ARCHIVED -  Decision CRTC 88-88

Decision

Ottawa, 5 February 1988

Decision CRTC 88-88

Cathay International Television Inc.

Vancouver, British Columbia - 872549100

At a Public Hearing in Vancouver on 27 October 1987, the Commission considered an application by Cathay International Television Inc. (Cathay) to renew the broadcasting licence for the ethnic regional pay television network operation serving British Columbia, expiring 29 February 1988.

Background

In Decision CRTC 85-628, the Commission approved the application by Cathay for authority to acquire the assets of World View Television Limited (World View), the licensee of a regional ethnic pay television network serving the Province of British Columbia, and for a broadcasting licence expiring 31 March 1987 to continue the operation of that undertaking.

In the decision, the Commission emphasized that World View had originally been awarded a licence on the basis of very specific and fundamental commitments to serve a number of ethnocultural groups in British Columbia. Accordingly, in approving Cathay's application, the Commission gave particular weight to Cathay's assurances that it was fully committed to re-introducing an ethnic pay television service in British Columbia for the provision of programming in languages other than English, French or native Canadian.

At a subsequent public hearing in Vancouver on 5 November 1986, the Commission examined whether or not Cathay had complied with a condition imposed upon it by the Commission in Decision CRTC 85-628 that, within one year, it provide at least 15 hours per week of programming in each of two languages other than Chinese, English, French or native Canadian. While admitting that it had not met this programming requirement within the specified one-year period, Cathay indicated that it was able and willing to provide programming to additional ethnic groups. It contended, however, that in order to retain its subscriber base, it would require a separate cable channel for its additional-language programming.

In Decision CRTC 87-73, the Commission renewed Cathay's licence for five months from 1 April 1987 to 31 August 1987, and required Cathay by condition of licence to provide such additional-language programming on an ongoing basis as part of a single service by 30 April 1987. The Commission scheduled a public hearing for 8 June 1987 to examine Cathay's compliance with this condition of licence.

At the 8 June 1987 hearing, Cathay stated that on 30 April 1987 it had introduced South Asian programming on an unscrambled basis in what it termed a "prelude stage", which was developed

... in order to gradually establish interest in the potential new and larger viewing audience and to establish credibility by actually demonstrating through variety and scope ... the Asian programming of Cathay television.

Cathay informed the Commission that its Chinese and South Asian programming was being distributed on a single cable channel, but that in order to maintain its Chinese subscriber base, programs in languages other than Chinese - primarily in Hindi and Punjabi - were not being aired in prime viewing hours. Cathay also informed the Commission that it was continuing to negotiate with distributing cable companies for access to a repeat or "mirror" channel on which it would provide its complete service but schedule its programs at different times in order to provide each ethnic group with access to its own programs during popular viewing hours.

Based on a number of factors set out in Decision CRTC 87-590, the Commission concluded that Cathay had substantially complied with its condition of licence respecting programming in additional languages.

In its Decision, however, the Commission noted that it did not have before it an application for the renewal of Cathay's licence beyond 31 August 1987. In order to allow Cathay sufficient time to prepare and submit such an application, the Commission renewed the licence of Cathay for a further six months from 1 September 1987 to 29 February 1988.

With respect to the matter of cable distribution, the Commission reaffirmed in Decision CRTC 87-590 that it would be willing to consider the re-distribution of Cathay's service on a repeat or "mirror" channel provided the complete program service was distributed, although programs would be scheduled at different times so as to provide each ethnic group with access to relevant programs during viewing hours appropriate to its distinct needs.

The 27 October Hearing

(i) A Single Service

In support of its application for renewal of its licence, Cathay had filed with the Commission financial projections and programming plans that had been developed on the assumption that negotiations with Rogers Communications Inc. (RCI) would result in the availability of a repeat or "mirror" channel for the redistribution of Cathay's Chinese and South Asian programming. Over 90% of Cathay's subscribers are subscribers to one of the three Rogers cable systems in the Lower Mainland and Victoria areas.

