ARCHIVED -  Decision CRTC 87-59

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Decision

  Ottawa, 22 January 1987
  Decision CRTC 87-59
  New Brunswick Broadcasting Co. Limited
Halifax, Nova Scotia; Saint John, Fredericton and Moncton, New Brunswick - 853091700 - 853093300 - 853094100 - 853092500
  Following a Public Hearing in Saint John on 9 September 1986, the Commission approves, by majority vote, the applications by New Brunswick Broadcasting Co. Limited (NBB) for broadcasting licences for new English-language television stations at Halifax, Saint John, Fredericton and Moncton, operating under the following technical parameters:
 
  Channel Effective Radiated Power
Halifax 20 128,200 watts
Saint John 23 134,000 watts
Fredericton 41 53,600 watts
Moncton 27 108,000 watts
  The Commission will issue licences expiring 31 August 1990, subject to the conditions specified in this decision and in the licences to be issued.
 

Introduction

  On 10 January 1986, the Commission announced that it had received applications for licences to carry on broadcasting transmitting undertakings to provide an English-language television service to serve Halifax, Saint John, Fredericton and Moncton (Public Notice CRTC 1986-5). The applicant, NBB, proposed the establishment of a third, over-the-air, local television service at a projected total capital cost of $6.1 million. In keeping with its usual procedure in such cases, the Commission called for applications from other parties wishing to operate a television service in the above-mentioned localities. No other applications were submitted in response to the call.
  The applicant is the licensee of CHSJ and CHSJ-TV Saint John. CHSJ-TV has operated as an affiliate of the CBC English-language television network for over thirty years, and is Canada's second oldest privately-owned television station. Today, the applicant operates rebroadcasters of CHSJ-TV at Bon Accord, Moncton, Newcastle/Chatham, Campbellton, Boiestown, Doaktown and Parker Ridge, New Brunswick. NBB is controlled by New Brunswick Publishing Company Limited, which is ultimately owned and controlled by members of the Irving family. Irving family members also control directly and indirectly four New Brunswick newspapers, two in Saint John and one in each of Moncton and Fredericton.
  At the 9 September 1986 hearing, the Commission discussed a number of matters with the applicant, including the issues of concentration of ownership and media cross-ownership raised by the holdings of the Irving family in broadcasting and newspaper publishing in New Brunswick. The Commission also discussed the implications of these proposals with respect to the provision of a complete CBC English-language television service in New Brunswick, the size of the market that exists for a new television service in Halifax, Saint John, Moncton and Fredericton, the impact of this new service on existing broadcasting services in the region, and the applicant's programming proposals and implementation schedule.
  The Commission heard divergent views from several interveners regarding the NBB applications, including strong arguments in support of the extension of full CBC Englishlanguage television network service in New Brunswick by the Honourable Richard Hatfield, Premier of New Brunswick, by Her Worship Mayor Elsie E. Wayne of Saint John, by Mr. Robert T. Colpitts, and by the CBC itself. In addition to the general concerns raised by the Atlantic Independent Film and Video Association, interventions strongly opposed to the introduction of this new service were received from the Office of Educational Communication - Association of Atlantic Universities, and from CHUM Limited, licensee of the CTV-affiliated stations CJCH-TV Halifax, CJCB-TV Sydney, CKLT-TV Saint John, and CKCW-TV Moncton, radio stations CJCH and CIOO-FM Halifax, and the Atlantic Satellite Network (ASN), the satellite service serving the Atlantic region and the Eastern Arctic.
  The Commission acknowledges the views of these appearing interveners, as well as those of the many groups and individuals who submitted written interventions, including more than 30 letters in support. All have been taken into account by the Commission in its deliberations.
 

