe (HDTV Canada) 54 825 -1,319 -160.0%

20 Moviola 685 2,403 353 14.7% 1,897 190 10.0%

21 MSNBC Canada 317 -109 -34.4% 1,126 -586 -52.1%

22 PunchMuch (MTV 2, Music 5) 397 596 -518 -87.0% 533 -720 -135.0%

23 MuchLOUD 154 396 -290 -73.4% 165 -382 -231.0%

24 MuchMore Classic Video 156 217 -41 -19.1% 23 -135 -599.1%

25 MuchVibe 511 900 12 1.4% 651 -105 -16.1%

26 National Geographic Channel 908 4,284 -2,463 -57.5% 3,525 -2,871 -81.4%

27 NHL Network, The 581 4,183 186 4.4% 3,833 -1,199 -31.3%

28 PetNet 40 37 -280 -756.8%

29 Racing Network Canada, The 289 1,104 -1,163 -105.4% 1,032 -1,594 -154.4%

30 Raptors NBA TV (Raptors Basketball Channel) 415 2,785 -1,963 -70.5% 2,998 -1,804 -60.2%

31 Scream (HorrorVision) 1,070 3,620 -350 -9.7% 3,115 -786 -25.2%

32 SexTV: The Channel (Relationship TV) 617 2,103 -640 -30.5% 1,962 -581 -29.6%

33 ShortFilm 1 63 -108 -172.0%

34 Short TV 66 115 -223 -193.7%

35 Showcase Action (Action Channel) 1,262 7,726 -850 -11.0% 5,465 -81 -1.5%

36 Showcase Diva (Romance Channel) 1,159 6,759 -2,137 -31.6% 4,725 -759 -16.1%

37 SilverScreen 36 359 87 24.4% 52 -54 -103.9%

38 TV Land (Retro) 929 3,259 -571 -17.5% 3,003 -816 -27.2%

39 X Channel (TEN-Channel 2) 1 649 35 5.4% 253 -236 -93.0%

40 Xtreme Sports 592 2,258 -820 -36.3% 1,955 -478 -24.5%

Total digital category 2 86,351 -23,530 -27.2% 68,631 -32,913 -48.0%

Total English-language specialty services 1,435,400 362,562 25.3% 1,318,877 254,109 19.3%

* Bililngual services

Table 3.15: Financial results for specialty analog and
digital services - French-language services

2005 2004

# of PBIT PBIT

(thousands) subscr. Revenues PBIT Margin Revenues PBIT Margin

Analog services

1 ARTV 1,690 12,751 363 2.9% 11,812 -26 -0.2%

2 Canal D 2,217 27,464 12,913 47.0% 26,231 11,962 45.6%

3 Canal Évasion 1,395 6,474 1,316 20.3% 5,544 1,081 19.5%

4 Canal Vie 1,850 34,761 15,129 43.5% 30,494 12,415 40.7%

5 Historia 1,402 10,543 2,165 20.5% 9,054 694 7.7%

6 LCN - Le Canal Nouvelles 1,793 18,201 5,566 30.6% 18,495 7,374 39.9%

7 Musimax 1,748 9,417 1,063 11.3% 8,418 983 11.7%

8 MusiquePlus 2,192 18,251 3,200 17.5% 16,486 2,404 14.6%

9 RDS (Réseau des Sports) 2,338 68,258 21,894 32.1% 81,194 11,690 14.4%

10 Réseau de l'information (RDI) (non-profit) 9,379 44,791 -2,449 -5.5% 43,577 1,850 4.2%

11 Séries+ 1,399 20,531 10,089 49.1% 17,341 6,508 37.5%

12 TV5 (non-profit) 6,302 12,766 133 1.0% 12,672 135 1.1%

13 VRAK-TV (Canal Famille) 2,309 16,876 5,860 34.7% 17,378 6,697 38.5%

14 Ztélé (canal Z) 1,405 13,495 2,152 15.9% 11,233 73 0.6%

Total analog services 314,580 79,394 25.2% 309,928 63,840 20.6%

Digital category 1 services

1 13 rue 321 -2,586 -804.6%

2 RIS Info Sports 479 630 -972 -154.4%

3 LCNAffairs 284 -1,664 -586.7%

Total digital category 1 1,235 -5,223 -423.0%

Digital category 2 services

1 Avis de Recherche 500 61 -234 -381.6%

Total French-language specialty services 315,876 73,937 23.4% 309,928 63,840 20.6%

Table 3.16: Financial results for specialty analog and
digital services - Ethnic and third-language services

2005 2004

# of PBIT PBIT

(thousands) subscr. Revenues PBIT Margin Revenues PBIT Margin

Analog ethnic services

1 Asian Television Network (ATN/SATV) 49 3,347 854 25.5% 4,796 1,095 22.8%

2 Fairchild TV 359 25,739 5,595 21.7% 24,577 6,133 25.0%

3 Odyssey 13 1,338 132 9.8% 1,065 305 28.6%

4 Talentvision 227 4,472 -464 -10.4% 4,013 -289 -7.2%

5 Telelatino 3,532 15,192 5,673 37.3% 13,795 5,263 38.2%

Total analog services 50,088 11,789 23.5% 48,246 12,506 25.9%

Digital category 2 - 3rd-language services

1 All TV (Doragi Television Network) 7 1,187 125 10.5% 1,003 126 12.6%

2 Festival Portuguese Television 6 1,124 -313 -27.8% 698 -214 -30.7%

3 SSTV 9 601 30 5.0% 513 26 5.0%

4 ABU DhabiTV (Arabic TV) 2 52 -137 -266.0%

5 Mabuhay Channel, The (ECG Filipino) 2 48 -145 -301.7%

6 InterTV 1 42 -172 -410.1%

7 Odyssey ll 7 525 -23 -4.4% 307 45 14.6%

8 RTVi (Russian TV1) 5 297 -1 -0.4%

9 RTVi+ (RussianTV2) 2 61 -115 -187.5%

10 SBTN 2 44 -144 -324.3%

11 Sky TG 24 -138

12 VideoItalia -82

13 ATN Alpha Punjabi 9 625 160 25.5%

14 ATN Tamil Channel 2 168 43 25.5%

15 ARY Digital (Urdu Channel) 6 399 102 25.5%

Total digital category 2 5,174 -811 -15.7% 2,521 -18 -0.7%

Total ethnic and third-language specialty services 55,262 10,978 19.9% 50,767 12,489 24.6%

Table 3.17: Financial results for pay and
PPV analog and digital services

2005 2004

# of PBIT PBIT

(thousands) subscr. Revenues PBIT Margin Revenues PBIT Margin

Pay services

1 Movie Network,The (TMN) 1,026 100,874 22,413 22.2% 99,731 18,432 18.5%

2 Encore Avenue (MovieMax!) 340 8,713 1,827 21.0% 8,673 4,345 50.1%

3 Family Channel, The 5,022 46,360 16,220 35.0% 43,053 14,678 34.1%

4 MovieCentral (Superchannel) 748 74,662 26,178 35.1% 69,087 17,696 25.6%

5 Moviepix! 1,244 18,801 8,939 47.5% 18,217 8,835 48.5%

6 SuperÉcran * 479 47,423 12,558 26.5% 48,017 13,847 28.8%

7 ATN Caribbean ** 2 267 68 25.5%

8 ATN B4U (Hindi) ** 17 1,126 287 25.5%

Total pay services 298,225 88,489 29.7% 286,777 77,832 27.1%

PPV services - Terrestrial(T) and DTH (DTH)

1 Bell ExpressVu (DTH) 30,268 5,177 17.1% 31,872 2,033 6.4%

2 Breakaway (DTH) 6 0 0.0% 3,718 0 0.0%

4 Canal Indigo* (T and DTH) 726 4,345 -1,016 -23.38% 5,453 -572 -10.49%

5 PPV Sports (T) 2,754 -787 -28.6%

7 Shaw (T & DTH) 912 18,018 3,402 18.88% 17,533 2,074 11.83%

9 Viewer's Choice Canada (T & DTH) 2,072 24,904 6,390 25.66% 26,634 6,368 23.91%

Total PPV services 80,293 13,166 16.4% 85,211 9,903 11.6%

Total pay and PPV services 378,519 101,655 26.9% 371,988 87,735 23.6%

* French-language service
** Third-language services

Table 3.18: Financial results for specialty, pay and PPV analog
and digital services - summary totals

2005 2004

Revenues PBIT Revenues PBIT

($000) ($000) Margin ($000) ($000) Margin

Specialty - analog 1,657,504 500,797 30.2% 1,560,763 380,391 24.4%

Specialty - digital category 1 57,448 -28,746 -50.0% 47,657 -17,023 -35.7%

Specialty - digital category 2 91,586 -24,574 -26.8% 71,152 -32,930 -46.3%

Total specialty 1,806,538 447,477 24.8% 1,679,572 330,438 19.7%

Pay and PPV 378,519 101,655 26.9% 371,988 87,735 23.6%

Total specialty, pay and PPV services 2,185,057 549,132 25.1% 2,051,560 418,173 20.4%

2. Companies with significant ownership interests in specialty, pay, PPV and VOD, analog and digital services

• The following table lists companies with significant ownership interests in specialty, pay, PPV and VOD services. This table also includes large broadcasting and distribution undertakings with interest in specialty, pay, PPV and VOD services.

Table 3.19: Companies with significant ownership interest in
specialty, pay, PPV and VOD services as of 1 June 2006

Direct/Indirect

Voting
Alliance Atlantis Language Interest

Analog specialty services:

. Life Network, The e 100%
. Showcase e 100%

. History Television, The e 100%

. HGTV Canada (Home & Garden Television) e 80.2%

. Food Network Canada e 57.6%

. Séries+ f 50%

. Historia f 50%

. The Score (Headline Sports) e 22.3%

Category 1 digital specialty services:

. Independent Film Channel, The e 100%

. Discovery Health Network e 80%

. One: Body, Mind & Spirit e 29.9%

Category 2 digital specialty services:
. Showcase Diva e 100%

. Showcase Action e 100%

. Fine Living e 80.2%

. BBC Canada e 80%

. BBC Kids e 80%

. National Geographic Channel e 64%

. Scream e 49%

Direct/Indirect

Voting

Astral Media Language Interest

Analog specialty services:

. VRAK-TV (Canal Famille) f 100%

. Canal D f 100%

. Canal Vie f 100%

. Ztélé (Canal Z) f 100%

. Historia f 50%

. Séries+ f 50%
. MusiquePlus f 50%
. Musimax f 50%
. Teletoon / Télétoon b 40%

Pay services:
. Moviepix! (The Classic Channel) e 100%
. TMN (Movie Network, The) e 100%

. Super Écran f 100%

. Family Channel, The e 100%

. CINÉPOP (Digital cat. 2) f 100%

PPV services: (terrestrial & DTH):

. Viewers Choice Canada e 50.1%

. Canal Indigo f 20.04%

Direct/Indirect
Voting

BCE⁽¹⁾ Language Interest

BCE Inc. holds 68.5% voting interest in Bell Globemedia Inc.

