Broadcasting Decision CRTC 2020-290

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Reference: Part 1 licence renewal application posted on 31 January 2020

Ottawa, 24 August 2020

4517466 Canada Inc.
Montréal, Quebec

Public record for this application: 2019-1019-1

CFHD-DT Montréal – Licence renewal

The Commission renews the broadcasting licence for the multilingual ethnic television station CFHD-DT Montréal (Québec) from 1 September 2020 to 31 August 2025.

Application

  1. The Commission has the authority, pursuant to section 9(1) of the Broadcasting Act (the Act), to issue and renew licences for such terms not exceeding seven years and subject to such conditions related to the circumstances of the licensee as it deems appropriate for the implementation of the broadcasting policy set out in section 3(1) of the Act.
  2. On 3 June 2019, the Commission issued Broadcasting Notice of Consultation 2019-192 (the Call), which listed the television services and stations for which the licences needed to be renewed to continue their operations. In that Notice of Consultation, the Commission requested that licensees of those services and stations submit renewal applications for their broadcasting licences.
  3. In response to the call, 4517466 Canada Inc. (4517466 Canada) filed an application to renew the broadcasting licence for the multilingual ethnic television station CFHD-DT Montréal, Quebec, also known as ICI Television, which expire 31 August 2020.
  4. The licensee confirmed that it would adhere to the standard requirements for television stations set out in Appendix 1 to Broadcasting Regulatory Policy 2016-436. Further, the licensee proposed to devote, in each broadcast year, a minimum of 15% of the service’s previous broadcast year’s gross revenues to Canadian programming expenditures (CPE). The licensee also requested the same requirements and expectations as set out in Broadcasting Decision 2012-696, including the requirement to broadcast 14 hours of original local ethnic programming per week.
  5. In addition, the licensee requested to adopt the same condition of licence in regards to described video as that of OMNI Regional as set out in Broadcasting Decision 2019-172. Given that CFHD-DT offers the vast majority of its content in third languages, the licensee stated that it is both impractical and cost prohibitive to provide described video in the manner contemplated in the standard conditions of licence for English- and French-language conventional television services.

Intervention

  1. The Commission received an intervention in regard to the present application from the Forum for Research and Policy in Communications (FRPC). In its intervention, the FRPC submitted that the Part 1 process used by the Commission for the renewal of the broadcasting licences for independent television stations is not appropriate given that a Part 1 proceeding does not give the public sufficient notice to consider and comment on licence renewal applications for stations in non-compliance.
  2. In regard to closed captioning, the FRPC added that CFHD-DT did not caption all of its English-language and French-language programming, as required by Broadcasting Regulatory Policy 2011-442. The FRPC considers that the licence should be renewed for one less year than required and that CFHD-DT should report on the corrective measures taken to the Commission in six months.
  3. In its reply, 4517466 Canada stated that it underwent a major change in operations during the licence term and that normalization of its operations occurred during the 2017-2018 broadcast year. With regard to the FRPC’s suggestion of shortening the licence term, CFHD-DT stated that the appropriate measures had already been taken to address the instances of non-compliance, which arose early in the licence term. Therefore, it stated that it disagreed with the FRPC and wishes to maintain its request for a full licence term.
  4. The Commission notes that dealing with licence renewal applications under the Part 1 process is a long-standing practice that was first announced to the public and to the broadcasting industry in Broadcasting Information Bulletin 2015-116. Any party may comment on a Part 1 application and examine the licensee’s correspondence with Commission staff regarding non-compliance. Moreover, this approach has served the Commission and the public well, as evidenced by the high level of compliance by licensees of television services.

