ARCHIVED -  Decision CRTC 87-739

Decision

Ottawa, 10 September 1987

Decision CRTC 87-739

Multilingual Television (Toronto) Limited

Toronto, Ontario - 870224300

At a public hearing in Toronto on 28 April 1987, the Commission considered an application by Multilingual Television (Toronto) Limited (MTV) to renew the broadcasting licence for CFMT-TV Toronto expiring 30 September 1987.

Background

CFMT-TV was originally licensed on 27 December 1978 to provide a multilingual television service to audiences in the Metropolitan Toronto area to meet the distinct needs of the various linguistic communities and diverse cultural groups in the region.

On 4 July 1985, the Commission announced new guidelines for ethnic programming (Public Notice CRTC 1985-139, "A Broadcasting Policy Reflecting Canada's Linguistic and Cultural Diversity"), designating five types of ethnic programs and setting out specific criteria for the broadcasting of such programming on both conventional and ethnic broadcasting undertakings. In the notice, the Commission recognized a number of constraints which made it difficult for radio and television stations which broadcast significant amounts of ethnic programming to attain the Canadian content requirements set out in the Commission's regulations. It also confirmed that CFMT-TV should be accorded the same priority status as all other Canadian television stations for the purpose of cable distribution.

On 18 April 1986, the Commission made a number of changes in the conditions of CFMT-TV's licence (Decision CRTC 86-371) and renewed the licence until 31 March 1987. The Commission noted that MTV would henceforth be required to achieve its 60% ethnic programming commitment on a monthly (rather than the previous six-month) basis. Eighty percent of the hours devoted to ethnic programming were to be programs of Types A and B as described in Schedule II of the Television Broadcasting Regulations, 1987 (the regulations) and set out in Appendix II to this decision. Further, CFMT-TV was expected to devote a minimum of four hours per month to Type B programs.

The licensee was also required by condition of licence to provide ethnic programming devoted to a minimum of eighteen cultural groups, in at least fifteen languages. In Decision CRTC 86-371, the Commission also permitted MTV, in accordance with the new ethnic policy, to devote up to 40% of the broadcast day to conventional programming, including "programs ... created for commercial U.S. networks or stations" and it allowed "third-language dubbed versions of such programs" to qualify as ethnic programming. The Commission thus expected CFMT-TV to "produce and/or acquire better quality domestic programs" with the additional revenue that would be generated.

The licensee was later granted a further six-month renewal until 30 September 1987 to permit the hearing of the renewal application following enactment of new television regulations which would allow the Commission to vary Canadian content requirements by condition of licence (Decision CRTC 86-1180 dated 8 December 1986). The new regulations were enacted on 9 January 1987.

Following a public hearing on 6 May 1986, the Commission approved an application by MTV to transfer effective control of the licensee to Rogers Broadcasting Limited (RBL) (Decision CRTC 86-586 dated 19 June 1986). The Commission made it a condition of approval that the status of CFMT-TV as an ethnic television station be maintained.

In assessing the transfer application, the Commission noted sixteen firm commitments made by RBL, including an assurance that it would be able to provide the licensee with the requisite financial strength and stability to maintain CFMT-TV in operation, while ensuring continuity of management and of the ethnic character of the station. Other commitments included the investment of $200,000 to modernize CFMT-TV's studio facilities; $375,000 in a research program to ensure the production of relevant, quality multilingual and multicultural programming; $450,000 for purchase of a program conversion unit and mobile news gathering equipment; $500,000 to be invested in the co-production of a television series featuring success ful Canadians of other than English or French origin; and $125,000 in scholarship funds to educate and train students of ethnic background enrolled in the Radio and Television Arts program at Ryerson Polytechnical Institute. As well, RBL undertook to enhance the role of the Community Advisory Committee and to employ a full-time community liaison officer to ensure that CFMT-TV's programming was responsive to the needs of the various ethnic communities within its service area.

The 28 April Hearing

In CRTC-Notice of Public Hearing 1987-19 announcing that the application for the renewal of CFMT-TV would be considered at a public hearing in Toronto commencing 28 April 1987, the Commission made reference to the transfer of control of the licensee to RBL and stated its intention to review the performance of CFMT-TV over the current licence term and its future plans in terms of the commitments made by RBL at the May 1986 hearing. Specifically, the notice made reference to the Commission's statement in Decision CRTC 86-586 that at the time of licence renewal, the CRTC might "impose these commitments as conditions of licence, with a view to preserving and strengthen ing CFMT-TV's role in the field of ethnic television broadcasting in Canada."

