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Ottawa, 13 March 1986
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Decision CRTC 86-216
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CHUM Limited
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Woodstock, Ontario - 842795700
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Following a Public Hearing in Hull, Quebec on 19 November 1985, the Commission approves the application by CHUM Limited for a licence to carry on a television broadcasting transmitting undertaking at Woodstock, operating on channel 31 with an effective radiated power of 706,000 watts, to rebroadcast the programs of CITY-TV Toronto, Ontario.
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The Commission will issue a licence expiring 30 September 1987, subject to the conditions specified in this decision and in the licence to be issued. This term will enable the Commission to consider the licence renewal of the rebroadcaster at the same time as that of CITY-TV.
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The Commission had previously denied applications by CHUM Limited to establish four low-power rebroadcasting transmitters of CITY-TV at Brantford, St. Thomas, Stratford and Woodstock on 13 March 1984 (Decision CRTC 84-259) on the grounds that the proposal would use the last available U.H.F. channels allocated to this area and would deprive "these locations of suitable frequencies for the establishment of their own locally-oriented stations in the future".
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At that time, the Commission's policy regarding the distribution of distant Canadian signals was under review. In response to extensive public comment on this subject, a public hearing took place on 27 November 1984 in Hull, Quebec.
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Public Notice CRTC 1985-61 dated 22 March 1985 announced a number of revisions to CRTC policy with respect to the extension of Canadian broadcasting signals, and set out criteria for both over-the-air transmission and cable distribution.
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The Commission stated that it would examine, on a case-by-case basis, over-the-air applications, taking into account the following considerations:
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(a) there should be no objection on
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the part of the originating station whose signal is being extended;
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(b) the originating station whose
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signal enters a distant market should not accept local advertising from such a market;
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(c) the originating station will
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continue to adhere to the local programming commitments of its licensing decision;
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(d) the distant signal should enhance
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the diversity of Canadian programming in the market;
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(e) the number of local television
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services in existence or likely to be licensed in the distant market;
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(f) the degree of the distant signals
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potential impact on the revenue base of the local broadcasters and on their ability to meet their programming commitments;
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(g) the availability of the required frequency in the proposed new market(s);
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(h) whether cooperative arrangements (such as twin-sticking) between the originating station and a local broadcaster in the distant market are involved or are being considered.
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The Commission is satisfied that in the present application from CHUM Limited, the applicant has met satisfactorily each of the criteria outlined above.
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In contrast to the licensee's previous submission to establish four low-power rebroadcasters, the present application proposes to serve the same area of southwestern Ontario by means of a single powerful transmitter.
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At the hearing, CHUM Limited argued for approval of the application on the basis of its alternate program content and format and its wish to offer that programming to a wider audience to enable it to compete more effectively with other Toronto stations whose signals are already available in southwestern Ontario.
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CHUM Limited described its proposal as "an adjacent expansion", in order to extend the over-the-air reach of CITY-TV to an area it already partially serves.
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The technical parameters of the present application will permit extension of the signal of CITY-TV into the communities of Brantford, Cambridge, Guelph, London, Kitchener, St. Thomas, Simcoe, Tillsonburg and Woodstock. At this time, this signal is only available to cable television subscribers with converter service in the communities of Kitchener/Stratford, Brantford/Paris and Woodstock.
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As a result of this approval, the broadcasting transmitting undertaking at Woodstock will be distributed on a priority basis on several cable systems in the southwestern Ontario region. It is thus estimated that cable carriage and over-the-air transmission of the CITY-TV rebroadcast signal from Woodstock will provide approximately 260,000 additional households with access to the service.
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Consistent with the Commission's criteria, the applicant made the commitment not to solicit any advertising from the new coverage area in order to minimize the rebroadcaster's potential impact on local broadcasters, particularly CFPL-TV. Accordingly it is a condition of licence that CITY-TV not solicit any advertisements from the area to be served by the Woodstock rebroadcaster.
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Moses Znaimer, President of CITY-TV, promised that
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the output of CITY-TV will not change. A clear, intense Toronto identity is our mandate and it is our business. We will remain precisely Toronto's downtown, hometown, big town television station.
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He added that a target date of 1 September 1986 had been set for broadcasting the CITY signal into southwestern Ontario.
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At the Public Hearing, the applicant stated that it is currently producing approximately 30 hours of original production per week on CITY-TV, an amount in excess of the programming commitments made at its last licence renewal and that, at the moment, only 4 U.S. and 2 Canadian programs that it broadcasts are duplicated on local stations in the extended coverage area.
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CHUM Limited noted that viewers in the proposed extended service area currently receive a wide selection of U.S. network and independent television signals from the cities of Erie, Pennsylvania; Cleveland, Ohio; and Detroit, Michigan.
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As a consequence of the foregoing, the Commission is convinced that extension of the CITY-TV signal to this area will help assure a stronger Canadian television presence, not only because it will add another Canadian signal to those available in the area, but also because its schedule is virtually unduplicated in the market that it will reach.
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CHUM Limited made the argument in marketing information submitted with its application that the extension of the CITY-TV signal into southwestern Ontario would have little economic impact on the local CBC and CTV affiliates. The licensee estimated that approximately $1 million a year is siphoned from the central southwestern Ontario region by U.S. broadcasters, and it expects to repatriate Canadian viewers to its alternative programming service and to attract Canadian advertising revenue to a market that currently lacks sufficient advertising availabilities. Five letters from national media buyers endorsed CHUM's position emphasizing that it is difficult to purchase suitable television advertising time in the markets of London and Kitchener.
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The present application was supported by 21 letters and by petitions from residents of Waterloo and London containing 174 signatures. Opposing interventions were submitted by the Canadian Broadcasting Corporation, CFPL Broadcasting Limited (CFPL), CKNX Broadcasting Limited, and by CAP Communications Limited (licensee of CKCO-TV).
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In their interventions, CFPL-TV London, its sister station CKNX-TV Wingham and the CBC urged the Commission to defer the introduction of the CITY-TV signal into the off-air and cable markets of London, Ontario until their discussions concerning the possible disaffiliation of these stations from the CBC network have been concluded.
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At the Public Hearing CFPL indicated that although the subject has been under discussion for about eight years, the CBC is now prepared to consider establishing a full network service in the London area and would support CFPL's plan to disaffiliate from the network and seek independent status. A preliminary target date of fall 1987 has been proposed. To this end, CFPL has commenced a major building project to extend the facilities of CFPL-TV London.
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In the event of disaffiliation, the CBC would require one or more channels in this area. However, the Commission is satisfied that, having approved the present application, sufficient channels still remain available for future assignment.
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In his oral presentation at the Public Hearing, Robert Elsden, President of CFPL Broadcasting Limited, expressed his opposition to the present application primarily on the grounds that the "extension of a third, distant station from TorontoHamilton into London and southwestern Ontario will diminish the advertising base necessary to support local service". Mr. Elsden also argued against approval of the application on the basis of potential loss of programming.
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The Commission believes that CHUM Limited responded adequately to both concerns. On the question of possible loss of programming, the Commission notes the statement by Moses Znaimer that CITY-TV would continue to make its own productions available to CFPL-TV should it wish to purchase them, and CITY-TV undertook not to purchase exclusive rights to distribute U.S. programs in Canada.
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Further, since CFPL-TV, as a local station, has higher priority than a rebroadcast transmission of a Toronto signal in the London area, it may use the simultaneous substitution provisions in the Cable Television Regulations and replace any identical program whether broadcast on CITY-TV or any other non-local station, with its own program feed.
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As to the second concern, the possible loss of advertising revenues, CHUM Limited submitted that revenues accruing to it as a result of this signal extension would be lost by American stations not by CFPL-TV. Dennis Fitz-Gerald, Vice-President and General Manager of CITY-TV stated at the hearing:
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We can find no evidence of CFPL's claim of financial hardship which would be caused by CITY's extension. They have enjoyed years of unending profitability...
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We must ask the question: Why do local sales only represent 10 percent of CFPL's revenue base when markets such as Calgary, Halifax, Moncton and Winnipeg realize 40 to 50 percent of their revenue from that source?
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We think they have never faced the need to exploit this revenue potential... We suggest that if CFPL's national advertising base should erode to any extent in the future, the effects could be easily offset through local revenue.
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CAP Communications Limited, expressed concern with the Commission permitting service extension with no local service responsibilities. The intervention stated:
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The issue "at its heart", is whether the Commission should licence an extension of the service of CITY-TV, beyond the area for which its Promise of Performance is meaningful, for the purpose of providing an opportunity to it to access revenues both regional and national which are the basis for support of the stations whose commitment in performance is to that region.
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The Commission notes that considerations like those expressed by CAP Communications were taken into account in developing the distant Canadian signals policy.
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The Commission accepts the assurances given by CHUM Limited that CITY-TV will continue to adhere to its Toronto programming commitments. Based on the financial information submitted during this proceeding, the Commission considers that the local stations should be able to continue to fulfill their programming commitments.
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Taking all of the foregoing into consideration, the Commission is satisfied that the introduction of the CITY-TV signal into southwestern Ontario will not have any undue impact upon the local broadcasters, particularly since the present decision contains a condition that CHUM not solicit any advertisements from
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the new coverage area. Further, it considers that the addition of this attractive, alternative Canadian signal will help redress the imbalance of Canadian and foreign viewing choices in the region and repatriate viewing audiences.
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Fernand Bélisle
Secretary General
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