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Ottawa, 14 November 1986
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Decision CRTC 86-1086
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Global Communications Limited
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Paris, Bancroft, Ottawa, Uxbridge, Sarnia and Windsor, Ontario - 861472900
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Following a Public Hearing in Toronto on 23 September 1986, the Commission renews the broadcasting licence issued to Global Communications Limited (Global) for CIII-TV Paris, CIII-TV-2 Bancroft, CIII-TV-6 Ottawa, CIII-TV-22 Uxbridge, CIII-TV-29 Sarnia and CKGN-TV-1 Windsor, from 1 October 1987 to 31 August 1992, subject to the conditions of licence specified in this decision (see Appendix) and in the licence to be issued.
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INTRODUCTION
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The 23 September hearing was the Commission's first opportunity since 1982 to discuss with Global its past performance and future plans in the context of its application for licence renewal. It was also the first of a series of comprehensive hearings to consider applications for the renewal of major television and network licences.
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Global operates as an independent television licensee, competing effectively against networks and other independent stations in one of the most competitive markets in Canada. Southern Ontario is also the richest market in the country. The combined coverage of Global's various rebroadcasting stations, including coverage through the extension of service by cable, makes its programming available to more Canadians than that of any other television station in the country.
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According to the licensee, its service is currently available to 49% of English-speaking Canadians. This percentage will increase somewhat as a consequence of the Commission's approval of applications by Global to consolidate and extend its service in Ontario; some of these applications were non-appearing items at the September hearing in Toronto and are the subject of another decision issued today (Decision CRTC 86-1087).
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Two important factors have influenced Global's performance in recent years: the introduction of the Canadian Broadcast Development Fund, which was established shortly after Global's licence renewal in 1982 and is administered by Telefilm Canada; and the licensee's increased financial strength. The significance of these factors is addressed below.
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Global's Performance
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The Commission has assessed Global's performance against the background of the Television Broadcasting Regulations, taking into account as well the commitments, expectations and conditions set out in renewal Decision CRTC 82-1066. The Commission is satisfied that, overall, Global has fulfilled all regulatory requirements and, in many instances, has exceeded its commitments and the expectations and conditions enunciated by the Commission in Decision CRTC 82-1066.
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With respect to Canadian content, Global has been one of the most consistent performers of all private English-language independent television stations and CTV affiliates in terms of the Commission's requirement that a minimum of 50% Canadian programming during evening hours and 60% over the entire broadcast day be scheduled equitably throughout the broadcast year. The Commission commends Global on this performance and takes note of its commitment to maintain this approach during the new term of licence.
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In Decision CRTC 82-1066, Global was required to fulfill certain commitments regarding the number of hours of, the scheduling of, and expenditures on, new Canadian programming.
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Global's commitment to local production was to broadcast 20 hours 50 minutes per week, composed predominantly of news and public affairs programs, including "segments of entertainment programming, totalling one half-hour per week, featuring local amateur and professional talent." Global also committed to devote a total of $7.7 million to its 1982/83 news budget. The Commission commends Global on having met and exceeded its local production commitments in each year of its current licence.
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Although the quality of the news programming produced by Global has remained consistently high, its efforts in the area of public affairs specials oriented to the needs and interests of Ontario residents have not been substantial. The licensee confirmed at the hearing:
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We do not specialize in public affairs programming per se. We try to do all of our public affairs programming as part of our news efforts, within the news itself ... It is not a large amount ... Fifteen [public affairs] programs over the licence period is approximately correct.
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With respect to drama, musical/ variety (including dance), children's programming and specials, Global's 1982/83 commitment was to broadcast, as a minimum, "a total of 94 hours of new Canadian productions ... including 117 half hours of children's programming, 26 half hours of drama, and 45 half hours of musical/variety programs", together with an unspecified number of specials. Much of this programming was to be produced in co-operation with, or to be acquired from, independent Canadian producers. In Decision CRTC 82-1066, the Commission said it expected Global to achieve these levels, as a minimum, throughout the licence term.
