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Decision
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Ottawa, 6 April 1989
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Decision CRTC 89-103
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Western Approaches Limited
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Vancouver, British Columbia -882158900
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Following a Public Hearing in Vancouver commencing 25 October 1988, the Commission renews the broadcasting licence for CKVU-TV Vancouver from 1 September 1989 to 31 August 1994, subject to the conditions specified in the appendix to this decision and in the licence to be issued.
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CKVU-TV was first licensed as an independent television station in 1975. Following a public hearing in July 1986, the Commission approved an application for authority to transfer the ownership and effective control of Western Approaches Limited (Western), licensee of CKVU-TV, to CanWest Pacific Television Inc. (CanWest Pacific), a subsidiary of CanWest Broadcasting Ltd. (CanWest) (Decision CRTC 87-123 dated 13 February 1987). CanWest, which is indirectly and ultimately owned and controlled by Mr. Israel Asper, is licensee of CKND-TV, an independent television station in Winnipeg, and its rebroadcaster CKND-TV-2 Minnedosa. CanWest also indirectly owns SaskWest Television Inc., licensee of independent television stations CFRE-TV Regina and CFSK-TV Saskatoon. Mr. Asper holds, indirectly, a 60.75% equity position but only a 50% voting position in Global Ventures Western Ltd. which in turn holds 100% of Global Communications Limited (Global), licensee of an Ontario regional television service.
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In approving the ownership transfer of Western to CanWest Pacific, the Commission outlined the various programming and capital expenditure commitments made by the purchaser. With respect to programming, CanWest Pacific undertook to increase CKVU-TV's programming budget by a minimum of $3.8 million annually, over and above CKVU-TV's existing five-year projected budget. It earmarked $3.2 million of this sum for the production of twelve one-hour specials per year: four dramas at a cost of $2 million; four musical variety shows at $800,000; and four documentaries budgeted at $400,000. CanWest Pacific also committed to produce a 13-episode musical program series and a 13-episode children's series, and to introduce a weekly arts magazine and a weekly business program.
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In the area of news programming, CanWest Pacific undertook to open a new year-round news bureau in Victoria in order to provide direct news reports from the provincial capital and committed to originate a new weekly half-hour public affairs show from that city.
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Capital expenditure commitments amounted to a total of $2.2 million. Western's new owners also committed to introduce 24-hour programming on CKVU-TV.
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In Decision CRTC 87-123, the Commission noted that the licence of CKVU-TV was scheduled to expire in the near future. With this in mind, the Commission stated that it would review the new owner's commitments at the station's licence renewal hearing, at which time it expected the commitments to be well-advanced.
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In its renewal application for CKVU-TV, Western stated that its strategic plan for the future was to be as local as possible and to provide an alternative service for viewers in the Vancouver market. It stated further that, "in a programming policy sense, our main competitive edge is to be the pre-eminent community-oriented station". In terms of the opportunities presented by its association with CanWest's other independent television stations, it remarked:
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The unique structure of CanWest allows for a new dimension. Each individual station maintains the independence to respond to local needs while at the same time bringing co-operation to regional-interest programming so that an aggregation of resources can result in improved quality and hence increased viewership of regional/local offerings.
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At the hearing, the licensee pointed out that "due to numerous complications and delays in the process", including legal proceedings arising from CanWest Pacific's purchase of Western, the new owners of CKVU-TV had only been able to assume control of the station as of 13 July 1988. The licensee explained that, while it fully intends to honour the commitments it made at the 1986 hearing, it had not as yet had the opportunity to implement all of them. It did inform the Commission, however, that in line with its commitments, it had already introduced 24-hour programming on CKVU-TV and had made a number of changes to CKVU-TV's program schedule which are to be reflected in the station's programming in the new licence term.
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With respect to local programming, the licensee committed in its renewal application to broadcast 27 hours 32 minutes of original productions per week. In line with the licensee's commitment, the Commission expects CKVU-TV to maintain, at a minimum, this weekly level of original local production over the new licence term.
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CKVU-TV's local productions will include a new variety magazine program, "West Çoast Panorama", scheduled each weekday evening, and a new hour-long weekday news and public affairs open-line show "Morning Line". Both were introduced in the 1988/89 season. Local newscasts will be scheduled, as at present, on weekdays at noon and at 5:30 p.m. Monday to Saturday. Rather than providing a late evening local newscast during the week, CKVU-TV broadcasts Global's national news program "The World Tonight". The Commission notes that the licensee's objective is to integrate a regular five-or six-minute local news segment within this program.
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Other local productions introduced in the current schedule which are to continue in the new licence term include the weekly information program "Eyes West" and a monthly news and public affairs program dealing with Native issues, "First Nation's Magazine". These two programs are produced in co-operation with CanWest's other independent television stations. The licensee stated that it also intends to undertake the production of documentary specials in the new licence term.
