ARCHIVED -  Decision CRTC 87-895

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Ottawa, 1 December 1987
Decision CRTC 87-895
Consortium de télévison Québec Canada - "TV5 Québec Canada" - 871228300
The Commission approves the application by the Consortium de télévision Québec Canada (the Consortium) for a network licence to provide a French-language specialty service. This satellite-to-cable service will be available on an optional basis to cable television affiliates situated in regions served by a satellite beam covering eastern Canada, for distribution on the basic service, in accordance with the provisions outlined in the Public Notices accompanying this decision (Public Notices CRTC 1987-260 and 1987-261).
The Commission will issue a licence expiring 31 August 1990, subject to the conditions specified in the appendix to this decision and in the licence to be issued. As proposed by the applicant, the term of this licence is a little more than two years. The Consortium stated that by that time it will be in a better position to take into account he evolving broadcast environment and to define, in concert with its European partners and the participating governments, a longer-term orientation for this service.
The applicant proposes to establish the first intercontinental television service consisting of French-language programs from Europe, Africa and Canada. As indicated by the applicant and as set out in the appendix as a condition of licence, the programming to be offered by the Consortium will consist exclusively of French-language programs originating with broadcasters in different francophone countries. Approximately 80% of the programming of this service will consist of programs from three of the television networks in France, from networks in Belgium and Switzerland, and from certain French-speaking African countries. The remainder of the schedule will consist of Canadian programs. The applicant emphasized that this service will replace TVFQ-99 which is currently received by more than 1,230,000 cable subscribers.
The consortium
According to the provisions of the partnership agreement of the Consortium de télévision Québec Canada (the CTQC partnership agreement) dated 4 November 1987, the Consortium is composed of eight Canadian organizations: three French-language public broadcasters (the Canadian Broadcasting Corporation, the Société de Radio-Télévision du Québec, and the Ontario Educational Communications Authority); three of the largest French-language private broadcasting undertakings (Télé-Métropole Inc., Cogego Inc. and Télévision Quatre-Saisons Inc.); the National Film Sat Inc. representing Quebec's independent producers.
The Commission notes that the equilibrium between the partners is maintained notably by means of certain terms in the CTQC partnership. agreement. For example, the consent of all of the members or their duly named representatives is required for each of the contractual agreements entered into by the Consortium, and the consent of two-thirds of the members is required for such matters as the appointment of the director general, approval of the operating budget, the content of the program schedule, commitments for supplying programs to the Consortium, its commercial policy and audited financial statements.
The Commission acknowledges the effort that has gone into the creation of the Consortium inasmuch as now for the first time in Canada there is a licensee which is composed of most of the public and private sector French-language television broadcasters as well as representatives of the production industry. This balance between public and private gives this proposal a unique character which marks an important stage in the collaboration of television entities operating in a restricted market whose development is most likely to be realized by encouraging a wider circulation of French-language television products. The Commission looks favourably upon this cooperative effort by the member organizations which, in other circumstances, may act in competition with each other and hopes that it continues outside the framework of this particular undertaking, particularly as such cooperative ventures are mor likely to succeed than are individual efforts.
The Consortium is also associated, through TV5-Europe, with five European television networks: three of the French networks (TF-1, Antenne 2 and FR-3); the Société suisse de radiodiffusion et de télévision (SSR); and Radio-Télévision belge de la Communauté française (RTBF). TV5-Europe is an international French-language satellite-to-cable television service which has been in operation since 1984. Its potential audience is estimated at 12 million viewers in some twenty European and North African countries. The Consortium has been an active participant in TV5-Europe since January 1986 when it was given responsibility for providing one day of programming per week, for which purpose it has offered a selection of Canadian French-language programs. Under the terms of the TV5 Québec Canada Agreement between the Consortium and TV5-Europe, the president of the Consortium will chair the meetings of the TV5 Québec Canada steering committee, which is to be composed of eight Canadian and four European members.