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Moreover, Global was expected to schedule this Canadian programming at times when the largest audiences would be available, to maintain the resources expended on the production or purchase of such programs "at a level equal, in constant dollars, to the amount spent in 1982/83", and to make every effort to maintain Canadian drama and musical/variety programming throughout the licence term in "roughly the balance as proposed" for 1982/83.
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Again, the CRTC's requirements pertaining to the total number of hours, scheduling and program expenditures were either fulfilled or exceeded by the licensee. In addition, the Commission notes that many of the Canadian productions aired by Global in recent years have received national and international recognition.
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Programming Plans
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In Decision CRTC 72-224 which first licensed Global, the Commission emphasized that "a major factor in the approval of this application has been the commitment of Global to concentrate on the development of programs using creative resources of independent Canadian producers and production houses." At the September 1986 hearing, Global estimated that approximately 70% of its new Canadian programming is produced by independent Canadian producers. Programming acquired from other Canadian television licensees accounts for 16% of the new Canadian programming aired by Global, and the remaining 14% is its own local production.
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At the hearing, the licensee indicated that the amount of programming obtained from independent producers would increase in the future. In addition to acquisitions and co-productions, Global stated that:
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... for the first time ever, we are able to work with the independent production community, not only on script development ... and development of projects, but on pilots. We have got four or five pilots going this year, which we never [had] the resources ... the opportunity or time to do before.
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In this context, and as discussed at the hearing, the Commission expects Global to ensure that the licence fees it pays to independent producers are set at equitable levels in order to encourage continued growth of the independent production industry upon which Global relies so heavily and to strengthen the production industry's ability to produce high quality Canadian programs which will clearly be of benefit to the Canadian broadcasting system.
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Global said that, at least in the short run, it would place greater emphasis on drama and less on variety, music and dance programs. Except for these adjustments, Global proposes to adhere to essentially the same formula it has used in the past.
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Consistent with this approach, Global plans to continue to devote the greater portion of its Canadian programming budget (approximately 60% to 70%) to news programming. At the hearing, Global noted that its projections call for an increase in the news budget of 7.5% per year and indicated plans to add a news package to its Sunday evening schedule.
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In addition to such existing popular programs as "Ray St. Germain", the award-winning "Profiles in Nature" and children's programs such as "Kidsbeat" and "Size Small", Global proposes to introduce a number of Canadian drama features and series (with such titles as "The Blue Man", "Verdict", the award-winning "Bradbury Chronicles" and "Family Theatre"), variety programs ("Variety Tonight"), children's programs ("Mr. Wizard") and documentaries ("American Caesar", "Dive to Adventure"). Programs in these categories are among the most complex and expensive to produce. As a consequence, it is very much in the licensee's interest to broadcast them at times when the largest audiences are available to view them.
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At the hearing, Global stated that, for most of its programming, the peak viewing hours were between 8:00 p.m. and 10:00 p.m. At the same time, it submitted that some types of new Canadian programs could often attract larger audiences when not scheduled directly opposite other highly competitive programs, noting that 7:30 p.m. on Saturday was "the best place we have now to launch a new Canadian program". Global reiterated its commitment to continue to schedule new, first run Canadian children's programs between 7:30 a.m. and 12:30 p.m. on Saturday, and all other new, first run Canadian programs during the evening hours between 8:00 p.m. and 11:00 p.m. Sunday to Friday, and between 7:30 p.m. and 11:00 p.m. on Saturday.
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FINANCIAL PERFORMANCE AND PROGRAMMING EXPENDITURES
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At the hearing, Global agreed that the amount of new Canadian programs it obtains from independent producers might be significantly less were it not for the availability of funding from Telefilm Canada.
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Before the Broadcast Development Fund was created, Global had difficulty in arranging solo or joint-venture financing to initiate development of a new Canadian production. Typically, Global's financial participation might have amounted to 40% of a production's total cost. Today, in many instances, Global and Telefilm together contribute 40% of the total cost. The Commission notes that Global's contribution has tended to average slightly less than 13% over the past years. As a result of this funding arrangement, the number of hours of new Canadian programming that Global is able to obtain for broadcast from its investment, and the amount of money that is ultimately injected into the Canadian independent production sector, are substantially greater than in 1982.