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The Commission notes that many of the programming commitments made by CKVU-TV's new owners at the 1986 hearing are already well-advanced. The station has introduced a new weekday children's game show, "Kidstreet", produced in co-operation with CFAC-TV Calgary, CFAC-TV-7 Lethbridge and the other CanWest stations, and involving Northstar, an independent production company, and the licensee stated at the hearing that it "will be joining our CanWest sister stations in the co-op production of 'Spelling Bee' for 25 episodes each year, starting next year". It also now broadcasts a new co-operatively produced arts program, "For Arts' Sake", involving the other CanWest stations, and includes business segments in its daily variety magazine program. According to its application, CKVU-TV is currently developing a weekly co-operatively produced music series which "will utilize western Canadian, professional performing artists from the full spectrum of musical disciplines".
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The Commission also notes that CKVU-TV has already opened its Victoria news bureau to improve its coverage of provincial affairs and that, according to the licensee, the bureau's two-way microwave system will be operational by September 1989. The licensee reiterated its commitment to broadcast a news and information program originating in the provincial capital and indicated that this program would likely be scheduled on Sundays when CKVU-TV currently does not provide local news.
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The Commission expects the licensee during the course of the new licence term to honour fully its 1986 commitments.
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In its renewal application for CKVU-TV, Western proposed to vary somewhat its 1986 commitment to expend $3.2 million each year for the production of four dramas, four musical variety shows and four documentaries. At the hearing, the licensee explained that, since CKVU-TV's new owners had only recently been able to assume control of the station and since drama projects often require years to develop, it would have difficulty meeting this commitment, particularly in the first year of the new licence term:
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Due to the very complex and difficult job of developing dramas to the production stage, and due to our late start and uncertainty ... of our secure position as owners of CKVU-TV, we cannot visualize a fast production track for quality drama, and therefore ask for the Commission's understanding of the realities in reported spending on local specials the first year.
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Firstly, the licensee requested that the Commission accept an expenditure commitment for the first year of the new licence term of $1.5 million rather than $3.2 million. It stated that it would adhere to the $3.2 million per year commitment in each of the remaining four years of the licence term.
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Secondly, the licensee proposed that its original allocation of funds between the three program areas be adjusted such that half of the annual $3.2 million expenditure in each of years two to five of the licence term be earmarked for drama projects with the other half allocated for musical variety specials and documentaries.
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Finally, the licensee requested that, rather than being held to its previous commitment with respect to the specific number of programs to be produced annually in each category, it be permitted to vary the number and type of specials to be produced each year; otherwise, the licensee stated, "we may have projects that are totally desireable and our hands might be tied by a restriction in category".
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As stated in the Public Notice introducing this and other television renewal decisions issued today, the Commission has decided to require licensees of television stations that earned more than $10 million in total advertising revenue in 1987/88, by condition of licence, to adhere to their commitment for first-year expenditures, at a minimum, and to adjust such expenditures in subsequent years in accordance with a formula linked to station advertising revenues. The Commission is satisfied that this approach offers a reasonable and fair means of ensuring that the Canadian program expenditures of each station keep pace with its revenue growth.
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According to its financial projections CKVU-TV will expend $8,367,000 on Canadian programming in the first year of the new licence term. This figure incorporates $1.5 million in additional expenditures rather than the $3.2 million committed to by the licensee at the time it applied to acquire control of the station.
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While the Commission acknowledges the merits of the licensee's arguments respecting its first-year program expenditure commitments, it is not prepared to accept a diminution of a benefit it had previously accepted in the context of the ownership transfer. The Commission is, however, prepared to accept a delay in the implementation of the licensee's Canadian program expenditure commitment. Accordingly, the licensee is required by condition of licence to expend $8,367,000 in the first year of the new licence term and to make up the unspent portion of its original $3.2 million commitment for year one, representing $1.7 million, in year two. Further, in order in year two to take into account this unspent portion when applying the formula as outlined in the introductory Public Notice, the Commission has added $1.7 million to the licensee's first year expenditure requirement to arrive at a base figure of $10,067,000. The specific Canadian programming expenditure condition of licence for CKVU-TV is set out in the appendix to this decision.
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The Commission also acknowledges that there is merit in granting some flexibility in the precise number and type of programs which CKVU-TV would produce and broadcast in any given year, particularly in respect of CKVU-TV's commitment to produce and broadcast 4 drama productions in the first year of the new licence term, since completion of complex dramatic projects can take as long as two or three years. Nevertheless, it expects CKVU-TV to broadcast an average of at least one original special per month, be it a drama, musical variety program or documentary, during each year of the licence term.
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The Commission does not accept the licensee's proposal to expend only half of the annual $3.2 million commitment on drama projects, since this would result in an annual drama expenditure of $1.6 million per year rather than $2 million per year, or $400,000 less per year than what CanWest Pacific originally committed to spend when it sought approval of its purchase of Western.
