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Decision
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Ottawa, 6 April 1989
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Decision CRTC 89-92
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Niagara Television Limited
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Hamilton, Ontario -881030100
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Following a Public Hearing in Toronto, commencing 3 October 1988, the Commission renews the broadcasting licence for CHCH-TV Hamilton from 1 September 1989 to 31 August 1992, subject to the conditions specified in the appendix to this decision and in the licence to be issued.
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This three-year renewal term should allow sufficient time for the licensee to respond to the Commission's concerns with respect to the size of CHCH-TV's Canadian programming expenditures relative to its total program expenditures. These concerns are addressed in this decision.
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CHCH-TV is owned by Niagara Television Limited (Niagara), which in turn is wholly-owned by Selkirk Communications Limited (Selkirk). Effective control of Selkirk, which is a public company, is exercised pursuant to the provisions of a voting trust agreement.
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Selkirk controls several other Canadian broadcasting undertakings including CFAC-TV Calgary. The Commission has received applications for the transfer of effective control of Selkirk to Maclean Hunter Limited and for the subsequent transfer of control of Niagara to CFPL Broadcasting Limited of London, Ontario. These applications will be considered at a future public hearing.
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CHCH-TV began broadcasting in 1954 as an affiliate of the Canadian Broadcasting Corporation. In 1961 it disaffiliated from the CBC and became Canada's first independent television station. CHCH-TV has been available to viewers in hundreds of communities across Canada since 1981 as part of the CANCOM package of Canadian television services.
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The Commission notes that CHCH-TV uses a "multiple levels of service" approach in terms of developing programming material: local programming designed to serve its primary coverage area which it defines as Hamilton, Wentworth, Burlington and the Niagara Peninsula, programming which may be attractive to other North American markets; and dramatic productions intended for the international market.
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During the current term of its licence, this independent station has played a major role in pursuing co-operative approaches to the production of Canadian programming and the purchase of non-Canadian programs. The station is a founding member of Independent Satellite News which operates a news bureau on Parliament Hill and exchanges news features among participating television stations. In 1986/87 CHCH-TV established a marketing co-operative with CFPL-TV London and CJOH-TV Ottawa, Ontario to sell advertising time, and has since expanded this concept and is "examining methods of co-operatively producing and marketing programs with stations in London, Wingham, Peterborough, Kingston and Barrie".
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With respect to the exhibition of Canadian programming, during the current term of its licence CHCH-TV has consistently performed at or above the minimum regulatory requirements of 60% Canadian content over the broadcast day and 50% between the hours of 6:00 p.m. and midnight. The balance of the station's weekly program schedule consists of non-Canadian programming which it purchases both for its own use and for resale to other Canadian independent television stations.
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With respect to local production, CHCH-TV currently broadcasts over 49 hours per week of local, co-produced and co-operative productions of which almost 35 are original hours. The Commission notes that 17 hours 30 minutes of the original programming is news, including a new midday newscast and an extended early evening news program.
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The licensee recently completed the installation of new program production facilities within its existing plant at a cost of $1.5 million. According to Niagara, these facilities will:
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expand our capabilities, confirm our commitment to quality, and open new sources of revenue to help support our primary production goals in high-end drama and entertainment plus intensified involvement in the areas of community affairs and news coverage.
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The licensee points with pride to the production of programs "completely different from those of other stations in the area". These programs include its full-scale operas which provide Hamilton-area artists with the opportunity to perform with international operatic talent. Over the past three years, CHCH-TV has produced six of the opera programs, all of which have been broadcast during prime evening viewing hours.
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The licensee is also involved in numerous co-operative ventures including dramatic productions such as "Chestnut Avenue", a series which is being developed by approximately 10 Canadian television stations and a Canadian independent producer; a pilot for a series intended for international distribution, "Ocean Force"; and co-productions with France, Great Britain and Australia. It recently introduced a new weekend series "Canada Business Week" and is in the development stage with "Freeze Frame", a current affairs project. The Commission commends the licensee for these worthwhile initiatives and notes the station's statement that it must endeavour to produce programs of significant quality in order to attract viewers and potential program sales which will ensure its future success.
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The Commission also notes that Selkirk has recently acquired several major production companies, such as Venture Entertainment Group Inc., in order to create an infrastructure within which it can "develop truly international-quality programming which will benefit [its] viewers as well as Canadian producers and creators".
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With respect to brokered programming, CHCH-TV currently broadcasts four hours per week of ethnic programming, consisting of three hours in the Italian language and one-half hour in each of the Portuguese and Spanish languages. All are aired on weekend mornings.