Concentration of ownership and media cross-ownership

  The Commission notes that this approval will expand the broadcasting holdings of the Irving family in New Brunswick. In this regard, the Commission reiterates the view that concentration of ownership in the broadcasting industry is not necessarily of concern provided 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. Similarly, with respect to media cross-ownership, the Commission's central concern is that, in any given region, there continues to be available a diversity of information, opinion and broadcasting sources to provide the communities served with differing points of view on matters of public concern.
  As stated in various recent decisions, in its examination of applications involving these issues, the Commission must be fully satisfied that the potential benefits to the communities concerned, and to the Canadian broadcasting system as a whole, clearly outweigh any potential disadvantages and that approval is in the public interest.
  The Commission has considered the financial strength of broadcasters operating in the communities in question and the diversity of programming sources they offer. It has also taken into account the ability of the market to support the proposed new service and the fact that NBB has submitted viable proposals to provide the communities with an alternative local service oriented to their needs and interests.
  The benefits which will accrue to Maritime residents through the introduction of a third, locally-oriented, over-the-air television service in Halifax, Saint John, Fredericton, Moncton and, ultimately, throughout the region, were also considered and particular weight was given to the provision of the long-awaited full CBC English-language television service in New Brunswick.
 

Diversity of Services in New Brunswick

  The Commission notes that residents of Saint John, Fredericton and Moncton have access to the French-and English-language radio and television network services of the CBC, as well as to the CTV network service. Student FM stations operate at both Moncton and Fredericton. In addition, there are a total of eight privately-owned radio stations currently serving these communities, including three at each of Saint John and Fredericton and two at Moncton.
  The diversity of broadcasting sources licensed to serve these Maritime communities has expanded in recent years with the introduction on cable in 1983 of the alternative regional programming and educational programming distributed via satellite to cable by CHUM Limited's ASN service. Moreover, new FM stations in Moncton and Saint John are expected to commence operation within the next several months.
 

The market

  In Decision CRTC 82-324 dated 20 April 1982, the Commission denied three applications, including one by NBB and another by CHUM Limited, to establish a third English-language television service at Halifax. The Commission stated at that time that it was not convinced that the Halifax market could support an additional private commercial television service.
  In its current applications, NBB submitted the results of independent market analyses as evidence that the markets to be served in New Brunswick, combined with the Halifax/ Dartmouth market, can support the operation of the proposed television service without creating undue harm or hardship for existing Canadian broadcasting services operating in those markets.
  NBB acknowledged that the proposed service would likely attract some advertising revenues away from existing stations, but also suggested that the total amount of advertising revenues in the Maritimes would increase upon the introduction of the proposed service, as has happened in other Canadian markets when a television service is introduced. In this context, NBB submitted that the proposed service would provide an attractive new option to local businesses for the placement of commercial messages. Further, it argued that, by taking advantage of the simultaneous signal substitution provisions of the cable television regulations, it would be able to repatriate substantial audiences and revenues now flowing to U.S. stations whose signals are distributed on Maritime cable systems.
  The applicant also argued that the Maritime economy has shown some steady growth since 1982 and presented evidence indicating that the amount of total television advertising revenues in the Halifax/ Dartmouth market has grown significantly in recent years. However, the Commission notes that although the Saint John/Moncton television market has exhibited some growth over the past decade, it has not been nearly as significant as in Halifax and shows signs of levelling off.
  When questioned regarding whether its proposals could be approved separately, NBB stressed that the Saint John/ Moncton market, by itself, would not be sufficient to support the proposed service and that the viability of its overall proposal hinged on gaining approval for the Halifax station:
 

Without a Halifax station, we would not be able to acquire the programming that is necessary to make this a viable entity from a business point of view. For many years, we have had the experience in New Brunswick that because of the extra services that our colleagues in broadcasting [CHUM Limited] have, that whatever program they want that we have introduced in the markets, they simply acquire from the distributors because they have the extra service and can afford to pay more for these programs.