In light of certain provisions of the draft TV5 Québec Canada Agreement accompanying the application, in particular the requirement that there must be unanimity among the members of the TV5 Québec Canada steering committee with respect to TV5's programming schedule, the Commission questioned the applicant at length during the hearing about its compliance with the spirit and letter of the Direction to the CRTC (Eligible Canadian Corporations).
The Commission notes that in the final signed version of the TV5 Québec signed version of the TV5 Québec Canada Agreement, which was submitted to it on 7 October 1987, paragraph 11 requires unanimity "on the general programming schedule, subject to Paragraph 1" (emphasis added by the Commission). Paragraph 1 reads as follows: [TRANSLATION]
 the parties acknowledge that according to Canadian broadcasting legislation, the Canadian broadcasting system must be effectively owned and controlled by Canadians so as to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada. Consequently, in accordance with this provision of law, only the Consortium de télévision Québec Canada (CTQC) has the right to obtain and hold the licence required for the operation in Canada of the TV5 Québec Canada service and to approve the general programming schedule.
The Commission considers that the Consortium has replied in a satisfactory manner to its concerns and is, thus, in compliance with both the spirit and letter of the Direction to the CRTC.
The TV5 project in Canada
Among the various measures it has taken over the past few years to promote an increase in the number of French-language services offered, in 1979 the Commission approved applications from several Quebec cable operators, members of the "Société d'Édition et de Transcodage T.E. Ltée" (la Sette), who proposed to distribute throughout Canada programs from three of France's television networks (TF-1, Antenne 2 and FR-3). The Commission's decision was based primarily on the fact that the proposed service would "help to create a better balance between the French-and English-language services provided by cable television systems in Quebec".
As previously noted, this specialty programming service, which is often referred to by the acronym "TVFQ-99" was, by April 1987, being delivered to more than 1,230,00 subscribers, primarily in the provinces of Quebec and New Brunswick. The TV5 Québec Canada (TV5) service proposed by the Consortium at the 20 July 1987 hearing should, according to the applicant, replace the TVFQ-99 service in early 1988.
The plan to introduce TV5 to North America was conceived at the first summit of francophone countries which was held in Paris in 1986 and is one of their joint cultural projects which is designed to strengthen the cultural and language ties between these countries. With the realization of this proposal, French-speaking countries will take their place in the forefront of world communication entities.
TV5 has a specific double objective with respect to Canada. It will serve as this country's French-language window on the world in exchange for introducing programs form other francophone nations to Canadians. The Consortium indicated that among the main advantages of this proposal for the Canadian broadcasting system are that TV5 will add a measure of diversity by providing a broader vision of the francophone world as reflected in a wide variety of programs, and that it will help to reduce the appeal of English-language television services by offering French-speaking Canadian audiences high quality complementary programming and scheduling.
Programming - Impact
TV5's program schedule will emphasize general information and will broadcast seven nights a week, from 7:00 p.m. to 9:00 p.m., a block of news, public affairs and magazine-type programs including a European newscast which is to be broadcast in Canada on the same day as it is in France. Other European programs will include drama, music, variety and cultural programs. For its part, the Canadian programming will include news reports emphasizing newsworthy events from the various regions of Quebec and of Canada. It will also feature documentaries, an arts magazine, and three series on young virtuosos, jazz and poetry. The production of Canadian content will be entrusted to the Consortium partners or to independent producers. In this regard, the Consortium has made a commitment to broadcast 357 hours of original Canadian productions in the first year of operation and 365 hours in the second year. As noted in the appendix to this decision, the Commission will require that the licensee respect this commitment as a condition of licence.
The applicant also indicated at the hearing that TV5 would present a number of special political, theatrical, literary, socio-cultural and, on occasion,s ports programs from Europe. The Consortium has assured the Commission that the type of special sports events it will import from Europe would not be what a Canadian sports specialty service or conventional broadcaster would wish to acquire.
The Commission also notes that the Consortium will invest $4.9 million in the production or acquisition of Canadian programs in the first year of operation and $5.7 million in the second year. These amounts include an annual sum of $100,00 to be allocated to program development. As noted in the appendix, the licensee will also be required, by condition of licence, to respect these commitments.