At the hearing, the Commission questioned the licensee on the sixteen commitments made by RBL at the May 1986 hearing with respect to the application for transfer of control. As part of the present renewal application, MTV filed a progress report dated 22 January 1987 which indicated that the commitments had already been implemented, except as indicated below. Aside from a request for Commission approval to reassign the $250,000 designated for a "Live Eye Mobile" to the purchase of new electronic field production equipment, and the stated intention of introducing an improved employee benefit package before 31 August 1987, the only outstanding issues were the investment of $375,000 in program research and the allocation of $500,000 (and a further investment of $250,000 from Rogers Telefund) for the co-production of a program series featuring Canadian ethnic storylines. Both matters are part of MTV's on going commitment to quality ethnic programming and both were elaborated on at the hearing.

To date, only $10,000 has been spent on the research project, although the station has had a number of meetings with the "existing traditional research systems, BBM and Nielsen", to negotiate a new approach "so that ethnic tuning [and] ethnic viewing is properly reflected". The discussions were described in the following terms:

We have been told by BBM and Nielsen that non English-speaking people are virtually excluded from the sample size ... We have come up with a number of different options ... one of them is to produce ... the ballot in ... five languages ...

But ... we are a long way, I think, from bringing it to fruition.

With respect to the $500,000 commitment over five years to co-produce a television series, the response at the hearing was that while CFMT-TV has been in negotiation with an independent producer regarding a co-production with the CBC, "we have not yet signed a piece of paper to commit to this money fully." The licensee stated that despite the fact that MTV does not believe that it has yet found the right program series, the commitment stands.

1) Programming

In its ethnic policy statement (Public Notice CRTC 1985-139), the Commission recognized that it may be difficult for television stations broadcasting significant amounts of ethnic programming to meet the current regulatory requirements with respect to Canadian content due to the high cost of producing quality Canadian programs specifically directed to ethnic audiences. Accordingly, pursuant to subsection 4(8) of the regulations, the Commission may authorize, by a condition of licence designed to enhance the quality or diversity of Canadian programs, different minimum Canadian content levels for licensees of ethnic stations than those required for conventional television broadcasters.

As part of the present renewal application, MTV applied for a condition of licence permitting CFMT-TV to broadcast a Canadian content level of 30% over the entire broadcast day (6 a.m. to midnight) and in the evening broadcast period (6 p.m. to midnight), as opposed to the existing requirement of 60% Canadian programming overall and 50% between 6 p.m. and midnight.

The licensee requested that the Commission consider an expanded definition of Canadian ethnic programming which would allow up to 45% non-Canadian inserts in any half-hour. The licensee also proposed that the Commission permit up to 5% of its required 60% ethnic programming, calculated on a 12-month basis, to consist of Type E programs but withdrew this proposal at the hearing.

During the hearing MTV emphasized that Canadian content requirements "designed for conventional television broadcasters" place undue constraints upon CFMT-TV when coupled with its 60% requirement for ethnic content. Since its inception, Canada's only over-the-air ethnic television service has been in a precarious financial situation. It acknowledged, however, that some of the constraints under which it had operated -- the low revenues generated by the required 60% ethnic programming and problems in achieving basic cable carriage of its signal -- have since been rectified through Commission initiatives, including allowing MTV to carry U.S. programming and requiring cable carriage of CFMT-TV on the basic band of certain cable systems as set out in the cable regulations.

At the hearing, MTV stated that the removal of the prohibition on U.S. programming has been of significant benefit to the station. Ninety-six percent of the 18.4% increase in advertising revenue projected for the fiscal year ending 31 August 1987 is attributable to acquired conventional programming which is primarily U.S. in origin.

As explained further by Mr. James Sward on behalf of the licensee:

... that 18% will be on a 12-month fiscal period. It represents ... maybe a 5% increase during the first six six months ... and the better part of, between 30% and 40% increase, on a month-to-month basis during the last six months.

So that kind of momentum speaks very well for next year. There [are] clearly increased revenue benefits for CFMT flowing from the April 1986 change in condition of licence.