PPV (Terrestrial & DTH) and VOD services:

. Bell ExpressVu (PPV) b 100%

. Vu! On Demand (VOD) b 100%

Direct/Indirect

Voting

Bell Globemedia⁽¹⁾ Language Interest

BCE Inc. holds 68.5% voting interest in Bell Globemedia Inc.

Analog specialty services:
. CTV Newsnet e 100%
. MTV Canada (TalkTV) e 100%
. ROBTV e 100%
. Comedy Network, The e 100%
. TSN (Sports Network, The) e 80%

. RDS - Réseau des Sports f 80%

. Discovery Channel, The e 64%

. Outdoor Life Network (OLN) e 33.34%
. ARTV f 16%

Category 1 digital specialty services:
. CTV Travel e 100%

. RIS Info Sports (Réseau Info Sports) f 80%

Category 2 digital specialty services:
. ESPN Classic Canada e 80%

. Discovery Civilization Channel e 64%

. Animal Planet e 64%

. Discovery HD Theatre e 64%

. NHL Network, The e 17.14%

. Raptors NBA-TV e 15.44%

. Leaf TV e 15.44%

PPV services (Terrestrial & DTH):

. Viewer's Choice Canada e 19.96%

. Canal Indigo * f 15.98%

* Comprised of 8% held through TQS inc. and 7.98% held through Viewer's Choice Canada.

Direct/Indirect

Voting

CanWest Language Interest

Analog specialty services:

. TVtropolis (Prime TV) e 66.7%

Category 1 digital specialty services:

. MenTV e 49%

. Mystery e 50%

Category 2 digital specialty services:

. Cool TV e 100%
. DejaView e 100%

. Fox Sports World Canada e 100%

. Lonestar e 100%

. Xtreme Sports e 100%

Direct/Indirect

Voting

CBC / SRC Language Interest

Analog specialty services:
. Newsworld e 100%
. RDI - Réseau de l'information f 100%
. ARTV f 37%

Category 1 digital specialty services:

. Country Canada e 100%

. Canadian Documentary Channel, The e 29%

Pay service:

. Galaxie (Pay audio) b 100%

Direct/Indirect

Voting

CHUM Language Interest

Analog specialty services:

. Bravo! e 100%

. MuchMusic e 100%

. MuchMoreMusic e 100%

. SPACE e 100%
. Star-TV e 100%

. Pulse 24 (CP24) e 100%

. Canadian Learning Television (CLT) e 100%

. MusiquePlus f 50%
. Musimax f 50%

Category 1 digital specialty services:
. FashionTelevision: The Channel e 100%

. Razer (MTV Channel) e 100%

. Book Television: The Channel e 100%

Category 2 digital specialty services:

. Drive-in Classics e 100%

. MuchLOUD e 100%

. MuchMoreRetro e 100%

. MuchVibe e 100%
. SexTV: The Channel e 100%
. PunchMuch (MTV2) e 100%

. Court TV Canada e 100%

. TV Land e 80.1%

Direct/Indirect

Voting

Cogeco Language Interest

PPV (Terrestrial & DTH) & VOD services:

. Canal Indigo * - PPV service f 32%

. Cogeco Câble - regional VOD service b 100%

* Comprised of 20% held by Cogeco and 12% held through TQS Inc.

Direct/Indirect

Voting

Corus⁽²⁾ Language Interest

Analog specialty services:

. YTV e 100%

. TreeHouse e 100%

. W (Women's Television Network) e 100%

. CMT (Country Music Television) e 90%

. Telelatino (Italian & Hispanic/Spanish) o 50.5%

. Teletoon / Télétoon * b 40%

. Food Network Canada e 22.59%

Category 1 digital specialty services:

. Canadian Documentary Channel, The e 53%

Category 2 digital specialty services:
. Discovery Kids e 80%
. Scream e 51%
. Leonardo World Canada (Sitcom Canada) (Italian) o 50.5%
. Sky TG24 (Network Italia) (Italian) o 50.5%
. Video Italia Canada (Italian) o 40.4%

Pay & VOD services:

. MovieCentral (SuperChannel) - pay service e 100%

. Encore Avenue (MovieMax!) - pay service e 100%

. MaxTrax (Pay audio service) b 100%

* 20% of the 40% voting interest is held by Nelvana Limited, a company that produces and distributes children and family productions. Corus Entertainment Inc. holds 100% voting interest in Nelvana Limited.

Direct/Indirect
Voting

Quebecor Media Language Interest

Quebecor inc. holds 54.72% voting interest in Quebecor Media Inc.

Archambault Group Inc.

Quebecor Media Inc. hold 94.5% voting interest in Archambault Group Inc..

VOD service:

. Illico sur demande - regional VOD b 100%

TVA Group Inc.
Quebecor Media Inc. hold 99.92% voting interest in TVA Group Inc.

Analog specialty services:
. LCN - Le Canal Nouvelles f 100%
. Canal Évasion f 8.31%

Category 1 digital specialty services:

. ARGENT (LCN Affaires) f 100%

. Mystère (13ieme rue) f 100%

. MenTV e 51%

. Mystery e 50%

Category 2digital specialty service:
. Prise 2 (Nostalgie) f 100%

PPV (terrestrial & DTH) services:

. Canal Indigo f 20%

Direct/Indirect
Voting

Rogers Communications Language Interest

Analog specialty services:

. Rogers Sportsnet e 100%

. Outdoor Life Network (OLN) e 33.3%

. TVTropolis (Prime TV) e 33.3%

Category 1 digital specialty services:

. Biography Channel, The e 100%

. G4TechTV (TechTV) e 66.66%

PPV (terrestrial & DTH) and VOD services:

. Sports/Specials Pay-per-View - PPV e 100%

. Viewers Choice Canada - PPV e 24.95%

. Canal Indigo - PPV service f 9.98%

. Rogers Cable - regional VOD service b 100%

Direct/Indirect

Voting

Shaw⁽²⁾ Language Interest

PPV & VOD services (terrestrial & DTH):

. Shaw Pay-Per-View - PPV service e 100%

. Videon CableSystems Inc. - regional VOD service b 100%

Notes to table 3.16:
. Legend: Language: e = English; f = French; o = Other; b=English/French, PPV = Pay-per-view; DTH = Direct to home; VOD = Video-on-demand
. Percentage of ownership interest indicated is related to the percentage of direct and indirect voting interest.
. Includes only category 2 services that have been launched as of 1 June 2006.
(1) Currently before the Commission is an application seeking the authority to change effective control of BGM.³³
(2) Shaw Communications Inc. is affiliated with Corus Entertainment Inc. as J.R. Shaw has voting control of both companies.
Sources: CRTC Acquisition & Ownership Policy Section, Industry Analysis Division and CRTC Decisions

H. Ethnic programming services

• Section 3(1)(d)(iii) of the Act provides, in part, that the Canadian broadcasting system should reflect the circumstances and aspirations of all Canadians, including the multicultural and multiracial nature of Canadian society.
• The principal components of the Commission's policy on ethnic broadcasting are set out in the Ethnic broadcasting policy, Public Notice CRTC 1999-117, 16 July 1999 (the Ethnic Policy). Among other things, the policy provides a framework for the licensing of an array of radio and television services in languages relevant to Canadian ethnocultural communities.
• Pursuant to the Ethnic Policy, ethnic television stations are required to devote at least 60% of their schedules to ethnic programming, and at least 50% of their schedules must consist of third-language programming.
• Ethnic programming is defined as programming directed to any culturally or racially distinct group other than one that is Aboriginal Canadian, or from France or the British Isles. Such programming may be in any language or combination of languages.
• Third-language programming is programming in languages other than English and French or those of Aboriginal Canadians.

1. Over-the-air Ethnic television stations

• The Commission is of the view that a primary responsibility of over-the-air ethnic television stations should be to serve and reflect their local community. Licensees are expected to report on past and future local programming initiatives at the time of licence renewal.
• Ethnic television stations are also required to serve a range of ethnic groups in a variety of third-languages. This approach allows for the provision of service to groups that would not otherwise be able to afford their own single-language service. However, where many distinct ethnic groups are served in the overall market, individual stations may be permitted to provide more hours of service to fewer groups.
• As a way of reflecting the circumstances and aspirations of the multicultural and multiracial nature of Canadian society and within the framework of the Ethnic Policy, the Commission has licensed four ethnic conventional television stations serving the following markets.

a) Montréal
CJNT-TV was approved in August 1995. This station is currently owned and operated by Global Communications Limited.

CJNT-TV is required to broadcast ethnic programs directed towards not less than 18 distinct ethnic groups monthly. It also broadcasts in at least 15 different languages monthly.

b) Toronto
There are currently two ethnic television stations licensed to serve the Toronto market. Both of these stations are owned and operated by Rogers Broadcasting Limited.

• OMNI 1 (formerly CFMT-TV) operates in the metropolitan Toronto/Hamilton area with transmitters in Ottawa and London making it available to approximately 70% of all Ontario residents.³⁴ This station was approved in December 1978.
  
  OMNI 1 provides ethnic programs dedicated to serve people of European, Latin American and Caribbean communities. It is required to broadcast programs targeted to not less than 18 distinct ethnic groups in a minimum of 15 different languages on a monthly basis.
   
• OMNI 2 was approved in April 2002. This station provides programming of interest to the Asian and African communities in the Toronto/Hamilton area, with transmitters³⁵ in Ottawa and London.
  
  OMNI 2 was launched in September 2002 and is required to broadcast programs targeted to a minimum of 22 ethnic groups in at least 18 different languages per month.

c) Vancouver
Channel M was approved in February 2002. This station is operated by Multivan Broadcast Limited Partnership and was launched on 27 June 2003. In CHNM-TV Vancouver - New transmitter in Victoria, Broadcasting Decision CRTC 2003-594, 3 December 2003, the Commission also approved a transmitter in the Victoria market.