  The applicant further argued that the only practical method of introducing a new, over-the-air, local service to New Brunswick residents and, coincidentally, the only realistic opportunity to make full CBC television network service available throughout the province is by implementation of the proposals contained in its applications.
  In support of its claim that it is the only party capable of bringing these things about, NBB emphasized the fact that no other applicants had come forward in response to the Commission's call of 10 January 1986. It also noted that, apart from CHUM Limited, no broadcaster in the region had intervened to express opposition to its proposals.
  In its intervention opposing the applications by NBB, CHUM Limited argued that its own satellite service, ASN, effectively constitutes a third service for the Atlantic region and submitted that the use of UHF frequencies, as proposed by the applicant, was a restrictive means of transmission for the proposed new service. It suggested that NBB would have to rely on the cable carriage of its programming to provide a reliable service and, even at that, would reach only 37% of the total population of New Brunswick and Nova Scotia. CHUM Limited claimed that there were serious doubts, based on the developing economic picture in New Brunswick and Nova Scotia, that the markets which the applicant is proposing to serve could support a new television service without having a negative impact on the ability of ASN to attract advertising revenues.
  The Commission has carefully considered the extensive evidence and arguments presented by all parties to this proceeding. Based on all of the information available, the Commission is satisfied that the markets to be served by the new television stations in Halifax, Saint John, Moncton and Fredericton can support the service proposed by NBB without causing undue harm to existing broadcasters.
  With specific reference to CHUM Limited, given the resources available to this large and highly successful broadcaster, and in particular the strong financial performance of its operational division in the Maritimes (the Atlantic Television System), the Commission considers that CHUM Limited is more than capable of competing effectively with the proposed service without compromising the quality of service provided by its various broadcasting undertakings in New Brunswick and Nova Scotia. While recognizing the concerns expressed by CHUM Limited, particularly with respect to the viability of CJCB-TV Sydney and ASN, the Commission does not expect the level of these important services to diminish as a consequence of the introduction of this new local service.
  Regarding the intervener's contention that the service proposed by NBB should be considered as the fourth English-language television service in the Maritimes after ASN, the Commission notes that the applicant's proposal is for a new, over-the-air, locally-oriented service, whereas ASN is licensed as an alternative, satellite-to-cable, regional service.
  With respect to the technical limitations of UHF transmission referred to by CHUM Limited, the Commission notes that there are no VHF frequencies available for use by NBB in the communities to be served. It also notes that the applicant has allocated a substantial budget for an advertising campaign to familiarize viewers who do not have access to cable with the appropriate method of tuning to UHF channels. Regarding the number of Maritime residents that will be able to receive the proposed service, as stated elsewhere in this decision, it is the Commission's expectation that NBB extend the third service licensed herein throughout the provinces of New Brunswick, Nova Scotia and Prince Edward Island at the earliest possible date.
 

Impact on CBC English-language television service in New Brunswick

  The Commission has expressed its serious concern in a number of earlier notices and decisions regarding the fact that New Brunswick remains the only province in which the CBC does not own or operate English-language television broadcasting facilities. Given the CBC's current budgetary constraints, there appears to be little likelihood that any such facilities will be established in the near future. Although CHSJ-TV has earned a solid reputation for the service it has provided during more than 30 years as a CBC affiliate, as such it broadcasts considerably less CBC network programming than do CBC owned-and-operated stations. The lack of full CBC service has been a source of long-standing dissatisfaction to the people of New Brunswick, as has been made clear to the Commission on frequent occasions through representations at public hearings by various municipal and provincial politicians.
  In Decision CRTC 82-324 denying applications by NBB and others for licences for a third television service in Halifax, the Commission made the following specific comment regarding the NBB proposal:
 

Further, this applicant ... advised that it envisaged a situation where, at some point in the future, the combined operation of the proposed station and of CHSJ-TV could have favourable implications for future plans for the disaffiliation of CHSJ-TV from the CBC and the potential introduction of full CBC service in New Brunswick. Notwithstanding the merits of such a possibility, the applicant failed to demonstrate to the Commission that these plans were sufficiently developed, or that an economically viable solution could be arrived at.