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Global's financial situation has also significantly improved since 1982. Today, despite growing competition and audience fragmentation in the southern Ontario market, the licensee's gross revenues are 80% more than their level in 1982. In fact, since 1980 Global has reported annual increases in profitability such that, by year-end 1985, it reported revenues of $88 million and operating income (pre-interest and pre-tax) of more than $20 million. The Commission notes that this performance is superior to that of any other television station in Canada.
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This improvement in Global's financial position has enabled the licensee to commit itself to investments in the oil and gas industry amounting to approximately $26 million to date. The licensee has assured the Commission that these investments do not affect its broadcasting activity "in any way, other than positively". It further confirmed that broadcasting remains its principal focus and that it is "not looking at making investments in which we will tie up company cash flow outside of broadcasting".
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Mindful of earlier unsuccessful investments by Global outside of broadcasting, the Commission expects it to maintain broadcasting as its principal focus, and to ensure that its outside investments do not diminish its ability to perform its broadcasting obligations.
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Global's financial success is a product of the licensee's broadcasting expertise, as well as the unique set of market and other circumstances in which it operates. As noted earlier, southern Ontario is the richest market in Canada, and Global's audience reach is greater than any other television station in the country. Although Global is precluded from obtaining revenue from local advertising, this is balanced by the fact that it is not obliged to provide costly, locally-oriented services to any of the communities it serves.
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Global derives a significant portion of its gross revenues from the simulcast of U.S. programs. With respect to the purchase of rights to popular U.S. programs, however, Global and other independent stations, particularly those in Ontario, must compete for programs which are also sought by the CBC and CTV networks for distribution on a national basis. All English-language commercial television stations in Canada acquire some popular U.S. programs to attract the large audiences upon which they rely for financial success. Accordingly, Global frequently purchases national rights for the exhibition of such programs, even though it is only licensed to serve the southern Ontario market.
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Global stated that, with the licensing of new independent stations and the recent formation of a new "buying group", the competition for U.S. program rights has intensified. Global claims that its expenditures on foreign product will continue to increase as a result.
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The Commission notes, however, that competition by the CBC for foreign program rights is diminishing as a result of its increasing use of Canadian productions in its television schedules.
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Moreover, with more independent stations being established across the country, Global should find it easier to amortize its acquisition costs by selling programs to stations operating outside its market area. The Commission also emphasizes that it would consider unacceptable that an independent station would unreasonably deny independent stations outside of its market access to non-Canadian programs for which it has purchased national rights.
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Notwithstanding Global's expectation that its expenditures on U.S. program rights will continue to rise in relation to its revenues, and the licensee's belief that it may not be possible to duplicate last year's successful financial performance, the Commission sees no evidence to suggest that Global will not continue to be a very profitable undertaking, one that is capable not only of maintaining, but also of improving upon, its performance in all areas.
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With specific reference to Global's performance in the funding of new Canadian programs, Global stated at the hearing that it recognizes the only way it can hope to attract larger audiences is by offering programs of higher quality. Global noted, however, that it has reached a point beyond which there is little likelihood of increasing the audience it now attracts for its non-Canadian programs. The licensee therefore concluded that it is principally in the area of Canadian programming that it will be able to increase its audience and thereby improve its financial performance:
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We recognize this is still the area where we have the greatest potential for growth and we have consciously decided to provide more funds for these programs with the avowed goal of continuing to improve them and, hopefully, to make them profitable.
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Bearing this in mind, the Commission has examined what Global was able to accomplish in 1985/86 in terms of first run, new Canadian programming in the drama, music and dance, and variety categories as well as documentaries and programming targeted to children, and has compared this performance to what Global, at the hearing, indicated it would accomplish in 1986/87 and beyond.
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The Commission notes that in 1985/86 Global broadcast a total of 206 hours of new Canadian programs of the types noted above, all scheduled during popular mid-evening viewing hours (with the exception of programming targeted to children), all first run, exclusive of repeats, and representing a direct expenditure estimated by Global to be $2.15 million, or approximately 2.4% of its gross revenues during the period.