In fact, projections filed with the application indicate that MTV expects to break even in the third year of the new licence term. The Commission considers this turnaround in the station's financial situation to be attributable to the changes noted above and to the introduction of new management and marketing initiatives resulting from the June 1986 ownership transaction.

As part of its submission, MTV asserted that over the past seven years CFMT-TV has provided a broad range of television programming to ethnocultural communities of varying size in Southern Ontario. In the past year alone, the station has covered more than 150 community events, supported more than 450 community organizations, interviewed some 400 different individuals and showcased 300 artists for viewers in the various ethnic communities in the Toronto area.

The application also indicated that CFMT-TV's scheduled mix of ethnic groups and the languages in which it broadcasts were determined by examining the demographics, language retention and immigration trends of the population in its service area. With respect to the advertising potential of its ethnic programming, MTV stated:

It is a necessary principle of advertiser-supported multicultural television that broadcasting to smaller ethno-cultural groups can only be provided through cross-subsidization by larger ones.

CFMT provides service to both large and small ethnic groups and, in particular, visible minorities. Advertising revenues from conventional English-language programming and programming to major cultural groups as the Italians, Portuguese, Greek and Asians permit us to - cross-subsidize programming to smaller ethnic communities including Spanish, Ukrainian, Korean, Arabic, Black and Japanese.

The licensee expressed its intention to maintain its mandate as an ethnic broadcaster with "the best level of service possible" and explained that in response to its audiences' increasing demand for a greater variety of high quality ethnic programming, both international and Canadian, it was seeking Commission permission to supplement the 30% station-produced or acquired Canadian multilingual and multicultural product with 30% non-Canadian "homeland" or "world ethnic" product. It further assured the Commission that it did not intend to increase the 40% level of non-ethnic programming. It argued that allowing it this flexibility would enable CFMT-TV to provide better ethnic programming in prime time, greater diversity, higher production values and fewer repeats.

The licensee committed itself:

... to provide the facilities, production equipment and the investment necessary to significantly improve the quality of existing CFMT ethnic productions;

... assuming a favourable ruling on our Canadian content request [to provide 30% Canadian programming], to reduce the repetition of ethnic programs on CFMT's schedule. We will continue to program Channel 33 in Toronto, which is our Canadian content rebroadcast channel on Rogers Cable;

... to provide the introduction of high quality, homeland or world television programs to meet the demands of the many ethnocultural communities we serve;

... [to] the further development of a credible research facility to provide dependable information about the audiences for the ethnic programs we produce, the relevancy of our content, and the rationale on which to market it to advertisers; [and]

... [to] the continued development of educational plans that make it possible for aspiring ethnic Canadians to complete studies in communications and in television production particularly.

2) Ownership Concerns

i) Assignment of Licence

At the hearing, a note in MTV's 1986 financial statements which indicated that MTV's broadcasting licence had been assigned to secure bank loans was brought to the licensee's attention.

Mr. Edward S. Rogers, Vice-Chairman and Chief Executive Officer of Rogers Communications Incorporated and Vice-President of RBL, acknowledged that MTV's broadcasting licence is not an assignable asset and stated:

To the best of my knowledge, the banking here is the same as in all the other enterprises and of course, the licence is not hypothecated ... so I am embarrassed by the reference in the audited statement.

The Commission reminds the licensee that CRTC licences can neither be transferred nor assigned as specified by condition of licence.

ii) Licensee Share Transfers

MTV was also asked to explain a series of changes in its ownership structure which had taken place since the Commission approved the transfer of effective control of MTV to RBL and for which Commission approval was not sought.

Decision CRTC 86-586 had approved RBL's acquisition of 80% of the outstanding voting shares of MTV Holdings Corp., which company in turn owned 73.3% of the voting shares of MTV. As a result, RBL was approved to hold 58.6% of MTV indirectly.

However, the ownership structure submitted in MTV's renewal application disclosed that RBL now directly owned 34.2% of the voting shares of MTV which, when added to its 32.8% indirect ownership through MTV Holdings Corp., resulted in a 67% ownership position. RBL's 34.2% direct ownership was obtained as a result of its participation in a $4 million common share issue by MTV in September 1986.

