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Decision
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Ottawa, 2 March 1987
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Decision CRTC 87-151
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Licensing of a New English-Language Television Broadcasting Transmitting Undertaking to Serve Ottawa, Ontario
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Nation's Capital Television Incorporated - 861797900
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CITY-TV, a division of CHUM Limited - 861813400
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151483 Canada Inc. - 861796100
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Edward J. Billo, on behalf of a company to be incorporated - 860517200
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Mid-Canada Communications (Canada) Corp., on behalf of a general partnership yet to be formed - 861795300
Table of contents
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INTRODUCTION
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THE MARKET
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EVALUATION CRITERIA
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THE COMMISSION'S DECISION
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OWNERSHIP CONSIDERATIONS
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PROGRAMMING
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INTERVENTIONS
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CONCLUDING REMARKS
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Following a Public Hearing in the National Capital Region on 1 December 1986, the Commission announces the following decision concerning the licensing of a new English-language television broadcasting transmitting undertaking to serve the National Capital Region.
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INTRODUCTION
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On 10 June 1986 the Commission issued CRTC Public Notice 1986-141 wherein it stated that it had received an application for an independent television service for Ottawa. In keeping with its usual procedure in such cases, the Commission invited other interested persons to submit applications.
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Six applications were filed in response to the call; however, the application by Capital Independent Television Corporation, which was gazetted for consideration, was withdrawn prior to the hearing at the applicant's request.
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In his opening statement at the hearing, the panel Chairman indicated that, given the numerous television services currently available in the Ottawa region, there was no guarantee that a new licence would be issued. It was therefore incumbent on the applicants to demonstrate that their proposals would add important ele-ments of diversity to the programming offered in the region and that the market is sufficiently able to support a new station without having serious impact on the viability of existing licensees or unduly reducing their ability to carry out their programming responsibilities. Furthermore, applicants were required to demonstrate during the hearing that their proposals, if approved, would respond to the ten criteria of Public Notice CRTC 1986-141 and be of significant benefit to the Ottawa region and to the Canadian broadcasting system as a whole.
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THE MARKET
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The National Capital Region is the fourth largest metropolitan area in the country and, by virtue of its central location and distinctive character as the principle site of Canada's Government, is a key market for broadcasters. Situated as it is on both sides of the border between the provinces of Ontario and Quebec, the National Capital Region is also unique in its market demography. The approximately 965,000 residents living in the region are divided into two main linguistic groups: the home language of 67% is English while 33% speak French at home. English-language television stations capture an audience share of 86% while French-language stations capture 14%. However, unique to this market is the fact that 60% of television viewing by the francophone audience is to English television stations.
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The market is served by four English-language over-the-air television stations: CBOT (CBC), CJOH-TV (CTV), CIII-TV-6 (Global) and CICO-TV-24 (TVOntario). There are four French-language over-the-air signals, CBOFT (CBC), CHOT-TV (TVA), CIVO-TV (Radio-Québec) and CFGS-TV (Ind). TVOntario's new station, "La Chaine française", which like the above-noted signals is priority carriage on local cable systems, is received via satellite. The three cable television undertakings, Ottawa Cablevision, Skyline Cablevision and Télécable Laurentien, each offer a total of eighteen conventional television services. They provide all of the signals of the above-noted stations as well as those of CHRO-TV Pembroke and CKWS-TV Kingston, both CBC affiliates, and CFCF-TV (CTV), CBMT (CBC) and CFTM-TV (TVA) Montreal. In addition, they carry four U.S. network services.
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The Commission carefully examined the broadcasting advertising revenue available in the market, its growth potential, the financial situation of existing broadcasting undertakings and the possible impact of the introduction of a new independent television station on their operations.
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The Commission has concluded that there could be a range of $5 million to $17 million in untapped local advertising revenue in the region. In their submissions the applicants projected first year local advertising revenues ranging from 25.7% to 40.3%.
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In 1985, total Ottawa area television revenues were $62.4 million, of which $35.9 million was derived from the sale of national advertising, $5.5 million from local advertising and $21 million from network advertising.
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The Commission notes that in the private television sector, revenues from the sale of local advertising in 1986 represented, on average, 23.5% of the total television advertising revenue generated in Canada. In Ontario, the corresponding percentage for local advertising was only 12.1%. In the National Capital market, revenue from the sale of local advertising represented only 10.4% of total television advertising revenue.
