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Decision
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Ottawa, 6 April 1989
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Decision CRTC 89-122
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Allarcom Limited
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Edmonton, Alberta -881048300
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Following a Public Hearing in Edmonton, Alberta commencing 14 November 1988, the Commission renews the broadcasting licence for CITV-TV Edmonton 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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Allarcom Limited (Allarcom) is an Alberta-based company entirely owned by residents of Alberta. It is indirectly controlled by Dr. Charles A. Allard through Cathton Holdings Ltd., which also has a 78.13% interest in Allarcom Pay Television Limited (known as Superchannel) which, in turn, holds a 50% interest in the Family Channel; both are general interest pay television services.
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In Decision CRTC 89-121 of today's date, the Commission has approved applications by Allarcom to acquire the assets of CKRD-TV Red Deer and its rebroadcasting undertakings CKRD-TV-1 Coronation and CKRD-TV-2 Banff, from Monarch Broadcasting Ltd. (Monarch), as well as the undivided ownership and control of the assets of the third service television station in Red Deer (to be known as CITA-TV), which is jointly licensed to Monarch and Allarcom, and to obtain broadcasting licences to continue the operation of these undertakings.
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CITV-TV has been available to various communities across Canada since 1981 as part of the CANCOM package of Canadian television services. When the station was first licensed in Decision CRTC 73-397 dated 10 August 1973, the Commission noted that locally-produced programs utilizing Edmonton talent and creative resources "should provide real alternatives to the programming presently available".
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Allarcom's current programming philosophy, as stated in a document accompanying the renewal application for CITV-TV, continues to reflect the complementary nature of the service:
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As an independent television station, CITV attempts to program its service in order to maximize viewer choice and increase viewer satisfaction in its market. CITV tends to offer, by and large, an alternative to network programming. CITV's independent programming philosophy contributes to a real diversity of programs in all categories. CITV's programming, whether locally-produced or acquired is completely differentiated from that of any other licensed television station in its market.
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In this regard, the licensee also stated that wherever possible, it broadcasts programming in time periods different from other stations, for example by offering children's programs on Saturday afternoons when other stations are presenting sports, and by providing news and public affairs programs opposite entertainment programs.
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The Commission notes that during the current licence term, CITV-TV has exceeded its commitment to broadcast a minimum of 23 hours 45 minutes of original local programming each week. The station provides a comprehensive news service to Edmonton and northern Alberta and has recently increased its news programming with the addition of a weekday half-hour newscast at noon. In 1988, three employees were added to its news department to enable the station to increase its coverage of sports.
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The Commission acknowledges the quantity and variety of local programs produced and broadcast by CITV-TV during the current licence term. In addition to its news service, which currently totals approximately 11 hours per week, the station currently presents several current affairs and human interest programs including "City Beat", which deals with civic affairs, "Alberta This Week", presenting political and economic issues from a provincial perspective, "Campus", a program aimed at the students and faculty of Edmonton's post-secondary institutions, "Good Good Morning", an hour-long current affairs magazine program featuring open-line discussions, and "Our Native Heritage", which features topics of "interest and of special concern to the native community". The licensee assured the Commission that in the new licence term it will continue to produce programs dealing with civic, provincial, and native affairs. Locally-produced sports programming includes the discussion program "Sports Night", as well as seasonal programs offering horse-racing and hockey highlights as well as live coverage of the hockey games of the Edmonton Oilers.
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CITV-TV has also been involved in the production of musical/variety programs featuring local talent. The weekly program "Rendez-vous" introduces viewers to the diversity of local French-Canadian culture and music and covers matters of interest to Franco-Albertans. Past endeavours in support of local musical talent have included "Our Music", a rock program simulcast with a local FM radio station and a music video program for which the station produced some 55 videoclips featuring local artists.
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The Commission also wishes to commend the licensee for its excellent track record in the production of comedy and dramatic programs and series and notes the licensee's statement at the hearing that "between September 1982 and the summer of 1988, CITV produced or contributed financially to the production of 94 original Canadian dramas". The Commission notes such productions as the internationally-acclaimed "SCTV" comedy series, "Stone Fox", a made-for-television family movie; "A Mouse, a Mystery and Me", a half-hour pilot for an animation and live-action children's program that has generated interest in the U.S. market, "The Little Vampire" a youth series which has also achieved great success in England and Germany and the mini-series "Louisiana" and "Blood of Others". In this regard, Dr. Allard stated at the hearing:
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I personally feel that western Canada can develop a successful production industry, providing we have the patience to continue carefully and also to try to achieve standards that will be accepted not only in Canada, but in the international marketplace as well.