At the hearing, MTV explained why it had not sought the Commission's prior approval for RBL's acquisition of direct control of 34.2% of the licensee's voting shares. First, it was of the view that the Commission's sanction had already been granted in the transfer of control approved in Decision CRTC 86-586, which noted RBL's assurance that it would meet any required infusions of capital, and through extensive discussions at the May 1986 hearing of RBL's commitment to acquire new equity in CFMT-TV to fund some $1.5 million worth of commitments.

Second, MTV argued that prior approval was not required pursuant to its ownership condition of licence be cause RBL's overall control position in the licensee had gone from a level de of 58.6% to 67%, a change of less than 10%. Further, MTV contended that RBL already had more than 50% effective control of MTV before the direct acquisition. It noted two other cases where an acquiring company which was already in control of a licensee had acquired a further block of voting shares of more than 10% without requiring the Commission's approval.

MTV also stated, with reference to the shares acquired directly by RBL:

... there is nothing we can find anywhere in the transcripts or the record that obliged Rogers to infuse any further equity through the holding company.

At the hearing, the licensee submitted for Commission approval, if required, a "Memorandum of Understanding" dated 29 April 1987 documenting transfers which would result in the reduction of RBL's direct ownership from 34.2% to 10.5%. The holding company would increase its ownership position from 41.2% to 63.6%; Mr. Daniel Iannuzzi, President of MTV would own 3.8%; and the other minority shareholders would own 22.1%.

At the hearing, Mr. Iannuzzi characterized this agreement as a reinstatement of "the intent or the spirit of the original agreement that was licensed, in that ... the original concept built in the ethnic content of this particular licensee." He added:

I am pleased to say that with this particular agreement today, and the fact that the holding company, MTV Holdings, now has 63% ... control is still intact in the holding company. It pleases me and I am sure it pleases those who have a shared interest in the fact that there is a reason able ethnic content to the ownership of this corporation.

Mr. James Sward, President of MTV Holdings Corp., who holds simultaneously the positions of President of RBL and Executive Vice-President and Chief Operating Officer of MTV, stated:

For the record, ... we applied for and had been approved that the control of MTV rests with Rogers Broadcasting Limited and not a holding company, and that the accommodations that we have made, which we are delighted have been made, are coincidental to today's hearings.

We at Rogers Broadcasting feel that our position in November was entirely within regulatory and legal parameters and that the changes that we have made are changes of an on-going nature between partners ... I am as delighted as Dan is, but I would just like it noted that the control continues through Rogers Broadcasting Limited.

I agree with Dan about there being the absolute necessity of on-going ethnic representation and that certainly is evident in terms of the majority of the board of directors and a number of the minority shareholders.

iii) Direction to the CRTC (Eligible Canadian Corporations)

At the hearing, the licensee was asked questions related to its compliance with the Direction to the CRTC (Eligible Canadian Corporations) and, specifically, the degree of ownership of shares of Rogers Communications Inc. by non-Canadians. Rogers Communications Inc. indirectly controls RBL and, through RBL, the licensee. At the Commission's request, the licensee undertook to provide further information on this issue after the adjournment of the oral hearing. Such material has now been received and considered by the Commission and is part of the public examination file for this application.

Interventions

A total of 68 interventions were received by the Commission in response to MTV's renewal application, including nearly 30 from various ethnic social, cultural and business organizations; 15 from elected officials at the municipal, provincial and federal levels; others from broadcasters, advertisers, representatives of religious denominations and educational institutions; as well as a number from interested individuals.

The vast majority expressed support for the CFMT-TV renewal application, although The Sports Network (TSN); CITY-TV; the CTV Television Network Ltd. (CTV); the Canadian Media Coalition (CMC); the Ukrainian Canadian Committee, Toronto Branch (UCC); the Black Media Watch Committee (BMWC); Mr J. Kalsi, spokesman for 17 religious, educational and cultural organizations of the South Asian community in Toronto and the vicinity; and the Ontario Closed Caption Consumers (OCCC) appeared at the hearing to voice a number of concerns.

OCCC noted that although the Commission had authorized CFMT-TV to transmit closed captions in Decision CRTC 87-61 dated 24 January 1987, it was now seeking a commitment from MTV that it would caption all Canadian programs and asked it to purchase captioned versions of acquired programs whenever possible, and to indicate such programming for television listings. It further recommended that CFMT-TV become more accessible to the hearing-impaired by installing a telephone device for the deaf (TDD) for use during business hours and during the transmission of captioned programs and by including a closed caption consumer on its advisory committee.