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The retail market has demonstrated continued growth since 1982, with significant increases in 1985 and 1986. The 1986 Financial Post Survey of Markets indicated that Ontario was 7% ahead of the nation in retail sales, with Ottawa-Hull 9% ahead of the national average.
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Information submitted by the applicants suggests that the introduction of a new television service will increase substantially the advertising availabilities in the market and has the potential to attract significant numbers of local retailers to the television medium, resulting in sufficient growth in the market to ensure adequate revenue sources for all of the existing broadcasting undertakings.
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On the basis of the analyses submitted by the applicants, the various interventions received, both in support of and in opposition to the establishment of a new television station, and the discussions at the public hearing, the Commission concluded that the advertising market in this region is sufficiently strong to justify the establishment of a new English-language television station and that the financial situation of the existing broadcasting undertakings is sufficiently sound that neither their existence nor the quality of the programming of the English- or French-language television stations would be endangered.
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EVALUATION CRITERIA
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In the course of its deliberations, the Commission carefully examined the programming commitments of each applicant in order to gauge how the quality and diversity of programming available in the region would be improved and what benefits would accrue to Canadian performers and producers. It has considered the applicants' proposed expenditures for in-house production and related facilities and the provision each applicant has made for the involvement of local Canadian talent. It also gave special attention to their ownership, broadcasting and management experience and their financial strength.
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As the region is very well served in terms of news and information coverage, the Commission was particularly interested in the following types of programs:
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- drama, with special attention to quality, volume, continuing series, reflection of local themes and interests, and scheduling;
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- music and variety, particularly the promotion of local talent;
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- programs aimed at specific audiences, e.g. children.
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THE COMMISSION'S DECISION
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After careful consideration of all of the above-noted factors, the Commission is convinced that the proposal by Nation's Capital Television Incorporated is the most viable, best meets the needs of this distinctive region in terms of programming diversity and offers the most significant benefits for the development of new Canadian programs.
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The Commission notes, in this regard, the significant programming proposals and commitments submitted by this applicant, particularly the projected quality and diversity of its 60 hours per week of local productions which will reflect the full spectrum of local interests.
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The licensee has committed $20-million in capital expenditures to establish its television station, of which approximately $12 million will be spent on the construction of a state-of-the-art production facility where the majority of the local productions will be produced. The Commission considers that this in-house production facility will be an enormous asset to the region and will be critical to the production infrastructure in the region.
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Also of primary importance are the licensee's scheduling commitments as they relate to Canadian programs: 26 hours per week to be broadcast between the hours of 6 p.m. and midnight of which 4.5 hours of entertainment programming per week will be aired between 8 p.m. and 10 p.m.
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Moreover, the co-operative production and inter-exchange arrangements proposed by the applicant will be of particular significance to the Ottawa region and to other elements of the Canadian broadcasting system, as described later in this decision, and will ensure wide exposure of quality local programs of high production value.
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The Commission has also considered the solid financial resources and creative talent available to the applicant through its parent company, Baton Broadcasting Incorporated (Baton), which will be used to realize its ambitious proposals.
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Accordingly, the Commission approves the application by Nations's Capital Television Incorporated ("Nation's Capital" or "the licensee") for a licence to carry on an English-language television broadcasting transmitting undertaking at Ottawa. As set out in the appendix to this decision, the four other competing applications are denied.
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The Commission will grant a licence expiring 31 August 1991, subject to the conditions stipulated in this decision and in the licence to be issued.
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The new television station will broadcast on channel 60 at 2,809,000 watts under the call letters CFNT-TV. It will be receivable throughout an area bordered on the east by Cornwall, on the north by Pembroke, on the west by Kingston and on the south by the St. Lawrence River.
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OWNERSHIP CONSIDERATIONS
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Nation's Capital is a wholly-owned subsidiary of Baton, which is a diversified Canadian communications company. Its broadcasting subsidiaries hold television licences in Toronto and Saskatchewan and radio licences in Saskatoon and Ottawa. Baton through its CFTO-TV studio and its wholly-owned subsidiary, Glen-Warren Productions Limited, has extensive facilities in Toronto for the production of television programs, commercials and movies. CFTO-TV Toronto is the flagship station of the CTV network.