Background

  1. In Broadcasting Decision 2017-152, the Commission approved an application by Rogers Media Inc. (Rogers) to operate a national, multilingual multi-ethnic discretionary service to be known as OMNI Regional for a licence term of three years. CFHD-DT Montréal entered into an agreement with Rogers to provide programming for the Quebec feed of its discretionary service OMNI Regional. Following a call for a new, national, multilingual, multi-ethnic discretionary service with mandatory carriage on the basic service, the Commission granted a new licence to OMNI Regional in Broadcasting Decision 2019-172, for a three-year period commencing on 1 September 2020 until 31 August 2023.
  2. As part of this agreement, 4517466 Canada receives a portion of the wholesale fee derived from Quebec subscribers to OMNI Regional in return for the programming it supplies to OMNI. The Commission determined in Broadcasting Decision 2017-152 that the wholesale rate per month per subscriber for OMNI Regional, would be initially set at $0.12. This wholesale rate was increased to $0.19 per subscriber per month in Broadcasting Decision 2019-172 as of 1 September 2020 and will continue to rise over the next five years.
  3. The Commission is of the view that, as a results of its agreement with Rogers, the licensee has access to a more stable source of revenues, which resulted in a significant change in its business model.

Commission’s analysis and decision

  1. After examining the record for the applications in light of applicable regulations and policies, the Commission considers that the issues it must address relate to the following:
    • non-compliance with closed-captioning;
    • licence amendments; and
    • the licensee’s proposed CPE requirement.

Non-compliance

  1. Among other things, section 3(1) of the Act declares that programming accessible by disabled persons should be provided within the Canadian broadcasting system as resources become available for the purpose (section 3(1)(p)). In accordance with this aspect of the broadcasting policy and pursuant to its authority in section 9(1), the Commission has imposed conditions of licence regarding the provision of closed captioning.
Closed captioning – condition of licence 5
  1. 4517466 Canada is subject to condition of licence 5, imposed in Broadcasting Decision 2011-442, which states that:

    5. The licensee shall caption 100% of the English- and French-language programs broadcast over the broadcast day, consistent with the approach set out in A new policy with respect to closed captioning, Broadcasting Public Notice CRTC 2007-54, 17 May 2007.

  2. Based on analysis of the program logs filed by the licensee and the results placed on the record of this proceeding, it appears that the licensee did not meet this requirement for the 2014-2015 and 2015-2016 broadcast year. Consequently, the licensee appears to be in non-compliance with its condition of licence 5.
  3. The licensee acknowledged its non-compliance and attributed it to a confusion as to whether closed captioning requirements applied to its multi-ethnic station. The licensee confirmed that all its English- and French-language programming should have been closed captioned.
  4. The licensee stated that its master control process is now able to determine if the English- and French-language programming offered is closed captioned and that it monitors the quality of closed captioning. It stated that its new control process ensures that the programming offered with closed captioning is logged correctly.
Closed captioning – condition of licence 6
  1. 4517466 Canada is also subject to condition of licence 6, imposed in Broadcasting Decision 2011-442, which states that:

    6. Consistent with Accessibility of telecommunications and broadcasting services, Broadcasting and Telecom Regulatory Policy CRTC 2009-430, 21 July 2009, as subsequently amended by the Commission, the licensee shall:

    • ensure that advertising, sponsorship messages and promos in the English and French languages are closed captioned by no later than the fourth year of the licence term;
    • adhere to the quality standards on closed captioning developed by television industry working groups, as amended from time to time and approved by the Commission; and
    • implement a monitoring system to ensure that, for any signal that is closed captioned, the correct signal is captioned, the captioning is included in its broadcast signal and this captioning reaches the distributor of that signal in its original form. “Original form” means, at a minimum, that the captioning provided by the licensee reaches the distributor unaltered, whether it is passed through in analog or in digital, including in high definition.
  2. Based on analysis of the program logs filed by the licensee and the results placed on the record of this proceeding, it appears that for the 2016-2017 broadcast year, the licensee failed to provide closed captioning of all the advertising, sponsorship messages, and promos in the English- and French-language. Consequently, the licensee appears to be in non-compliance with its condition of licence 6.
  3. The licensee also acknowledged its non-compliance with condition of licence 6 and stated that it was also due to the limited functionality of its previous master control system. Specifically, its third-language advertising, sponsorship, and promo content was not logged as third-language programming, which caused a discrepancy in the system, since this content does not have to be closed captioned. Furthermore, some of its advertising, sponsorship and promo content did not contain voice over material and was not logged as being closed captioned.
  4. The licensee stated that it has changed its master control and operating procedures to ensure that the programming offered with closed captioning is logged correctly. The licensee further confirmed that there have been no compliance issues since the 2016-2017 broadcast year.
Commission’s analysis and decision
  1. The Commission notes the licensee’s explanation that its apparent non-compliance with its condition of licence 5 specifically the requirement to close caption English- and French-programming and its condition of licence 6, specifically the requirement to close caption English- and French-language advertising, sponsorship messages, and promos was due to the limited functionality of its previous master control system.
  2. The Commission notes that the licensee has updated its master control system and procedures. It further notes that there have been no further compliance issues with the licensee’s closed captioning requirements since the 2016-2017 broadcast year.
  3. In light of the above, based on its analysis of the program logs filed by the licensee and the results placed on the record of this proceeding, the Commission finds the licensee in non-compliance with its conditions of licence 5 and 6, but considers that no further measures are required.