In general, the CMC, UCC and BMWC were highly supportive of the unique ethnic broadcasting service provided Southern Ontario viewers by CFMT-TV and recognized the limitations it faces in trying to meet the needs of each of the various cultural and racial groups that constitute its audience. They agreed, however, that the licensee has an obligation to support the multicultural aspects of Canadian life and, to this end, opposed the licensee's proposal to broadcast only 30% Canadian programming.

Among their suggestions were: the recognition of local ethnic talent and the provision of production facilities and expertise to facilitate the production of relevant, balanced programming by community organizations; expanded use of English and French within programs broadcast in third languages so that these programs may be better appreciated by all Canadians regardless of their ethnic heritage; and the use of dubbing to enhance intercultural cross-communication.

Mr. Ihor Klufas, on behalf of the UCC, spoke of Canada's multicultural reality:

In Canada one-third or 8 million, and in Metropolitan Toronto one-half or almost 11/2 million of our population are other than English and French. And, therefore, [MTV] must reflect this policy, especially since Toronto is regarded by others in the world as a peaceful, harmonious example of multi-racial co-existence. Canadian pride and loyalty by its citizenry should be encouraged so that our country is the real model internationally.

And therefore, it is inherent that Canadian content be maintained ....and that MTV's ethnic content be produced in Canada and not the homeland countries, because this, now, is our homeland...

The CMC, too, addressed "homeland" programming and, while acknowledging the need for this type of programming, suggested there is greater need for ethnic journalists to look at Canadian political and economic developments "from the perspective of the many ethnocultural communities". It asked that CFMT-TV not be permitted to present "homeland" or "world ethnic" material as Canadian content simply because it has added a local introduction.

Mr. Kalsi also intervened against two specific programs aired by the licensee, asking that MTV not "dwell with things ongoing in our former homelands, but to revel in and celebrate Canada by bringing to it our own cultures and traditions".

CKVR-TV Barrie, CFTO-TV Limited (Toronto) and CFPL Broadcasting Limited (London) submitted written interventions expressing support for the multilingual/multicultural programming service broadcast by CFMT-TV and endorsed MTV' s renewal proposals provided that it devoted at least 50% of the schedule between 6 p.m. and midnight to ethnic programs. CITY-TV, CTV and TSN, while generally supportive of the application, appeared at the hearing to discuss specific concerns and to ask for further clarification of MTV' s plans.

CITY-TV wished to clarify that CFMT-TV would not exploit regulatory opportunities to direct savings realized from offshore purchases of multilingual/multicultural programming into the more aggressive pursuit of costly, U.S. network and syndicated material, or that it become a conventional English-language television service throughout prime time, with all of that programming being of foreign origin , while the CTV network sought assurance that CFMT-TV's acquisition of U.S. English-language programming would continue to be limited to the current 40% of its schedule. When assured by the licensee's statement at the hearing that any adjustment in CFMT-TV's Canadian content requirement would be used to provide foreign-source ethnic programming, these interveners advised the Commission that their major concerns had been put to rest.

TSN objected to the fact that MTV might broadcast English-language play-by-play coverage of North American major league sports events.

The Commission's Decision

In considering the renewal application before it, the Commission has reviewed all of the information submitted by MTV in its application and at the hearing and by the interveners, including the written submissions of the non-appearing interveners. The Commission commends MTV for its pioneering role in bringing to the diverse population of Southern Ontario the first over-the-air Canadian television service to broadcast a broad range of programs each week to eighteen different cultural groups in considerably more than fifteen languages. Not only is the service provided by CFMT-TV unique to Canada, it is the first television service to attempt to reflect the wide spectrum of peoples that make up its audience and the only one to have responsibility for informing and entertaining the diverse, multidimensional ethnocultural communities that comprise the population of a major metropolitan centre.

Notwithstanding the concerns discussed below with respect to the licensee's past performance, in view of the particular nature of this television station and, in particular, the fact that the Commission is fully satisfied that CFMT-TV is now being operated as an ethnic station, it renews the broadcasting licence for CFMT-TV Toronto from 1 October 1987 to 31 August 1992, subject to the conditions specified in this decision and in the licence to be issued.