Channel M is required to broadcast ethnic programming directed to at least 22 ethnic groups in a minimum of 22 distinct languages per month.

2. Ethnic pay & specialty services

In addition to ethnic conventional broadcasting services, the Commission has also licensed a number of Canadian ethnic specialty services.

a) Analog ethnic specialty services

There are five national Canadian analog ethnic specialty services offering programming in a variety of languages. These services are currently distributed either on a stand-alone basis or as part of a package with other discretionary services and are available to subscribers for a fee in addition to the basic monthly fee.

• Fairchild Television offers programming predominantly in Cantonese. The service was approved by the Commission in May 1984.
• Telelatino provides programs directed to Italian and Hispanic/Spanish audiences. The Commission approved this service in May 1984.
• Talentvision provides programming predominantly in Mandarin, complemented by some programming in Vietnamese and Korean. The service was approved by the Commission in December 1993.³⁶
• Asian Television Network (SATV) serves South Asian communities in 15 South Asian languages, predominantly Hindi, supplemented by programming in English. The service was approved by the Commission in September 1996.
• Odyssey provides programming intended for the Greek community. With the exception of a small amount of news programming, 100% of its programming is in Greek. The service was approved by the Commission in September 1996.

b) Category 2 digital ethnic pay & specialty services

As of 2 April 2006, the Commission has approved over 126 Canadian ethnic category 2 digital pay and specialty services. Of these, 25 specialty and 5 pay services have been launched.

Specialty services

• ABU Dhabi TV (Arabic TV) is a national service targeting the Arabic speaking community. 90% of all programming broadcast is in Arabic.
• All TV (Doragi Television Network) is a national service directed to the Korean / Korean-speaking community. 90% of the programming is in Korean.
• ATN Alpha Punjabi is a national service directed to the Punjabi-speaking community. 100% of this service's programming is in Punjabi.
• ATN Tamil Channel is a national service directed to the Tamil-speaking community. 100% of the programming broadcast is in Tamil.
• ARY Digital (Urdu Channel) is a national service directed to the Urdu-speaking community. 100% of the programming broadcast is in Urdu.
• Festival Portuguese Television is a national service directed to the Portuguese speaking community. 90% of its programming is in Portuguese.
• ATN ZEE Gujarati is national service directed to the Gujarati-speaking community. It is required to broadcast all of its programming in Gujarati.
• Inter TV (Ukrainian TV1) is a national service directed to the Ukrainian-speaking community. 90% of its programming is in Ukrainian.
• Israeli TV 1 is a national service directed to the Hebrew-speaking community. It is required to broadcast 90% of its programming in Hebrew. It cannot broadcast more than 10% of programming in the English language.
• SKY TG24 is a national service directed to the Italian community. It is required to broadcast not less than 85% of its programming in Italian.
• ITBC Television Canada is a national service targeting the Tamil-speaking community. 90% of the programming is in Tamil.
• The Mabuhay Channel, The (formerly ECG Filipino) is a national ethnic service directed to the Filipino-speaking community. 90% of the programming broadcast is in Filipino.
• Odyssey 2 is a national service directed to Greek-speaking audiences. 100% of the programming is in Greek.
• Persian/Iranian TV is national service directed primarily to the Farsi-, Azeri-, Kurdish-, Armenian- and Assyrian-speaking communities. It is required to broadcast not less than 80% of the programming in Farsi and not less than 10% in the Azeri, Kurdish, Armenian and Assyrian languages. It cannot broadcast more than 10% of all programming in the English language.
• Persian Vision is a national service directed to the Persian community. 85% of the programming is in Farsi.
• HTB Canada is a national service directed to the Russian-speaking community. It is required to broadcast 90% of its programming in the Russian language. It cannot broadcast more than 10% of the programming in English language.
• RTVi (Russian TV1) is a national service directed to the Russian-speaking community. 90% of the programming is in Russian.
• RTVi+ (Russian TV Two) is a national service providing a programming service with a focus on Russian culture and issues, targeting the Russian-speaking community. Not less than 90% of all programming broadcast during the broadcast week is in the Russian language.
• SBTN (Vietnamese TV) is a national service directed to the Vietnamese-speaking community. 90% of the programming is in Vietnamese.
• S.S.TV is a national service dedicated to programming that focuses on Punjabi religious teachings; music, dance and video based on Punjabi culture; and news and information concerns in East Indian countries and Punjabi communities in Canada. Not less that 50% of all programming is in the Punjabi-language and no more than 38%, 7% and 5% in the Hindi-, Urdu- and English-languages respectively.
• Leonardo World is a national service directed to Italian-speaking audiences. It is required to broadcast not less than 85% of its programming in Italian.
• Salt & Light Television (Inner Peace Television Network) is a national service devoted to providing religious programming from the single point-of-view of the Roman Catholic faith. The service targets Italian-, Spanish-, Portuguese-, Polish-, Filipino-, English- and French-speaking audiences.
• Tamil Vision (Tamil Channel) is a national service directed to the Tamil-speaking community. 90% of the programming is in Tamil.
• Telegu is a national service directed to the Telegu-speaking community. 100% of the programming is in Telegu.
• VideoItalia is a national service directed to the Italian-speaking community. It is required to broadcast at least 85% of its programming in Italian.

Pay services

• ATN Caribbean and African Network is a national ethnic pay television service targeting Caribbean and African communities.
• ATN B4U Hindi (Hindi Movie Channel) is a national pay service devoted predominantly to Hindi movies. 90% of all programming is in Hindi.
• ATN - Bangla Channel One is a national pay service directed to the Bengali-speaking community. It is required to broadcast 100% of its programming in the Bengali language.
• ATN - South Asian Devotional Music & Discourse Channel is a national pay service devoted to religious programming presented in South Asian languages. It is required to broadcast 100% of its programming in a variety of South Asian languages. It cannot broadcast programming in the English language.
• Hindi Movie Channel Two is a national pay service directed to the Hindi-speaking community. It is required to broadcast 100% of its programming in the Hindi language.

3. Non-Canadian third-language programming services eligible for distribution in Canada

• The Commission also authorizes non-Canadian third-language programming services that may be distributed by broadcasting distribution undertakings in Canada. There are currently 45 third-language programming services authorized for distribution³⁷.

I. Native television services

• Section 3(1)(o) of the Act provides that programming that reflects the Aboriginal cultures of Canada should be provided within the Canadian broadcasting system as resources become available. The Commission's native broadcasting policy is set out in Native Broadcasting Policy, Public Notice CRTC 1990-89, 20 September 1990.
• The primary role of Aboriginal broadcasters is to address the specific cultural and linguistic needs of their audiences while creating an environment in which Aboriginal artists and musicians, writers and producers, can develop and flourish. Native undertakings have a distinct role in fostering the development of Aboriginal cultures and, where possible, the preservation of ancestral languages.
• There are currently nine originating and 95 rebroadcasting native television stations in operation. The Commission has also licensed two native television networks:
  • Native Communications Inc. (NCI)
  • Wawatay Native Communications
• In addition, the Commission has licensed the national Aboriginal television programming service, Aboriginal Peoples Television Network (APTN) and has given it mandatory carriage under an order issued pursuant to section 9(1)(h) of the Act.

J. Religious television stations

• The Commission's religious policy is set out in Religious Broadcasting Policy, Public Notice CRTC 1993-78, 3 June 1993. Pursuant to this policy, a religious program is defined as one which deals with a religious theme, including programs that examine or expound religious practices and beliefs or present a religious ceremony, service or other similar event.

1. Over-the-air religious television stations

• There are five over-the-air religious television stations:
  • The Miracle Channel (CJLT-TV) Lethbridge, Alberta
  • Crossroads Television System (CITS-TV) Burlington, Ontario. The station serves the Hamilton, Burlington, St. Catharines and Toronto markets. It also has rebroadcasting transmitters in the Ottawa and London markets.
  • CFEG-TV, Abbotsford, British Columbia
  • CHNU-TV, Fraser Valley, British Columbia. The station is authorised to broadcast the programming of CHNU-TV to Victoria and its surrounding areas.
  • CIIT-TV, Winnipeg, Manitoba.³⁸

K. The national public broadcaster

• The Canadian Broadcasting Corporation / Société Radio-Canada (CBC/SRC) is Canada's national public broadcaster. Pursuant to section 3(1)(l) of the Act, the CBC/SRC should provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains.

1. Over-the-air conventional television stations

• The CBC/SRC operates two national television network services - one in English and the other in French. CBC/SRC also provides a distinctive television service in northern Canada, broadcasting in English, French and eight Aboriginal languages. Privately-owned stations affiliated with the CBC/SRC allow it to reach more Canadians.

2. Specialty services

• The CBC/SRC owns and operates the following specialty services:
  • CBC Newsworld, a national English-language news and information specialty service;
  • Le Réseau de l'information (RDI), a national French-language news and information specialty service; and
  • Country Canada, a national English-language category 1 digital specialty service that provides information and entertainment from a rural perspective.
• The CBC/SRC also has partial ownership interests in the following specialty services:
  • ARTV, a national French-language specialty service dedicated to the arts (37%); and
  • The Canadian Documentary Channel, a national English-language category 1 digital specialty service that broadcasts documentary programming on a 24-hour basis (29%).

L. Community-based television

• The role of community-based television is primarily to provide a public service, facilitating self-expression through free and open access to members of the community. As such, at least 60% of the programming aired during each broadcast week is comprised of local community television programming.
• In Policy framework for community-based media, Broadcasting Public Notice CRTC 2002-61, 10 October 2002 (Public Notice 2002-61), the Commission set out an integrated policy framework for community-based media. The objective of this policy is to ensure the creation and exhibition of more locally-produced, locally-reflective community programming and to foster a greater diversity of voices and alternative choices by facilitating new entrants at the local level.
• Public Notice 2002-61 replaced the 1991 Community channel policy³⁹ establishing a new licensing framework for community programming services. Public Notice 2002-61 also established a new class of broadcasting licence for the provision of community programming known as "community-based television programming undertakings."⁴⁰ There are currently 12 such services licensed in Canada: ten English-language, one bilingual (English & French) and one French-language.
• In situations where the cable company does not provide a community channel, or does not operate a community channel in accordance with the provisions of the Commission's policy, community groups may apply for a community programming service licence. The licensees of these services must be non-profit organizations with membership, management and programming that is mainly from the community.