In his introductory remarks at the outset of the hearing, however, Mr. Brian Sung, President of Cathay, informed the Commission that representatives of RCI had told him at a meeting in Toronto on 17 September 1987 that RCI categorically opposed the repeat rescheduled channel concept. This position was confirmed by RCI in its intervention at the 27 October hearing. In this regard, Mr. Philip Lind, RCI's Senior Vice-President, Programming and Planning, stated:

... Roger's position on non-discriminatory access for Canadian programming services is premised on a very fundamental assumption and that is one licence, one channel ... [I]f discretionary network licensees could expect as a matter of right to be granted access to more than one cable channel to deliver a single programming service, RCI's access policy would shortly be rendered unworkable by reason of channel scarcity.

While stating that Cathay intended to continue its efforts to negotiate with RCI for a repeat or "mirror" channel, Mr. Sung offered two alternative approaches for the distribution of its programming "to properly serve the many people of the many languages of the various cultures that comprise the South Asian community". One approach, referred to as the "split single channel" concept, would involve the encoding by a cable company of the full Cathay service with one code and of the South Asian portion only with another, so that interested cable viewers could subscribe to Cathay's full programming service or, as an option within that service, only to the South Asian programming on the same single cable channel, at a reduced price. Under the other approach, referred to as the "no-split single channel" concept, Cathay would scramble and upgrade its existing South Asian programming (currently being distributed in the unscrambled "prelude" mode), continue to provide it during the times it is presently being provided, and offer the complete scrambled Cathay service to all subscribers. Mr. Sung indicated that Cathay was "fully prepared" to adopt this latter "no-split single channel" approach. At the hearing, Cathay submitted revised financial projections and programming plans, based on each of these two approaches.

The Commission reaffirms that it is not opposed to the repeat or "mirror" channel concept, whereby the complete Cathay service would be distributed on two cable channels with time scheduling differences so as to accommodate different ethnic groups. At the same time, however, the Commission acknowledges the difficulties that such a solution could generate.

Moreover, the Commission reaffirms that Cathay was licensed to provide a complete multilingual ethnic pay television service and, accordingly, considers unacceptable Cathay's proposal to encode separately a portion of the service in order that it may be provided only on a partial or separate basis to certain subscribers (the "split single channel" concept).

In light of the foregoing considerations, and in keeping with the mandate and existing licence of Cathay, the Commission has proceeded to examine Cathay's proposal to offer one complete, scrambled, single-priced service on a single cable channel to all its subscribers.

(ii) Programming

Cathay currently provides some 52 hours per week of Chinese-language programming which is scheduled on weekdays from 12:00 noon to 3:00 p.m. and from 6:00 p.m. to 11:00 p.m., and on weekends from 6:00 p.m. to 11:00 p.m. Virtually all of Cathay's non-Canadian Chinese-language programming is supplied by TVBI of Hong Kong, although some programs also come from suppliers in China and Taiwan. With respect to locally-produced programs, Mr. Sung highlighted "Police Call" as "an example of our commitment to our community". The first series of these programs, which was co-developed with the Vancouver Police Department, was awarded the National Community Service Award in 1986 by the Solicitor-General of Canada. A second series has also been produced and broadcast. These programs, produced in Cantonese, inform and educate viewers about the Vancouver Police Department and cover a wide range of topics designed to assist the community in its relations with the Department. Mr. Sung also highlighted Cathay's series of programs, produced in conjunction with the Vancouver Community College, which teach "survival" English to Cantonese-speaking immigrants who are unable to attend language classes at conventional educational institutions.

Mr. Sung indicated that Cathay would continue to offer the same level of Chinese-language programming each week throughout its new licence term. Original Canadian-produced Chinese programming would amount to 5.74 hours per week by the end of the first year of a new licence term, rising to 7.1 hours per week by the end of the third year.

With respect to the existing condition of Cathay's licence which stipulates that it must provide, as part of a single service, on an ongoing basis and in addition to Chinese-language programming, as a minimum, programming in two languages other than English, French or native Canadian and that at least 15 hours per week be allocated to each language, Mr. Sung stated:

Cathay is committed to the full implementation of its South Asian programming and to fulfilling and indeed exceeding that condition of licence.

Cathay currently provides 37 hours per week of unscrambled South Asian programming acquired from Asian Television Ltd. of Toronto which is built into Cathay's schedule around its scrambled Chinese-language programming and is not made available to viewers during prime evening viewing hours. The majority of Cathay's South Asian programming is in Hindi and Punjabi, but programs are also offered in Urdu, Gujarati, Bengali, Tamil, Malayalan, Marati and Teluga.