Among the considerations taken into account in reviewing this application were whether MTV had abided by its Promise of Performance and whether it was operating CFMT-TV as an ethnic station in accordance with the guide-lines established in the CRTC's ethnic policy, the extent to which MTV had implemented the commitments outlined in the June 1986 transfer of control decision, and MTV's compliance with the ownership conditions of its licence.

With regard to its performance, the Commission has noted that there were significant deviations in CFMT-TV's ethnic programming during the period 1 October 1983 to 31 March 1986 (that is, prior to the CRTC's issuance of a policy for ethnic programming and the subsequent amendments to the licensee's conditions of licence) and during the 10-month period between 1 May 1986 and 28 February 1987, and that MTV's level of ethnic programming fell just short of the 60% monthly required level on three occasions.

Correspondence between Commission staff and the licensee during the period December 1986 to March 1987 revealed that some of the ethnic content shortfall was due to the station's incorrect coding of programs, and the licensee acknowledged that the differences between the CRTC's method of calculation and its own could well be attributed to the fact that it was using half-hour segments to determine compliance rather than the precise on and off times required by regulation. MTV added that its computer program would be adjusted to provide the proper reporting of ethnic content.

At the hearing, Mr. Iannuzzi confirmed that CFMT-TV's ethnic content for December 1986 and January and February 1987 was 60.5%, 61.2% and 61.4%, respectively, indicating that the licensee had taken measures to come into compliance.

The Commission also recognizes that CFMT-TV provides a valuable service to the many cultural and linguistic groups that constitute its mandate. In this regard, it notes the licensee's commitment to devote at least 80% of its ethnic programming, calculated on a monthly basis, to programs of Types A and B. The Commission expects that at least four hours per month will be devoted to Type B programs.

The Commission has noted that the financial prospects of the licensee have improved considerably since the transfer of control in June 1986. Testimony offered at the hearing with respect to new marketing and programming initiatives suggests that, should recent trends continue, this undertaking may be even more successful than indicated in the projections submitted as part of the application.

With respect to Canadian content, the Commission has noted that the station had difficulties in achieving its required Canadian content levels. For the year ending 30 September 1986, CFMT-TV achieved 55.4% over the broadcast day (rather than the required minimum 60%). It is to be noted, however, that it achieved 52.2~ between 6 p.m. and midnight (50% is the minimum level required by the regulations).

In considering the licensee's proposals for a Canadian content level of 30% over the full broadcast day and a revised definition of a Canadian ethnic program, permitting up to 45% non-Canadian inserts in any half-hour, the Commission has taken into account the statement in its ethnic policy that, following due public process, it would determine appropriate Canadian content requirements for television stations broadcasting significant amounts of ethnic programming.

Having considered all of the information available to it, the specific concerns expressed by various sectors of the ethnic community with respect to the scarcity of quality Canadian ethnic programming, and the particular circumstances of the station at this time, the Commission has decided to establish a level of Canadian content for CFMT-TV that will permit the licensee to continue to be a unique source of enrichment for its diverse audiences. The precise ethnic and Canadian programming requirements for the new licence term are set out in Appendix I of this decision. Of course, subsection 9(1) of the regulations, which requires the licensee of an ethnic station to devote not less than 60% of the broadcast month to ethnic programs, continues to apply to MTV as well.

As a result of this decision and by condition of licence, CFMT-TV is required to achieve a minimum overall Canadian content level of 40% in each of the first three years of the new licence term, to be increased to 45% in year four and 50% in year five.

The Commission will monitor closely the performance of the licensee, expects it to fully meet all of the conditions of its licence, and will not tolerate any deviation.

With respect to the scheduling of non-ethnic programming, the Commission notes Mr. Iannuzzi's comment at the hearing that the basic CFMT-TV schedule includes ethnic programming in the hours from 8 p.m. to 10 p.m. as counter programming to the traditional American network programming.

Mr. Sward clarified this matter further:

the assumption that CFMT has been proceeding upon since April 1986, and continues to proceed upon, and is proceeding upon for its future schedule is that one-half of the time between six p.m. and midnight will contain ethnic programs and the other half will contain conventional popular programming. This is fully within the existing conditions of licence, fully within the regulations as they pertain to us now.