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In its renewal application, Global stated that it would broadcast a minimum of 117 hours of new Canadian programs per year, consisting of 104 hours of drama, music and dance, variety and programs targeted to children, plus 13 hours of documentaries (Category 2 programs). At the hearing, in response to questioning by the panel, Global revised this commitment upwards and undertook to broadcast a minimum of 166 hours of these types of new Canadian programs in 1986/87 and in each year of its new term of licence. Global stated that, as part of its business plan, it fully expected that the actual number of hours of these types of new Canadian programs would be 205 hours, or approximately the amount achieved in 1985/1986. Nevertheless, it was unwilling to make any firm commitment to broadcast more than the 166 hours, either in 1986/87 or in any year of its new term of licence.
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With respect to programming expenditures, in Decision CRTC 82-1066 the Commission said that it expected Global to maintain, at a minimum, the resources budgeted for such programs at the same constant dollar level in each year of its licence as were spent in 1982/83. In fact, Global's actual expenditures of $2.15 million in 1985/86 were almost $1 million greater than the amount required by Decision CRTC 82-1066.
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At the hearing, Global stated that, as a new commitment, it would allocate the sum of $2,500,000 in 1986/87 for new Canadian programs of the types mentioned earlier in this section, and the same amount, in constant dollars, as an annual average over the new term of licence. Based on the licensee's forecasts, the $2,500,000 would represent approximately 2.7% of the projected gross revenues in 1986/87, but only 2.37% of the projected gross revenues in 1990/91.
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With respect to the total volume of Global's Canadian programming, the Commission notes Global's 1985/86 direct and indirect expenditures, excluding overhead allocations, amounted to $16.8 million, or 18.5% of gross revenues. Global projects that the direct and indirect expenditures, excluding overhead allocations, for all Canadian programming to be aired between 6:00 a.m. and midnight in 1986/87 will be $18.9 million, or 20.3% of its projected gross revenues for the period. The Commission notes that Global's projected direct and indirect expenditures on comparable foreign programming, excluding overhead allocations, is $24.7 million, or 26.6% of projected gross revenues in 1986/87.
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The Commission also notes that there is a growing imbalance between what the licensee spends on Canadian programming on the one hand, and on foreign product on the other. In 1983, Global spent roughly equivalent amounts on Canadian and foreign programming. According to Global's projections for 1986/87, Canadian program expenditures, representing approximately the same level (20.3%), will be significantly less than foreign program expenditures, which would rise to 27.8% of gross revenues. Further, Global forecast that by 1991, Canadian program expenditures will have remained at a level of 20.3% while foreign program expenditures will have risen to 29.6%, creating an apparent imbalance of 9.3%. It should be noted, however, that, because of funding from sources such as Telefilm, Global's expenditures on any new Canadian program very often represent only a fraction of the total cost of the production. Thus the total production value of the Canadian programs aired by Global is significantly greater than what might be implied by these percentages. As was also noted earlier in this decision, the projected increase in the cost of foreign programs is attributable in part to Global's recent tendency to purchase national rights for popular U.S. programs, in competition with the CBC and CTV networks, while not being able to amortize such costs over the entire Canadian market.
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The Commission's Decision
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The Commission's evaluation of Global's proposals and commitments to new Canadian programming has taken into account the considerations and developments noted in the foregoing sections. In light of the very distinct characteristics of the licensee's overall operation and obligations, and given the accessibility of funds such as those administered by Telefilm and other government agencies, the growing number of other independent stations and the market they provide for new Canadian programs, and the extent to which Global's financial situation has improved during the past four years, the Commission does not consider that the licensee's commitments with respect to the production of new Canadian programming are adequate or consistent with its proven capabilities.
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Clearly it would be inappropriate for the Commission to accept less of Global during its upcoming licence term than what it is now doing, both in terms of the number of hours of new first-run Canadian drama, music and dance, variety, documentary and children's programs, and in terms of the number of dollars spent on their production each year. In the Commission's view, and as emphasized by the Chairman of the CRTC at the hearing, broadcasting licensees should make a concerted effort to improve significantly the quality and creativity of their Canadian programming. Such effort will be needed to ensure the continued vitality of the Canadian broadcasting system in the face of the challenges represented by burgeoning technology and easily accessible competitive services.