Most of this programming consists of feature films from India and Pakistan, but "an average of seven hours per week has included magazine programs, both purchased from overseas and locally produced in Canada." In summing up Cathay's efforts regarding its South Asian programming, Mr. Sung stated:

... given our time frame and limited resources, we would like to assure you that we have attempted to sincerely do our best to cater to the vast multilingual, multicultural, multi-religious and multi-national South Asian/Canadian community in Vancouver.

... [This] community includes individuals from India, Pakistan, Bangladesh, East and South Africa, Sri Lanka, the West Indies, including Trinidad, Guyana and Surinam as well as from the Fiji Islands and elsewhere in the world. It is a multi-religious group, including in part, Christians and Jews, Sikhs and Hindus, Moslems, Jains, Zoroastrians and Buddhists.

At the hearing, Cathay proposed a modification to the above-noted condition of licence whereby the licensee would continue to be required to program as a minimum a total of 30 hours per week of additional-language programming, but there would be no set 15-hour minimum per language. Cathay cited "problems directly associated with the consistency of supply of sufficient quality programming from the Punjabi region" in proposing this modification. However, in response to suggestions that its proposal amounted to an amendment of its application as filed, Cathay indicated that it was prepared to continue with the present condition and that its application for the renewal of its licence was not dependent on any change in that condition.

At the hearing, Cathay undertook to scramble its South Asian programming within 90 days of a renewal decision, thereby ensuring that its entire service will be offered in a full pay television mode. Cathay indicated that, once it commenced scrambling its signal, the quality of its South Asian programming would improve:

We have lined up some excellent quality first-run programming once we go into the pay mode. We have lined up already excellent drama series ... television premieres, some of them would be North American television premieres, and a few world television premieres.

Cathay also made a commitment to expand the membership of its Board of Directors within three years to include two additional members to be drawn from the South Asian community. In this regard, Mr. Sung stated:

When the South Asian service is such an important part of Cathay, it would be surely faulty for us not to have meaningful and significant input at the Board of Directors' level.

For the new licence term, Cathay has committed to provide 45 hours per week of South Asian programming which will include 27 hours of feature films, the majority of which will be produced in India, and 10 hours of drama produced by either the Pakistan Television Corporation or the Indian National Television Network (Doordarshan). This programming, which Cathay intends to offer outside of prime evening viewing hours, will also include a magazine series (in various South Asian languages), sports (in English) and multi-faith religious programs. Of these 45 hours of South Asian programming, 4.5 hours will be Canadian-produced adult education, religious and magazine programs. Mr. Sung described these local productions, which will resemble those currently produced by Cathay in Chinese languages:

It is the programming that enables the new immigrant [to learn] very, very simple things like how to cash a cheque at a bank, how to call the police, what happens to them at hospitals, how to go into a supermarket to even order. What we call survival English, that's number one.

Number two is education. Education, not in the academic sense, but education into such things as Canada's systems of government, what support structures are there ...

Because of the small size of its company and its use of existing staff and equipment resources for its local productions, Cathay did not provide a separate Canadian programming budget. Instead, the budget for such programming was included within Cathay's general overhead expense totals excluding all program acquisition costs.

When questioned as to Cathay's financial commitments to Canadian programming, Mr. Sung replied:

... I would ask you to apply a 50% figure to our overhead. In other words, if my overhead is in the area of $500,000, I feel very confident in saying to you that 50% of that is for local production, and it's more in line with 75%, I think.

(iii) Commitment to a New Language

At the hearing, Cathay stated that it was committed to the further development of its service. In this respect, Mr. Sung proposed that the Commission attach a condition to Cathay's licence requiring that, within three years from the date of renewal, it provide, as a minimum, a further 10 hours per week of programming in a language or languages other than Chinese, English, French, native Canadian or any of the official languages of India.

Mr. Sung was not prepared to identify the additional cultural groups to be served, however, indicating that the choice would depend on immigration trends.

Interventions

The Commission received a total of 175 interventions in response to Cathay's renewal application, the majority of which were submitted by or on behalf of individual Chinese-Canadians or by Chinese cultural and business organizations located across the country. Many interventions were also filed by members of British Columbia's South Asian/Canadian community. Twelve interventions were presented orally at the hearing.