We already have commitments for the prime time schedule for the fall, beginning in September, which are roughly: conventional English[-language] programming in the 6 p.m. to 8 p.m. period; ethnic programming in the 8 p.m. to 11 p.m. period; and conventional programming [from] 11 p.m. to [midnight].

Therefore, in line with the licensee's stated commitment to retain the ethnic character of its service during the most favourable evening viewing period, the new licence requires, as set out in Appendix I, that at least 75% of MTV's programming between 8 p.m. and 10 p.m. be devoted to ethnic programming and that at least 50% of its programming between 6 p.m. and midnight be ethnic.

With respect to the licensee's proposed definition of a Canadian ethnic program which would include segments of ethnic programming from homeland countries ( world ethnic ), the Commission has taken into consideration MTV's arguments, as well as the concerns expressed by the interveners. The Commission rejects MTV's proposed revised definition of a Canadian ethnic program and requires the licensee to abide by the definition for Canadian programs that is set out in the regulations and the Commission's policy on the Logging of Television Programs which Contain Foreign Inserts (CRTC Circular no. 187 dated 4 June 1973).

The licensee is further required to file, for the Commission's consideration, an annual report detailing the following aspects of its activities:

* a listing of each Canadian ethnic, non-Canadian ethnic and non-ethnic program broadcast and the percentage of the total number of hours of programming broadcast represented by each of these three categories;

* the costs of producing or acquiring each program or series cited above and the revenues derived from each program or series;

* its progress in improving production facilities and programs in order to better serve its ethnic audience; and

* its progress in implementing each of the other expectations outlined in this decision.

The Commission views with concern the changes in the MTV ownership structure that have occurred without Commission approval since June 1986. The Commission has examined MTV's arguments with regard to these transactions, as set out earlier in the decision, and is of the opinion that the licensee has overlooked the fact that its ownership condition of licence pertains both to changes in ownership as well as changes in control. In this respect, the Commission notes that although RBL had effective control of MTV on 20 June 1986, it had no ownership position in the licensee at that time as it did not directly hold any MTV shares. RBL only acquired an ownership position in the licensee when it acquired directly 34.2% of the outstanding shares following the September 1986 share issue, and this change in ownership required the Commission's prior approval pursuant to the ownership condition of licence.

The Commission has consistently taken the position that material changes in ownership, even in the absence of changes in effective control, require its prior approval. The cases where Commission approval was not required which were cited by MTV at the hearing all involved acquiring companies that already had ownership positions in the licensees.

The Commission is of the view that the ownership transfers detailed in the 29 April 1987 Memorandum of Understanding require its approval, and hereby grants such approval. The Commission has noted that the proposed transfers provide for the direct ownership in MTV by Mr. Iannuzzi (3.8%) and various minority share-holders (22.1%) who represent many ethnic groups. It also notes that Daisons Corporation, a company owned by Daniel and Paul Iannuzzi, will have a 12.7% indirect ownership interest in MTV. The Commission requires the licensee to notify it of any future transfers of MTV shares which would result in a level of representation in the ethnic ownership of MTV lower than that set out above.

While the Commission is satisfied that the changes approved herein affecting minority shareholder interests conform with the original intent of RBL's proposal to acquire MTV, the Commission is concerned that the multilingual and multicultural character of MTV's board of directors be retained and that the board not become unduly removed from the operation of the station. The Commission expects that a majority of the members of MTV's board of directors will continue to represent ethnic communities.

With respect to the Direction to the CRTC (Eligible Canadian Corporations), the relevant information before the Commission does not establish that the licensee falls within any of the classes of applicants for which broadcasting licences may not be issued or renewed as described in section 3 of the Direction.

Over the new licence term, the Commission will monitor the level of non-Canadian ownership of the shares of Rogers Communications Inc.

With respect to the fulfilment of the outstanding commitments made by RBL at the 6 May 1986 public hearing and set out in Decision CRTC 86-586, the Commission expects the licensee to abide by its undertaking to invest $375,000 in research to measure the relevancy of its multilingual and multicultural programming and to contribute $500,000 (to be supplemented with a further investment of $250,000 from Rogers Telefund) toward the production of a quality series focusing on ethnic Canadians. Progress in these areas is to be reported to the Commission on an annual basis as outlined above and the Commission fully expects these commitments to be fulfilled during the new licence term.