Given the proposal submitted by the Consortium and the very specific nature of the service, the Commission requires as a condition of this licence as indicated in the appendix to this decision, that at least 19.5% of TV5's programming schedule must consist of Canadian programming. Furthermore, the Commission expects that this level will be increased at the time of the renewal of this licence.
Aside from the international nature of the proposed service and the advantages already cited in terms of diversity, complementary and a better linguistic balance, in authorizing a lower level of Canadian content than is required of conventional broadcasters, the Commission has taken into account the fact that TV5 will be replacing the TVFQ-99 service, which consists entirely of foreign programs and only attracts 0.4% of the viewing audience.
The Commission also notes that among the Consortium's members are Canada's major French-Language broadcasters, who view the TV5 project as a practical and effective means of putting their know-how to work on an international scale while at the same time strengthening the francophone element of Canadian broadcasting. Furthermore, TV5 will, as previously noted, replace the existing TVFQ-99 service, and the Consortium indicated at the hearing that it has concluded an agreement with the Association des câblodistributeurs du Québec Inc. (ACQ) to distribute TV5 in Quebec. As the vast majority of TVFQ-99's subscribers are located in this province, where the service reaches more than 90% of cable households, this agreement should facilitate the replacement of the one service by the other. According to the revenue and expenditure projections filed with the application, it should also provide TV5 from the outset with a wide enough subscriber base to ensure its viability.
The Commission has also determined that TV5 should not have a significant negative impact on the number of subscribers to the other specialty programming services to be licensed, since it will not compete directly with any of them.
Almost half of TV5's operating costs will be derived from subscriber fees, with most of the balance being provided by the Consortium's European partners, and grants from the federal and Quebec governments. For each of the first two years, about $200,000 a year will be derived from institutional sponsorships, out of total projected annual revenues of approximately $10 million. The Commission is, therefore, of the opinion that TV5 will not have any undue negative effect on Canada's French-language broadcasters in terms of advertising revenue.
With respect to subscriber fees, the Consortium has proposed a wholesale rate to cable operators distributing the TV5 service of $0.27 per subscriber per month in the firs year, rising to $0.28 in the second year. This amount has been authorized by a condition of TV5's licence as set out in the appendix to this decision. However, inasmuch as the TV5 service will replace that of TVFQ-99 on most cable undertakings, the net increase for subscribers should in fact be in the order of $0.07 per month in the first year and $0.08 in the second year, since the basic monthly fee charged by cable undertakings presently offering TVFQ-99 currently includes $0.20 per month for that service.
In accordance with the Consortium's proposal and as set out in the appendix to this decision, it is a condition of licence that the licensee broadcast only national advertising material devoted exclusively to sponsorship or institutional advertising, public service announcements and material promoting the service or a program of the service. No more than three minutes per hour of such messages may be broadcast during the licence term and sponsorship messages may only be broadcast at the beginning and/or end of programs.
At the public hearing, the Commission questioned the applicant about the terms "institutional advertising" and "sponsorship advertising" in order to gain a better understanding of the Consortium's plans in this regard. Although the applicant was not prepared at that time to define the scope of this form of advertising, it stated that it would submit its advertising code to the Commission. This document was received 16 November 1987.
Accordingly, the Commission, as set out in the appendix to this decision, has imposed on the Consortium conditions of licence as to the form that this restricted advertising shall take. In order that the viewer may recognize which programs are sponsored, each such program shall clearly identify the name of the sponsor. The sponsorship messages shall not promote the features of the goods or services offered by the sponsoring firm. Inasmuch as there was no discussion with respect to barter, this type of sponsorship will not be permitted.
There is to be no connection in terms of content between institutional advertising messages broadcast on behalf of a sponsor an any sponsored program.
The Commission also notes other aspects of the advertising code submitted by the applicant, particularly with respect to liability, exclusivity and the selection of advertisers, and it expects the licensee to respect in its entirely the terms of this code.