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With its renewal application the licensee submitted an overview addressing various areas such as future strategies and commitments. CHCH-TV proposes to maintain its current level of local production and to concentrate its efforts "on improving qualitative elements in the shows presented". It intends to continue its efforts to produce programming for local, regional and international audiences, programs "as diverse as major league sports and grand opera". While the licensee acknowledged that its primary responsibility is to the local market, it emphasized that involvement with other stations and independent producers "is an important and growing area for our station". According to the licensee, the leveraging effect of development expenditures, with additional funds obtained through government sources such as Telefilm Canada and the independent production community, will result in the production of high-quality, attractive and competitive programming. At the hearing the licensee stated:
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the independent stations in Canada require a team of players to acquire the quality of Canadian production that we are trying to get on the air.
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The Commission encourages CHCH-TV to continue to co-operate with other licensees in the production of programming. However, it also wishes to advise the licensee that not all of the programming which it has claimed as local productions in its new Promise of Performance qualifie as such according to the guidelines set out in Public Notices CRTC 1985-58 dated 20 March 1985 and CRTC 1986-177 dated 23 July 1986. The licensee is therefore required to submit, within one month of the date of this decision, a revised Schedule I that takes into account the Commission's policy in this respect as set out in those notices and in the Public Notice accompanying this and other television licence renewal decisions. The revised Promise of Performance should reflect more accurately the station's real commitment to local program production during the new licence term and should include a listing of qualifying programs. In this regard, the Commission expects the licensee to abide by the commitments given at the hearing that CHCH-TV will broadcast a minimum of 34 hours 21 minutes per week of original local productions throughout the new licence term and directs its attention to the under-represented program categories of drama, variety and children's programming.
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The Commission notes that the licensee has made a commitment to expend $1 million over the next five years, averaging $200,000 each year, for program development. In this regard, Niagara stated in its application that those "funds will be allocated to the categories which changing circumstances -and our best judgement -determines to be most appropriate in the months ahead". The Commission expects these expenditures will be made in keeping with the guidelines for program development spending which are set out in the afore-mentioned introductory Public Notice.
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CHCH-TV also undertook to increase, over time, the amount of Canadian content broadcast between the hours of 8:00 p.m. and 11:00 p.m. It indicated that it will continue to broadcast approximately 22 hours of news programming each week including 4.5 hours of repeated newscasts, and that it will continue to seek out opportunities for co-operative and co-produced initiatives. In this regard, the Commission notes that CHCH-TV and CFAC-TV are developing plans whereby the Hamilton station would focus on dramatic productions while the Calgary station would concentrate on the production of children's programming. Niagara advised the Commission that the stations have agreed to exchange programs. The Commission notes that both of these programming categories are under-represented and encourages the licensee to pursue its plans with CFAC-TV.
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Of considerable concern to the Commission, resulting in the granting of only a three-year renewal, are the licensee's proposed expenditures for the acquisition of non-Canadian programs relative to its proposed expenditures for the production and acquisition of Canadian programs. The Commission notes that in its financial projections, the licensee committed to spend during the new licence term an average of 22.7% of its projected total annual revenues on Canadian programming, declining from 23.8% in year 1 to 21.9% in year 5. It made a commitment to spend $13,493,000 for Canadian programming in the first year of the new licence term. The Commission notes that when inflation is taken into account at the licensee's projected annual rate of 4.5%, the amounts allocated to Canadian program expenditures would actually decrease over the new licence term.
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Over five years the licensee would spend approximately $74.6 million, (less than 33% of CHCH-TV's total program expenditure) in direct costs on Canadian programming, while $154.6 million would be spent on non-Canadian productions. The Commission notes that most other Canadian independent stations will spend more than 50% of their total programming budgets on Canadian programs.
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While admitting its current dependence on non-Canadian programming, CHCH-TV explained that its long-range plan is to reduce this dependency by increasing its investment in Canadian programming and by continuing to seek opportunities to share the costs of non-Canadian programs with other television stations throughout Canada. It stated that turning its attention to high-quality Canadian drama,
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will enable us to lessen our dependence on the supply of foreign programming by providing a competitive alternative, an alternative that will indeed deliver the kinds of audiences that we need in order to improve our negotiation ability with the suppliers of foreign programming.
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CHCH-TV reported at the hearing that its recent decline in revenues is largely attributable to a decision that was taken some years ago to decrease the budget for the acquisition of non-Canadian programs as part of an attempt to reduce costs. The licensee confirmed, however, that this decision, rather than slowing the decline in its revenues, was clearly responsible for accelerating the decline. It stated that
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even through the difficult period where we made some decisions that adversely affected our performance, the level of our commitment to Canadian [programming] and our production and provision of that to other independents in the country was not deterred. We lived up to the expectations expressed in our last licence.