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The Commission has considered Baton's important broadcasting interests in Ontario and Saskatchewan and, as noted in earlier decisions, reiterates that concentration of ownership within the broadcasting system is not in itself necessarily of concern to the Commission provided that there continues to be an effective degree of diversity of ownership and of programming sources to ensure that the objectives of the Broadcasting Act are met.
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While acknowledging the extensive broadcast holdings of Baton, the Commission notes that in the Ottawa region market, Nation's Capital will be a new television voice and will, as an independent station, provide programming diversity to the residents of the region. Co-operative arrangements and program exchanges among Baton's various stations will also add new programming fare not presently available. Furthermore, the Commission notes that there is no ownership overlap between Nation's Capital and CJOH-TV, the local CTV affiliate.
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Moreover, the Commission notes that given the numerous news and information services in both the English and French languages available in the Ottawa region, diversity will not be reduced and will, in fact, be enhanced both in Ontario and Saskatchewan through the co-operative arrangements and program exchanges proposed by the licensee.
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The Commission reiterates that the existing highly competitive communications environment in every market as well as the high costs and risks involved, dictate that the ownership structure must undoubtedly be composed of broadcasting holdings of various sizes, including larger entities with larger pools of resources, that are strong enough to compete with foreign competition and that have the capacity to produce Canadian programming of competitive quality.
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For these reasons, in this case, the Commission has concluded that concentration of ownership should not be a determining factor.
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The licensee addressed the advantages to be realized through approval of its application:
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The economic base of our stations would be enlarged, and this in turn produces a greater ability to provide more and better Canadian programming, particularly high quality, distinctive local programming.... Additional advantages include no decrease in the diversity of ownership, the enhancement of the diversity of programming sources with a new regional production facility and a new television voice in the Ottawa market.
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With respect to Baton's links to CFTO-TV Toronto and its CBC and CTV affiliated stations in Saskatchewan, the Commission notes the statement at the hearing:
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We believe that the ownership of affiliates of a network, as well as an independent station, presents no inherent conflict. We take our network obligations seriously, [and] are committed to ensure that approval of this application will not in any [way] diminish our other responsibilities.
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With respect to the management and operation of the station, the licensee emphasized its policy for local participation noting:
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We believe in local programming with local management making decisions for their stations, backed up by the resources of Baton.... It is our policy to operate the television station on a local basis and we shall continue that policy.
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Moreover, the Commission notes the licensee's intention to ensure that seven of the fifteen-member Board of Directors and three of the four-member Executive group are from the region and that its management comprises representatives of both the anglophone and francophone communities.
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The Commission expects the licensee to adhere fully to these important commitments.
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PROGRAMMING
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The cornerstone of the proposal by Nation's Capital is its very impressive 60 hours per week of original locally-produced programs which, to a large degree, will be produced in its new state-of-the-art studio. The Commission notes that only one other privately-owned station, TéléMétropole, the licensee of CFTM-TV Montreal, the flag-ship station of the Quebec-based TVA network, produces an equivalent amount of local programs.
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At the public hearing, the licensee made a pledge to spend a minimum of $31 million over five years on Canadian productions. It has made a minimum expenditure commitment of $5.6 million in year one increasing to $6.9 million in year five. With respect to the acquisition of Canadian programs which it will not produce itself, it will spend a minimum of $109,200 in year one increasing to $206,300 in the fifth year of operation.
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Nation's Capital plans to make extensive use of co-operative productions, program inter-exchanges and other related distribution arrangements and has undertaken "to pursue co-operative efforts to the fullest extent possible and seek other broadcaster involvement as well as the assistance of the independent producers." For this purpose the licensee plans to allocate $888,657 from CFTO-TV Toronto and $253,079 from its Saskatchewan stations for co-operative local dramatic programs.
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In the Commission's view, the significant advantages offered by these co-operative arrangements, particularly as they relate to the opportunities for the wide exposure of new Canadian programs, will contribute to enhancing the quality of programs featuring Canada's extensive performing and production talent. In this respect, Nation's Capital stated:
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... we see Canada and the broadcasting industry at a crossroads. On the one hand, ... there is a great demand for increasing viewer choice. On the other hand, there is the challenge of strengthening the Canadian component of our broadcast system ... increasing the quality and diversity of Canadian programming is of the highest priority. We believe that both challenges must be faced, for if we don't respond to viewer demand for increasing choice, they will go elsewhere for that choice. And if we don't strengthen the Canadian component of our broadcast system, we will have lost a distinctively Canadian broadcast system.