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In this regard, the Commission draws on Global's own statements recognizing that any significant expansion in the size of the audiences attracted to its foreign programming is unlikely, and that its future growth will depend upon the strength of its efforts to improve the quality and attractiveness of its Canadian programming.
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The Commission has, therefore, decided to impose conditions on Global's licence designed to ensure that a substantial core of new Canadian programs of the types largely under-represented particularly on private English-language television continues to be scheduled by Global during the most favourable viewing hours while, at the same time, ensuring that Global retains the ability to acquire the popular U.S. programs upon which a large portion of its revenues depends, and to schedule them effectively against the growing competition it faces within its own market. A significant investment in, and proper scheduling of, new Canadian programs represent the most appropriate and important areas in which Global can contribute during its new term of licence to ensure the fulfillment of the goals of the Broadcasting Act.
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As well, the Commission considers that the substantial effort made by Global in news and public affairs over the past licence term should be continued, in accordance with the licensee's commitments. The Commission has, therefore, decided to require, as a part of the conditions of licence, annual budgetary allocations of the order committed by the licensee.
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Accordingly, the Commission imposes the following conditions of licence:
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It is a condition of licence
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(a) that in the eleven-month period commencing on 1 October 1987, Global broadcast a minimum of 183 (11/12 of 200) hours, and in each subsequent twelve-month period commencing on 1 September, a minimum of 200 hours of new, first run Canadian drama, music and dance, variety, children's and Category 2 documentary programs, to be scheduled, with the exception of children's programs, between 8:00 p.m. and 11:00 p.m. on Sunday through Friday and between 7:30 p.m. and 11:00 p.m. on Saturday; and
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(b) that during the twelve-month period commencing on 1 September 1991, Global broadcast an additional 50 hours of these types of programs at the licensee's discretion at any time during the broadcast day.
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It is a condition of licence
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(a) that Global spend, in respect of first run amortized play costs for new, first run, Canadian drama, music and dance, variety, children's and Category 2 documentary programs, in the eleven-month period commencing on 1 October 1987, a minimum of $4.58 million (11/12 of $5 million), and in respect of the direct and indirect costs of news programs, excluding overhead allocations, a minimum of $11.67 million (11/12 of $12.736 million); and
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(b) that Global spend, in respect of first run amortized play costs for new, first run Canadian drama, music and dance, variety, children's and Category 2 documentary programs, in each subsequent twelve-month period commencing on 1 September, a minimum of $5 million plus an amount to reflect the percentage increase in the All Items Consumer Price Index for Canada published by Statistics Canada for the twelve-month period ending on the last preceding 30 April; and in respect of the direct and indirect costs of news programs, excluding overhead allocations, a minimum of $12.736 million plus an amount to reflect the percentage increase in the All Items Consumer Price Index for Canada published by Statistics Canada for the twelve-month ceding 30 April.
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The Commission notes that between the 1982/83 and 1985/86 program years inclusive, approximately 55% of the total hours of new, first run Canadian drama, children's, musical/ variety and specials were devoted to drama and children's programs. The Commission expects the licensee, as a minimum, to maintain this percentage of new drama and children's programs, relative to the amount of music and dance, variety and documentaries it broadcasts, in each year of its new licence term.
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With respect to the second condition, the Commission reminds the licensee that the requirement is for a minimum annual expenditure as opposed to the average annual expenditure proposed by Global.
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The Commission is satisfied that these conditions of licence represent reasonable requirements and is confident that they will have the desired effect of improving the quality and attractiveness of the licensee's Canadian programs. Such quality and attractiveness should translate into larger audiences, and hence, larger revenues for the licensee. The conditions are also consistent with the Commission's stated intention to require much more by way of effort in Canadian program production from all broadcasting licensees. Based on Global's record of performance since 1982, the Commission is convinced that the licensee has the resources to meet these requirements, and that it has the ability to respond forcefully and effectively to the growing challenges confronting it and to strengthen its contributions to the Canadian broadcasting system.