Mr. Leon Yue, appearing at the hearing on behalf of the Chinese Cultural Centre in Vancouver, commended Cathay for its presence in the community, stating that Cathay has "been most helpful and generous towards our activities and our financial needs".

Another intervener to appear at the hearing was Chinavision Canada Corporation (Chinavision), the operator of a nationally licensed Chinese-language specialty programming network. Chinavision argued that Cathay has failed to provide a multilingual service, and that the competition for Vancouver's substantial Chinese viewing audience, given Cathay's reliance on Chinese-language programming in prime time, has prevented Chinavision from fulfilling its national mandate. According to Chinavision, Cathay has, by its continuing concentration on the Chinese market, constrained Chinavision's ability to establish a viable position in the British Columbia market. Further, Chinavision argued that Cathay has negotiated exclusive British Columbia rights for the popular Chinese-language programming supplied by TVBI, thus compounding Chinavision's marketing difficulties. Because of these problems, the intervener argued, Chinavision has been unable to achieve sufficient economic viability to undertake satellite distribution of its service, which would permit Chinavision to serve many smaller centres that are currently unserved due to the expense and impracticality of other distribution mechanisms. Chinavision proposed that the Commission not renew Cathay's licence or, at most, renew it on a short-term basis and attach a number of conditions of licence designed to ensure that Cathay becomes a truly multi-language ethnic service.

Chinavision's arguments were supported by approximately one-third of the interveners, almost all of whom came from communities outside of British Columbia which are presently deprived of either the Chinavision service or TVBI programming. These interveners included the Regina Chinese Canadian Association, the United Calgary Chinese Association, the Winnipeg Chinese Cultural and Community Centre and the Chinese Cultural Society of Ottawa.

While Mr. Nasim Shivji, on behalf of the Khalsa Diwan Society, appeared at the hearing in support of Cathay, a number of other interveners called upon Cathay to provide more South Asian programming. One intervener, Ms. Sushma Sardana, an independent producer, appeared at the hearing and questioned Cathay's commitment to such programming.

RCI, Western Cablevision and the B.C./Yukon section of the Canadian Cable Television Association supported the renewal of Cathay's licence, but opposed the repeat or "mirror" channel proposal.

The Commission's Decision

In considering Cathay's renewal application, the Commission has reviewed all of the information submitted by Cathay in its application and at the hearing and by the interveners, including the written submissions of the non-appearing interveners.

The Commission is encouraged by Cathay's recent performance with respect to meeting the condition of licence which requires it to provide, as part of a single service on an ongoing basis and in addition to Chinese-language programming, as a minimum, programming in two languages other than English, French or native Canadian, with at least 15 hours per week being allocated to each language.

Given however, this licensee's earlier difficulties in complying with its own commitments, the decisions of the Commission, and more particularly with this condition of licence, and the fact that Cathay initiated programming for British Columbia's South Asian community only as of 30 April 1987, the Commission wishes to be in a position to continue to monitor closely the applicant's ongoing development as a multilingual ethnic service. Accordingly, by majority decision, the Commission renews the broadcasting licence for Cathay's ethnic regional pay television network operation serving British Columbia for a period of three-and-a-half years, from 1 March 1988 to 31 August 1991, subject to the conditions specified in the appendix to this decision and in the licence to be issued.

Chief among the considerations taken into account in reviewing this application was Cathay's commitment to fulfill its original mandate as set out in Decision CRTC 85-628. In this respect, the Commission will continue to require, by condition of licence that Cathay provide, as part of a single service on an ongoing basis, at least 15 hours per week of programming in each of two languages other than Chinese, English, French or native Canadian.

Moreover, the Commission notes Cathay's commitment to scramble its South Asian programming within 90 days of the date of this decision and its intention to improve that programming to reflect its status as a significant component of Cathay's complete pay service. Consistent with the applicant's commitment, Cathay will therefore be required, by condition of licence, to ensure that its complete service is distributed to all subscribers in an encoded form commencing no later than 1 May 1988.

