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Decision
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Ottawa, 28 September 1989
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Decision CRTC 89-769
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Calgary Television Limited
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Calgary, Drumheller and Banff, Alberta - 890220700Lethbridge Television LimitedLethbridge, Coleman, Brooks and Burmis, Alberta - 890221500
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Okanagan Valley Television Co. Ltd.
Kelowna, British Columbia - 890222300
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WIC Western International Communications Ltd., on behalf of its subsidiary and associated licensee companies - 890774300
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Following a Public Hearing commencing 29 May 1989 in the National Capital Region, and pursuant to Decision CRTC 89-766 of today's date approving the transfer of effective control of various broadcasting undertakings owned by Selkirk Communications Limited (Selkirk), and their reorganisation under the indirect ownership of MH Acquisition Inc. (MHA), the Commission approves the applications for authority to transfer effective control of Calgary Television Limited, licensee of CFAC-TV (IND) Calgary, CFAC-TV-1 Drumheller and CFAC-TV-2 Banff; and of Lethbridge Television Limited, licensee of CFAC-TV-7 Lethbridge, CFAC-TV-6 Coleman, CFAC-TV-5 Brooks and CFAC-TV-4 Burmis, through the transfer of 100% of the common voting shares of the licensees' parent companies, NEWCO Calgary Television and NEWCO Lethbridge Television, respectively, to Westcom Television Group Ltd. (Westcom Television), a wholly-owned subsidiary of WIC Western International Communications Ltd. (WIC Western) of Vancouver.
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The Commission also approves the application for authority to transfer the 50% ownership interest in Okanagan Valley Television Co. Ltd. (Okanagan), held by NEWCO Okanagan Valley Television Co. (NEWCO Okanagan), through the transfer of 100% of the common voting shares of NEWCO Okanagan to Westcom Television. Okanagan is the licensee of CHBC-TV (CBC) Kelowna and its rebroadcasters in the British Columbia interior.
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Further, the Commission approves the application for authority to transfer ownership of 36.9% of the Class B voting shares and related non-voting shares of British Columbia Broadcasting Company Ltd. (BCBC) through the transfer of 100% of the voting shares of NEWCO BCTV to Westcom Television.
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WIC Western had also applied to acquire indirect control of CJCA and CIRK-FM Edmonton. These applications were denied by the Commission in Decision CRTC 89-770 of today's date.
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As stated in a number of decisions relating to applications for authority to transfer ownership or effective control of broadcasting undertakings, because the Commission does not solicit such applications, and because there is thus only one proposal presented to the Commission, the onus is on the applicant to demonstrate to the Commission that the application filed is the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature.
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One such potential concern is concentration of ownership of licensed undertakings, the issue being raised in the current context given WIC Western's existing broadcast holdings.
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In radio, WIC Western's wholly-owned subsidiary Westcom Radio Group Ltd. holds licences for 9 stations, including CHQR Calgary and an AM and FM station in each of Winnipeg, Hamilton, and in the Toronto and Vancouver areas.
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While WIC Western's radio interests will remain unaltered as a result of today's decisions, its television holdings will increase considerably. WIC Western already holds effective control of British Columbia Television Broadcasting System Ltd. and CHEK T.V. Limited, licensee of CHAN-TV Vancouver and CHEK-TV Victoria, respectively, through its indirect ownership of 63.1% of BCBC. CHAN-TV, CHEK-TV and their numerous rebroadcasters provide CTV network service virtually throughout British Columbia. Acquisition of the remaining 36.9% of BCBC by Westcom Television, through the latter's purchase of NEWCO BCBC, will increase to 100% WIC Western's indirect ownership of the two above-named licensee companies. Currently, through BCBC, WIC Western owns 50% of Okanagan. This position of negative control will become one of 100% effective control as a result of Westcom Television's purchase of NEWCO BCTV, owner of the remaining 50% of Okanagan previously owned by Selkirk Communications Limited.
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These changes, together with WIC Western's acquisition of effective control of Calgary Television Limited and Lethbridge Television Limited, will leave WIC Western as the third-largest private television broadcaster in Canada in revenues, and sixth-largest in audience. While this expansion of WIC Western's relative position in Canada's television industry clearly represents an increase in the level of concentration within that sector, the Commission has expressed the view on several previous occasions that concentration of ownership need not necessarily be of concern provided that, in any given region, there continues to exist a diversity of opinions, information and ideas flowing from broadcast and other media sufficient to ensure that residents have access to differing views on matters of public concern.