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The Commission notes that, with respect to Canadian drama productions, CKVU-TV stated in its application that it is currently developing two feature films with CKND-TV Winnipeg as part of the "CanWest Drama Project", a television drama series with a Prairie setting in co-operation with the other CanWest stations and an independent producer, and a West Coast action-adventure series involving a Vancouver independent producer and another independent television station.
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In its renewal application, the licensee indicated its intention to spend $2.2 million in capital expenditures, in line with the dollar commitment given at the time of the transfer of ownership transaction. However, when questioned on this at the hearing, the licensee stated that in order to meet the commitments given by it at the 1986 public hearing, it now realized that considerably more money would have to be allocated "to bring CKVU-TV up to state-of-the-art production". Subsequent to the hearing, the licensee submitted documentation setting out a "fixed asset purchase schedule" which indicates that capital expenditures in the new licence term will total $6 million.
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In renewing this licence, the Commission authorizes the licensee to make use of the Vertical Blanking Interval. The Commission expects the licensee to adhere to the guidelines set out in Appendix A to Public Notice CRTC 1989-23 dated 23 March 1989 entitled "Services Using the Vertical Blanking Interval (Television) or Subsidiary Communications Multiplex Operation (FM)".
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With respect to service for the deaf and hearing impaired, the Commission notes the licensee's statement that all acquired programs that are available with closed captions are broadcast in captioned form. The Commission also notes that the licensee will install closed captioning equipment by the first year of the new licence term which will enable CKVU-TV to provide listing text and captioned news headlines. Moreover, the licensee stated that it will establish an electronic newsroom during the new licence term which will permit the captioning of its full newscasts, and that its locally-produced specials in the drama and documentary categories will be captioned using the services of the newly-established captioning centre in Vancouver.
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The Commission notes the positive response to the licensee's plans as expressed at the hearing in the interventions presented jointly by the Canadian Hard of Hearing Association (B.C. Chapter) and the Greater Vancouver Association of the Deaf. Other matters raised in the interventions by these two organizations are addressed in the Public Notice introducing this and other television renewal decisions issued today.
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In line with the licensee's plans, the Commission expects CKVU-TV to close caption, at a minimum, headlines and appropriate scripted portions of its early evening newscast during the new licence term.
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The Commission also expects CKVU-TV to obtain a telephone device for the deaf (TDD) during the first year of the new licence term and to install it wherever is most appropriate, such as in the master control room, in order to ensure access to the station by the deaf and hearing impaired over the entire broadcast day.
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The Commission acknowledges the 17 interventions submitted in support of the licence renewal of CKVU-TV. The Commission also acknowledges the intervention of Allarcom Limited, as well as the comments of Mr. David A. Sinclair with respect to CKVU-TV's method of station identification and of Mr. Joe Phelan regarding simultaneous signal substitution. Matters raised in interventions submitted by the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) and the Canadian Association of Broadcasters (CAB) are addressed in the Public Notice introducing this and other televisions renewal decisions. With respect to the intervention submitted by the British Columbia Ministry of Regional Development, the Commission is satisfied that the issues raised by the intervener regarding CKVU-TV have been adequately addressed in the context of this decision.
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Fernand Bélisle
Secretary General
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APPENDIX
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Conditions of licence for CKVU-TV Vancouver
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1. The licensee shall expend on Canadian programming, at a minimum:
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(a) for the year ending 31 August 1990, the amount of $8,367,000;
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(b) for the year ending 31 August 1991, the amount of (i) $10,067,000 increased (or decreased) by the year-over-year percentage change for the year ending 31 August 1990, in the total of the station's revenues from local time sales, national time sales and payments (if any) received from networks, as reported in the relevant Annual Return, plus (ii) $1.7 million;
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(c) for the year ending 31 August 1992, the minimum required expenditure calculated in accordance with subparagraph (b)(i) above, increased (or decreased) by the average of the year-over-year percentage changes for the years ending 31 August 1990 and 31 August 1991, in the total of the station's revenues from local time sales, national time sales and payments (if any) received from networks as reported in the relevant Annual Returns; and
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d) in each subsequent year, an amount calculated in accordance with the following formula: the amount of the previous year's minimum required expenditure, increased (or decreased) by the average of the year-over-year percentage changes for the years ending on 31 August of the three previous years, in the total of the station's revenues from local time sales, national time sales and payments (if any) received from networks, as reported in the relevant Annual Returns;
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with all terms or calculations found in subparagraph (b)(i) and paragraphs (c) and (d) set out above to be interpreted or made in accordance with the explanations set out in Public Notice CRTC 1989-27 dated 6 April 1989.
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2. The licensee shall adhere to the provisions of the Broadcast Code for Advertising to Children published by the Canadian Association of Broadcasters as amended from time to time and approved by the Commission.
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3. The licensee shall adhere to the Canadian Association of Broadcasters' self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.
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