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Other Matters
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Although much of the discussion at the hearing focused on Global's performance and future plans with respect to Canadian programming, the Commission also reviewed a number of other issues related to Global's operation which are addressed below:
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a) Global's Role and Mandate
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The Commission's decisions over the years have consistently emphasized Global's role and primary responsibility to provide a regional service to southern Ontario. The Commission wishes to reiterate that Global, at this time, is expected to augment its efforts to orient its service to southern Ontario by ensuring that its news and public affairs programming in particular responds adequately to the needs and interests of Ontario residents.
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Global is also expected to increase its contribution to the exposure of emerging Canadian talent in Ontario, through such initiatives as the entertainment segments presented on its noon-hour news program and through its variety, music and dance programs.
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Global's suggestion that it might have a wider role as a national programming service was discussed at the hearing. The Chairman of Global's Executive Committee, Mr. Seymour Epstein, made the following comment:
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To all of us at Global, from the very beginning, we also thought it was clear that Global was -- the ambitions of all parties at the time Global was licensed, was to develop and contribute to a national programming service.
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The Commission wishes to underscore the point that Global's contribution to a national programming service is confined principally to facilitating the distribution of new Canadian programming, particularly drama, documentaries, music and dance, variety and children's programs, to stations outside its coverage area. The Commission rejects any wider interpretation of Global's role at this time.
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The Commission recognizes that some of the news segments produced by Global are used by other Canadian stations, and considers that this contributes to the diversity of news voices within the Canadian broadcasting system. This does not, however, confer a national mandate on Global. The Commission wishes to be assured that Global's southern Ontario regional service is improved; with this in mind, the Commission has today approved a number of applications by Global designed to improve and extend its coverage in southern Ontario.
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b) Ownership and Control
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Another subject canvassed at the hearing concerns the ownership and control of Global. The licensee confirmed the Commission's understanding that Global continues to be managed according to the terms of the 1978 Unanimous Shareholders Agreement under which the shares of the licensee's parent company, Global Ventures Western Ltd. (Ventures), are voted 50% by each of Canwest Communications Enterprises Inc. (Canwest) and Seyton Ltd., although Canwest holds beneficially more than 60% of the shares of Ventures.
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The licensee advised that the Board of Directors of Ventures consists of four members, but is about to be increased to six members, including three nominees of each of Canwest and Seyton Ltd. Global's Board of Directors is composed of thirteen members: five nominees of Canwest, five of Seyton Ltd., two independent nominees to be selected jointly by Canwest and Seyton Ltd., and the remaining a nominee of the holders of Units of Global. Global's Executive Committee consists of six members, with three representing the interests of Canwest and three representing those of Seyton Ltd.
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During a discussion regarding an ongoing dispute between CanWest and Seyton Ltd., who are the shareholders of Ventures, Global's parent company, the Commission expressed concern that disagreements between these shareholders could have a detrimental impact on the licensee's performance of its obligations as a broadcaster. In responding to this concern, Global's legal counsel stated on behalf of Canwest and Seyton Ltd. that:
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[Canwest and Seyton] will use every effort, notwithstanding the external litigation, to assure that firstly the conditions of licence and any performance obligations required by the Commission in its decision on this hearing -- assuming they are not extraordinary items -- will be fulfilled; and secondly that the operations of Global, that is to say, programming scheduling and ordinary broadcast activities, will not be interfered with.
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The Commission expects Global and its principals to ensure that this undertaking is upheld at all times.
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The Commission notes that the presence of three non-aligned directors, together with the mechanism contained in the Unanimous Shareholders Agreement whereby decisions on the Board shall be made by a majority of not less than 2 provides a method to avoid a deadlock situation on the Global Board of Directors. Because of the ongoing dispute between the above-mentioned parties, and to ensure that this method is maintained, the Commission has decided to impose the following condition of licence:
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It is a condition of licence that the Global Board of Directors be composed of thirteen members: five nominees of Canwest, five of Seyton Ltd., two independent nominees to be selected jointly by Canwest and Seyton Ltd., and the remaining a nominee of the holders of Units of Global, and that the Commission's approval be obtained prior to making any change to this composition.