Condition of licence amendments

Original local ethnic programming
  1. Pursuant to section 9(1) of the Act and in accordance with the many provisions of section 3(1) of the Act related to the reflection of Canadians, the requirements to contribute to the creation and presentation of Canadian programming and the requirement that programming provided by the Canadian broadcasting system be drawn from local, regional, national and international sources, the Commission imposed obligations on the licensee regarding minimum amounts of original local ethnic programming.
  2. In particular, the licensee is required, pursuant to condition of licence 7, imposed in Broadcasting Decision 2012-696, to broadcast, in each broadcast month, 14 hours of original local ethnic programming, calculated monthly.
  3. As part of its renewal application, the licensee requested to amend its condition of licence 7 regarding local ethnic programming to make it clear that it is required to broadcast a minimum of 14 hours of original local ethnic programming per week. It noted that the English-language version of Broadcasting Decision 2012-696 made the 14 hours a monthly requirement, while the French-language version makes it a weekly requirement.
  4. In Broadcasting Decision 2017-415, the Commission acknowledged that the English- and French-language versions of condition of licence 7 set out in Broadcasting Decision 2012-696 were contradictory. The Commission determined that it was clear that the intention of the Commission in 2012 was for a weekly obligation as opposed to a monthly one.
  5. The Commission further notes that the 14-hour level of local programming proposed by the licensee is consistent with the level of local programming imposed on conventional stations operating in the metropolitan markets. The licensee has also made a commitment to produce original content, which exceeds the standard conditions of licence for television stations. Therefore, the Commission approves the request to amend condition of licence 7 regarding the level of exhibition of local original ethnic programming. A condition of licence to that effect is set out in the appendix to this decision.
Described video
  1. In addition to closed captioning, the Commission has also imposed conditions of licence regarding described video pursuant to sections 9(1) and 3(1)(p) of the Act.
  2. The licensee is currently subject to a described video condition of licence in which the licensee shall provide described video for a minimum of four hours per broadcast week, of which two hours must be broadcast in described video for the first time on the service. In its application, the licensee has proposed to adopt the same described video condition of licence as OMNI Regional (as set out in Broadcasting Decision 2019-172) which states that:
    1. The licensee shall adhere to the standard conditions of licence, expectations and encouragements for discretionary services set out in Appendix 2 to the Standard requirements for television stations, discretionary services and on-demand services, Broadcasting Regulatory Policy 2016-436, 2 November 2016, with the exception of conditions 6 and 18(d), as well as 17, the latter of which is replaced by the following:

      The licensee shall provide described video for all English- and French-language programming that is broadcast during prime time (i.e. from 7 p.m. to 11 p.m.) and that is drawn from program categories 2 (b) Long-form documentary, 7 Drama and comedy, 9 Variety, 11 (a) General entertainment and human interest and 11 (b) Reality television, and/or its programming targeting preschool children (0-5 years of age) and children (6-12 years of age).

