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Public Notice
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Ottawa, 13 August 1986
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Public Notice CRTC 1986-199
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CALL FOR APPLICATIONS FOR NETWORK LICENCES TO OFFER CANADIAN SPECIALTY PROGRAMMING SERVICES
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Related Documents: Public Notices CRTC 1982-65 (7 July 1982), CRTC 1983-93 (4 May 1983), CRTC 1983-112 (2 June 1983), CRTC 1983-244 and CRTC 1983-245 (26 October 1983), CRTC 1984-13 (16 January 1984), CRTC 1984-68 (13 March 1984), CRTC 1984-81 (2 April 1984), CRTC 1984-196 (27 July 1984), CRTC 1985-138 (4 July 1985), CRTC 1985-155 (22 July 1985), CRTC 1985-174 (2 August 1985), CRTC 1985-200 (30 August 1985) and Regulations Respecting Cable Television Broadcasting Receiving Undertakings (Public Notice CRTC 1986-182 dated 1 August 1986); and Decisions CRTC 84-444 to 84-446 (24 May 1984), 86-215 (13 March 1986) and 86-585 (19 June 1986).
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1. INTRODUCTION
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As noted by the Commission in previous licensing decisions related to specialty services, the increasingly competitive nature of the communications environment brought about by the rapid expansion of a variety of technologies and new services emphasizes the need for prompt action with regard to the development of a broader range of viable new Canadian programming services. The need to schedule an early public hearing to discuss matters concerning the potential cable distribution of certain specialty services on basic service were also mentioned by the Commission in an exchange of correspondence with the former Minister of Communications, the Honourable Marcel Masse, earlier this year.
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The CRTC Chairman noted that, pursuant to its practices, the Commission would proceed as follows:
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Having already received licence applications for specialty services requesting Commission authorization for distribution on the basic tier of cable systems, such requests involving a change to existing Commission policy, the Commission will hold a public hearing to consider the advisability of modifying this policy and will hear these applications as well as others which may be made involving the same conditions of distribution ... we will proceed as expeditiously as possible with this process as soon as we have been made aware of the Report of the Sauvageau-Caplan Study Group, with whom we have agreed, as you know, to await publication of the Report before considering an application precisely involving such a change to our existing policies.
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In view of the imminent publication of the report which could be consulted by interested parties, the length of time required by applicants for the preparation of their applications, the length of time necessary to process and hear applications for new licences under the statutory requirements of the Broadcasting Act, the need to ensure adequate public consultation and the length of such a process, and the consequent need for prompt action if some of the services to be offered by licensees as a result of these proceedings are to be in operation by the fall of 1987, the Commission has now decided to issue a call for new Canadian specialty services. Accordingly, as noted further below, it invites applications for network licences to offer certain Canadian specialty programming services to be distributed by cable television systems either on the basic service or on a discretionary basis. To foster the development of these new services and to give them the chance to become established in a viable manner, the Commission, at present, is only calling for applications for the origination of Canadian specialty services.
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For the purposes of this document, a Canadian specialty service is defined as narrowcast television programming designed to reflect the particular interests and needs of different age, language, cultural, geographic or other groups in Canada. The specialty services so envisioned could consist of what is commonly known as "theme or vertical" programming material.
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The Commission will be guided by certain general principles and objectives in considering such applications. Specifically, specialty programming services should:
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contribute to the realization of the objectives set out in the Broadcasting Act and strengthen the Canadian broadcasting system;
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increase the diversity of high quality programming available to Canadians and provide new opportunities and revenue sources for Canadians, in particular producers and artists.
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2. TYPES OF PROGRAMMING SERVICES
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A) A Program Service for Canadian Youth
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In Public Notice CRTC 1984-196, dated 27 July 1984, the Commission called for applications for the provision of a program service for Canadian youth. In Public Notice CRTC 1985-155 dated 22 July 1985, at the request of the Sauvageau/Caplan Task Force, the Commission agreed to defer consideration of the applications received until the Task Force had the opportunity to submit its recommendations to the Minister. The Commission is now returning the applications received in response to the original call so that they can be updated, and it is prepared to receive applications from other interested parties. All applicants should refer to Public Notice CRTC 1984-196 regarding the comments received with respect to youth services. In addition the Commission intends to publish shortly a summary of the various general representations on youth services received at subsequent public hearings.