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The Commission strongly encourages the licensee to utilize the talent of independent producers and to seek out other regional television undertakings to maximize its production potential.
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As stated earlier, the majority of the local programming will be produced in the licensee's in-house production facility in Ottawa. The licensee stated:
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CFNT-TV's commitment to provide quality local programming starts with the building of a modern $20 million television and production facility in Ottawa that will employ a full-time staff of 138, and draw on the creative community of the National Capital Region.
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In this regard, the Commission notes that a similar studio had a very significant impact on the development of CFTO-TV Toronto, a fact stressed by Baton at the hearing:
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This, twenty-five years ago when we applied for the licence in Toronto, was the approach that we took, and it seemed like an enormous facility in those days at the outset. Two years after we were on the air, we recognized what a wise decision it was and how it has led to the development of CFTO in Toronto over the succeeding years, and as I sense this application, we have many of the same thoughts in mind as we come into Ottawa.
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The licensee's specific commitments for local production are set out below. The licensee will produce two one-hour drama series entitled Premiere Showcase and Drama Showcase to be aired during prime mid-evening viewing hours (8 p.m. to 10 p.m.). The first, which will be developed in co-operation with local and regional theatre groups and with Baton's other television undertakings, will have twenty original episodes annually and be produced at a minimum annual cost of $1.5 million.
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Drama Showcase will have 26 original one-hour episodes each year based on repertory theatre format and will also be co-produced by the Baton group of stations. The total annual cost for this series is projected to be $614,979. Both Premiere Showcase and Drama Showcase will be broadcast on the co-operating stations and will also be made available to other independent stations.
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A 90-minute to 2-hour initial episode of a drama special, History of Canada, based on the lives of prominent Canadians, will also be produced by Nation's Capital at a minimum cost of $1 million and will be broadcast during the prime 8 p.m. to 10 p.m. viewing hours. The licensee has undertaken to air the special within the first two years of its licence term and hopes to expand it into a series of four to six annual episodes for which it will seek co-producers and possibly financial investment from the Broadcast Program Development Fund administered by Telefilm Canada. In this regard, Baton stated:
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We at Baton believe this to be one of the most important projects we have ever considered. We will ensure that "History of Canada" is shown on all of our stations, and we are confident that it will receive widespread viewing on other Canadian stations, as well as PBS and British television. Indeed, we believe that the initial program will be so highly regarded that we will find all of the support needed from partners, licensing arrangements, commercial sponsors, or the Broadcast Fund, to increase production beyond that committed.
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The licensee's commitments to local music and variety programs are impressive: it proposes 26 original prime-time one-hour country music programs to be co-produced with Baton's Saskatchewan stations; Variety Showcase will feature local talent and will be produced at an annual cost of $354,536; Rideau Rocks entails a total production commitment of $78,000 for 39 one-hour programs featuring new talent in the region. It will also be aired in popular evening viewing hours.
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The Commission considers the licensee's plans to schedule these and other Canadian programs in the most attractive mid-evening viewing hours as an essential element of the proposal. It notes that a total of 26 hours per week of Canadian programming will be broadcast between 6 p.m. and midnight including 4 hours of local and a half-hour of Canadianacquired programing to be aired between the hours of 8 p.m. and 10 p.m. The Commission will follow the implementation of this commitment with interest.
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Nation's Capital also has significant proposals for children's programs. The 26 half-hour episodes of Mooney's Bay and the 26 one-hour episodes of Junior Parliament represent a total financial commitment of $91,000.
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The licensee has allocated an annual budget of $2.3 million for news and public affairs programming which will focus on local stories and issues. Of a total staff of 138, 48 will be devoted to producing 241/2 hours per week of news and public affairs programs. In addition, Nation's Capital has undertaken to produce 26 original half-hour episodes of a documentary entitled Heritage for which it has budgeted $52,000. Other local programs are in the categories of Information, Education, Religion, and Sports.
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Nation's Capital plans to acquire 131/2 hours per week of Canadian programming which, in addition to Canadian movies scheduled to be broadcast on weekend afternoons, represents an annual expenditure of $109,200 in its first year of operation, increasing to $206,290 in its fifth year.