M. Non-Canadian satellite services authorized in Canada

• In A new approach to revisions to the Commission's lists of eligible satellite services, Broadcasting Public Notice CRTC 2006-55, 28 April 2006, the Commission announced public notices setting out the Commission's determinations on requests to amend the lists would provide a link to an up-to-date version of the lists on the Commission's web site⁴¹. The Commission will periodically issue public notices setting out revised lists that include references to all amendments that have been made since the previous public notice setting out the lists was issued.
• The Commission's policy precludes the addition of English- or French-language non-Canadian services to the Lists if the Commission determines them to be either partially or totally competitive with Canadian specialty or pay television services. This policy serves to ensure that Canadian licensed services are in a position to fulfil their commitments and obligations with respect to Canadian programming, a responsibility that non-Canadian services do not have.
• In Improving the diversity of third-language television services - A revised approach to assessing requests to add non-Canadian third-language television services to the lists of eligible satellite services for distribution on a digital basis, Broadcasting Public Notice CRTC 2004-96, 16 December 2004, the Commission adopted a more open-entry approach to non-Canadian third-language general interest television services in order to expand the diversity and choice in television services available to underserved third-language communities in Canada without adversely affecting the viability of Canadian third-language ethnic genres and their ability to contribute to that diversity.
• Since the issuance of the 2005 Broadcasting Policy Monitoring Report, the Commission has removed one multilingual service⁴² from the Lists and approved 27 new non-Canadian services to the digital Lists.
• There are currently 134 non-Canadian services, broadcasting in 22 languages from approximately 31 countries, authorized for distribution in Canada by digital distributors. Of these services, 75 are also authorized for distribution by broadcasting distribution undertakings on an analog basis.
• The following table lists the non-Canadian satellite services that are authorized for distribution in Canada in May 2006⁴³.

Table 3.20: Non-Canadian satellite services
authorized in Canada

Authorized for

Principal Analog Digital

Country of origin/Non-Canadian service name Language & digital only

Australia

Network TEN English ü

Europe
France, Eurochannel Spanish / French / English / ü
Italian / Portuguese

France, EuroNews English / French ü

France, Eurosportsnews English ü

France, KTO French ü

France, Mezzo French ü

France, Paris-Première French ü

France, Planète French ü

+ France, Radio-France outre-mer (RFO1) French ü

France, Trace TV (formerly Tropic) French ü

+ Germany, Deutsche Welle German ü

+ Germany, German TV ** German ü

Germany, ProSiebenSat.1 Welt German ü v

Great Britain, BBC World English ü

+ Great Britain, Muslim Television Ahmadiyya Arabic/Chinese/French/ ü

Russian/Spanish/

Swahili/Urdu

Ireland, TV3 Republic of Ireland English ü
Italy, RAI International 2 Italian ü

+ Netherlands, BVN-TV Dutch ü

Poland, Polsat 2 International Polish ü v
+ Poland, TV Polonia Polish ü
Portugal, ITVN Polish ü v

Portugal, Radio Television Portugal International (RTPI) Portuguese ü v

+ Romania, Romanian Television International (RTVI) Romanian ü

+ Spain, Grandes Documentales de TVE Spanish ü

Spain, TVE Internacional Spanish ü v

+ Yugoslavia, RTV Palma Hungarian/Serbian ü

Authorized for

Principal Analog Digital

Country of origin/Non-Canadian service name Language & digital only

Asia

Bangladesh, NTV Bangla Bengali ü v

Bangladesh, ETV Bangla Bengali ü v

China, ET-Global Channel Chinese (Mandarin) ü v

India, Sahara One Hindi ü v

India, Sun TV Tamil ü v

+ Japan, TV Japan Japanese ü

Pakistan, GEO TV Urdu ü v
Pakistan, Indus Vision Urdu ü v

Philippines, PMA Pinoy TV Filipino ü v

Russia, Channel One Russia Worldwide TV (Channel One) Russian ü v

Central and Latin America⁴⁴

Argentina, TELEFE Internacional Spanish ü v

+ Argentina, Utilisima Spanish ü

Brazil, TV Globo Internacional (TV Globo) Portuguese ü v

Chile, TV Chile Spanish ü v

Colombia, TV Colombia Spanish ü v

Dominican Republic, Supercanal Caribe Spanish ü v

+ Latin America, Canal SUR Spanish ü

+ Latin America, CineLatino Spanish ü

Mexico, Azteca 13 International Spanish ü v
Mexico, Canal de las Estrellas Latinoamérica Spanish ü v
Mexico, Canal 52 MX Spanish ü v

Middle East & North Africa

+ Qatar, Al Jazeera Arabic ü

Saudi Arabia, Art Movies Arabic ü

New Zealand

TV3 Television Network English ü

TV4 Television Network English ü

United States

ABC - 8 independent stations* English ü

CBS - 9 independent stations* English ü

FOX - 7 independent stations* English ü
NBC - 8 independent stations* English ü
PBS - 7 independent stations* English ü

KSTW-TV, Tacoma/Seattle (independent) English ü

WUAB-TV, Cleveland (independent) English ü

7 Superstations* English ü

American Movie Classics English ü

+ ART America Arabic ü

Arts and Entertainment Network (A&E), The English ü

Black Entertainment Television (BET) English ü

Bloomberg Television English ü

Bridges TV English ü v

Cable News Network (CNN) English ü

Cable Satellite Public Affairs Network (C-Span) English ü

Comedy Central English ü

Authorized for

Principal Analog Digital

Country of origin/Non-Canadian service name Language & digital only

Consumer News and Business Channel (CNBC) English ü

Court TV English ü

CNN Headline News (CNN-2) English ü

Discovery Wings *** English ü

Eternal Word Television Network (EWTN) English ü

+ Filipino Channel, The Tagalog (Filipino) ü

Fox News English ü

Game Show Network English ü

Golf Channel, The English ü

Learning Channel, The English ü

Lifetime Television English ü

MSNBC English ü

New Tang Dynasty Television (NTDTV) Chinese (Mandarin) ü v

NFL Network English ü

Oxygen Network English ü

Phoenix North American Chinese Channel (PNACC) Chinese (Mandarin) ü v

Playboy TV English ü

PTV-Prime USA (PTV) Urdu ü v

Silent Network, The English ü

Speed Channel English ü

Spike TV English ü

Sony Entertainment Television Asia (SET Asia) Hindi ü v

Weather Channel (TWC), The English ü

Turner Classic Movies English ü

TV Land English ü

+ WMNB-TV: Russian-American Broadcasting Company Russian ü

* For a listing of each station refer to Appendix A of the most recent Revised lists of eligible satellite services, which are available on the Commission's website.
** In Call for comments on the proposed addition of Baby TV to the eligible lists of satellite services for distribution on a digital basis, and on the removal of German TV, Public Notice CRTC 2006-38, 30 March 2006, the Commissions stated that it was its understanding that German TV ceased to operate on on 31 December 2005 and proposed to delete German TV from the digital Lists.
*** In Distribution of The Military Channel - Call for comments, Broadcasting Public Notice CRTC 2005-91, 19 September 2005, the Commission called for comments on a request to amend the Lists to reflect a name change to The Military Channel.
+Denotes a third-language service that was on the Lists prior to 16 December 2004.
v New authorization.

IV. Broadcasting distribution

A. Promoting effective competition

• The Commission's policy to promote competition among broadcasting distribution undertakings (BDUs) was first set out in New regulatory framework for broadcasting distribution undertakings, Public Notice CRTC 1997-25, 11 March 1997 (Public Notice 1997-25). The Broadcasting Distribution Regulations¹ (the BDU Regulations) serving to implement this policy came into effect 1 January 1998. The BDU industry has been experiencing a fundamental shift towards increased competition since the adoption of the regulatory framework in 1997 and the Commission has made a number of changes to its regulatory framework in response to this new environment.
• The Commission exempted small BDUs under certain conditions to allow them to operate with increased efficiency and reduced expenses in order to compete more effectively in Exemption order respecting cable systems having fewer than 2,000 subscribers, Public Notice CRTC 2001-121, 7 December 2001 (Public Notice 2001-121), Exemption order respecting radiocommunication distribution undertakings (RDUs), Broadcasting Public Notice CRTC 2002-45, 12 August 2002 (Public Notice 2002-45), Exemption of cable broadcasting distribution undertakings that serve between 2,000 and 6,000 subscribers, Broadcasting Public Notice CRTC 2003-23, 30 April 2003, and Exemption order respecting cable broadcasting distribution undertakings that serve between 2,000 and 6,000 subscribers; and Amendment to the Broadcasting Distribution Regulations, Broadcasting Public Notice CRTC 2004-39,
• 14 June 2004 (Public Notice 2004-39).
• In Public Notice 2001-121, the Commission identified 1,583 cable distribution undertakings having fewer than 2,000 subscribers. To date, 1,479 Class 3 cable licensees have been granted exemption status.
• Of the 103 cable distributors serving between 2,000 and 6,000 subscribers that might be eligible for exemption from licensing and regulation identified in Public Notice 2004-39, all but 27 had been granted exemption status as of 30 May, 2006. In addition, five Class 1 cable distribution undertakings having fewer than 6,000 subscribers had also been granted exemption status as of the same date.
• Subscription Television systems (STV) provide over-the-air television service to small (rural or remote) communities in underserved areas. These undertakings broadcast signals in an encoded or scrambled mode by means of low-power (about 20 watts) transmitters. In Public Notice 2002-45, the Commission issued an exemption order affecting most of these undertakings.
• In August 2004, the Commission concluded a review of its winback rules that prohibit the targeted marketing by incumbent cable companies of customers who have cancelled basic cable service. In Changes to the winback rules for broadcasting distribution undertakings, Broadcasting Public Notice CRTC 2004-62, 13 August 2004, the Commission determined that the winback rules would be more effective if they were focused on areas where a truly competitive broadcasting distribution market has yet to emerge. Accordingly, the Commission eliminated the winback rules for single-unit dwellings and for cable systems that have fewer than 6,000 subscribers. The Commission also introduced additional winback rules to govern the conduct of incumbent BDUs with 6,000 or more subscribers in their dealings with residents of multiple-unit dwellings.
• In Auditing of distributor subscriber information by programming services, Broadcasting Public Notice CRTC 2005-34, 18 April 2005, the Commission issued a set of guidelines to ensure that programming services are able to obtain reasonable access to information held by BDUs regarding subscribers to their services.

1. Subscriber levels of incumbent and alternative BDU delivery systems

Table 4.1: Number of basic subscribers (000)

Cable, class 1* DTH MDS & STV Total

2001 6,857 81.0% 1,520 18.0% 87  1.0% 8,465 100.0%

2002 6,704 76.9% 1,960 22.5% 57  0.7% 8,723 100.0%

2003 6,581 74.9% 2,152 24.5% 50  0.6% 8,783 100.0%

2004 6,642 74.1% 2,277 25.4% 39  0.4% 8,958 100.0%

2005** 6,607 72.7% 2,455 27.0% 32  0.4% 9,094 100.0%

* In this instance and throughout the document references to class 1 BDUs and class 1 cable BDUs include Digital Subscriber Line (DSL) results. Also note that as a result of PN 2004-39 a few class 1 cable systems have been exempted from reporting requirements.
** In this instance and throughout the document 2005 CRTC financial database results are preliminary.
Note: 2001 to 2004 figures have been updated to reflect current aggregate August 31 results.
Source: CRTC financial database

• Class 1 cable licensees continue to maintain the bulk of subscriber market share. Competition, primarily from direct-to-home (DTH), has reduced the overall share of Class 1 cable licensees from 81% in 2001 to 73% in 2005.
• Statistics Canada figures for 2004 indicate that there was a total of 7.6 million cable subscribers, meaning that in 2004, there were approximately 1 million subscribers to exempt cable systems.²
• DTH subscribership increased by 178,000 in 2005. This represents an increase of 7.8% in 2005 for a total market share of 27.0%.
• Digital Subscriber Line (DSL) undertakings distribute programming to subscribers through a telephone line or "copper twisted-pair." Digital modulation techniques permit the transmission of voice, high-speed data and video on the same copper twisted-pair. Currently Aliant Telecom Inc. (Aliant), Bell Canada (Bell), MTS Communications Inc. (MTS), Saskatchewan Telecommunications (SaskTel) and Telus Communications Inc. (TCI) are licensed as Class 1 BDUs to provide service using DSL technology.

B. Ensuring a financially strong sector

1. Revenues

Table 4.2: BDU revenues ($ 000,000)

2001 2002 2003 2004 2005

Basic programming revenue

Revenue obtained from the basic programming service packages provided by distributors.

Cable (Class 1) 1,693 1,664 1,709 1,810 1,843

DTH, MDS, STV 91 280 356 458 505

Total 1,784 1,944 2,065 2,268 2,348

Non-Basic programming revenue

Revenue derived from discretionary programming service packages provided by distributors (programming services not on the basic service).

Cable (Class 1) 1,295 1,360 1,394 1,475 1,538

DTH, MDS, STV 575 650 811 871 931

Total 1,869 2,009 2,205 2,346 2,469

Non-programming revenue

Revenue derived from exempt services and non-programming services such as the Internet.

Cable (Class 1) 440 685 1,053 1,270 1,188

DTH, MDS, STV 13 16 36 28 32

Total 453 702 1,089 1,298 1,220

Total revenue

Includes revenue derived from programming and non-programming services.

Cable (Class 1) 3,427 3,709 4,156 4,555 4,569

DTH, MDS, STV 679 946 1,204 1,357 1,468

Total 4,106 4,656 5,360 5,912 6,037

Source: CRTC financial database

• The BDU industry as a whole has continued to grow. In 2005 total revenues increased by over $100 million.
• DTH, MDS and STV providers reported increased revenues of 8.2% in 2005.
• The charts below illustrate the changes in the share of total BDU revenues from 2001 to 2005.

Chart 4.1: Distribution of total revenues

2001	2005

 Source: CRTC financial database

2. Profit before interest and taxes (PBIT) margins, Class 1 undertakings

Chart 4.2: PBIT margins

Source: CRTC financial database

• The chart above shows the PBIT margins for Class 1 undertakings based on the reported results from all programming and non-programming services.
• The PBIT margin for Class 1 undertakings decreased slightly to 20.3% in 2005.

3. Return on investment - Class 1 undertakings

Chart 4.3: Return on average net fixed assets (RANFA)

Source: CRTC Financial Database

• A significant increase in the amount of average net fixed assets of class 1 cable undertakings led to a decrease in the RANFA in 2005.

C. Top Canadian distributors

Table 4.3: Top Canadian distributors and
number of basic subscribers

Number of subscribers (000)

Corporations 2004 2005 2006

Rogers Cable Inc. ⁽¹⁾ 2,266 2,249 2,260

Shaw Communications Inc. ⁽²⁾ 2,074 2,138 2,179

Bell ExpressVu LLP. ⁽¹⁾ 1,403 1,532 1,739

Vidéotron Ltée ⁽¹⁾ 1,428 1,455 1,520

Star Choice Television Network Inc. ^(2,3) 814 830 862

Cogeco Cable Inc. ⁽²⁾ 829 831 836

Total - Top Canadian distributors 8,814 9,035 9,396

(1) As of March 31 each year.
(2) As of February 28 each year.
(3) Star Choice Television Network Inc. is controlled by Shaw Communications Inc.
Sources: Corporate Quarterly Reports

D. Promoting digital technology

Table 4.4: Number of subscribers receiving digital services

Number of digital subscribers (000)

Total English French

% of

Distribution type Number Total Growth Number Growth Number Growth

Sept. 2005 04 to 05 04 to 05 04 to 05

Digital cable 2,630.8 50% 28% 2,116.8 27% 514.0 32%

DTH * 2,514.9 48% 9% n/a * n/a *

MDS 39.4 1% -16% 26.2 -17% 13.2 -14%

DSL 90.3 2% 87% 90.3 87% - -

Total 5,275.4 100% 19%

June 03 June 03 June 03

Sept. 2004 to Sept. 04 to Sept.04 to Sept.04

Digital cable 2,054.0 46% 6% 1,663.9 7% 390.1 4%

DTH * 2,301.4 52% 2% n/a * n/a *

MDS 47.0 1% -3% 31.7 -1% 15.3 -7%

DSL 48.2 1% 18% 48.2 18% -

Total 4,450.6 100% 4%

June 2004     03 to 04   03 to 04   03 to 04

Digital cable 1,937.8 45% 25% 1,561.7 21% 376.1 48%

DTH * 2,257.4 53% 14% n/a * n/a *

MDS 48.4 1% -14% 32.0 -10% 16.4 -23%

DSL 40.9 1% n/a 40.9 -

Total 4,284.5 100% 19%

June 2003     02 to 03 02 to 03 02 to 03

Digital cable 1,550.4 43% 34% 1,295.6 31% 254.9 53%

DTH 1,987.5 55% 9% 1,458.6 528.9

MDS 56.7 2% -19% 35.5 -16% 21.2 -23%

Total 3,594.6 100% 18%

June 2002

Digital cable 1,155.6 38% 989.3 166.3

DTH 1,825.0 60% 1,339.4 485.6

MDS 69.9 2% 42.4 27.5

Total 3,050.5 100%

* English- and French-language subscriber estimates for DTH were not provided in 2004 or 2005.
Source: Mediastats

E. Ensuring contributions to Canadian programming and local expression

• The BDU Regulations require that all Class 1 and Class 2 cable licensees³, as well as all DTH and MDS distribution undertakings, contribute a minimum of 5% of their gross annual revenues derived from broadcasting activities to support Canadian programming. Contributions to Canadian programming are made through the Canadian Television Fund (CTF)⁴ and other independent production funds, as well as through contributions to local expression.
• The BDU Regulations require that a minimum of 80% of the gross revenues that must go to production funds be directed to the CTF, with up to 20% directed to one or more independently administered production funds, other than the CTF. The Commission's Contributions to Canadian Programming by Broadcasting Distribution Undertakings, public notice CRTC 1997-98, 22 July 1997, as well as two subsequent Public Notices⁵, set out the criteria to be met by such independently administered funds.

1. Contributions to programming funds

Table 4.5: Contributions to programming funds

Contributions to programming funds ($ 000,000)

CTF Independent Funds Total CTF & Other Funds

Class & subscriber level 01 02 03 04 05 01 02 03 04 05 01 02 03 04 05

Class 1 > 20,000 63 61 64 67 66 15 15 16 17 15 78 76 80 84 81

Class 1 < 20,000 4 5 3 1 0 1 1 1 0 0 5 6 4 1 0

DTH, MDS & SRDU* 25 38 47 54 57 8 10 12 14 15 33 47 59 67 71

Total 92 103 115 122 123 24 26 29 31 30 116 129 143 152 153

Notes: Based on August 31 of each year. An internal review resulted in a reclassification of some of the contributions from 2001-2004.
SRDU: Satellite Relay Distribution Undertaking
Source: CRTC financial database

• As Class 2 cable systems have largely been granted exemption status, they are not required to file annual returns reporting their contributions to programming funds to the Commission.
• Several Class 1 cable systems passed the 20,000 subscriber mark in 2004 and some Class 1 cable systems serving fewer than 6,000 subscribers were exempted and ceased to file annual returns in 2004, accounting for the difference in CTF contributions reported between 2003 and 2004.

2. Total community channel expenses

Table 4.6: Community channel expenses for class 1 cable

Total community channel expenses ($ 000)

2001 2002 2003 2004 2005

Class 1 > 20,000 56,680 65,812 64,288 69,493 71,331

Class 1 < 20,000 13,970 20,152 16,986 18,828 17,797

Total 70,651 85,965 81,274 88,321 89,128

Notes: Based on August 31 of each year. 2001 to 2004 figures have been updated to reflect current aggregate August 31 results. Class 1 BDU must comply with Section 29 of the Broadcasting Distribution Regulations, which requires them to pay a contribution of 5% of its gross revenues derived from broadcasting activities to Local Expression and Canadian Programming. The eligible amount for Local Expression is explained in Public Notice CRTC 1991-59, Community Channel Policy, and includes the depreciation relating to direct expenditures.
Source: CRTC financial database

• Public Notice 1997-25 introduced flexibility for cable licensees in regard to the manner in which they contribute to Canadian programming and local expression, formerly required through investment in a community channel.
• The BDU Regulations permit Class 1 licensees with fewer than 20,000 subscribers to allocate all of their Canadian programming contributions to local expression.

3. Number of systems maintaining a community channel

• The BDU Regulations no longer require class 1 and 2 licensees to operate a community channel. Apart from its benefits to the public through local reflection, the community channel provides cable operators with a highly effective medium to establish a local presence and to promote a positive corporate image. Accordingly, many continue to offer one.
• The following table outlines the number of Class 1 licensees that have reported community channel expenses between 2001 and 2005. The figures do not necessarily represent the actual number of community channels in operation, as some channels are funded by more than one undertaking.

Table 4.7: Cable undertakings contributing to community channels

2001 2002 2003 2004 2005

Class 1 > 20,000 70 68 66 68 69

Class 1 < 20,000 75 75 77 69 66

Note: Based on August 31 of each year. 2001 to 2004 figures have been updated to reflect current aggregate August 31 results.
Source: CRTC financial database

V. Diversity and social issues

The Commission's key social policy objectives can be described under four general headings:

A. Official languages
B. Diversity
C. Accessibility
D. Programming standards

A. Official languages

• The Broadcasting Act (the Act) acknowledges that "English and French language broadcasting, while sharing common aspects, operate under different conditions and may have different requirements". The Act requires that "a range of broadcasting services in English and in French shall be extended to all Canadians as resources become available" and that CBC programming shall reflect the "particular needs and circumstances of English and French linguistic minorities" and be "of equivalent quality in English and French".
• Furthermore, the CRTC is required, pursuant to section 41 of the Official Languages Act (OLA), to develop, following consultations with minority official languages communities, an action plan on official languages.
• The steps taken by the Commission to support the Broadcasting Act's objectives related to linguistic duality are set out in the CRTC's 2004-2005 Official Languages Action Plan.¹ This plan reflects CRTC activities falling within the scope and limits of its mandate while addressing the needs and priorities of the minority official languages communities.
• The Commission is currently preparing a three-year action plan regarding the implementation of section 41 of the OLA and is completing a Statement of Achievements for the past year. Both documents will be available on the CRTC website in early Summer 2006.
• The Commission will continue to actively support initiatives to encourage linguistic duality, to help foster the recognition and use of both English and French in Canada. It will also continue, within the limits of its mandate, to support the enhancement of the vitality of English- and French-language minority communities in Canada and assist them in their development.

B. Diversity

• The Commission's objective with regard to diversity is to ensure all broadcasters contribute to a system that accurately reflects the presence in Canada of ethnocultural minorities, Aboriginal peoples and persons with disabilities. Consistent with section 3(1)(d)(iii) of the Act, 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.

• Accordingly, the Commission expects all licensees to reflect the diversity of the markets they serve.
• The Commission has identified two clear objectives for the Canadian broadcasting system with respect to diversity:²
  • The broadcasting system should be a mirror in which all Canadians can see themselves.
  • The broadcasting system should be one in which producers, writers, technicians and artists from different cultural and social perspectives have the opportunity to create a variety of programming and to develop their skills.
• In practical terms, the Commission's objectives are to ensure:
  • the accurate reflection of the presence ("who we see" and "who we hear") of ethnocultural minorities, Aboriginal peoples and persons with disabilities; and
  • the accurate, fair and non-stereotypical portrayal ("how we see" and "how we hear") of such groups.
• The Commission is achieving its objectives by licensing services that target specific communities and through expectations with regard to private television broadcasters, private radio broadcasters and the Canadian Broadcasting Corporation (CBC).

1. Services targeted to specific communities

• The Commission continues to license services dedicated to serving specific communities such as:
  • over-the-air ethnic radio and television services;
  • ethnic specialty and pay services;
  • native radio and television undertakings; and
  • The Aboriginal Peoples Television Network.
• The Commission authorizes non-Canadian third-language services for distribution in Canada, subject to certain criteria. In December 2004, the Commission issued Public Notice 2004-96³, which announced a revised approach to the assessment of requests to add non-Canadian third-language television services to the lists of eligible satellite services for distribution on a digital basis. The revised policy, which established a more open-entry approach to the authorization of non-Canadian third-language general interest services, puts a greater emphasis on expanding the diversity and choice in television services available to underserved third-language ethnic communities in Canada. Since the announcement of the revised policy, a total of twenty-five (25) third-language services have been authorized.⁴
• In November 2005, the Commission issued Public Notice 2005-104⁵, which announced the establishment of an open-entry approach for general interest third-language ethnic Category 2 pay and specialty services in order to expand the diversity and range of services available to underserved communities. Thirteen (13) Canadian third-language ethnic Category 2 services have been approved under the revised policy and several applications are currently under review.⁶

2. Private television broadcasters

Employment Equity

• The Commission requires broadcasters to describe their plans and activities with respect to the equitable employment⁷ and on-air representation of the four designated groups: visible minorities, Aboriginal persons, women and persons with disabilities.

Cultural Diversity Corporate Plans

• Since August 2001, the Commission has required television licensees to develop and file detailed corporate plans that include specific commitments to corporate accountability, the reflection of diversity in programming, and the solicitation of effective feedback from viewers.⁸ Since 2004, the Commission has required that these plans also include persons with disabilities.⁹ As of 31 March 2006, the Commission has received plans from:
  • Alliance Atlantis Broadcasting Inc.
  • Astral Broadcasting Group Inc.¹⁰
  • Cable Public Affairs Channel Inc.
  • CHUM Limited
  • Consortium de télévision Québec Canada inc.
  • Corus Entertainment Inc.
  • CTV Television Inc.
  • Global Communications Limited
  • Groupe TVA inc.
  • Learning & Skills Television of Alberta Limited
  • MusiquePlus inc.
  • Pelmorex Communications Inc.
  • Rogers Broadcasting Limited
  • The Score Television Network Limited
  • TQS Inc.
  • Vision TV
• As a key tool for monitoring progress in this respect, the Commission also requires television licensees to file annual reports outlining progress made to achieve the stated goals and any new initiatives undertaken. These reports are available on the Commission's website.¹¹

Task Force for Cultural Diversity on Television

• In July 2004, the Task Force for Cultural Diversity on Television, which was formed by the CAB in 2001, published an extensive report.¹² The report includes the results of a landmark quantitative and qualitative study of the state of representation on private Canadian television as well as a recommended set of best practices and industry initiatives.
• The Commission issued its response to the report in Public Notice 2005-24.¹³ The Commission stated that, in addition to overall improvements in the representation and reflection of ethnocultural diversity on television, it expects progress to be made by broadcasters in addressing the key gaps identified by the research, namely:
  • the virtual absence of Aboriginal peoples in all genres of programming;
  • the significant under-representation of Asian Canadians in all genres of programming; and,
  • the lack of visible minorities and Aboriginal peoples in French-language news, in lead roles in English-language news programming, and in primary roles in English-language drama.

• The Commission stated that it expects the CAB to report annually on its progress in implementing the industry initiatives recommended by the Task Force. The CAB filed its first report on 28 April 2006.

Persons with Disabilities

• In Public Notice 2004-2¹⁴, the Commission also called upon the CAB to develop and file a plan outlining its proposed process to examine issues surrounding the presence, portrayal and participation of persons with disabilities in television programming. The CAB filed an action plan on 16 August 2004.
• The CAB's final report, entitled The Presence, Portrayal and Participation of Persons with Disabilities in Television Programming, was filed with the Commission in September 2005. It included the results of a three-part qualitative research project on the state of the presence, portrayal and participation of persons with disabilities on Canada's privately-owned television services, as well as proposed initiatives, tools and recommendations for both the CAB, its members and its industry partners. The Commission is expected to issue its response to the CAB's final report in Spring 2006.

Review of Industry Codes

• In Public Notice 2005-24, the Commission further directed the CAB to review its broadcasting industry codes to determine whether they address concerns identified in the research findings regarding reflection and portrayal. The CAB filed a report with the Commission on 23 December 2005. The CAB reported that it plans to submit a new code to the Commission in June 2006 that establishes industry standards for the portrayal of ethnocultural and Aboriginal groups and persons with disabilities. It is the CAB's intention that this code will expand and effectively replace the CAB Sex-Role Portrayal Code for Radio and Television Programming.

3. The Canadian Broadcasting Corporation (CBC)

• The Commission requires that the CBC include in its annual reports a description of how it is fulfilling its commitment as noted in Public Notice CRTC 2000-1¹⁵ to more adequately reflect the multicultural and multiracial nature of Canada and to balance their representation on the air in a manner that realistically reflects their participation in Canadian society, and that help to counteract negative stereotypes.

4. Private radio broadcasters

• In Public Notice 1998-41¹⁶, the Commission encouraged radio broadcasters to reflect the cultural diversity of Canada in their programming and employment practices, especially with respect to news, music and promotion of Canadian artists.
• As part of the current policy review announced in Notice of Public Hearing 2006-1¹⁷, the Commission is exploring ways to ensure that the commercial radio sector reflects the multicultural and multiracial nature of Canadian society and the special place of Aboriginal peoples within society, as well as reflection of persons with disabilities.

C. Accessibility

• Section 3(1)(p) of the Act states that "programming accessible by disabled persons should be provided within the Canadian broadcasting system as resources become available for the purpose."

1. Access for persons who are deaf or hard of hearing

• Access for persons who are deaf or hard of hearing is provided through closed captioning, which provides on-screen textual representation of the audio component of a program. Closed captioning is generally presented as a banner at the bottom of the screen, showing on-screen dialogue and selected sounds in text form.
• 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 English-language conventional television and specialty and pay services to caption 90% of their programming, including 100% of their news, by condition of licence.
• In Public Notice 1999-97¹⁸, the Commission stated that French-language television broadcasters should be subject to requirements similar to those imposed on English-language television broadcasters. Increased obligations are being imposed on French-language broadcasters at individual licence renewals.
• The Commission also expects the broadcasters to focus on improving the quality, reliability and accuracy of closed captioning, and to work with representatives of the deaf and hard of hearing community to ensure that captioning they provide continues to meet their needs.
• The Commission encourages the private television English-language broadcasters to use the closed captioning manual developed by the CAB entitled "Closed Captioning Standards and Protocol Manual for English-Language Broadcasters".
• In addition, the CBC/SRC has developed and uses The CBC Captioning Style Guide and the Normes de sous-titrage.
• Following the licence renewals of 21 French-language television stations in 2004, the Commission required that SRC, TVA and TQS report annually to the Commission on the progress made toward improving the quality and quantity of closed captioning. The Commission also required TVA and TQS to file their internal standards on caption quality with the Commission, and to work with the CAB to develop standards and procedures respecting closed captioning for French-language television broadcasters.
• As part of its on-going role in monitoring and assessing its approach to closed captioning, the Commission met with the Canadian Association of the Deaf and the CAB in November 2005 to discuss concerns relating to the quantity and quality of captioning.

2. Access for persons who are blind or whose vision is impaired

• Access for persons who are blind or whose vision is impaired is provided through audio description or video description (or described video programming).
• Audio description is the provision of basic voice-overs of textual or graphic information displayed on screen. The Commission expects licensees to provide audio description, wherever appropriate.
• Described video programs have narrated descriptions of key visual elements that are timed to occur during lapses in dialogue. Description is normally provided on the secondary audio programming (SAP) channel. Programming such as drama, documentary and children's programs best lend themselves to described video.

Current requirements to provide described video programming

• Major conventional television stations are:
  • Required, by condition of licence, to describe a minimum amount of Canadian programming, generally starting at two hours per week and eventually reaching four hours per week.
  • expected to broadcast described versions of programming, wherever available.
• Pay and specialty services renewed since 2001 are:
  • expected to broadcast described versions of programming, wherever available.
  • six of the specialty services renewed in January 2004 are required, by condition of licence, to describe a minimum of two hours per week (starting 1 September 2005), increasing to three hours per week (beginning 1 September 2008).¹⁹
  • two of the French-language specialty services renewed in August 2005 are required, by condition of licence, to describe a minimum of two hours per week (starting 1 September 2007 or 1 September 2008), increasing to a minimum of three hours per week (starting 1 September 2010 or 1 September 2011) ²⁰ and two others are required, by condition of licence, to describe a minimum of two hours per week (starting 1 September 2009).²¹
• Distributors:
  • In Public Notice 2005-18,²² the Commission reminded Class 1 cable operators and direct-to-home (DTH) providers of their obligation to pass through all described video programming being provided to them by programming services.
  • Subsequently, in Public Notice 2006-6,²³ the Commission stated that, while Class 2, Class 3 and exempt broadcasting distribution undertakings (BDUs) are required to pass through video description of all programming services on a digital basis, it would be prepared to relieve exempt BDUs and certain Class 2 and Class 3 BDUs of the requirement to pass through video description on an analog basis. The Commission also stated that it finds it appropriate to relieve multipoint distribution system (MDS) BDUs of the pass through requirements due to difficulties experienced in the existing competitive environment.

3. National reading services

• VoicePrint and La Magnétothèque are national reading services which were licensed in 1990 to provide programming of benefit to persons who are blind, whose vision is impaired or who are print-restricted. These services provide full-text reading of stories, information, news and features published by a variety of newspapers, magazines and periodicals.
• VoicePrint has mandatory carriage in English-language markets pursuant to an order issued under section 9(1)(h) of the Act.²⁴ Cable companies distributing VoicePrint on an analog basis distribute it on CBC Newsworld's SAP channel. MDS licensees, DTH satellite distributors and cable companies distributing Voiceprint on a digital basis distribute it on an audio channel located near a CBC channel.
• La Magnétothèque is provided by cable undertakings as background audio on alphanumeric channels or as audio services on audio channels of their undertakings. It is also offered to FM radio station licensees for broadcast on Subsidiary Communications Multiplex Operation Channels (SCMO).

D. Programming standards

• The Commission is required, pursuant to section 5(1) of the Act, to regulate and supervise the Canadian broadcasting system with a view to implementing the broadcasting policy set out in section 3(1) of the Act. Section 3(1) sets out an extensive declaration of the broadcasting policy for Canada, listing a number of policy objectives that speak to programming standards. Section 3(1)(d)(i) declares that the Canadian broadcasting system should "serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada." Section 3(1)(d)(ii) states that the Canadian broadcasting system should "encourage the development of Canadian expression by providing a wide range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity." Section 3(1)(d)(iii) states that the Canadian broadcasting system should through its programming and 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." Section 3(1)(g) states that "the programming originated by broadcasting undertakings should be of high standard."
• The Commission is required to balance the achievement of these objectives against the requirement to apply the Act in a manner consistent with freedom of expression and journalistic, creative and programming independence enjoyed by broadcasting undertakings as set out in section 2(3) of the Act. Section 3(1)(h) of the Act states that the broadcasters themselves "have a responsibility for the programs they broadcast."
• A key mechanism for achieving these objectives is through self-regulation. The industry must abide by the following industry codes, some of which apply as a result of the Commission's regulations, some by condition of licence and some as a result of membership in the Canadian Broadcast Standards Council (CBSC), Advertising Standards Canada (ASC) or the Cable Television Standards Council (CTSC):²⁵
  • ASC Canadian Code of Advertising Standards
  • Broadcast Code for Advertising to Children
  • Cable Television Community Channel Standards
  • Cable Television Customer Service Standards
  • CAB Code of Ethics
  • CAB Sex-Role Portrayal Code for Television and Radio Programming
  • CAB Voluntary Code Regarding Violence in Television Programming
  • CBC Guidelines on Sex-Role Portrayal
  • Code for Broadcast Advertising of Alcoholic Beverages
  • Industry Code of Programming Standards and Practices Governing Pay, Pay-Per-View and Video-on-Demand Services
  • Pay Television and Pay-Per-View Programming Code Regarding Violence
  • Radio-Television News Directors Association of Canada (RTNDA Canada) Code of Ethics

• As noted above, in response to Public Notice 2005-24, the CAB intends to submit a new portrayal code in June 2006 that incorporates standards, not only for the portrayal of women, but also for the portrayal of ethnocultural groups, Aboriginal peoples and persons with disabilities.²⁶
• The Commission expects any discretionary service broadcasting adult programming to adhere to the adult programming provisions contained in Industry Code of Programming Standards and Practices Governing Pay, Pay-Per-View and Video-on-Demand Services.²⁷ The Code includes a comprehensive section specifically addressing adult programming that provides clear guidance for broadcasters regarding the classification and scheduling of adult films. Furthermore, the Commission expects all licensees that distribute adult programming to develop internal policies for the broadcast of adult programming to be submitted at the time of licensing, licence renewal or in the event of a complaint.

1. Complaints and enquiries

• The Commission frequently receives requests for information, comments on procedural issues and complaints by the public, via e-mail, telephone and letter. The following table provides a breakdown of contacts related to broadcasting enquiries in general and broadcasting complaints that the Commission received on an annual basis from 1 September 2002 to 31 August 2005, and during the 6-month period from 1 September 2005 to 31 March 2006.

Table 5.1: Number of contacts by public

1 Sep. to

1 September to 31 August 31 Mar.

  2002-03 2003-04 2004-05 2005-06

Broadcasting matters 24,770 18,273 23,848 12,531

Broadcasting complaints 11,581 10,575 9,604 5,644

Source: CRTC Correspondence Tracking System²⁸

• The following table provides representative samples of the types of broadcasting complaints that the CRTC received during the same time periods, with respect to radio, television, specialty, pay and PPV services. The table also provides the number of referrals that were made by the CRTC to the CBSC for complaints that fell within the CBSC's mandate.

Table 5.2: Broadcasting complaints by sector, by issue

1 Sep. to
1 September to 31 August 31 Mar.

2002-03 2003-04 2004-05 2005-06

Com- Referrals Com- Referrals Com- Referrals Com- Referrals

plaints to plaints to plaints to plaints to

received CBSC received CBSC received CBSC received CBSC

Radio

Abusive comment²⁹ 148 57 81 39 93 48 56 31

Adult content 46 23 32 16 28 17 21 17

Alcohol advertising - - 1 - 1 1 1 1

Gender portrayal 39 27 1 1 1 1 2 2
Offensive comment³⁰ 408 255 291 165 331 156 129 52
Offensive language³¹ 74 24 27 8 58 24 26 13

Conventional television

Abusive comment 87 31 195 34 370 84 199 78

Adult content 303 145 441 286 270 120 158 86

Alcohol advertising 19 3 17 1 13 1 2 1

Gender portrayal 51 32 14 - 14 2 2 1

Offensive comment 203 62 660 158 389 161 369 218

Offensive language 91 59 48 21 49 19 49 20

Television violence 84 27 99 34 90 32 63 25

Specialty channels

Abusive comment 25 18 10 2 130 9 8 4

Adult content 110 59 102 62 138 84 69 43

Alcohol advertising 4 - 1 - - - - -

Gender portrayal 6 4 - - - - 3 2

Offensive comment 35 19 38 21 59 35 20 15

Offensive language 15 7 8 1 42 14 14 9

Television violence 12 9 11 11 19 12 13 8

Pay television and pay-per-view services³²

Abusive comment - - - - - - - -

Adult content 11 - 14 - 5 - 3 -

Alcohol advertising - - - - - - - -

Gender portrayal - - - - - - - -

Offensive comment - - - - - - - -

Offensive language - - - - 1 - - -

Television violence 1 - 5 - - - 1 -

Subscription Radio (Satellite)

Abusive comments - - - - - - 3 3

Source: CRTC Correspondence Tracking System

2. Canadian Broadcast Standards Council (CBSC)

• The CBSC³³ administers specific codes of broadcast conduct and provides a means of recourse for members of the public regarding the application of the standards set out in the following codes:
  • CAB Code of Ethics
  • CAB Voluntary Code Regarding Violence in Television Programming
  • CAB Sex-Role Portrayal Code for Television and Radio Programming
  • Radio and Television News Directors Association of Canada Code of Ethics
• The Commission deals with complaints that are related to non-member broadcasters who are not CBSC members and with issues that do not fall within the parameters of the Codes administered by the CBSC.

Table 5.3: Complaints handled by the CBSC

1999/00 2000/01 2001/02 2002/03 2003/04 2004/05

Files handled by the CBSC 620 873 924 1,395 1,492 1,526

Referred by the CRTC 283 443 635 941 1,066 1,013

Source: CBSC annual reports

• The CBSC files annual reports about its activities with the Commission.
• It is important to note that, while not a censor, the Commission is always the final arbiter on matters regarding programming standards. Viewers and listeners may always ask the Commission to consider their complaints either directly, or where they are not satisfied with the results of the self-regulatory process.

