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Decision
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Ottawa, 13 May 1987
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Decision CRTC 87-352
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Monarch Broadcasting Ltd. and Allarcom Limited Red Deer, Alberta - 860769900
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Monarch Broadcasting Ltd. Coronation, Alberta - 860768100
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Following a Public Hearing in Calgary on 17 February 1987, the Commission approves the joint application by Monarch Broadcasting Ltd. (Monarch) and Allarcom Limited (Allarcom), as a co-venture, for a licence to carry on a television broadcasting transmitting undertaking at Red Deer, operating on channel 10 with an effective radiated power of 180,000 watts, to rebroadcast the programs of CITV-TV Edmonton, received via satellite from the CANCOM network.
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The Commission will issue a licence expiring 31 August 1990, subject to the conditions specified in this decision and in the licence to be issued.
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Also at the Calgary hearing, the Commission considered an application by Monarch to amend the broadcasting licence for CKRD-TV-1 Coronation, by increasing the effective radiated power from 97,000 to 98,000 watts in order to minimize co-channel interference between CKRD-TV-1 Coronation and the new station at Red Deer. The Commission approves this amendment.
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The new licence will be issued jointly to Monarch and Allarcom. Consistent with their co-venture agreement, which specifies joint control of the new undertaking and sets out the terms of the co-venture arrangement, the Commission will hold both parties jointly and severally responsible for the licence and for the implementation of and compliance with all applicable statutory provisions and Commission decisions and policies.
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The Commission acknowledges the extensive financial and human resources of Monarch and Allarcom and the ability of both parties to fulfill their respective responsibilities. As detailed specifically in the application, Monarch will own and operate the studio and transmitting facilities for the new station; be responsible for its maintenance in terms of cost, facilities, equipment and staff; pay for all satellite downlinking costs; and be responsible for local switching and substitution of advertisements.
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Allarcom will supply the program feed and the co-venture participants will guarantee to Monarch a minimum monthly average of 50% of the broadcast commercial availabilities of CITV-TV between the hours of 6 p.m. and midnight and also between midnight and 6 a.m., for the substitution by Monarch of broadcast advertisements to be included in the CITV-TV Red Deer service. Revenue generated from the sale of such advertising will remain in the possession of Monarch to offset the above-noted operating costs and repayment of the capital debt.
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The community of Red Deer is currently served by two local English-language television signals: CKRD-TV, a CBC affiliate licensed to Monarch; and CFRN-TV-6, which rebroadcasts the programs of CFRN-TV, the CTV affiliate in Edmonton. As submitted by the applicants, CITV-TV Edmonton is currently provided to approximately 18,000 households in Red Deer as part of the basic service cable package; as a result of this decision, the CITV-TV signal will be available over-the-air to an estimated 58,000 households within the grade B contour of the new service.
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It is the applicants' contention that the Red Deer market is "too small and fragmented to support a full-fledged competitive third service station". In support of this statement, they noted the size of the population, the number of competing media outlets and out-of-market signals and the downturn in the Alberta economy. The applicants also underlined the fact that there was no response to the call issued by the Commission for applications for an English-language television service to serve Red Deer and Medicine Hat (Public Notice CRTC 1986-214 dated 3 September 1986).
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Under the circumstances, the Commission is of the view that the arrangement proposed by Monarch and Allarcom is the most viable method of providing a third over-the-air service to Red Deer, given the particular situation of the market.
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In its assessment of this application, the Commission has taken into consideration a number of benefits that would accrue to the residents of the Red Deer area as a result of this arrangement. Specifically, the Commission has noted the quality of CITV-TV Edmonton's programming and the fact that the wider availability of this signal will provide for further diversity of Canadian programming in the Red Deer market, including programming of regional interest to central Albertans. Further, the applicant stated at the hearing that the parameters of the grade B contour of the new station will allow it to serve approximately 170,000 people in Red Deer and the surrounding region, about twice the number that currently receive the signal via cable.
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Moreover, the Commission considers that this proposal will minimize the potentially negative impact that a new station would have on the local broadcaster, Monarch, as the arrangement permits Monarch to access and retail a minimum monthly average of 50% of the commercial availabilities of the new service. This should enable Monarch at least to maintain the current level and quality of local programming on CKRD-TV.