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By the fifth year of operation, annual Canadian programming expenditures will be a minimum of $6.9 million regardless of revenues generated. The Commission notes the licensee's statement:
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We emphasize that while the commitments in our application are considerable, and while the revenue expectations are moderate, our commitments are firm regardless of whether the revenue expectations are met.
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The National Capital Region, situated as it is on both sides of the boundary of the provinces of Ontario and Quebec presents special challenges to local area broadcasters for the development of regional programs. Accordingly, the Commission expects the licensee to ensure that regional issues and concerns are adequately reflected in its programming, particularly in its coverage of local and regional events, and will follow the licensee's efforts to provide programming that reflects the distinct needs of the entire region.
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With respect to ethnic programming, the Commission notes that the application failed to address this important type of programming and, furthermore, that strong interventions, which are addressed later, were submitted with regard to the need for some programming directed towards the ethnic groups in the region.
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Accordingly, the Commission expects the licensee to develop specific plans in this respect and encourages it to contact local ethno-cultural groups to ascertain their requirements.
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Consistent with its commitments and taking into account the strong financial and creative resources available to the licensee, the Commission attaches the following conditions of licence related to the production of local programming as set out below:
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It is a condition of licence that:
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a) the licensee broadcast at least 60 hours per week of locally-produced programming of which a minimum of 4 hours is to be broadcast between 8 p.m. and 10 p.m.;
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b) the licensee spend a minimum of $973,243 per year for dramatic productions such as Premiere Showcase and Drama Showcase and broadcast them between the hours of 8 p.m. and 10 p.m.;
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c) the production of History of Canada or an equivalent dramatic production of comparable value be broadcast between 8 p.m. and 10 p.m. during the licence term and represent a minimum expenditure by the licensee of $1 million;
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d) the licensee spend a minimum of $2.3 million each year for news and public affairs programming;
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e) the licensee spend a minimum of $2.1 million each year for other local programming, which is to reflect all categories excluding news and public affairs.
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With respect to non-Canadian programming acquisitions, Nation's Capital outlined its plans to simulcast 31 hours each week of acquired U.S. programming, of which 16 hours will be aired during evening viewing hours, as follows:
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Complementing the Canadian component of our program schedule will be the non-Canadian programming segment, which has been designed to repatriate Canadian viewers. CFNT-TV will, as a policy, purchase as a priority non-Canadian programs that can be scheduled for simultaneous substitution on American channels, thus ensuring the least amount of impact on local stations in the marketplace.
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The licensee also indicated its willingness to adhere to the self-regulatory industry programming standards. Accordingly, consistent with the Commission's requirements, as set out in recent decisions, the licensee is expected to adhere to the Canadian Association of Broadcasters' (CAB) code on violence. Furthermore:
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It is a condition of licence that Nation's Capital 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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It is a condition of this licence that construction of the station be completed and that it 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.
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INTERVENTIONS
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There were over nine hundred interventions filed with the Commission with respect to the competing applications for a new Ottawa-based television station. They either supported or opposed all or one particular proposal for the establishment of a new television station. Within the more general interventions, several issues were raised, some of which are addressed below.
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The Commission was particularly impressed by the intervention of the Ottawa-Hull Film and Television Association (OHFTA), whose representatives expressed concerns on behalf of 80 individuals and organizations within the local film and television industry.
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They provided an extensive listing of the facilities currently available in the region and underlined the enormous amount of creative and production talent which, to date, has been extremely under-utilized. One of OHFTA's representatives stated:
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there has been virtually no support for the independent producers, services, talent and facilities in this region ... we have a large, thriving talented production community ... we are concerned that without the proper guidelines, without local management with a demonstrated commitment to the local industry, the addition of a new station in this region will not change our situation, and will not result in any real benefit to the local community.
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In OHFTA's opinion "in-house productions tend to reflect the needs of the broadcaster rather than the public", while independent programming "tends to be more sensitive to public issues and more in tune with viewer demand because independent producers are part of the community." OHFTA also outlined the many funding sources which may be accessed when independent productions or co-productions are involved and stressed the need for more high quality, saleable drama productions.