The Commission acknowledges the licensee's fulfilment of its undertaking with respect to the employment of a full-time community liaison officer whose role is to ensure that the station and its programs are sensitive and responsive to the various cultural communities it serves. The licensee is also committed to enhance the role of the Community Advisory Committee, and the Commission has noted that plans are underway to implement this commitment and, in particular, to respond to concerns expressed by smaller ethnic communities, as well as those of the groups who were represented at the hearing. The Commission requires MTV to report annually on these aspects of its operation which are essential components of its service.

It is MTV's mandate to operate an ethnic television station serving a large variety of cultural groups, and the Commission notes the strong evidence of continuing demand for the service as expressed by the many community groups and individuals who intervened to express support for the renewal of CFMT-TV's licence. The Commission considers television to be an important medium for cultural expression and CFMT-TV a unique vehicle that enhances Canadian multiculturalism and recognizes and responds to the changing needs of its distinct cultural and racial audiences.

Fernand Bélisle Secretary General

APPENDIX I

The broadcasting licence of Multilingual Television (Toronto) Limited (MTV) for the licence term 1 October 1987 to 31 August 1992 will be subject to the following conditions of licence and to others contained in the licence to be issued.

1. It is a condition of licence

(a) that in the month commencing 1 October 1987, and in each subsequent month of the licence term, MTV devote to the broadcasting of ethnic programs not less than 50% of the total number of hours broadcast between 6 p.m. and midnight; and

(b) that in the eleven-month period commencing 1 October 1987, and in each subsequent twelve-month period commencing 1 September, MTV devote to the broadcasting of ethnic programs not less than 75% of the total number of hours broadcast between 8 p.m. and 10 p.m.

2. It is a condition of licence that, in the month commencing 1 October 1987 and in each subsequent month of the licence term, MTV devote to the broadcasting of programs of Types A and B not less than 80% of the total number of hours devoted to the broadcasting of ethnic programs.

3. It is a condition of licence that, in the month commencing 1 October 1987 and in each subsequent month of the licence term, MTV broadcast ethnic programs directed toward not less than eighteen distinct ethnic groups.

4. It is a condition of licence that, in the month commencing 1 October 1987 and in each subsequent month of the licence term, MTV broadcast ethnic programs in not less than fifteen different languages.

5. It is a condition of licence that MTV devote to the broadcasting of Canadian programs

(a) not less than 40% of the total number of hours broadcast between 6 a.m. and midnight in the eleven-month period commencing 1 October 1987, and in each twelve-month period commencing 1 September 1988 and 1 September 1989;

(b) not less than 45% of the total number of hours broadcast between 6 a.m. and midnight in the twelve-month period commencing 1 September 1990;

(c) not less than 50% of the total number of hours broadcast between 6 a.m. and midnight in the twelve-month period commencing 1 September 1991; and

(d) not less than 40% of the total number of hours broadcast between 6 p.m. and midnight in the eleven-month period commencing 1 October 1987 and in each subsequent twelve-month period commencing 1 September.

6. It is a condition of licence that MTV devote to the broadcasting of non-Canadian, non-ethnic programs

(a) not more than 40% of the total number of hours broadcast between 6 a.m. and midnight in the eleven-month period commencing 1 October 1987 and in each subsequent twelve-month period commencing 1 September; and

(b) not more than 50% of the total number of hours broadcast between 6 p.m. and midnight in the eleven-month period commencing 1 October 1987 and in each subsequent twelve-month period commencing 1 September.

7. It is a condition of licence that the licensee adhere to the CAB self-regulatory guidelines on sex-role stereotyping, as amended from time to time and accepted by the Commission.

APPENDIX II

Definitions as described in Schedule II of the Television Broadcasting Regulations, 1987

Type A

A program in a language other than French, English or a language of the aboriginal peoples of Canada.

Type B

A program in French or in English that is directed toward a distinct ethnic group, the mother tongue or common language of which in its country of origin is French or English.

Type C

A program in French or English that is directed toward a distinct ethnic group, the mother tongue of which is included in Type A.

Type D

A bilingual program in French or English as well as a language other than French, English or a language of the aboriginal peoples of Canada, that is directed toward a distinct ethnic group.

Type E

A program in French or English and that is directed toward ethnic groups or toward the general public and that depicts Canada's cultural diversity through services that are multicultural, educational, informational or ou inter-cultural.