3. Advertising Standards Canada (ASC)

• ASC³⁴ is a not-for-profit industry body committed to creating and maintaining community confidence in advertising. ASC responds to complaints by consumers and special interest groups regarding advertising with respect to all media subject to the Canadian Code of Advertising Standards, the principal instrument of advertising self-regulation. In addition, ASC undertakes pre-clearance functions in five industry categories based on applicable legislation, regulations, and/or industry codes and guidelines.

Table 5.4: Complaints handled by ASC

1999 2000 2001 2002 2003 2004 2005

Complaints received by ASC 1,075 1,143 1,164 1,828 1,133 1,540 1,271

Complaints about television ads 554 595 549 591 588 939 579
(51%) (52%) (47%) (32%) (52%) (61%) (46%)

Complaints about radio ads 51 48 57 50 51 90 57

(5%) (4%) (5%) (2.7%) (5%) (6%) (4%)

Source: Ad complaints reports

4. Cable Television Standards Council (CTSC)

• The CTSC³⁵ dealt with complaints with respect to cable service, such as concerns about quality of service and billing until 12 April 2006, when this organisation ceased operation. Since then, complaints filed with the Commission about quality of service and billing are forwarded to the appropriate licensee for resolution. The Commission continues to process complaints regarding simultaneous signal substitution, quality of signal and carriage of mandatory signals. For the 2004/2005 broadcast year, the CTSC processed 456 complaints, of which 135 were referred to the CTSC by the CRTC.

VI. New media

A. New media broadcasting undertakings

• New Media broadcasting undertakings are those undertakings that provide broadcasting services delivered and accessed over the Internet in accordance with the interpretation of "broadcasting" set out in New Media, Broadcasting Public Notice CRTC 1999-84, 17 May 1999 (New Media report).
• In the New Media report, the Commission considered that new media were making a positive contribution to the objectives of the Act by enhancing opportunities for Canadian expression. The Commission also found that a significant amount of Canadian content was present on the Internet and that this content was created and made available in the absence of regulation. Further, the Commission found that local Canadian content was important to the development of Canadian new media businesses.
• In Exemption order for new media broadcasting undertakings, Broadcasting Public Notice CRTC 1999-197, 17 December 1999 (New media exemption order), the Commission exempted new media broadcasting undertakings that operate in whole or in part in Canada from regulation. The exemption does not apply to the licensed broadcasting activities of a company that also operates new media broadcasting undertakings.
• In issuing the exemption order, the Commission noted that conditions in the new media market were changing rapidly and that the exemption would enable continued growth and development of the new media industries in Canada, thus contributing to the achievement of the broadcasting policy objectives, including access to these services by Canadians.
• The Commission also noted that key technological developments would be required before new media services could compete directly with conventional broadcasting services or impede traditional broadcasters from fulfilling their obligations under the Act.
• In April 2006, the Commission set out a regulatory framework for mobile television broadcasting services. In Regulatory framework for mobile television broadcasting services, Broadcasting Public Notice CRTC 2006-47, 12 April 2006 (Public Notice 2006-47) the Commission concluded that certain mobile broadcasting services that were both delivered and accessed over the Internet fell within the scope of the New media exemption order. The Commission also proposed to issue an additional exemption order¹ that would apply to mobile television broadcasting services that are not delivered and accessed over the Internet. In so doing, the Commission stated that mobile television broadcasting services share many of the same characteristics as those discussed in the New Media report.
• The Commission will continue to monitor the impact of new media broadcasting undertakings on the Canadian broadcasting industry and licensed broadcasters.

B. Internet

• This section provides a brief overview of how Canadians are accessing and using the Internet.
• Most of the results presented in this section are taken from CyberTRENDS, ComQUEST Research Reports². The data is based on national surveys of Canadian adults.
• For additional information relating to the Canadian Internet, broadband and wireless services, the reader may also refer to the CRTC Telecommunications Monitoring Report, Status of Competition in Canadian Telecommunications Markets and Deployment/Accessibility of Advanced Telecommunications Infrastructure and Services³. This annual report provides information relating to Canadian telecommunications markets and includes data and analysis relating to Canadian Internet, broadband and wireless services, as well as new technologies.

1. Computer ownership by Canadian households

Table 6.1: Personal computer ownership rates of Canadian households

March December

1998 1999 2000 2001 2002 2003 2004 2004 2005

49% 53% 55% 63% 64% 64% 68% 71% 74%

Source: CyberTRENDS, ComQUEST Research: March 1998 to 2004 and December 2004 to 2005 editions

• Overall, personal computer ownership rate increased 3 percentage points from December 2004 to December 2005. According to CyberTRENDS, significant ownership increases were noted among individuals between 55 to 64 years of age (7 percentage points) and those 65 years of age or greater (12 percentage points).
• Income continues to be a determining factor in computer ownership. In December 2005, 96% of households with an income over $80,000 owned computers while 49% of households with an income under $20,000 owned computers.

2. Internet access by Canadians

a) Percentage of Canadians having Internet access

• The following chart shows the overall percentage of Canadians who have access to the Internet.
• The clustered columns in this chart set out the percentage of Canadians having access to the Internet from various devices or locations. Since many Canadians access the Internet from more than one source, these percentages reflect multiple responses.

Chart 6.1: Overall Internet access and Internet access by location

Notes: (1) Such as BlackBerry, cell phone or Personal digital assistant (PDA) (2) Sometimes referred to as Hotspots
Source: CyberTRENDS, ComQUEST Research: March 2003 and 2004, and December 2004 and 2005 editions

• The percentage of Canadians accessing to the Internet has increased only slightly since March 2004.
• The decline in the "Other" category from March 2003 to December 2005 can be attributed to the introduction of new and separate categories such as "Libraries & other locations without access fees" and "CyberCafes and other locations with access fees" in March 2004, and "Public wireless access zones" in December 2004.

Table 6.2: Internet access by household income (%)

Home Work School Overall

Income March December March December March December March December

($ 000) 2004 2004 2005 2004 2004 2005 2004 2004 2005 2004 2004 2005

< 20 31 34 36 12 12 11 20 11 15 54 55 54

20-40 45 51 50 23 26 30 16 13 12 65 67 67

40-60 62 69 68 50 43 44 13 13 11 84 85 83

60-80 75 78 78 65 58 64 13 19 21 93 90 91

> 80 78 88 91 74 74 78 14 19 24 91 97 98

All 58 63 65 43 42 45 15 15 16 76 76 78

Source: CyberTRENDS, ComQUEST Research: March 2004, December 2004 and December 2005 editions

• As with computer ownership, lower income groups continue to be the least likely to have access to the Internet. Overall Internet access is generally stable, showing only slight variations.

Table 6.3: Internet access by education (%)

Home Work School Overall

March December March December March December March December

Education 2004 2004 2005 2004 2004 2005 2004 2004 2005 2004 2004 2005

< High school 28 27 26 13 9 11 8 6 5 41 37 37

High school 50 54 59 29 25 31 11 10 10 71 70 73

Some college/

University 66 74 75 45 49 48 23 22 22 85 88 89

Post secondary 68 78 80 61 61 65 14 19 17 88 92 93

Post graduate 83 84 76 70 72 73 21 16 27 93 95 91
All 58 63 65 43 41 45 15 15 16 76 76 78

Source: CyberTRENDS, ComQUEST Research: March 2004, December 2004 and December 2005 editions

• Except for the post graduate, access to the Internet increases with the level of education.

Table 6.4: Internet access by age (%)

Home Work School Overall

March December March December March December March December

Age 2004 2004 2005 2004 2004 2005 2004 2004 2005 2004 2004 2005

18-34 69 73 72 50 53 56 33 28 30 92 91 92

35-44 70 72 76 57 54 62 14 19 20 88 86 91

45-54 62 68 70 58 52 56 11 13 17 82 82 82

55-64 51 63 66 33 32 34 8 5 7 66 73 76

65+ 32 27 35 6 3 5 0 1 1 40 34 41

All 58 63 65 43 42 45 15 15 16 76 76 78

Source: CyberTRENDS, ComQUEST Research: March 2004, December 2004 and December 2005 editions

• Younger households adopt the Internet more readily than other age groups.

Chart 6.2: Percentage of Canadians having access to
the Internet by region

Source: CyberTRENDS, ComQUEST Research: March 2003 and 2004, and December 2004 and 2005 editions

• The number of Canadians in the province of Quebec having access to the Internet has increased significantly from 63% in December 2004 to 71% in December 2005.
• On the other hand, the number of Canadians having access to the Internet in the Manitoba and Saskatchewan region decreased from 77% to 73% over the same period.
• Access levels in the remaining regions varied only slightly.

b) Type of Internet access used at home

Chart 6.3: Dial-up and high-speed Internet access at home

Source: CyberTRENDS, ComQUEST Research: December 2004 and 2005 editions, and March 2001 to 2004 editions

• The percentage of Canadians choosing high-speed rather than dial-up Internet access at home continues to increase.
• According to CyberTRENDS, gender, household income and marital status do not appear to be factors influencing the selection of broadband versus dial-up Internet access. Dial-up users are more likely to be infrequent or short-term users.
• The 9 percentage point increase in high-speed Internet access from December 2004 to 2005 is due, in part, to a refinement in the December 2005 survey questionnaire that now includes DSL resellers.

c) Frequency and duration of Internet use

• According to CyberTRENDS:
• - In December 2005, the average Canadian with Internet access connected for an average of 16 hours of Internet use per week.
• - On average, men spent 142 minutes more on the Internet per week than women.

Chart 6.4: Percentage of Canadians using the Internet
at least once in a given week

Source: CyberTRENDS, ComQUEST Research: March 1998 to 2004 and December 2004 to 2005 editions

• The number of Canadians who reported using the Internet, at least once a week, remained constant at 60% from December 2004 to December 2005.

Chart 6.5: Time spent by Canadians on the Internet in a given week

Source: CyberTRENDS, ComQUEST Research: December 2004 and 2005 editions, and March 2002 to 2004 editions

• The percentage of Canadians spending less than one hour on the Internet in a given week remains stable.
• There appears to be a trend towards heavier use of the Internet, as shown by the increasing percentage of Canadians spending 11 hours or more on the internet.

d) Profile of Canadians without Internet access at home

Chart 6.6: Major reasons for not having access
to the Internet at home