Other Matters
In presenting its distribution plan, the Consortium indicated that the TV5 service will be rebroadcast by satellite by means of a satellite beam which serves eastern Canada, and will thus be available to cable operators in the four Atlantic provinces, Quebec, Ontario, and the mots heavily populated part of Manitoba.
The Consortium indicated in its application that the bast majority of francophone Canadians will, in this way, have access to TV5 since, according to 1981 census data from Statistics Canada, 97% of Canadians whose mother tongue is French live east of Manitoba. Nevertheless the Consortium indicated that its medium-and long-term plans include the provision of a Canada-wide service.
With respect to other issues of public concern, and as set out in the appendix to this decision, the Commission requires as conditions of its licence that the Consortium comply with the CAB's guidelines on sex-role stereotyping and the CAB's code on advertising to children.
The Commission also expects the Consortium to ensure that TV5's Canadian programming realistically reflects the participation of multicultural minorities in Canadian society and contributes to eliminating negative stereotypes.
The Commission encourages the applicant to close caption its programs for the hearing impaired as its financial situation permits.
The Commission also notes that violence in television programs continues to be a matter of public concern. It therefore expects the licensee to exercise particular care and discretion in the presentation and scheduling of programs which depict scenes of violence and to abstain from showing any programs portraying excessive or gratuitous violence.
The Commission expects TV5 to exercise discretion in the scheduling of programs whose content may be suitable only for adult audiences and to give viewers advance notice of the broadcasting of such programs.
The Consortium's proposal has generated considerable interest in terms of the potential for the rapid development of an international French-language audio-visual domaine, particularly in view of the benefits that viewers will derive from this service. Canada's francophone producers and broadcasters also stand to benefits, as the market for their programs will be considerably expanded.
The Commission is confident that this new service will contribute significantly to the diversity of program services available to Canadians, particularly to francophone audiences. The Commission wishes to stress the significant accomplishment of the Consortium in bringing together Canada's major French-language programming with an international dimension available to Canada's francophone population. The Commission considers that the original and innovative project put forward by the Consortium will contribute to the strengthening of the Canadian broadcasting system.
The Commission acknowledges the interventions it has received in support of the TV5 project. The ACQ noted the considerable interest this project has generated and its [TRANSLATION] "future potential within the international francophone audiovisual environment". The Canadian Association of Broadcasters emphasized the proposal's value "as an initiative designed to preserve and promote the French language and French-Canadian culture based in Quebec and very much in the minority in North America." The Commission has also taken note of the intervention from the Association des producteurs de films et de vidéo du Québec which supports the general objectives of the TV5 project, as [TRANSLATION] "it will offer a counterbalance to the abundance of foreign English-language channels available on cable and will thus increase the diversity of programming of Canadian origin".
The Commission also notes the conditional support for this application by 36 Quebec cable operators, as well as the comments received from several organizations including TVOntario and the Institut canadien d'éducation des adultes (ICEA), an umbrella group of twelve organizations.
Fernand Bélisle
Secretary General
Conditions of Licence
Consortium de télévision Québec Canada (TV5 Québec Canada)
1. The programming provided by the licensee shall consist exclusively of French-language programming originating with broadcasters from various francophone countries.
2. From the date of commencement of service until 31 August 1988 and in each successive broadcast year thereafter, the licensee shall devote not less than 19.5% of the broadcast year or part thereof in the case of the period prior to 1 September 1988 to the distribution of Canadian programs.
3.  a) For the period from the date of commencement of service until 31 August 1988, the licensee shall distribute original, first-run Canadian programs for not less than the number of hours that is the product of 357 multiplied by a fraction where the numerator is the number of months that the service is in operation prior to 1 September 1988 and the denominator is 12.
  b) From 1 September 1988 to 31 August 1989, the licensee shall distribute not less than 357 hours of original, first-run Canadian programs.
  c) From 1 September 1989 to 31 August 1990, the licensee shall distribute not less than 365 hours of original, first-run Canadian programs.
 For the purposes of this condition, an original, first-run program means a program which has never before been distributed by any licensee of a broadcasting undertaking and which will be distributed to the public for the first time by the licensee.