  At the 9 September 1986 hearing, NBB submitted that the current proposals for a new television service respond to the Commission's concern by ensuring, at the same time, the introduction of a substantially increased amount of CBC English-language television network programming to viewers in New Brunswick. It also emphasized that this would be accomplished at no cost to the CBC.
  Although the CBC had originally been scheduled to appear at the hearing as an opposing intervener to NBB's applications, NBB announced during the proceeding that the two parties had reached an agreement whereby CHSJ-TV and its rebroadcasters will continue to operate as CBC affiliates for a further period of at least ten years. Under the terms of the agreement, which was placed on the public file at the hearing, the amount of CBC programming broadcast by its affiliated stations in New Brunswick will increase by approximately 30 hours per week over the current level. The Commission notes that the new level will be equal to, or greater than, the amount of CBC network programming broadcast by many CBC owned and operated stations.
  The agreement between NBB and the CBC is contingent upon approval by the Commission of these applications and takes effect upon implementation of all the undertakings authorized in this decision.
  NBB confirmed that the current level of 9 hours 55 minutes of programming produced locally by CHSJ-TV will continue to be produced each week, including 3 hours 30 minutes of programming directed to viewers in northeastern New Brunswick which will continue to be split fed and broadcast on CHCR-TV Campbellton and CHCN-TV Newcastle/Chatham.
  The CBC expressed satisfaction with the terms of its agreement with NBB and withdrew its opposing intervention at the hearing. It noted that the introduction of the proposed service would likely have some impact on its audiences and revenues but stated that the benefits associated with implementation of these proposals outweigh any CBC concerns regarding audience fragmentation and decreasing revenues. The CBC recommended to the Commission that adherence to the terms of the agreement be made a condition of CHSJ-TV's licence.
  In the Commission's view, the longawaited introduction of full CBC English-language television network service in New Brunswick is a major benefit to be derived from the current applications; the Commission commends NBB on its initiative and efforts to date in bringing this about.
  The Commission considers it desirable that the CBC have control of the scheduling of its programs, and notes in this regard that, under the agreement between NBB and the CBC, the 30 hours of additional CBC programming will be broadcast by NBB over CHSJ-TV and its rebroadcasters in accordance with the schedule proposed by the CBC.
  With respect to the condition of licence recommended by the CBC, the Commission considers that such a condition would be appropriate, but notes that the licence for CHSJ-TV does not expire until 30 September 1987. Accordingly, the Commission advises the applicant that this condition will be dealt with at the time of licence renewal, and that it intends to impose a requirement that NBB adhere to the terms of its agreement with the CBC, as a condition of the CHSJ-TV licence. In the in-terim, it expects the licensee to adhere to its commitment in this regard. Moreover, should the CBC choose to terminate its agreement with NBB at some future point and establish CBC owned-and-operated facilities in New Brunswick, the Commission would not envisage renewing the licences for CHSJ-TV and its rebroadcasters for a further term and would, moreover, strongly expect NBB to surrender its licences for these services.
 

Implementation schedule and programming plans

  The service proposed by NBB will be known as Maritime Independent Television, or MITV-NS in Nova Scotia and MITV-NB in New Brunswick. It will be received by viewers in the Maritimes through UHF television transmitters at Halifax, Saint John, Moncton and Fredericton and, where applicable, through its priority carriage on cable television. For the most part, the new service will originate in Halifax and will be delivered via microwave for simulcast on the New Brunswick stations. The Commission also notes and approves the applicant's proposal for the simulcast of a certain limited number of programs on CHSJ-TV and on MITV-NB.
  Furthermore, with respect to NBB's proposed implementation schedule, and in light of the importance placed by the Commission on the earliest possible introduction of the full CBC English-language television service in New Brunswick, the Commission strongly expects that this new television service be launched simultaneously both in Nova Scotia and New Brunswick, at the earliest feasible date.
  Accordingly it is a condition of each licence that the four new stations approved herein be completed and that they all 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.
  The Commission notes the applicant's statements at the hearing confirming its intention to extend the MITV service to other areas of New Brunswick and elsewhere in the Maritimes as soon as it is feasible. Specifically, the applicant stated:
 

... eventually we would extend the service to as many other people in the Province of New Brunswick and in fact in Nova Scotia as possible ... we expect that as we are able to make this work, that we will be able to extend it to more Maritime communities. One of them that is missing ... is Prince Edward Island. Summerside and Charlottetown should be able to have a third off-air service.