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The Commission also expects the licensee to inform it upon any disagreements between Canwest and Seyton Ltd. being referred to arbitration pursuant to the Unanimous Shareholders Agreement.
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c) First Choice Intervention
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In its intervention at the hearing, First Choice Canadian Communications Corporation (First Choice) raised its concern that Global may have adopted a policy of not participating in the funding of independent productions when such productions involve participation by pay television licensees in areas where Global is authorized to broadcast. It argued that this, coupled with Telefilm's policy of involving itself only in projects supported by a commercial broadcaster, effectively served to prevent participation by segments of the pay television industry in the funding of such productions, and worked against the orderly process of program distribution and exhibition common in North America, whereby program exhibition proceeds in a sequence that provides for an earlier showing, or "window", on pay television prior to its distribution on conventional television.
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The intervener argued that first window showings of new productions on pay television are essential to maximize the benefits of available funding, and proposed that a condition of licence be imposed on Global requiring the licensee not to deny an opportunity for the prior exhibition of new productions on pay television in contracts into which it enters with independent producers.
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In response, Global denied that it had implemented a policy against co-operating with the pay television industry in the funding of new productions, but expressed its concern about the degree to which pay television first window showings and attendant publicity tended to reduce the value of later showings of such productions on its television stations.
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The Commission considers that the condition of licence proposed by First Choice relates to a matter involving program rights, a matter which the Commission prefers to leave for resolution by the parties concerned. At the same time, given the relatively low penetration of pay television, the Commission considers that first window showings on pay do not pose a significant threat to Global in terms of audience. In the interest of the orderly development of the market place and in order to maximize the benefits of available funding from sources such as Telefilm, the Commission encourages Global to co-operate with all the general interest pay television licensees in the matter of program development and related financial participation, and will monitor Global's efforts to respond to the Commission's concerns in this regard.
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d) Closed Captioning
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In another intervention presented at the hearing, the Ontario Closed Captioned Consumers complimented Global on its efforts to support the development of closed captioned television programs, in co-operation with the Canadian Closed Captioning Development Agency, and encouraged Global to maintain these efforts. The Commission notes that in response to this intervention the licensee undertook to continue to use only the captioned versions of U.S. network programs, and to continue to co-operate with the Closed Captioning Development Agency with a view to increasing the availability of captioned programs.
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Global indicated it would endeavour to ensure that captioned programs are properly identified in television guides, and that it would study further the feasibility of purchasing telephone equipment, such as was recommended by the intervener, as a means to facilitate Global's communications with the deaf and hard of hearing.
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In responding to an intervention concerning the use of the text channel, Global also indicated that it should be able to supply this service very shortly.
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In particular, the Commission encourages Global to follow up on its commitment to investigate further the possibility of captioning its news, and expects to be kept informed on the results of this investigation and of any firm implementation plans in this regard.
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e) Adherence to Industry Codes
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With respect to violence on television, Global described its policy in its application and at the hearing to ensure that any program containing scenes of explicit violence is scheduled in late evening hours:
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If (a program) is violent ... we have got to make sure it does not play in family time, we have got to make sure ... there are appropriate announcements on it, to make sure that the public is advised it is coming up, and the potential violence of it.
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The Commission notes that Global has worked with the Canadian Association of Broadcasters (CAB) on the development of an industry code on violence, which has now been adopted by the CAB, and that Global has made a commitment to adhere to the provisions of this code.
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The Commission also notes Global's statement at the hearing that "there would be no problem" if it were to be required, by condition of licence, to adhere to the CAB's voluntary guidelines on sex-role stereotyping. Consistent with the commitments made at the hearing, the Commission expects the licensee to increase its efforts towards the elimination of sex-role stereotyping, and imposes the following condition of licence:
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It is a condition of licence that Global adhere to the CAB self-regulatory guidelines on sex-role stereotyping, as amended from time to time and accepted by the Commission.
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f) Prohibition Against Local Advertising
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The Commission notes Global's statement at the hearing that it concurs with the CRTC definition of what constitutes "local advertising", as set out in a letter from the Commission to the licensee dated 19 June 1985, and that it "will continue its mandate to carry no local advertising."
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Accordingly, it is a condition of licence that Global not broadcast any local advertising.
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The Commission acknowledges all the interventions submitted with respect to Global's application for licence renewal, of which the vast majority were in support. In particular the Commission has taken note of the praise expressed by several representatives of the Canadian production industry, in their written interventions and at the hearing, regarding Global's performance and participation in the development of new Canadian programming.
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The Commission also notes the intervention by the Alliance of Canadian Film Cinema and Radio Artists, and its concern that there be no decrease in the amount of new Canadian programming broadcast by Global. Regarding the intervention by Mr. David Brough on behalf of the Community Access Network, the Commission accepts the licensee's reply at the hearing that although it has a policy of responding quickly to all proposals by independent producers, it regrets that a proposal by Mr. Brough was not acknowledged.
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In conclusion, the Commission wishes to emphasize that it approached the hearing of Global's application for licence renewal with strong expectations as to what this licensee, given its projected financial health, should be able to contribute during its upcoming licence term. The role that Global will play in the development of the Canadian broadcasting system, the impact its service will have in bringing Canadian talent to the fore, and the success of its programming in attracting a large Canadian audience, are critical. The Commission is satisfied that Global is entirely capable of fulfilling such expectations.
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Fernand Bélisle
Secretary General
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The broadcasting licence of Global Communications Limited for the licence term 1 October 1987 to 31 August 1992 will be subject to the following conditions of licence and to others contained in the licence to be issued.
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1. It is a condition of licence
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(a) that in the eleven-month period commencing on 1 October 1987, Global broadcast a minimum of 183 (11/12 of 200) hours, and in each subsequent twelve-month period commencing on 1 September, a minimum of 200 hours of new, first run Canadian drama, music and dance, variety, children's and Category 2 documentary programs, to be scheduled, with the exception of children's programs, between 8:00 p.m. and 11:00 p.m. on Sunday through Friday and between 7:30 p.m. and 11:00 p.m. on Saturday; and
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(b) that during the twelve-month period commencing on 1 September 1991, Global broadcast an additional 50 hours of these types of programs at the licensee's discretion at any time during the broadcast day.
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2. It is a condition of licence
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(a) that Global spend, in respect of first run amortized play costs for new, first run, Canadian drama, music and dance, variety, children's and Category 2 documentary programs, in the eleven-month period commencing on 1 October 1987, a minimum of $4.58 million (11/12 of $5 million), and in respect of the direct and indirect costs of news programs, excluding overhead allocations, a minimum of $11.67 million (11/12 of $12.736 million); and
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(b) that Global spend, in respect of first run amortized play costs for new, first run Canadian drama, music and dance, variety, children's and Category 2 documentary programs, in each subsequent twelve-month period commencing on 1 September, a minimum of $5 million plus an amount to reflect the percentage increase in the All Items Consumer Price Index for Canada published by Statistics Canada for the twelve-month period ending on the last preceding 30 April; and in respect of the direct and indirect costs of news programs, excluding overhead allocations, a minimum of $12.736 million plus an amount to reflect the percentage increase in the All Items Consumer Price Index for Canada published by Statistics Canada for the twelve-month period ending on the last preceding 30 April.
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3. It is a condition of licence that
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the Global Board of Directors be composed of thirteen members: five nominees of Canwest, five of Seyton Ltd., two independent nominees to be selected jointly by Canwest and Seyton Ltd., and the remaining a nominee of the holders of Units of Global, and that the Commission's approval be obtained prior to making any change to this composition.
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4. It is a condition of licence that
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Global adhere to the CAB self-regulatory guidelines on sex-role stereotyping, as amended from time to time and accepted by the Commission.
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5. It is a condition of licence that
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Global not broadcast any local advertising.
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