The Commission also notes the applicant's commitment to expand its Board of Directors to include two additional members to be drawn from the South Asian community. The Commission shares Cathay's view that, given the increasing importance in Cathay's schedule of South Asian programming, the South Asian community should have meaningful and significant input at the Board level. Given that Cathay is already providing some 37 hours of South Asian programming each week, however, the Commission considers that there is a need for South Asian representation on Cathay's Board of Directors sooner than within three years, as was proposed. Accordingly, the Commission expects Cathay to have at all times at least two full voting members on its Board of Directors from within the South Asian community commencing no later than 1 August 1988.

Furthermore, in order to ensure input from the local South Asian community with respect to the day-to-day programming to be offered in the various South Asian languages, the Commission expects Cathay to establish and maintain a South Asian program advisory committee commencing no later than 1 May 1988. The Commission expects Cathay to consult with this advisory committee on such matters as the scheduling of its South Asian programming in appropriate viewing hours, and to report to the Commission on the outcome of these consultations by no later than 1 August 1988.

The Commission views Cathay's proposal for a condition of licence requiring it to provide programming in an additional language as a positive development. Accordingly, in line with the licensee's proposal, the Commission will, by condition of licence, require Cathay to provide an additional 10 hours per week of programming in a language or languages other than Chinese, English, French, native Canadian or any of the official languages of India. In order that the Commission may be in a position to review the licensee's implementation of this condition of licence at the time of Cathay's next licence renewal and to assess the impact of this condition on Cathay's service and subscriber levels, the condition will require that Cathay begin to provide the 10 hours of additional-language programming by no later than 1 March 1990.

The Commission expects the licensee, at all times during the licence term, to offer its multilingual programming at times when the different ethnic groups to which the programming is devoted are available to watch it.

At the present time, Cathay is the only pay television or specialty licensee which does not have a condition of licence requiring that a minimum percentage of its over-all programming schedule be devoted to the distribution of Canadian programming, nor a requirement that a minimum percentage of its subscriber revenues be expended on Canadian programming.

In its application, Cathay proposed to provide 10.24 hours per week of original Canadian programming by the end of the first year of the new licence term (of which 5.74 hours would be in Chinese languages and 4.5 hours in South Asian languages), rising to 11.6 hours per week by the end of the third year (7.1 hours in Chinese languages, 4.5 hours in South Asian languages). After assessing these proposals, taking into account the applicant's size and subscriber base and in light of the requirements imposed on other pay television and specialty licensees, the Commission considers that an appropriate minimum level of Canadian programming is 12 hours per week, with at least four of the hours to be within its South Asian programming and a further four hours to be within its Chinese programming. This requirement will be imposed by condition of licence and the licensee will be required to fulfill this condition throughout the new licence term. In line with Cathay's statement at the hearing concerning Canadian program expenditures, the Commission expects the licensee to devote no less than 50% of its non-program acquisition general expenses to the production of Canadian programming.

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 refrain from broadcasting any programs portraying excessive or gratuitous violence.

In the original pay television decision (Decision CRTC 82-240), the Commission noted that access by some licensees to sufficient high quality programs could be jeopardized if other licensees were to engage in exclusive buying or distribution practices. The Commission stated its expectation "that licensees will not participate in program acquisition arrangements that would frustrate the Commission's pay television objectives".

With respect to the matter of program rights, Cathay stated categorically that it had not negotiated exclusive distribution arrangements with TVBI for its popular Chinese-language programming. Nevertheless, the Commission remains concerned that, given the limited sources of third-language programming such as that supplied by TVBI, many Canadians could be deprived of access to popular programs in their mother tongue if exclusive arrangements were to be negotiated. The Commission will therefore require, by condition of licence that Cathay refrain from entering into exclusive distribution arrangements with any Canadian or foreign program supplier. Furthermore, the Commission expects Cathay to refrain from buying individual programs or program series on an exclusive basis from any particular Canadian or foreign program supplier which would preclude others from having access to those programs at a later date. The Commission intends to address further the matter of exclusive program rights with other pay television and specialty licensees at the time of their next licence renewals.

A major intent in the Commission's past decisions concerning Cathay has been to ensure that the licensee provides a multilingual, ethnic programming service for more than one linguistic community. In issuing this renewal decision, the Commission remains committed to that policy, and reaffirms that the total service should be available to all of Cathay's subscribers.