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B) Religious Program Service
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In Public Notice CRTC 1983-112 dated 2 June 1983, the Commission announced a policy for licensing broadcasting undertakings to offer a religious broadcasting service and issued a call for applications for a licence to carry on a satellite-to-cable, interfaith religious program service.
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In response, the Commission received an application from the Canadian Interfaith Network/Réseau Inter-Religieux Canadien (CIN). Subsequently, at the request of the applicant the public hearing of the application was adjourned until such time as the applicant had clarified the financial arrangements for the proposed network.
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The Commission has now received a revised application predicated on new proposed financial arrangements. Should these proposals appear to the Commission on first examination to be sufficiently complete, the Commission intends to consider this application at the same time as it hears the other Canadian specialty services proposals received in response to this call. The Canadian Interfaith Network may now wish to modify its application in view of this public notice.
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C) English-language Services
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The Commission is calling for applications for licences to provide English-language services in formats not yet authorized by the Commission that would be distributed by cable television systems on the basic service or on a discretionary basis.
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The Commission has already licensed three discretionary English-language specialty program networks to provide a music video service (Much-Music), a sports service (TSN) and a health and lifestyle service (Life Channel). The licensees of these undertakings may also wish to apply for their distribution on the basic service. In view of the limited size of the Canadian market, the Commission is not inviting applications for network licences to provide additional English-language services in these three formats.
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D) French-language Services
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The Commission has previously amended the licence of MuchMusic (Decision CRTC 86-215) to provide a video music service to be presented in French that can be substituted by affiliated cable undertakings situated in the region which is serviced by the satellite beam that covers Eastern Canada. The absence of a French-language music service was noted by the Commission when Much Music was first licensed prompting a statement in the decision as follows:
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Further, as noted in Public Notice CRTC 1984-81, the Commission encourages the applicant to consult with the cable television licensees serving predominantly francophone communities, to arrive at some reasonable arrangement for the provision of French-language programming in their markets.
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Similar suggestions were included in the decisions concerning the sports specialty service (TSN) and the health and lifestyles service (Life Channel).
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Recognizing the unique requirements and characteristics of the francophone market and the importance of establishing a balance between the number of French- and English-language television services in these markets, the Commission has already authorized the distribution of non-conventional and non-commercial services, such as La Sette and Télé-des-jeunes, on the basic cable service in francophone markets.
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In its decision regarding the amendment to the licence of Much Music to add French-language programming, the Commission stated that:
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the approval of the present application should not be construed as prejudicing any future public proceeding of this type or any future decisions on proposals for a full-time video music service to be presented in French.
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The Commission has received an application for a licence to provide a French-language music video service to be distributed on the basic service. The application will be returned to give the applicant a chance to update it in response to this call.
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The Commission is inviting applications for network licences to provide French-language services in all formats that would be distributed by cable television systems either on the basic service or on a discretionary basis.
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E) National Ethnic Service
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When the Commission licensed Telelatino Network Inc. (Telelatino) and Chinavision Canada Corporation (Chinavision) (Decisions CRTC 84-444 to 84-446), it expected that these ethnic specialty programming service providers would assist in fostering the cultural values and traditions of Chinese-, Italian- and Spanish-speaking people who live in communities across Canada, and would assist these groups to participate in, and contribute to, Canadian society.
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In Public Notice CRTC 1985-139 entitled "A Broadcasting Policy Reflecting Canada's Linguistic and Cultural Diversity" (4 July 1985), the Commission outlined the criteria it would consider when dealing with applications where ethnic programming is a factor.
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In Decision CRTC 86-585 dated 19 June 1986, the Commission denied the application by MTV Broadcasting System Inc. (MTV) for a network licence to distribute an ethnic television programming service throughout Canada via satellite. In that decision, the Commission encouraged all interested parties to investigate viable means for establishing such a service. The Commission now calls for applications for a network licence for the national distribution of an ethnic specialty programming service.
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For the purpose of this call, attached as an appendix to this notice is the Commission's definition of an "ethnic" specialty programming service.
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As with others licensed to provide specialty services, Chinavision and Telelatino may wish to apply for distribution on the basic service. However, until the Commission has dealt with applications for a licence to offer a nationally distributed ethnic specialty service, it will not invite applications for licences to provide any other type of ethnic service.
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3. CANADIAN CONTENT
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When the Commission licensed the three English-language Canadian specialty networks, it required the licensees to meet Canadian content conditions of licence which took into account their limited means of distribution, the availability of Canadian programming and the economics of the services. In light of this, their Canadian content levels are less than those presently required of conventional Canadian television and radio broadcasters.