  3. In support of its proposal, 4517466 Canada stated that OMNI Regional and its service CFHD-DT (which provides the Quebec feed for OMNI Regional) are multi-ethnic and multi-cultural services that provide third-language programming. The licensee notes that the standard described video licence conditions apply to English- and French-language programming and are designed for services that operate primarily in the official languages. Given that CFHD-DT offers the vast majority of its content in third language, it is both impractical and cost prohibitive for CFHD-DT to provide described video in the manner contemplated in the standard conditions of licence.
  4. The Commission notes that the terms of the described video condition of licence that the Commission would have applied for the new licence term are set out in Broadcasting Regulatory Policy 2015-104 and that these provisions are identical to the conditions proposed by the licensee. However, given that the licensee used the language from OMNI Regional’s decision, the proposed condition of licence will only replace condition 14.
  5. Accordingly, the Commission finds it appropriate to impose a requirement related to described video in line with OMNI Regional’s conditions of licence. A condition of licence to that effect is set out in the appendix to this decision.

Canadian Programming Expenditures

  1. Sections 3(1)(e) and 3(1)(s)(i) of the Act declare that each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming and that private networks and programming undertakings should, to an extent consistent with the financial and other resources available to them, contribute significantly to the creation and presentation of Canadian programming. In accordance with this aspect of the broadcasting policy and pursuant to its authority in section 9(1), the Commission has imposed conditions of licence requiring programming undertakings to contribute in various ways to the creation of Canadian programming, including imposing CPE requirements.
  2. In Broadcasting Regulatory Policy 2015-86, the Commission announced that it would impose requirements on all independent over-the-air television stations and that it would set appropriate CPE levels at the time of licence renewals, based on historical expenditures.
Partnership with OMNI Regional
  1. As part of its applications, specifically in regard to historical expenditures on Canadian programs, the licensee demonstrated that its operations underwent a major change beginning in the 2017-2018 broadcast year, due to its new relationship with OMNI Regional. Therefore, the licensee stated that the financial results for the 2018-2019 broadcast year represent a more accurate reflection of its current operations than those of the previous years.  
  2. 4517466 Canada requested a CPE requirement of 15% for CFHD-DT, indicating that a CPE requirement higher than 16.5% could affect the viability of its services. According to the information provided as part of its application, the licensee projects to spend from 16% to 16.5% on CPE annually.
  3. The Commission considers that, unlike other independent conventional television services, CFHD-DT is in a particularly beneficial situation as it generates revenues from guaranteed distribution in Quebec, due to its program supply agreement with Rogers. However, the Commission notes that the projections that were filed by the licensee do not take into account the revenue that it is receiving from its partnership with OMNI Regional. Therefore, the projections that were submitted as part of this licence renewal process are lower than the revenues that the service will generate. When the projections are adjusted to take into account the portion of the monthly subscriber fee that the licensee receives from OMNI Regional’s Quebec subscribers, the Commission notes that the increase in revenue puts the licensee in a net-positive financial situation from the 2019-2020 broadcast year onward.
  4. The Commission notes that OMNI Regional will see an increase in its wholesale rate over the next five years. Given that CFHD-DT receives a percentage of this rate, its revenues derived from its agreement with OMNI Regional will also be subject to this increase, furthering its ability to financially support a higher CPE level.