Fernand Bélisle
Secretary General

Dissenting Opinion of Commissioner Louis R. Sherman

I disagree with the length of the new licence term being granted to Cathay International Television Inc. While supporting a limited renewal, in recognition of improved conformity by Cathay in recent months in fulfilling its obligations as an ethnic (multilingual) television network, I favour a term shorter than three and-a-half years.

It is both important and obligatory that Cathay move swiftly to become the ethnic network implicit in its application three years ago to acquire the assets of World View Television Limited, and in the Commission's approval of that application. Fulfillment of its responsibilities, under its licence, means equitable service by Cathay to viewers of a range of ethnic backgrounds in its British Columbia service area. It means avoidance of programming practices that intentionally or otherwise appear to subordinate the viewing preferences of certain major audiences to those of others. In this connection, the licensee's limited response to the legitimate programming expectations of the large South Asian community in its service area has been particularly conspicuous during its licence terms to date.

It is worth noting the observations of Mr. Shan Chandrasekar, President of the Asian Television Network, which is involved in provision of South Asian programming to Cathay. At a Public Hearing in Vancouver on 8 June 1987 to examine whether Cathay was in compliance with its programming requirements, Mr. Chandrasekar said:

The success of our venture in British Columbia will depend upon the nature of our community support and the availability of prime time viewing ... We feel the South Asian community in Vancouver has enormous potential to contribute to the growth and development of this service ...

In my opinion, Cathay's failure thus far to offer any programming to its South Asian audiences during the prime evening hours of the service, and its policy of reserving this preferred part of the schedule exclusively for Chinese-language programming, is in fundamental conflict with the spirit, if not the letter, of its licence as an ethnic (multilingual) network.

Accordingly, I believe that while a licence renewal for Cathay can be justified under the conditions and expectations specified in this decision, it should have been limited to two years. The shorter term would have afforded the Commission an earlier future opportunity to re-examine the progress of the licensee towards fulfillment of its obligations to the many language groups it is commissioned to serve.

APPENDIX

The licence to carry on an ethnic pay television network operation of Cathay International Television Inc. for the licence term 1 March 1988 to 31 August 1991 shall be subject to the following conditions of licence:

1. The licensee shall not provide service to any location outside of the Province of British Columbia without obtaining the prior approval of the Commission.

2. The licensee shall, during the six-month period commencing on 1 March 1988 and during each subsequent six-month period of the licence term, devote not less than 60% of the total time (i) during which programming is distributed on its undertaking and (ii) during the hours between 6:00 p.m. and 10:00 p.m., to the distribution of programs in languages other than English, French or a native Canadian language.

3. The licensee shall devote to the distribution of feature films not more than 25% of the total programming time permitted for the distribution of programs in English, French or a native Canadian language.

4. The licensee shall provide as part of a single service on an ongoing basis

(a) in each week of the licence term, not less than 15 hours of programming in each of two languages other than English, French, native Canadian or Chinese; and

(b) in addition to the programming required by paragraph (a), in each week of that portion of the licence term commencing on 1 March 1990, not less than 10 hours of programming in a language or languages other than English, French, native Canadian, Chinese, Hindi, Punjabi, Urdu, Gujarati, Bengali, Kannada, Kashmiri, Sanskrit, Malayalam, Marathi, Oriya, Assamese, Sindhi, Tamil or Telugu.

5. The licensee shall devote not less than 12 hours per week to the distribution of Canadian programs.

6. The licensee shall devote not less than 4 hours per week to the distribution of Canadian programs in Chinese languages.

7. The licensee shall devote not less than 4 hours per week to the distribution of Canadian programs in one or more of the following languages: Hindi, Punjabi, Urdu, Gujarati, Bengali, Kannada, Kashmiri, Sanskrit, Malayalam, Marathi, Oriya, Assamese, Sindhi, Tamil or Telugu.

8. The licensee shall ensure that its complete service is distributed to all subscribers in an encoded form commencing no later than 1 May 1988.

9. The licensee shall not enter into any arrangements with program suppliers whereby the licensee would become the exclusive distributor of the suppliers' programming; however, this does not preclude the licensee from entering into an arrangement, for its licensed area, whereby the licensee has the exclusive rights for a particular program or program series, for a period not extending beyond one year from the date such programming is first available for distribution by the licensee.

10. The licensee shall adhere to the CAB's self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.