Decision
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Ottawa, 5 January 1984 |
Decision CRTC 84-3 |
Allarcom Limited |
Regional English-Language Pay Television Service for the Province of British Columbia and the Yukon Territory - 832632400 |
Following a Public Hearing in Vancouver, on 29 November 1983, a majority of the members of the Commission approves the application by Allarcom Limited ("Allarcom"), the regional, general interest, English-language pay television licensee serving Alberta to amend its pay television network licence by extending its authorized service area to include the Province of British Columbia and the Yukon Territory, on an interim basis. |
This approval is effective until 30 September 1984 or such further period as the Commission may, upon receipt of a request for extension received before 30 September 1984, deem appropriate under the circumstances. |
Aim has entered into an agreement with Allarcom dated 2 September 1983 to provide pay television service to British Columbia and the Yukon on a temporary basis by using Allarcom's signal originating and uplinked from facilities located in Edmonton. |
The agreement stipulates that Aim will act as a wholesaler of Allarcom's signal in British Columbia and the Yukon Territory. Aim will enter into affiliation agreements with cable operators in the region, collect revenues under these agreements and make payments to Allarcom on the basis of an agreed formula. Aim will provide Canadian programs acquired in the British Columbia and Yukon region, for insertion into Allarcom's programming schedule for distribution via Allarcom's satellite signal to all cable affiliates. |
The agreement also stipulates that "Aim shall provide Allarcom with its regional input as to the acceptability of the programming schedule prepared by Allarcom from Aim's regional perspective ... [and] Allarcom agrees to consider the inclusion in its monthly programming schedule, of Canadian programs locally or regionally acquired by Aim within Aim's Territory." |
The major reason given by Allarcom for this application is the importance of regional pay television service being made available to cable subscribers in British Columbia and the Yukon without further delay. Allarcom also emphasized that such a service would significantly strengthen the other regional pay television licensees by improving their program purchasing agreements, considering the size of the potential subscriber base of the British Columbia and Yukon region. |
The Commission notes that, even under the most favourable circumstances, Aim could probably not provide pay television service using its own origination centre before October 1984. This delay in providing service would make it more difficult for Aim to establish itself in a competitive environment within the term of its licence. Moreover, the Commission considers that this interim proposal will provide residents in British Columbia and the Yukon with immediate access to an alternate general interest pay television service, already available to the majority of cable subscribers across Canada. |
As noted in Decision CRTC 84-2, at the public hearing, Allarcom discussed the possibility of raising the requirement related to the total revenues from its overall pay television operations to be expended on Canadian programming from 35% to 45% if it were authorized to use the same transponder, origination centre and uplink facility located in Edmonton to serve British Columbia and the Yukon, on a permanent basis. The applicant noted that it would not be financially feasible to achieve this level of expenditures if separate facilities were to be established in British Columbia. |
The Commission recognizes the fact that the use of a distinct transponder and uplink facility to serve the British Columbia/Yukon market might not be financially viable, at least at the present time. Accordingly it would be prepared to review further the possibility of Allarcom extending its Alberta signal to the British Columbia/Yukon region on a permanent basis, provided Allarcom also increases its overall Canadian programming expenditure requirements from 35% to 45% in addition to maintaining all of the commitments made at the hearing by Aim and Allarcom and outlined on paged 4, 5 and 6 of this decision. |
Not withstanding the above, it is a condition of approval of this application that Allarcom spend 45% of its total revenues from its overall Western Canada pay television operations on Canadian programming during the interim period authorized in this decision. |
Furthermore, in the discussion of this application at the hearing, Allarcom undertook that, should the application for the transfer of effective control of Aim to Allarcom also be approved (Decision CRTC 84-2), it would honour all of the commitments made by Aim in connection with its transfer of control application. Accordingly, the Commission requires, as a condition of its approval of this interim authority, that Allarcom adhere to this undertaking throughout the interim period. The commitments made by Aim, and discussed both with Aim and Allarcom at the hearing, are set out below: |
- a minimum of $12 million to be expended on the investment in, or acquisition of, Canadian programs during the term of Aim's licence. The Commission expects the licensee to ensure that a large portion of this amount be expended in the British Columbia and Yukon region; |
- $1 million to be expended on the investment in Canadian programming during the first year of operation. The Commission expects the licensee to ensure that a large portion of this amount be expended in the British Columbia and Yukon region; |
- the establishment of a script and concept development fund to which will be allocated 2.7% of gross revenues from the pay television operation in British Columbia and the Yukon; and the immediate investment of $500,000 in "seed" money for script and concept development; |
- the establishment of a program production fund generated from the profits from the pay television operation in British Columbia and the Yukon, through the flow-through concept. 75% of this fund to be invested in regionally-based projects or on projects done in cooperation with other regional general interest pay television licensees; |
- the investment of 100% of the Company's profits over the first five years from the pay television operation in British Columbia and the Yukon, in Canadian productions; |
- the establishment of a creative development department in British Columbia within 90 days of the issuance of this decision. In this regard, Aim stated: "This department will meet with producers and writers, here in Vancouver, in the region". It "will assess and critique proposals, invest in promising projects, offer a vital link with other regional pay services and other Canadian sources of co-production financing, and beyond that, offer inroads to international markets."; |
- the allocation of 6% of the total revenues from the pay television operation in British Columbia and the Yukon for the production or acquisition of regional productions. In line with this commitment, Allarcom committed 6% of the total revenues from its overall operations in the Prairie provinces and in British Columbia; |
- the distribution of a minimum of eight hours per week of programming produced or acquired in the British Columbia/Yukon region. Accordingly, Allarcom's across-the-board regional productions will total a minimum of 16 hours per week; |
- the establishment of a seven-member regional advisory committee to be comprised entirely of residents of British Columbia and the Yukon, who will make recommendations on the use of the program production fund. Aim stated that the decisions on the use of the fund "will be made in the region by the [AIM] Board of Directors..., a majority of whom are long-time B.C. residents". The advisory committee will engage "in an exchange of ideas with key people in the industry "and will include a representative from the Yukon."; |
- to initiate or cause the initiation of six Canadian feature films in the British Columbia/Yukon region during the first year of operation; |
- 18% of all the feature films to be distributed to be Canadian; |
- children's programming to represent at least 121/2% of the 168 hour-a-week schedule; |
- the restriction of the distribution of adult movies to a maximum of 12 hours a week, representing 7.1% of the total viewing time; and |
- adult programming in the British Columbia/Yukon region not to be shown prior to 12 midnight. |
It is a condition of this approval that Allarcom provide this service to British Columbia and the Yukon within thirty days of the date of this decision or such further period as the Commission may, upon receipt of a request for extension before the expiry of the said thirty days, deem appropriate under the circumstances. |
The Commission acknowledges the views expressed by interested parties in the numerous interventions received, the large majority of which supported this application. |
J.G. Patenaude Secretary General |
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