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The Commission does not propose to continue this practice for any services which would be distributed on the basic cable television service. All applicants wishing to offer such services will be required to meet the same Canadian content conditions that are required of conventional Canadian television broadcasters.
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4. FINANCIAL SUPPORT
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Applicants will be expected to provide firm evidence which clearly supports and substantiates all aspects of their proposals, particularly in terms of the financial viability of, and market demand for, their proposed service.
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Two critical sources of financial support are advertising and subscriber revenues. The Commission is prepared to consider applications which are based on both subscriber and advertising revenues. However, it is not disposed to approve applications that propose to draw on local advertising revenues.
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Any applicant who wishes to provide a youth service proposing a model based totally or in part on advertising revenues will be expected to subscribe to the Broadcast Code for Advertising to Children. Further, any such applicant should consider the advertising restrictions that exist in the Province of Quebec.
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In those cases where the viability of the service is dependent in whole or in part on subscriber revenue, the Commission will wish to see evidence of commitments for carriage on cable systems. In the event that these commitments are not available, the Commission will expect applicants to indicate the reasons. The Commission expects representatives of the cable industry to appear before it to comment on the accuracy of the estimated projections and how they propose to deal with these prospective licensees.
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5. OTHER MATTERS
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Programming Restrictions
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Certain programming restrictions have been placed on existing licensed specialty networks. The Commission is not disposed to alter these restrictions for those applicants who elect to apply for distribution on the basic cable television service. This includes:
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° Music Video Service:
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No feature film or variety program may be included in the programming.
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° Health & Lifestyle:
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No feature film and other general interest type of programming may be distributed.
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Ownership
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The Commission encourages broadcasters, producers and other public or private entrepreneurs to draw from their experience and knowledge of the Canadian programming industry to develop innovative approaches in submitting proposals for the ownership structure of undertakings providing specialty programming services. The Commission would welcome applications predicated on collaborative efforts which might involve various sectors of the broadcasting and production industries.
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In previous decisions respecting specialty programming services the Commission expressed concern about exhibitors of new discretionary services also functioning as program packagers or distributors. Given the increasingly competitive communications environment the Commission is seeking ways to stimulate the development of new services that maximize the exposure of Canadian programming while making full use of available resources. The Commission recognizes that, as an active participant in the delivery of new services, the cable industry could well respond to the growing need to combine such opportunities.
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While the Commission is not disposed to change its previous requirement limiting cable licensee involvement to a minority shareholder position, in order to maximize available resources, proposals based on the integration of distribution and exhibition functions will be considered. Applicants making such proposals, however, should be prepared to demonstrate how fair and equitable access will be ensured to others wishing to use cable channels as their means of exhibition.
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Applications for network licences for the distribution of specialty programming services should be filed with the Secretary General of the Commission on or before 24 October 1986. Following receipt of these applications, the Commission will announce details of a public hearing to be held at the earliest possible date.
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Fernand Bélisle Secretary General
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APPENDIX
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For the purpose of this call, the Commission considers an ethnic specialty programming service to be one offered by a network that is required to devote not less than 60% of its monthly programming time between 6 a.m.and midnight to ethnic programs of types A, B, C, D, or any combination thereof. The remaining 40% of the broadcast month between 6 a.m. and midnight may be devoted to ethnic programs of Types A, B, C, D or E or any combination thereof, or to any other type of conventional programming.
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The five types of programming A, B, C, D, and E are defined as follows:
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TYPE A: A program in a language or languages other than French, English or native Canadian.
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TYPE B: A program in French or in English that is directed specifically to racially or culturally distinct groups whose first or common bond language (in the country of their national origin) is French or
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TYPE C: A program in French or in English that is directed specifically to any culturally or racially distinct group whose heritage language is already included in TYPE A (such as those groups who have not retained the use of a third language).
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TYPE D: A program using a bilingual mix (French or English plus a third language from TYPE A) that is directed specifically to any culturally or racially distinct group (such as French and Arabic, English and Italian, English and Punjabi).
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TYPE E: A program in French or in English that is directed to any ethnic group or to a mainstream audience and that depicts Canada's cultural diversity through services that are multicultural, educational, informational, cross-cultural or intercultural in nature.
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(This will allow for programming in English or French that will facilitate the integration of ethnic groups into the mainstream and will reflect culturally or racially distinct groups to the population at large).
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