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Following an examination of this issue, the Commission has concluded that the expansion of WIC Western's television holdings will not bring about an excessive or undue expansion of concentration, whether at the regional level or otherwise. In the case of Kelowna, for example, subsidiaries of WIC Western will now be operating a CBC-affiliated television station in addition to a rebroadcaster of its CTV-affiliated Vancouver television station. For several years WIC Western has been involved in the ownership and management of the subsidiary companies concerned. Thus, to the extent that there can be said to be any change in the diversity of broadcast voices available in those communities, such change and its impact, in the Commission's view, will not be substantial.
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The Commission notes further in this regard that those communities in the Okanagan Valley served by CHBC-TV and its rebroadcasters have various alternative sources of local information. In Kelowna, in addition to a daily newspaper, local residents have access to a joint AM and FM radio operation, as well as separate independent AM and FM stations. Penticton, to the south, is served by an AM/FM joint licensee and an independent FM licensee, while Vernon has two independent AM radio stations, and Salmon Arm has one independent AM station. All of these communities, and several others in the area, are served by cable television systems.
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In the case of Calgary, the only other community in which WIC Western is acquiring effective control of a second broadcasting undertaking (CFAC-TV in addition to its existing indirect ownership of CHQR), the Commission is satisfied that the diversity of media voices present in that market, including 2 daily newspapers, 2 other television stations and 11 other radio stations, as well as cable television, is sufficient to ensure that residents continue to have access to differing views on matters of public concern.
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The Commission has also taken into account WIC Western's past performance in fulfilling its commitments and responsibilities as a television broadcaster and the substantially greater obligations it assumes with respect to the realization of all of the benefits promised in its applications. These benefits are summarized in the document entitled "Benefits Tables, Organization Charts and Preliminary Statistics Tables: Radio and Television" published by the Commission for the 29 May 1989 Public Hearing.
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According to WIC Western, approval of these applications will enhance its regional strength, thereby broadening "the opportunities for Canadian talent development, high quality Canadian program production and more attractive local programming". WIC Western claimed the benefits that will flow from approval of its applications to acquire the ownership of Selkirk's former television holdings in Alberta and British Columbia represent financial expenditures amounting to $18,703,000 over five years, all of which it indicated will be devoted to the funding of new capital projects, new program production and initiatives in support of Canadian talent. This total includes direct and indirect expenditures of $11,905,000 and $1,145,000 in respect of CFAC-TV Calgary, $3,117,000 and $178,000 in respect of CFAC-TV-7 Lethbridge, and $1,741,000 and $617,000 in respect of CHBC-TV Kelowna. The Commission notes that the proposed expenditures are incremental in that they are to be over and above those that will be made in fulfillment of various existing and outstanding commitments of the licensees concerned. The Commission has assessed the various projects and initiatives put forward by WIC Western as being benefits associated with the applications. In general, and with such minor exceptions as the applicant's proposal to expend $20,000 for the purchase of cellular telephone equipment (a normal cost of doing business in the Commission's view), the Commission is satisfied that the benefits are clear and unequivocal, commensurate with the size and nature of the transactions involved, and take into account the responsibilities to be assumed by the applicant, the characteristics and viability of the broadcasting undertakings concerned, and the scale of the programming, management, financial and technical resources available to WIC Western. Moreover, the Commission considers that approval of these applications is in the public interest.
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The Commission expects WIC Western to ensure that all of the expenditures proposed under the $18,703,000 benefits package are made over the course of the next five years in accordance with the schedule outlined by the applicant. In this regard, the Commission notes the assurance given by WIC Western at the hearing that the proposed benefits represent minimum commitments, in that it may spend more, but will not spend less than promised, and that the commitments are unconditional in the sense that they will be fulfilled regardless of the financial situation of the broadcasting undertakings concerned. In order that the Commission may assess WIC Western's performance in this regard, it expects that company to submit annual reports regarding the status of each benefit. Among the proposed benefits are a number of initiatives aimed at improving both the quantity and the quality of the local news programming produced by CFAC-TV Calgary, CFAC-TV-7 Lethbridge and CHBC-TV Kelowna. These include the establishment of additional news bureaus, the upgrading of production facilities and equipment, the computerization of the three newsrooms and the insertion of additional news or public affairs programming into the local program schedules of the three stations.
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WIC Western also committed to invest, on behalf of CFAC-TV, a total of $2.5 million over five years in a new Program Development Fund. It will also provide for additional direct operating expenditures by the three stations of $2,598,000 over five years, over and above their existing budgets, for the production of new Canadian programming or for expanding the production runs of existing series. The new programming is to include six series produced either individually by the three stations, in co-operation with each other, or as co-productions involving independent producers.
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The Commission will follow with interest WIC Western's progress in implementing these and all of the other plans and proposals put forward by the applicant as being the benefits associated with these transactions.
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Fernand Bélisle
Secretary General
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