  The Commission strongly expects NBB to implement these plans and further to submit applications at the earliest feasible time for extension of the proposed service throughout New Brunswick, Nova Scotia and Prince Edward Island. The Commission also requires NBB, within six months of commencing the MITV service, to submit a report containing a proposed timetable for completing this extension of service.
  At the hearing NBB noted that, although no firm agreement has been reached, it has held discussions with CANCOM regarding the possibility of adding the MITV service to the package of Canadian services distributed by CANCOM to remote and underserved areas. Such distribution would be consistent with CANCOM's commitment "to add an Atlantic service as part of its network operation as soon as such a service becomes available"; this commitment was noted by the Commission in Decision CRTC 81-252 originally granting CANCOM its licence. Accordingly, the Commission encourages NBB to continue its negotiations with CANCOM in this regard.
  As for the applicant's specific programming plans, NBB intends to offer a programming service on the Halifax station consisting of 116 hours 30 minutes per week. This will include 21 hours weekly of new local production featuring news, public affairs, community affairs, arts, variety, quiz programs and sports:
 

In planning our schedule, we have tried to find special niches not filled by other services. Examples include an Atlantic business program, a weekly sports wrap-up show, a daily noon-hour news and community affairs program, fuller coverage of regional sports and the presentation of amateur theatre productions.

  The Commission expects the applicant to adhere to its commitment to schedule Canadian programming equitably throughout the broadcast year.
  Local productions such as "Variety" (a half-hour entertainment program featuring local and regional talent), "Reach for the Top", and coverage of local and regional sporting events, will be complemented by an attractive mix of acquired Canadian and foreign programming not otherwise available from a Canadian source in the markets to be served.
  With respect to news and community affairs programming, NBB emphasized that it would focus on "local news, and on matters that affect people in the coverage area." News programs will be broadcast Monday to Friday at noon, every day at 7:00 p.m., Tuesday to Sunday at 11:00 p.m., and at 1:00 a.m. on Monday. NBB will also broadcast "Newscope", a weekly digest of the news, on Sunday evening at 7:30 p.m.
  The applicant proposed to follow its own weekday early evening news with the "Global National News" which it proposes to acquire from Global Communications Limited. In this regard, the applicant is reminded that, should it propose to rebroadcast any such programming "live", CRTC prior approval would be required of applications to be filed by the program originator for a network licence and by NBB for affiliation.
  The programming to be broadcast by the proposed stations in New Brunswick will be essentially identical to that contained in the Halifax service, with the exception of 8 hours 45 minutes per week of programming, all in the domain of news and community affairs oriented to a New Brunswick audience, which will be produced at the applicant's existing studios in Saint John and broadcast at times when the Halifax station is airing local and regional news programming.
  The Commission considers that the 21 hours per week of local production proposed for the Halifax station is an acceptable level, and notes that it is in line with the amounts proposed by third service licensees authorized by the Commission in recent years to serve communities elsewhere in the country. In the Commission's view, however, the 8 hours 45 minutes per week of local production proposed for the New Brunswick stations is a minimal amount which should be expanded, as resources permit, to encompass programming in categories other than just news and community affairs.
  In this context, the Commission notes NBB's statement at the hearing that it will initiate the production of at least some New Brunswick sports programming within its first licence term. The Commission also notes the applicant's plans to work towards developing a drama production capability in Halifax:
 

What we have proposed in our application is to, in the initial licence period, involve ourselves in the learning curve as a drama producer, and to make available to the artistic community in the Halifax area the tools that would allow them to embrace that same learning curve.

  The Commission encourages the applicant to adopt the same approach in Saint John.
  The Commission expects to be kept informed by NBB of its efforts to expand the amount of local New Brunswick production, and intends to review this particular matter at licence renewal time.
  As stated in Public Notice CRTC 1986-351 dated 22 December 1986 entitled Policy on Sex-Role Stereotyping in the Broadcast Media, the Commission intends to require all television and radio licensees to abide by the Canadian Association of Broadcasters' (CAB) self-regulatory code on sex-role stereotyping by condition of licence. Accordingly, it is a condition of licence that NBB adhere to the CAB self-regulatory guidelines on this subject, as amended from time to time and accepted by lhe Commission.
  The Commission also expects the applicant to adhere to its commitment to make use of local talent in the communities it is licensed to serve, in particular to make use of independent producers in Nova Scotia and New Brunswick, thereby encouraging the growth of a strong independent production industry in the Maritimes. The importance attached to NBB's involvement with independent producers was the theme of a number of interventions received by the Commission, including those by the Atlantic Independent Film and Video Association, and Carota Films Ltd. In this regard, the Commission notes the following statement by NBB:
 

Any programs that have been done in the Maritimes up to this point have basically been done by the broadcasters because there was no other way. There was not an independent production industry. One is beginning to grow, and we are delighted to see that, and we would like to be at the very least a catalyst in that process.