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To this end, the Commission notes that in June 1988, Allarcom completed construction of a production and post-production complex adjacent to CITV-TV's facilities, which includes a 15,000 square foot sound stage. The licensee indicated that the cost of the facility approached $9 million with a further $8.5 million having been expended for technical improvements ranging from ENG cameras to special effects animation computers and the 1987 conversion to stereophonic broadcasts. CITV-TV indicated at the hearing that the complex will be available for use by independent producers and that it hopes that the studio " will create a unique opportunity for Alberta talent and crafts people to be in world class productions".
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The Commission is generally satisfied with the licensee's performance during the current licence term, given its success in continuing to meet the objectives outlined in its initial licensing decision and the major programming accomplishments it has realized over the current licence term, particularly in news, information and drama production. Further, based on its significant commitments for Canadian program production in the new licence term, the Commission considers that CITV-TV's licence should be renewed for a full term.
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The Commission notes that some of the information in respect of the licensee's Canadian programming expenditures as filed with its application was revised in a letter dated 8 November 1988 and further updated at the public hearing itself. There may have been some confusion on the part of the licensee as to the Commission's specific information requirements, nevertheless the Commission wishes to remind the licensee that in the interest of the public process, all information relevant to applications should be available prior to public notification that an application is to be considered at a specific public hearing.
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With respect to the projected revenues of CITV-TV, the Commission notes that the licensee considers that:
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the revenue growth experienced by commercial television in the late 70s and early 80s, cannot be repeated in the much more competitive, fragmented, and low-growth environment of our next licence term.
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Allarcom confirmed that local advertising revenues which had decreased marginally in the recent past, are a "major component" of its total revenue. The Commission notes, however, that CITV-TV's national advertising revenue is meeting the station's targets and has concluded that the licensee's projected profitability percentages should continue to result in healthy pre-tax profit levels.
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According to the financial projections submitted by Allarcom, CITV-TV will expend $9,048,000 on Canadian programming in the first year of the new licence term (1989/90). As stated in the Public Notice introducing this and other television renewal decisions, inasmuch as the advertising revenue of this station exceeded $10,000,000 in 1987/88, the licensee will be required, by condition of licence, to adhere to its forecast for first-year expenditures on Canadian programming and to adjust such expenditures in each subsequent year in accordance with the prescribed formula linked to changes in the station's 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 changes in its annual revenue growth. The specific condition of licence pertaining to CITV-TV is set out in the appendix to this decision.
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In its Promise of Performance for the new licence term, CITV-TV has undertaken to schedule 26 hours of original local production each week, an amount which represents an increase of 2 hours 15 minutes per week over its current commitment. The Commission therefore expects the licensee to broadcast, at a minimum, this level of locally-originated programming throughout the new licence term. Allarcom has also undertaken to allocate 80% of the station's annual Canadian programming budget to local productions.
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The Commission notes CITV-TV's commitment to spend a minimum of $1.2 million annually for the production of programs in under-represented categories (drama, documentaries and children's programming). At the hearing, Allarcom stated:
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While we say we pledge a minimum of $1.2 million a year, I hope that we are going to be able to leverage it so that the actual production done is three to five times, or even more than that amount.
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Specifically, the licensee has undertaken to produce a minimum of eight drama productions and six documentaries during each year of the new licence term. The licensee specified that the documentaries would focus on local and regional issues. The Commission notes that the licensee is currently developing two children's series and encourages CITV-TV to continue to explore these or other similar endeavours.
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A major co-operative initiative currently being developed by CITV-TV is the "Coast-to-Coast Talent Search" series. Allarcom is actively seeking the participation of other stations across the country in the production of a series of programs featuring Canadian musical, dance and comedic talent. At the hearing the licensee indicated that stations in Halifax and Montreal have expressed an interest in the series. While individual performances would be auditioned and taped by the local stations, Allarcom intends to co-ordinate the efforts of the participating stations and package a 26-episode series which would be broadcast by each of the stations. The Commission notes the promise given at the hearing that "in the event that CITV does not obtain a sufficient number of commitments from other broadcasters in the major regions of Canada ..., CITV will still produce a regular talent program in Alberta with a comparable format". The Commission acknowledges Allarcom's past efforts in support of the development of Canadian talent and expects it to assume a leadership role in this area.