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The Commission notes that all of the applicants responded positively to the OHFTA intervention and it strongly encourages Nation's Capital to pursue opportunities for utilizing the available local talent. In this regard, it notes the licensee's response to the OHFTA intervention:
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We were impressed by the solid indication of both the breadth and depth of the creative talent in the marketplace. We believe that what we propose is consistent with their observations and requests.
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The Ottawa Branch of the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) appeared at the hearing. Among the issues addressed were the need to add to the mix of locally-produced programming aired in prime time and the need to better utilize local talent. ACTRA also indicated that the National Capital Region does not currently have a sufficient number of production facilities to ensure the production of local programs of quality. The Commission notes that Nation's Capital has made commitments with respect to programming of a dramatic nature, a significant amount of which will be widely distributed. The licensee stated at the hearing that, while the majority of its programs would be produced in-house, it also intends to work with local independent producers and to hire its writers through ACTRA. The Commission encourages the licensee to provide access whenever possible to its new studio by outside interests.
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Earlier in this decision the Commission made reference to an intervention by the Regroupement des Gens d'affaires de l'Outaouais Inc. which echoed many of the concerns of OHFTA and ACTRA and expressed a strong desire that the successful applicant adequately represent this unique bilingual community which it described as "the focal point of Canadian culture and identity ... the heart of English and French Canada ... the soul of all cultures and religions which interact in this great country of ours." The Commission re-emphasizes that the licensee will be expected to ensure that its programming reflects the social fabric of the region as well as the major issues of concern to its residents.
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Several interveners expressed a desire to have multicultural programming carried on the new television station. The Commission considers this to be an important element for the appropriate reflexion of the community to be served as well as for the satisfaction of the audiences in the National Capital Region. As noted earlier, the Commission expects the licensee to take measures to introduce ethnic programming in its schedule.
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The Commission thanks the many area representatives, both municipal and federal, who submitted interventions and notes that several regional representatives appeared at the hearing and made valuable contributions.
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The Commission was also impressed by the presentation of a group of area performers and directors. The Commission commends its objectives for script and concept development and for the production and realization of local programs. It encourages the group to pursue its objectives with area licensees.
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Global Television Network, licensee of CIII-TV-6 Ottawa (Global), appeared at the hearing and opposed the licensing of a new English-language television service in the Ottawa region, noting that 15% to 18% of its total revenue is derived from this market. The Commission has closely examined Global's intervention and acknowledges that this new station may, at least initially, have some impact on Global's revenues. Given, however, the modest audience share projections of Nation's Capital and its significant reliance on local advertising revenues which, pursuant to a condition of its licence, are not sought by Global, the Commission considers that this impact should not cause Global any undue harm. Furthermore, the Commission notes that Global has recently received approval to expand its coverage area through additional transmitters which are expected to result in increased audience levels outside of the Ottawa region.
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Bushnell Communications Limited (Bushnell), licensee of CJOH-TV Ottawa, like Global, appeared in opposition to all applications and presented very comprehensive written and oral representations which included several studies by independent companies.
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Bushnell argued that the demand for a new local television service had not been proven and that, if one were introduced, it would have the effect of seriously fragmenting its revenues while driving up costs for foreign programming.
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The Commission considers that the regional surveys presented by the applicants and the great interest shown in this proceeding, as evidenced by the over 900 interventions suggests that there is strong local interest in an additional station that would serve local needs.
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With respect to the costs of prime time foreign programming, the Commission notes that the reply of Nation's Capital drew attention to the potential reduction in demand by individual stations as they schedule increasing amounts of Canadian programs in mid-evening viewing hours. In the opinion of Nation's Capital, this lower demand will be reflected in more reasonable prices.
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Bushnell was also concerned that Nation's Capital, through its links with Baton's CFTO-TV station, would be in a position to establish a "network" which would result in further erosion of CJOH-TV's audience and revenue. In its reply to the interventions, Nation's Capital noted that it will not purchase national rights for any programs. The licensee stated:
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The Commission created the opportunity for enhanced quality of Canadian programming through co-operative initiatives, such as coproduction and program exchanges ... CFTO will not acquire programming on behalf of the Ottawa market and CFNT-TV will not acquire national rights to its programs. We will not offer national advertisers a rate card which reflects the combined audiences. We believe that these undertakings answer the de facto network suggestion.
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As noted earlier, given the strength and economic growth of the market, the Commission is convinced that the addition of this new television station will not unduly impact on the ability of CJOH-TV to fulfill its programming commitments.