  5. The Commission notes that OMNI Regional has a CPE requirement of 40%. Given that CFHD-DT will be providing most of the local programming for the Quebec feed and receiving a portion of the subscriber fee in doing so, the Commission considers it appropriate that CFHD-DT be required to spend at a level that is aligned with OMNI Regional.
  6. In light of the above, the Commission is of the view that the service could sustain a higher CPE threshold than what was proposed by the licensee in its projections.
Commission’s analysis and decision
  1. Since its launch in 2015, when removing the 2018 outlier year which saw a considerable increase in CPE for CHFD-DT, the service has recorded average CPE of 50% of previous year’s gross revenues. The Commission believes that this better reflects the spending capabilities of the service with respect to Canadian programming. Also, no evidence was provided to corroborate the claim that a CPE higher than 16.5% would jeopardize the service financially.
  2. However, the Commission recognizes that the licensee relies on a hybrid approach to programming, wherein it acquires programming by both traditional purchasing means as well as relying on a barter system. Non-standard programming strategies such as these (hybrid, barter and otherwise) are subject to change over time, along with fluctuations in the market. Given that the licensee’s approach to program acquisition is prone to such fluctuations, it might be difficult to sustain a CPE level as high as 50%.
  3. As a result, the Commission considers that a 40% CPE level, while lower than the service’s historical expenditures, would be appropriate and would take into account the approach and nature of the licensee’s programming strategy. The Commission is also of the view that such a requirement is commensurate with the benefits the licensee receives in the form of guaranteed income from Rogers through its recent partnership with OMNI Regional.
  4. In light of the above, the Commission impose a CPE level of 40%. A condition of licence to that effect is set out in the appendix to this decision.
  5. The broadcasting policy set out in section 3(1) also provides that the Canadian broadcasting system should reflect the special place of aboriginal peoples within Canadian society (section 3(1)(d)(iii)) and the different needs and circumstances of English and French linguistic minorities (section 3(1)(m)(iv)).
  6. In light of these provisions, the Commission considers it appropriate to adopt an incentive to encourage the reflection of Indigenous peoples within the broadcasting system. Specifically, for each of their stations licensees will receive a 50% credit towards their CPE requirements for expenditures on Canadian programming produced by Indigenous producers, up to a maximum (expenses plus credit) of 10% of each licensee’s overall CPE requirement when combined with the credit discussed below regarding official language minority community (OLMC) reflection. Only programming costs counting towards CPE as defined in Public Notice 1993-93 will be considered eligible for the credit.
  7. The Commission is also of the view that a similar credit could encourage greater onscreen reflection of OLMCs in the broadcasting system. Consequently, for each of their stations, the licensees will receive a 25% credit against their CPE requirements for expenditures on Canadian programming produced by OLMC producers, up to a maximum (expenses plus credit) of 10% of each licensee’s overall CPE requirement when combined with the credit on Indigenous reflection. Once again, only programming costs counting towards CPE as defined in Public Notice 1993-93 will be considered eligible for the credit. Further, the OLMC producer must be an independent producer as defined by the Commission and (i) if in the province of Quebec, the original language of the production must be English or (ii) if outside of the province of Quebec, the original language of the production must be French.
  8. A condition of licence to that effect is set out in the appendix to this decision.