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The Commission has also taken note of Allarcom's commitment to spend $160,000 in year 1, increasing to $180,000 in year 5, for script and concept development. The licensee indicated that a portion of these funds will be used to sponsor seminars and workshops in writing and drama production conducted by the National Television and Film Institute. The Commission refers the licensee to the guidelines for program development funds set out in the introductory Public Notice of today's date.
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With respect to programming that responds to the interests and concerns of ethnic and cultural minorities within CITV-TV's coverage area, the licensee explained that in the past, it had produced and broadcast a series of programs dealing with various cultures and featuring folk dancing and other heritage traditions. It has since determined that viewers might be more interested in other types of television programs. The Commission has taken note of Allarcom's undertaking to meet with various ethnic groups in the Edmonton area in order to find an innovative approach to meeting their needs within its mainstream programming and its promise to provide a report on the outcome of these discussions to the Commission. Accordingly, the Commission will expect CITV-TV to submit such a report within one year of the date of this decision.
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In terms of co-operative programming ventures, the Commission notes that the licensee has earmarked 5% of CITV-TV's annual Canadian programming budget during the new licence term for productions involving other broadcasters, and 6% for programs produced in co-operation with the independent production community. The Commission notes the licensee's statement that it considers that its commitments will make a "significant contribution to the growth and development of the television broadcast industry in western Canada" and its expression of willingness "to develop an industrial strategy [and] to ... pool funds ... to help make Canadian production a reality". The licensee also remarked upon its past success in working with the Calgary and Vancouver CTV affiliates, CFCN-TV and CHAN-TV respectively, the independent Hamilton station CHCH-TV, and Global Television. Nevertheless, the Commission notes that Allarcom's current involvement with independent productions has been largely limited to providing guidance and letters of support for funding purposes. The Commission, therefore, will expect CITV-TV, during the course of its new licence term, to increase its co-operation with the Alberta independent production community.
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In addition to constructing the new Edmonton production and post-production facility, Allarcom has undertaken to make further technical improvements at CITV-TV during the new licence term and notes that it has made a commitment to spend $3,595,000 in capital expenditures for replacements, upgrading and additions to the CITV-TV studio and transmitter plant.
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Another technical improvement which will be undertaken by CITV-TV is the installation of a computer system which will permit it to implement its commitment to improve services to its deaf and hearing-impaired viewers. CITV-TV currently broadcasts approximately 540 hours per year of closed-captioned programs and stated at the hearing that it will soon begin providing closed captions during its 6:00 p.m. daily newscasts and its weekday late evening newscasts, as well as in its public affairs programs "Alberta This Week" and "Civic Affairs". Allarcom estimates that when these efforts are combined with the amount of captioned programs CITV-TV acquires, the station will be broadcasting a minimum of 1,200 hours per year of closed-captioned programming. Further, CITV-TV intends to hire two additional employees who will be responsible for captioning during newscasts. To implement these initiatives, the Commission notes that the licensee has allocated annual budgets ranging from $100,000 in year 1 to $122,000 in year 5, as well as an initial capital expenditure of $20,000. The Commission commends Allarcom for its initiatives in ensuring that its news and public affairs programs are readily accessible to deaf and hearing-impaired viewers and expects it to caption, at a minimum, headlines and appropriate scripted portions of its early evening newscasts within the first year of the new licence term and to adhere to its additional commitments during the course of the new licence term.
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The Commission also expects CITV-TV to acquire a telephone device for the deaf (TDD) during the first year of its new licence term and to install it in the master control room or wherever is most appropriate, in order to ensure that deaf and hearing-impaired viewers have access to the station throughout the broadcast day.
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In renewing this licence, the Commission also authorizes CITV-TV 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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The Commission wishes to thank the 56 groups and individuals who submitted interventions with respect to this application.
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Fernand Bélisle
Secretary General
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APPENDIX
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Conditions of licence for CITV-TV Edmonton
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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 $9,048,000;
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(b) for the year ending 31 August 1991, the amount set out in paragraph (a) above, 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;
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(c) for the year ending 31 August 1992, the minimum required expenditure calculated in accordance with paragraph (b) 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 paragraphs (b), (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 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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3. 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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