ARCHIVED - Decision CRTC 2000-453

Land and Sea - a new specialty channel

On 24 November 2000, the Commission made a decision to issue a licence for a new national English-language Category 1 specialty television service to be called "Land and Sea". The Commission noted at that time that reasons, terms and conditions of the new licence would follow at a later date.

Land and Sea will provide a full range of programming for rural audiences. As noted in Public Notice CRTC 2000-171 issued today, Land and Sea and 20 other new digital specialty services will be made available to subscribers by all distributors who offer programming to the public using digital technology and by some cable operators who serve smaller markets using analog technology. The licence, when issued, will expire 31 August 2007.

Land and Sea will bring added diversity to the Canadian broadcasting system with a unique and attractive service, targeted to the large and under-served rural population of Canada. In Public Notice 2000-171, the Commission discusses the general criteria for the approval of this and other applications for new specialty services.

Corus Entertainment Inc. owns 70% of the voting interest in Land and Sea Network Inc. (OBCI). The CBC holds the remainder of the voting interest. In addition to the obvious expertise of the CBC in producing "rural" programming, Corus has extensive experience in Canadian radio and specialty services.

Terms and conditions of licence common to all of the new Category 1 specialty services are set out in an appendix to Public Notice 2000-171. Conditions specific to this application can be found in the appendix to this decision.

Programming

Nature of service

According to the application, Land and Sea's programming will:

• provide a full range of programming for rural audiences, relating to their sense of belonging and place in Canadian society,

• cover stories that affect resource industries with the attention and depth they deserve. A substantial amount of the weekly schedule will be dedicated to current news, information and analysis of events of special concern to rural Canadians,

• reflect to the nation the concerns of various regions of the country,

• give rural Canadians a meeting place, with the potential for phone-in and Internet feedback, and

• create understanding between rural and urban Canadians.

Contributions to diversity

Land and Sea will contribute to increased diversity in the Canadian broadcasting system by providing original news coverage of rural industries and issues, in a level of detail not currently found in the Canadian broadcast system. The majority of current Canadian television services are urban-oriented. This diverse new service will emphasize rural themes, and embrace and respect rural values and lifestyles. The variety of attractive rural-based programming that Land and Sea will offer will add greatly to the diversity of voices in the broadcasting system. In order to protect this enhanced diversity, the Commission expects that the CBC will not in any way reduce the presentation of regional programming on its own television networks, following the launch of Land and Sea.

Canadian content

The licensee made a commitment to broadcast a minimum of 50% Canadian content from 6 a.m. to midnight, and a minimum of 50% from 6 p.m. to midnight, in each of the first three years of the licence term. This amount will increase gradually over the licence term, to 60% both daily and in the evening period, by the last two years of the term. A condition of licence specifying the required levels is set out in the appendix to this decision.

Following discussions at the hearing, the licensee further committed to broadcast a minimum of 1,391 hours of original Canadian programming in the first year of the licence term, gradually increasing to a level of 1,439 hours of original Canadian programs by the final year of the licence term.

Canadian programming expenditures

Beginning in the year following the first year of operation, the licensee will expend a yearly minimum of 51% of its gross advertising, infomercial and subscription revenues on Canadian programming for broadcast on Land and Sea. The licensee estimates that, in accordance with this formula, it will spend over $28 million over the licence term, to acquire or produce Canadian programs. A formula for the calculation of the amounts required is set out in a condition of licence, found in the appendix to this decision.

Independent production

Land and Sea will acquire Canadian programs from both the CBC and Sullivan Entertainment. While the applicant did not make specific commitments related to acquisitions from independent producers, Land and Sea did indicate that it believes strongly that programming diversity in the Canadian broadcasting system as a whole is enhanced by the participation of producers unrelated to licensees. It also stated that the work of independent producers will be well represented on Land and Sea. The Commission notes the licensee's statements, and as set out in Public Notice 2000-171, all Category 1 services will be subject to a standard condition of licence in this regard.

Interactivity

Land and Sea plans to operate a complementary website that will offer more detailed information related to program content, games, webcasts and potential for audience feedback. It will provide rural Canadians with a reliable source of facts on rural issues and a unique opportunity to communicate with one another on topics of mutual concern. Land and Sea will provide current and regionalized weather data, commodity prices, on-demand services, an electronic program guide to Land and Sea's programs, and other information designed specifically to meet the needs of Land and Sea's audience.

Corus has stated that it is committed to being ready for advanced television-based interactivity, when technology allows. It follows developments of this nature through membership in the Advanced Television Enhancement Forum, a cross-industry alliance of broadcasters, distributors, and manufacturers of set-top boxes, computers and consumer electronics.