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The licensee also made reference to the fact that its proposed direct investment of $1 million for Canadian program development "will actually leverage many more dollars" and estimated that the actual production cost of the 28 projects currently in development would be $11.6 million. The Commission notes that the licensee will allocate portions of the development funds, ranging from 45% to 69.8% per year, to drama productions.
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At the hearing, Mr. Brian Foley, President of Niagara and Vice-President, Television of Selkirk, confirmed that a "co-operative approach to foreign acquisition has been in place for some time" and that "the cost of foreign programming will continue to escalate". He indicated that CHCH-TV would "love to see a more formal association, one that we can count on in negotiations", and confirmed that "on those programs that we acquire the national rights for, the risk is ours". As noted earlier in this decision, CHCH-TV currently supervises the sale, or the licensing in other Canadian markets, of non-Canadian programs for which it acquires national rights. It indicated that in order to alter the ratio of Canadian to non-Canadian program expenditures, CHCH-TV would require more support from purchasing stations and a more formal arrangement among the stations.
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The Commission encourages the licensee to examine carefully any avenue which would result in more balanced expenditures for Canadian as opposed to non-Canadian programs. It expects the licensee to follow through on its stated intention to "try and take an orderly and strategic balancing of the relationship between foreign-acquired and our Canadian expenditures". At the time of the next CHCH-TV licence renewal, the Commission will wish to review thoroughly the measures which will be taken by the station to achieve a more equitable distribution of its expenditure for Canadian and non-Canadian programs.
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According to the financial projections submitted by Niagara, CHCH-TV will expend $13,493,000 on Canadian programming in the first year of the new licence term (1989/90). As specified in the Public Notice accompanying this and other television renewal decisions, inasmuch as the total advertising revenues of the station exceeded $10,000,000 in 1987/88, the Commission has imposed a condition of licence which requires that CHCH-TV invest a minimum of $13,493,000 for Canadian programming expenditures for the year ending 31 August 1990, and to adjust this amount in each subsequent year in accordance with the prescribed formula linking program expenditures with 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 changes in its revenues. The condition of licence is set out in the appendix to this decision.
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The Commission has taken note of the licensee's commitment to spend $9.3 million over the next five years on technical improvements including $8.8 million for studio and production improvements and $470,000 for a new transmitter. It also notes that new computer equipment will be purchased for the CHCH-TV newsroom.
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In renewing this licence, the Commission also authorizes CHCH-TV to make use of the Vertical Blanking Interval. The Commission expects CHCH-TV 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 services for the deaf and hearing impaired, the licensee indicated that it is currently using NewsCap software to close caption news headlines which are aired several times each day and that it will be using "CC Writer" software to caption station-produced comedy and drama series such as "Comedy Mill" and "Emergency Room" as well as in-house specials. It committed to close caption its productions which are nationally-syndicated at no extra cost to the client stations. The licensee also indicated that once its newsroom computer is installed early in 1989, it will caption its noon and late evening newscasts. It was not yet in a position to commit to the captioning of its supper hour news program because of the extensive use of "live" reports. The Commission commends CHCH-TV for the noteworthy efforts it has taken to close caption its programming and expects the licensee to implement the initiatives noted above in order that by the end of the first year of the new licence term, at a minimum, the headlines and appropriate scripted portions of the supper-hour newscast will also be closed-captioned.
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The Commission expects CHCH-TV to acquire 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, to ensure access to the station by deaf and hearing-impaired viewers over the entire broadcast day.
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The Commission received several interventions in response to this renewal application including one from Multilingual Television (Toronto) Limited with respect to ethnic programming. Matters raised in interventions by the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the Canadian Association of the Deaf, the Ontario Closed Caption Consumers, Inc. and the Deaf Connection have been addressed in the Public Notice introducing this decision.
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The Commission considers that the licensee has responded adequately to the issues raised by the interveners.
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The Commission also received an intervention by Mr. Tim Scollard of Toronto, who appeared at the hearing objecting to the station's decision in 1987 to broadcast a program on the subject of AIDS that he considered contained numerous inaccuracies. In replying to this intervention, the licensee noted that the program, which was a brokered one, had been screened by an internal committee prior to broadcast but acknowledged that there was "misinformation that our screening committee at the station did not pick up". The licensee stated that it had apologized to Mr. Scollard and had broadcast a two-hour informational phone-in program during prime evening viewing hours in order to ensure that inaccuracies contained in the original program were corrected. On a wider basis, the station also indicated a willingness to develop an internal code for brokered programs.
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Fernand Bélisle
Secretary General
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APPENDIX
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Conditions of licence for CHCH-TV Hamilton
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1. It is a condition of licence that the licensee expend on Canadian programming, at a minimum:
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(a) for the year ending 31 August 1990, the amount of $13,493,000;
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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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