Conclusion

  1. In light of all the above, the Commission renews the broadcasting licence for the multilingual ethnic television programming undertaking CFHD-DT Montréal from 1 September 2020 to 31 August 2025. The terms and conditions of licence are set out in the appendix to this decision.

Secretary General

Related documents

This decision is to be appended to the licence

Appendix to Broadcasting Decision CRTC 2020-290

Terms, conditions of licence, expectations and encouragements for the multilingual ethnic television programming undertaking
CFHD-DT Montréal, Quebec

Terms

The licence will expire 31 August 2025.

Conditions of licence

  1. The licensee shall adhere to the conditions of licence set out in Appendix 1 to Standard requirements for television stations, discretionary services, and on-demand services, Broadcasting Regulatory Policy CRTC 2016-436, 2 November 2016, with the exception of condition of licence 14, which is replaced by the following:

    14. The licensee shall provide described video for all English- and French-language programming that is broadcast during prime time (i.e. from 7 p.m. to 11 p.m.) and that is drawn from program categories 2 (b) Long-form documentary, 7 Drama and comedy, 9 Variety, 11 (a) General entertainment and human interest and 11 (b) Reality television, and/or its programming targeting preschool children (0-5 years of age) and children (6-12 years of age).

  2. The licensee shall, in each broadcast year, devote not less than 40% of the previous year’s gross annual revenues of the undertaking to the acquisition of or investment in Canadian programming.
  3. Subject to condition 4, the licensee may claim, in addition to its expenditures on Canadian programming:
    1. a 50% credit against its Canadian programming expenditure requirements for expenditures made on Canadian programming produced by an Indigenous producer and claimed as Canadian programming expenditures during that broadcast year;
    2. a 25% credit against its Canadian programming expenditure requirements for expenditures made on Canadian programming produced by an official language minority community producer and claimed as Canadian programming expenditures during that broadcast year. The licensee may claim the credit if:
      1. the programming is produced in the province of Quebec and the original language of production is English; or
      2. the programming is produced outside the province of Quebec and the original language of production is French.
  4. The licensee may claim the credits calculated in accordance with condition 3 until the expenditures made on Canadian programming produced by Indigenous producers and by official language minority community producers, including credits, reach a combined maximum of 10% of the Canadian programming expenditure requirement for the undertaking. 
  5. In regard to expenditures on Canadian programming:
    1. In each broadcast year of the licence term, excluding the final year, the licensee may expend an amount on Canadian programming that is up to 5% less than the minimum required expenditure for that year calculated in accordance with condition of licence 2; in such case the licensee shall expend in the next broadcast year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year’s under-expenditure.
    2. In each broadcast year of the licence term, excluding the final year, where the licensee expends an amount for that year on Canadian programming that is greater than the minimum required expenditure, the licensee may deduct that amount from the minimum required expenditure in one or more of the remaining years of the licence term.
    3. Notwithstanding paragraphs a) and b) above, during the licence term, the licensee shall expend on Canadian programming, at a minimum, the total of the minimum required expenditures calculated in accordance with condition of licence 2.
  6. In the two years following the end of the licence term ending 31 August 2020, the licensee shall report and respond to any Commission enquiries relating to the expenditures on Canadian programming made by the licensee for that term.
  7. The licensee is responsible for any failure to comply with the requirements relating to expenditures on Canadian programming that occurred during the licence term ending 31 August 2020.
  8. The licensee shall devote to the broadcast of ethnic programs, as defined in section 2 of the Television Broadcasting Regulation, 1987:
    1. not less than 60% of the total number of hours broadcast monthly between 6 p.m. and midnight; and
    2. not less than 75% of the total number of hours broadcast annually between 8 p.m. and 10 p.m.
  9. The licensee shall devote to the broadcast of Canadian programs:
    1. not less than 55% of the total number of hours broadcast annually between 6 a.m. and midnight; and
    2. not less than 50% of the total number of hours broadcast annually between 6 p.m. and midnight.
  10. The licensee shall devote to the broadcast of non-ethnic programs:
    1. not more than 40% of the total number of hours broadcast annually between 6 a.m. and midnight; and
    2. not more than 50% of the total number of hours broadcast annually between 6 p.m. and midnight.
  11. In each broadcast month, the licensee shall broadcast ethnic programs directed to no less than 18 distinct ethnic groups.
  12. In each broadcast month, the licensee shall broadcast ethnic programs in no less than 15 different languages.
  13. In each broadcast week, the licensee shall broadcast 14 hours of original local ethnic programming, calculated monthly.

Definitions

For purposes of these conditions:

Indigenous producer means an individual who self-identifies as Indigenous, which includes First Nations, Métis or Inuit, and is a Canadian citizen or resides in Canada, or an independent production company in which at least 51% of the controlling interest is held by one or more individuals who self-identify as Indigenous and are Canadian citizens or reside in Canada. In regard to the definition of “independent production company,” “Canadian” includes a person who self-identifies as Indigenous and resides in Canada, whereas “Canadian company” includes a production company in which at least 51% of the controlling interest is held by one or more individuals who self-identify as Indigenous and reside in Canada.

Official language minority community producer (OLMC) means a company that meets the definition of “independent production company” and that, if operating in the province of Quebec, produces original English-language programming or, if operating outside of the province of Quebec, produces original French-language programming.

Clarification for OLMC producer

To be considered an OLMC producer in Canada, a production company must:

  1. if it produces original programs in English, have its head office in Quebec and be owned and operated by a resident of Quebec; or
  2. if it produces original programs in French, have its head office outside Quebec and be owned and operated by a resident outside of Quebec.

Expectations

The standard expectations applicable to this licensee are set out in Appendix 1 to Standard requirements for television stations, discretionary services, and on-demand services, Broadcasting Regulatory Policy CRTC 2016-436, 2 November 2016.

Encouragements

The standard encouragements applicable to this licensee is set out in Appendix 1 to Standard requirements for television stations, discretionary services, and on-demand services, Broadcasting Regulatory Policy CRTC 2016-436, 2 November 2016.

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