Ownership and synergies

As noted above, Land and Sea will be owned by Corus and by the CBC, forming a strong combination. The strengths of both the CBC and Corus are crucial to the service. Land and Sea will draw upon CBC's extensive production expertise, complement and take advantage of CBC's news infrastructure and journalism resources, and will use material from both current CBC sources and its archives, much of which has received limited exposure.

Corus is affiliated with Shaw Communications Inc., which also has extensive holdings in Canadian broadcasting and many years of experience in operating Canadian specialty services. The potential for cross-promotion with Corus radio properties will further develop relationships with rural audiences at the local level.

Filing requirements

This authority will only be effective and the Commission will only issue the licence when the applicant has clearly demonstrated that it is a "qualified corporation" as defined in the Direction to the CRTC (Ineligibility of non-Canadians) and is eligible to hold a licence. Consequently, the applicant is required to file all relative incorporation documents (certificate and articles, by-laws, etc.), copies of the programming supply agreement; unanimous Shareholders' Agreement, management agreement or any other pertinent agreement, for review and approval by the Commission.

Other matters

Rate

In its business plan, the licensee proposed a monthly wholesale rate of $0.45 per subscriber in the first year of operation, decreasing to $0.37 by the final year of the licence term. The licensee proposed a decreasing wholesale rate because of its view that the average penetration of the service will grow among digital subscribers over the licence term.

Service to the hearing-impaired

The licensee committed to install a TTY (teletypewriter) for the use of the hearing-impaired, and to ensure that 50% of the programming on Land and Sea will be closed captioned in the first year of operation. That level will increase gradually, and by the final year of the licence term, 90% of the programming will be closed captioned. The Commission notes the licensee's commitments, and expects the licensee to fulfil them.

Service to the visually-impaired

With respect to descriptive video service (DVS), the licensee stated that "Land and Sea will install the necessary audio lines within our facilities to prepare for service to the visually impaired as/when programming becomes available. We will take special care during all news/information programming to ensure that all information is presented with the needs of the visually impaired in mind."

The Commission requires Land and Sea to be technically equipped to deliver described video programming and to fulfil the commitments included in the application. In addition, the Commission encourages the licensee to provide audio description of visual information wherever possible, and to provide described video programming as outlined in Public Notice 2000-171.

Employment equity

The Commission notes that this licensee will be subject to the Employment Equity Act that came into effect on 24 October 1996 and therefore will file reports concerning employment equity with Human Resources Development Canada.

Conclusion

The Commission is confident that Land and Sea will offer a distinctive and attractive service to Canadian television audiences, while providing opportunities for the building of community ties between its regions and throughout rural Canada. The partners of Land and Sea, with their vast experience in television production, will ensure stability for the undertaking and excellence in production values.

Secretary General

This decision is to be appended to the licence It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca

Appendix to Decision CRTC 2000-453

The licence for the national English-language programming undertaking (specialty television service) known as Land and Sea will be subject to the following conditions, as well as those set out both in Public Notice CRTC 2000-171, and in the licence to be issued.

Nature of service

2. The programming must be drawn exclusively from the following categories, as set out in Schedule I to the Specialty Services Regulations, 1990:

News

Theatrical feature films aired on TV

Analysis and interpretation

Animated television programs and films

Long-form documentary

Comedy sketches, improvisation, unscripted work, stand-up comedy

Formal education and pre-school

Other drama

Informal education/recreation and leisure

Music and dance other than 8b or 8c

Professional sports

Variety

Amateur sports

General entertainment and human interest

Ongoing dramatic series

Interstitials

Ongoing comedy series (sitcoms)

Public service announcements (PSAs)

Specials, mini-series, made-for-TV feature films

Infomercials, promotional and corporate videos

• No more than 10% of all programming broadcast during each broadcast week shall be devoted to subcategory 7d.

• No more than 10% of all programming broadcast during each broadcast week shall be devoted to subcategories 6a and 6b.

• No more than 10% of all programming broadcast during each broadcast month shall also be broadcast on either the CBC or the specialty service Country Music Television during the same broadcast month.

• For the purposes of this condition, "rural Canadians" shall be defined as individuals who live outside of the large urban centres, in small communities, and who predominantly make their living from the land and sea and/or through businesses that are directly associated with those that do.

Exhibition of Canadian programs

Broadcast day

Evening broadcast period

50%

50%

50%

50%

50%

50%

55%

55%

55%

55%

60%

60%

60%

60%

Expenditures on Canadian programs

Definition

The term "broadcast day" shall have the same meaning as that set out in the Television Broadcasting Regulations, 1987.