4.  a) For the period from the date of commencement of service until 31 August 1988, the licensee shall expend on the acquisition of and/or investment in Canadian programs not less than the amount that is the product of $4.9 million multiplied by a fraction where the numerator is the number of months that the service is in operation prior to 1 september 1988 and the denominator is 12. This amount shall include an amount for script and concept development which is the product of $100,00 multiplied by a fraction where the numerator is the number of months that the service is in operation prior to 1 September 1988 and the denominator is 12.
  b) From 1 September 1988 until 31 August 1989, the licensee shall expend on the acquisition of and/or investment in Canadian programs not less than $4.9 million (including $100,00 for script and concept development).
  c) From 1 September 1989 until 31 August 1990, the licensee shall expend on the acquisition of and/or investment in Canadian programs not less than $5.7 million (including $100,00 for script and concept development).
5. The licensee shall not distribute any advertising material other than a maximum of 3 minutes during each clock hour of national sponsorship or institutional advertising, public service announcements and material promoting the service or a program of the service.
  No barter shall be permitted. Sponsorship advertising is not permitted in newscasts. The sponsorship messages shall only be placed at the beginning and/or end of programs. All sponsored programs must clearly identify the name of the sponsor.
 Institutional advertising messages shall have no connection in terms of content with sponsored programs. Institutional advertising messages shall only be permitted to interrupt programs that last at least two hours, and have one or more natural breaks, for example an intermission in a play or concert.
 Institutional advertising is not permitted on behalf of companies whose primary products are drugs, alcoholic beverages or tobacco products.
 For the purpose of this condition, the following definitions apply:
(i) Sponsorship advertising:   Sponsorship advertising consists, in exchange for a direct or indirect financial contribution, of the name and distinctive visual and sound signs or symbols of a firm and a sound accompaniment according to the following formulas:
  "(Name of firm) is pleased to be associated with the broadcasting or presentation of (name of program)"; or
  The presentation of this program has been made possible thanks to (name of firm)"; or
  "This program has been produced with the participation of (name of firm)".
  Sponsorship advertising does not include the promotion of the features of the goods and services produced and/or offered by the sponsoring firm or promotional slogans.
(ii) Institutional advertising:   Institutional advertising consists of an identification of the advertiser by name, corporate logo or distinguishing visual or sound symbol. While the accompanying text may include a musical background or an institutional slogan, institutional advertising does not include promotion of the range of products or services offered or the use of such products or services.
 6. The licensee shall adhere to the provisions of the Broadcast Code for Advertising to Children published by the CAB, as amended from time to time and accepted by the Commission.
  7. The licensee shall adhere to the CAB self-regulatory guidelines on sex-role stereotyping, as amended from time to time and accepted by the Commission.
 8. a) From the date of commencement of service until 31 August 1989, the licensee shall charge each exhibitor of this service the wholesale rate of $0.27 per subscriber per month.
  b) From 1 September 1989 to 31 August 1990, the licensee shall charge each exhibitor of this service the wholesale rate of $0.28 per subscriber per month.
 9. The licensee shall keep separate accounts which set out for each financial year or partial year ending 31 August
  a) the gross revenues in respect of its operations under its licence;
  b) the amounts expended by it on the acquisition of and/or investment in Canadian programs intended for distribution on its undertaking, including a breakout of the amount expended on script and concept development; and
  c) the amount expended by it on the acquisition of non-Canadian programs for distribution on its undertaking.
 10. The licensee shall file a statement of the accounts referred to in section 9 above with the Commission on or before 30 November of each year.
 11. For purposes of these conditions, all time periods shall be reckoned according to the eastern time zone.
 12. The definitions of broadcast day, broadcast month, broadcast year, Canadian program and clock hour set out in Section 2 of the Television Broadcasting Regulations, 1987 (SOR/87-49), as amended by SOR/87-425, and the provisions of sections 5, 6, 7, 8, 10(1) and (3) to (6), 12, 13 and 14 of the said Regulations shall apply to these conditions and to the licensee with the necessary changes.

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