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Mid-Canada Communications (Canada) Corp., licensee of CHRO-TV Pembroke, intervened in opposition to the competing applications citing concern for its future viability should it not be the successful applicant in this process. The Commission considers that the licensing of Nation's Capital will not have undue impact on the viability of CHRO-TV. CHRO-TV's alternative scheduling practices and its important presence, and involvement in the Ottawa Valley which was demonstrated by the strong support of many interveners, should assist in ensuring that it maintains its loyal audience.
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With respect to local advertising revenues, the Commission notes the commitment by Nation's Capital to refrain from soliciting advertising in Pembroke or in Kingston, which is served by CKWS-TV. In this regard the licensee stated:
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it is not our style to take away...it is [our policy] to add to the system...we are not going to run in and solicit local advertising in the Kingston market or in the Pembroke market. We are here to serve Ottawa, the National Capital Region.
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The Commission expects the licensee to adhere fully to the above commitment. Furthermore, Nation's Capital stated at the hearing that it would be willing to co-produce programs with CKWS-TV and CHRO-TV, a development which could be advantageous to all parties. Given these factors, it is the Commission's opinion that CHRO-TV will be able to continue to provide its valuable service to the Ottawa Valley and Ottawa without suffering undue harm.
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Moreover, the Commission notes that CHRO-TV is currently carried on the basic band of Ottawa Cablevision Limited and Skyline Cablevision Limited and on channel 19 of Télécable Laurentien. The Commission is confident that the establishment of a new station will not displace the CHRO-TV signal from the basic band of the Ottawa cable systems.
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In a separate decision issued today the Commission denies a CBC application for authority to establish a retransmitter of CBOT-TV Ottawa at Deep River, and addresses CHRO-TV's application to disaffiliate from the CBC. Mid-Canada's proposal was conditional upon it being the successful applicant in this competitive process for a new Ottawa region television licence.
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CONCLUDING REMARKS
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The Commission considers that the significant commitments and proposals of the licensee will offer benefits not only to residents of the National Capital Region but also to other regions of the country.
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In its concluding remarks at the hearing the licensee summarized its application as follows:
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The desire to produce a strong, financially viable independent new television station in Ottawa, producing high quality television programs in all program categories has been the foundation underlying our application.
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We believe that there are also overriding benefits to this community which will result from your approval of our application. A $20 million regional television and production facility; the creation of twenty-eight new, high quality local programs; a total of sixty hours per week in all program categories including a minimum of $1 million for the History of Canada; $950,000 per year for Premiere Showcase and Drama Showcase; a minimum of $2.3 million per year for News and Public Affairs programming, and $2.1 million per year for other local programming for a total annual commitment for Canadian programming of $5.6 million in year one, rising to $6.9 million in year five, for a total minimum commitment of more than $31 million over five years.
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All this programming has been positioned to add diversity to the marketplace, and to minimize potential impact on existing television stations. All these, we believe to be of an overriding benefit to this Ottawa-Hull community, but we believe moreover that approval of our application would also produce clear and unequivocal benefits for the Canadian broadcasting system and would take advantage of the momentum to strengthen the Canadian broadcast system.
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Those benefits include windows of exposure for such programming in other markets. This enhanced exposure is assured because of common ownership by Baton. Shared use of resources means enhanced program quality in all markets served by our television stations. A larger economic unit creates economies of scale, strengthening the Canadian broadcasting system with its necessity for strong, individual local entities.
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But more importantly, the Canadian broadcasting system is strengthened by the licensing of strong local television stations with the financial resources necessary to meet [their] commitments.
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The Commission is confident that Baton's leadership, corporate expertise and successful experience in the broadcasting and production industries combined with its very strong financial resources and wide economic base will ensure that the new station develops into a truly local, dynamic and popular alternative to the television services currently available in Canada's National Capital.
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Fernand Bélisle
Secretary General
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Appendix to Decision CRTC 87-151
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The following applications were competing with Nation's Capital for a licence to carry on an English-language television broadcasting transmitting undertaking in Ottawa and are denied.
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CITY-TV, a division of CHUM Limited - 861813400
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151483 Canada Inc. - 861796100
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Edward J. Billo, on behalf of a company to be incorporated - 860517200
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Mid-Canada Communications (Canada) Corp. - 861794600 - 861795300
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