  The Commission strongly encourages NBB to pursue this objective and to increase its involvement with independent producers in the Maritimes.
 

Conclusion

  As noted earlier, the Atlantic region is the only one in southern Canada not served by an over-the-air third television service. In considering the benefits to be derived by the provision of the locally-originated third service, the Commission has also placed considerable importance on the fact that, as a consequence of this approval, New Brunswickers will now finally receive the full CBC English-language network television service. In its deliberations, it has weighed carefully all of the evidence presented, including the market surveys, and has determined that the new service will not affect the existing broadcasters' ability to continue to meet their important programming commitments.
  The Commission is also satisfied that there will continue to be strong alternative broadcast voices providing a diversity of information and opinion in each of the New Brunswick communities of Saint John, Moncton and Fredericton, and that such diversity will neither be diminished nor threatened by the introduction of the proposed service. The Commission notes in this regard NBB's plans to acquire the national news package from Global Communications Limited so as to complement its own evening news broadcasts.
  In light of all of the foregoing, the Commission is convinced that the advantages accruing from the introduction of this third local over-the-air television service, combined with the provision of full CBC English-language television network service in New Brunswick, clearly outweigh any of the disadvantages with respect to concentration or cross-media ownership, that this approval will yield clear and unequivocal benefits to the Maritime region, and that it is in the public interest.
  Fernand Bélisle
Secretary General
 

Minority Opinion

  Commissioners Rosalie Gower and Paul McRae dissent for the following reasons:
  1) In no other province is CBC service provided through this kind of an arrangement. Except for the province of British Columbia, where CBC television provides service through an owned-and-operated station in Vancouver, rather than the provincial capital of Victoria, all provincial capitals have fully owned-and-operated CBC stations except for New Brunswick.
  2) If CBC, because of budgetary constraints, cannot provide an owned-and-operated service to New Brunswick at this time, then implementation should be delayed until it can. The arrangement proposed cannot be seen as temporary since there will no longer be any pressure on CBC to own the station in New Brunswick.
  3) Because local news and public affairs will still be provided by New Brunswick Broadcasting for the CHSJ-TV service, even though the 5 hours of local CBC production from Fredericton will continue, the advantages of a full professional CBC team will be lost both as a standard for excellence and for a more competitive environment.
  4) The other major concern is the issue of media concentration in New Brunswick and the lost opportunity for a new voice in these markets.
  The Irving interests presently own the two Saint John daily newspapers, the one daily in Moncton and the one daily in Fredericton. These are the only local English-language dailies in the province.
  Irving interests also own 100% of the local CBC affiliate in Saint John, CHSJ-TV, and its rebroadcasters throughout the province.
  Radio is only an issue in Saint John where Irving interests own a local AM station.
  In the present application, the Irving interests will continue to own CHSJ-TV and its rebroadcasters. The local input of 13 hours will continue to be provided by New Brunswick Broadcasting and not by CBC staff.
  The new network, which this decision licences, will originate in Halifax and supply its service via microwave to Saint John where it will be transmitted off-air in Saint John, Moncton and Fredericton. This will be a new service supplied by the Irving interests but the 8 hours of local news and public affairs inserted in Saint John, to be broadcast in New Brunswick only, will also be provided by New Brunswick Broadcasting. In our opinion, although this decision may seem to meet many of the long-term goals for the provision of CBC service to the province of New Brunswick and also provides a third television service to add to that of CHSJ-TV, ATV (CTV), and ASN (provided on cable only), the awarding of this licence to the Irving interests will permanently eliminate the opportunity for a new alternative voice to provide over-the-air television service to the people of New Brunswick. Indeed CHUM's intervention was based on the fragility of the market to support new services.
  For the above reasons, we are of the opinion that the price is too high for an additional 30 hours of CBC programming.

Date modified: 1987-01-22

Date modified: