ARCHIVED -  Decision CRTC 86-350

Decision

Ottawa, 11 April 1986

Decision CRTC 86-350

Radio Nord Inc.

Val d'Or and Rouyn, Quebec - 853097400 - 852976000

For related document: see Decision CRTC 85-733 dated 6 September 1985.

Following a Public Hearing in Montreal on 21 January 1986, the Commission approves, by majority decision, the applications for broadcasting licences for French-language television stations at Val d'Or, on channel 25, and at Rouyn, on channel 20, with an effective radiated power of 102,000 watts and 81,000 watts respectively. The Val d'Or station will rebroadcast the programs of CFJP-TV Montreal and will broadcast certain local programs, whereas the Rouyn station will rebroadcast in its entirety the programming of the Val d'Or station.

The Commission will issue licences expiring 31 March 1990 subject to the conditions stipulated in this decision and in the licences to be issued. This term will enable the Commission to consider the renewal of these licences at the same time as those of CFJP-TV Montreal and the authorized television network of the Four Seasons Television Network Inc. (Decision CRTC 86-162). This application is a follow-up to Decision CRTC 85-733, wherein the Commission authorized the operation of CFJP-TV, a new French-language television station in Montreal. At the time, the Commission took into account the impact that this new service could have on the revenues of stations in adjacent Quebec markets, in view of the low profit level of a number of them. In order to minimize the impact, the Commission stated:

With regard to secondary Quebec markets, the Commission anticipates that the new service could be made available by cable or by establishing a relay transmitter to be operated by an existing station. In the case of a twin-stick or rebroadcaster, the Commission will examine each case on its own merits, taking into account the particular circumstances of each market.

Radio Nord Inc. (Radio Nord) is a regional broadcaster that operates stations CKRN-TV and CFEM-TV Rouyn, affiliates of the French-language television networks of the CBC and TVA respectively. Through these stations and their rebroadcasters, the licensee serves a large part of the Abitibi-Témiscamingue region and a portion of northeastern Ontario. It is also the licensee of one FM and three AM radio stations in the region. With the present decision, the licensee will be the first in Canada authorized to operate three television services in the same market to rebroadcast the programs of three different networks.

All of the interventions from the region expressed support, in principle, for the establishment of the new television stations. Most of them, however, including the Conseil régional de développement de l'Abitibi-Témiscamingue, the Corporation de développement industriel et commercial de la région de Val d'Or, the City of Val d'Or and the Val d'Or Chamber of Commerce, noted that Radio Nord would be in a monopoly position; they expressed concern about increased concentration of ownership of the broadcast media in the Abitibi-Témiscamingue region. Another intervention, submitted by Mr. Roland Hamel and eight other signatories, raised similar concerns and also indicated that a regional business group was interested in submitting a competing application.

The Commission notes that no other application to serve Rouyn and Val d'Or was submitted to it prior to the hearing, even though such a call was made on 6 September 1985 (Decision CRTC 85-733). Furthermore, Mr. Hamel stated at the hearing that no actual study was underway and that he would not be in a position to submit an application for two or three months.

With regard to the issue of concentration of ownership, and as emphasized in a number of past decisions, the Commission has maintained a flexible, case-by-case approach in assessing ownership applications based on the particular circumstances of each region.

The Abitibi-Témiscamingue region is one of the most isolated markets in the province of Quebec. It covers a vast area and its communities are small in population and widely scattered. This environment has an unavoidable impact on the region's economy and on the local broadcaster's capacity to earn enough revenue to maintain a reasonable level of profitability while providing adequate service to the audience that it is licensed to serve.

Radio Nord stated at the hearing that it anticipated little demographic or economic growth in the Abitibi market in the foreseeable future. It expects that the revenues of the new stations will result, in part, from a redistribution of national advertising and, in part, from local advertising captured from CKRN-TV and CFEM-TV. It also projected a slight overall increase on local advertising revenues. It stated specifically [TRANSLATION]:

Radio Nord Inc. is fully aware of the fact that the ratings of its present television stations will decline as a result of the new service, and that there will be a shift in national advertising revenues which will have obvious and adverse economic consequences for the company, to the point of having an impact on existing services.

The applicant explained that, in submitting the present applications, its aim was to provide the new service to the region while protecting the existing stations, which would suffer some revenue losses in view of the limited advertising base in Abitibi.

The financial information available to the Commission shows that the Abitibi television stations operated by the applicant had some difficulty from 1981 to 1984 and that it was not until 1985 that they achieved a profit comparable to the average for Quebec television stations. The same data also indicated that when CFEM-TV was established in 1980, its revenues were earned at the expense of the existing station, CKRN-TV. The Commission considers that this corroborates the licensee's statement regarding the inflexibility of the Abitibi advertising base and that, according to all forecasts, exactly the same thing will happen when the new station is set up, given the economic conditions which prevail in the region.

The Commission has taken into account the statements made by a group of Val d'Or interveners on this matter, and notes that they made a more optimistic forecast for economic growth, in light of the recent discovery of significant gold deposits in this region. Although this may be true for the Val d'Or area, the Commission considers that this growth would not necessarily be representative of the general state of the Abitibi economy.

The Commission further considers that if the selective local and national advertising revenues projected by the applicant were to be realized by a competitor at the expense of CKRN-TV and CFEM-TV, these stations would suffer serious harm, significantly reducing their profitability and possibly jeopardizing their local program production.

Therefore, while sharing the concerns expressed by the above-mentioned interveners with regard to concentration of media ownership, the Commission has concluded, based on the economic factors outlined above, that approval of these applications would be, under these very particular circumstances, the best means of serving the public interest and of meeting the Commission's objective of broadening, as much as possible, and with as little delay as possible, the range of French-language television services available in the region.

As stated in Section 3 of the Broadcasting Act, broadcasting undertakings "make use of radio frequencies that are public property" and their programming "should provide reasonable, balanced opportunity for the expression of differing views on matters of public concern". In view of this, the Commission notes the licensee's statements made at the hearing that it is willing to make every effort to work together with the communities that it serves.

The Commission also relies on a vigilant and involved attitude on the part of the public to ensure that the licensee properly reflects their concerns and interests on the the new stations as well as on the existing stations. At past public hearings, the Commission has often noted the pertinent, genuine and dynamic interest shown by various Abitibi-Témiscamingue groups and organizations in the development of regional communications. The Commission expects that they will continue to make the same contribution in the future and, given the very particular circumstances, that even greater co-operation will be established between these various groups and the licensee.

The Commission notes the licensee's proposal to broadcast 1 hour 15 minutes of local programming per week. These local programs will consist of a 15-minute local and regional newscast to be presented within the network's late afternoon Monday-to-Friday information program. These newscasts will be broadcast from the existing television studio at Val d'Or which will be refitted for this purpose, and the content will be divided evenly between Val d'Or news and news of a broader regional interest. The licensee stated at the hearing that the news team and the content of the newscasts will be different from those of CKRN-TV and CFEM-TV Rouyn. The Commission expects this commitment to be maintained.

As well, at the time of licence renewal, the Commission intends to discuss with the licensee an increase in its local Val d'Or production.

The Tewegan Communications Society, on behalf of the Algonquin Council of Western Quebec and the James Bay Cree Communications Society presented a joint intervention at the hearing in which they stated their wish to participate in the programming of the new stations. The Commission notes that the contours of the new stations cover part of Canada's northern region, as defined by the Hamelin line, and that the native population of these regions is estimated at 6,000 inhabitants.

In accordance with Public Notice CRTC 1985-274 entitled "Northern Native Broadcasting", the Commission expects the licensee to ensure that these native communities are served adequately during periods of local broadcasting. The Commission has taken note of the licensee's desire to co-operate with the native people in its territory and expects the licensee to submit a report, within the first year of operation, on the measures taken in this regard.

The Commission has taken into consideration the opposing interventions submitted by the Réseau de Télévision TVA Inc. and Radiomutuel Limitée which objected to the sale of air-time on the new stations to local advertisers in this market. The Commission notes that, according to the licensee's projections, the stations will only begin to make a profit in the fifth year of operation and is of the opinion that, in the absence of local revenue, their profitability would be uncertain. Furthermore, the Commission considers that such revenue is necessary to enable the licensee to provide adequate service in view of the economic factors mentioned above.

It is a condition of these licences that construction of the undertakings be completed and that they be in operation within twelve months 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 twelve months, deem appropriate under the circumstances. délai de douze mois.

DISSENTING OPINION FROM COMMISSIONER PAUL McRAE

This dissent is based on concern about concentration, whereby a single broadcaster has control of almost all of the local broadcast time. Since testimony indicated the possibility of a future competitive application, I would have favoured another call.

Fernand Bélisle
Secretary General