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At the present time, CKRD-TV, through its twin-stick arrangement with CFRNTV, pays an annual access fee to Sunwapta Broadcasting Limited (Sunwapta), licensee of CFRN-TV. This agreement expires on 31 December 1987.
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The applicants' forecasts indicate that local revenues accruing to Monarch from the operation of the CITV-TV rebroadcaster in Red Deer would not far exceed, in the first year of operation, the revenue currently generated by Monarch through its agreement to access a proportion of the local commercial availabilities on CFRN-TV-6. At the hearing, however, Monarch indicated that the quality of the commercial availabilities on CITV-TV would be better than those it now has access to on CFRN-TV-6. The Commission has stated in a number of decisions that local revenue should not be drawn from a market unless local programming is provided, and in this regard, notes that the present application, as filed, made no provision for such programming.
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Accordingly, the Commission expects the licensee to produce and broadcast a minimum of 21/2 hours of local programming per week, as of the commencement of the second year of operation. In this regard, it expects the licensee to submit a report, six months from the date on which the station commences broadcasting, outlining its plans for such programming.
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The unique nature of the agreement between Allarcom and Monarch raised a number of concerns, including whether a network licence was required. It is the Commission's view that since the signal is to be delivered by CANCOM, which already holds a network licence to distribute CITV-TV, there is no need for a separate network licence. In this respect, the Commission expects the licensee to file a copy of its affiliation agreement with CANCOM.
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Of significant concern to the Commission was the fact that the proposed station's grade B contour would include an area within 32 kilometres of the Crossfield head-end of the cable system licensed to Rogers Cable TV Alberta Ltd. (Rogers). Moreover, the applicant expressed the concern shared by a number of interveners that the proposed service might be entitled to priority carriage on Rogers' Calgary undertaking. For this reason, at the Commission's request, a representative of Rogers attended the hearing to discuss the possible impact of this application on its Calgary cable system.
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A number of options were considered by the Commission to ensure that this potential problem would not arise. One option would be to require that the proposed station's grade B contour be adjusted so that it not include any portion of the 32-kilometre parameter of the Crossfield head-end. The Commission notes, however, that such an adjustment would have reduced the proposed audience size by more than 11,000, depriving residents of Carstairs, Didsbury, Three Hills and surrounding areas of the new service.
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A second option would be for Rogers to apply to add a condition of licence ensuring that the Red Deer service would not be a priority on the Rogers' cable system serving Calgary. The Commission has noted Rogers' willingness, as indicated at the hearing, to apply for such a condition of licence and expects Rogers to do so without delay. The Commission considers this to be the best option to ensure service to the greatest number of households, while avoiding the problems associated with the possibility that the new service would be priority carriage on the Calgary cable system.
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The Commission has noted the opposing interventions filed by The Canadian Motion Picture Distributors Association, CTV Television Network Limited, Global Communications Limited, CFCN Communications Limited and the Calgary Television Centre, who raised such issues as the lack of local programming, the need for a network licence and the priority cable carriage of the new service on the Calgary system. The Commission is satisfied that these issues have been carefully considered and addressed in this decision. The Commission also wishes to acknowledge the twelve interventions filed by various individuals and other interested parties from the Red Deer area, in support of this application.
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Of additional concern to two interveners, CKND Canwest Broadcasting Ltd. and Sunwapta, was the delivery of CITV-TV to Red Deer via the CANCOM network.
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It was their contention that CANCOM was never intended to be used to deliver distant Canadian signals for the provision of third service in markets such as Red Deer. It is the Commission's view that it is precisely because of the availability of satellite delivery systems such as CANCOM, that it is possible to provide a wide range of Canadian viewing choices to communities such as Red Deer that currently receive a limited number of Canadian services.
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In its intervention, Sunwapta also indicated that it should be permitted to solicit advertising in Red Deer, should this application be approved. After careful study of the proposed area to be served, the Commission is not satisfied that the Red Deer market has the necessary capacity to support solicitation of local advertising by Sunwapta, whose primary market is Edmonton. Therefore, the Commission expects Sunwapta to refrain from soliciting advertising revenue from the Red Deer and surrounding area until the matter is dealt with in the context of CFRN-TV's upcoming licence renewal.
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It is a condition of licence that the licensee adhere to the CAB selfregulatory 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 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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Fernand Bélisle
Secretary General
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