ARCHIVED -  Public Notice CRTC 1989-27

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Public Notice

Ottawa, 6 April 1989
Public Notice CRTC 1989-27


Table of Contents Page
1. Economic Background 3
2. Programming 8
(i) News and Information 9
(ii) Music and Entertainment 11
(iii) Program Development 15
(iv) Definition of a Local Program 16
(v) Infomercials 21
3. Canadian Program Expenditures 21
4. Capital Expenditures 28
5. Social Issues 30
(i) Closed Captioning 30
(ii) Reflection of the Community 33
(iii) Sex-role Stereotyping 35
(iv) Depiction of Violence 36
(v) Advertising to Children 36
1. The CBC's Corporate Plan 37
2. Canadianization and Regional Production 37
3. Commercial Strategy 44
4. Capital Expenditures 48
5. Social Issues 49
(i) Closed Captioning 50
(ii) Reflection of the Community 52
(iii) Sex-role Stereotyping 54
(iv) Other Issues 55


Related documents: Decisions CRTC 87-140 dated 23 February 1987, CRTC 87-200 dated 24 March 1987 and CRTC 88-275 dated 8 April 1988; Public Notices CRTC 1985-58 dated 20 March 1985, CRTC 1986-177 dated 23 July 1986, CRTC 1987-8 dated 9 January 1987 and CRTC 1988-159 dated 22 September 1988; Notice of Public Hearing CRTC 1987-73 dated 2 September 1987; and Circular No. 350 dated 8 August 1988.


During the fall of 1988, the Commission held seven public hearings to consider applications for the licence renewal of 76 television stations across Canada. These public hearings took place in Toronto, Winnipeg, Vancouver, Edmonton, Montreal, the National Capital Region and Halifax. In total, 53 applications from originating television stations were considered as appearing items and 23 other applications were considered as non-appearing. As a result of these hearings, the Commission was able to evaluate the performance of a wide cross-section of the television industry throughout the country. A similar evaluation will take place in the fall of 1989 in respect of private sector French-language television stations in Quebec.
Most of the applicants for licence renewal at the fall 1988 hearings had not appeared before the Commission since the early 1980s and, in some cases, the late 1970s. These hearings were initially scheduled for the fall of 1987 following consideration of the CBC and CTV television network renewal applications and that of Global Communications Limited. However, in Notice of Public Hearing CRTC 1987-73, the Commission announced it would delay the hearings related to the renewal applications of individual stations in order to allow for the restructuring of the CTV television network. Following confirmation of a new affiliation agreement and cost/revenue sharing arrangement between the CTV network and its affiliates in the spring of 1988, the Commission proceeded with the station renewal hearings.
As part of its assessment, the Commission reviewed each television station's performance since its last renewal hearing and examined each licensee's proposals for the coming licence term. With respect to past performance, the Commission has accorded particular attention to each station's local programming, its financial performance, and its responses to complaints from the public that had been filed with the Commission. Regarding proposals for the new licence term, the Commission has assessed each licensee's proposed Canadian program expenditures and the role each intends to play in developing quality Canadian programming that responds to the needs of audiences in the local market.
In the Notice of Public Hearing announcing each of the licence renewal hearings, the Commission identified 14 issues of interest and concern which it intended to discuss with the applicants at the hearings. The general conclusions reached by the Commission with respect to these and other issues are set out below. The licensees' proposals and the issues examined by the Commission with the licensees are set out separately in the licence renewal decisions that accompany this Notice.
1. Economic Background
With very few exceptions, the licensees appearing at the fall 1988 television licence renewal hearings described their revenue potential for the new licence term in very cautious terms. In some markets, specific circumstances were offered to explain these projections. For example, some licensees said the introduction of new over-the-air services in Manitoba, Saskatchewan and the Maritimes, along with changes in ownership or affiliation in other markets would affect revenues in ways which they were unable to predict with accuracy. For the most part, licensees considered it difficult to provide five year forecasts with any degree of certainty. In addition to marketspecific developments, many licensees, as well as interveners such as the Canadian Association of Broadcasters (CAB), referred to more general factors.
In its intervention supporting the renewal of all private sector broadcasters' licences, the CAB spoke of a climate of uncertainty and instability, caused in part by questions relating to the proposed Broadcasting Act as well as:
° increased competition from new services;
° major changes to the capital cost allowance for film and video production
° the possibility of a new tax on advertising;
° new technologies such as high definition television (HDTV).
The CAB noted that television's share of total advertising expenditures in Canada declined from 14.1% in 1983 to 13.7% in 1987, and estimated the dollar value of this decline at $30 million. The CAB also filed a study by Communications Management Inc. (CMI) which identified a shift by advertisers away from media advertising and towards promotional activities which they consider more easily measured and evaluated.
Among other things, the CMI study noted an increasing shift toward local or retail advertising in television and away from national advertising. Information from broadcasters' annual returns confirms this. While the annual rate of growth of national time sales exceeded that of local time sales in reporting years 1983, 1984 and 1985, the reverse was true in 1986 and 1987. Preliminary results for reporting year 1988 indicate this trend may continue.
The fragmentation of audiences, the impact of videocassette recorders (VCRs), and the possible ramifications of the Canada/U.S. Free Trade Agreement were additional elements mentioned by the CMI to explain broadcasters' cautious revenue forecasts.
The CAB also raised the possibility that expenses may increase at a faster rate than projected by the licensees. Canadian programming costs could increase as a result of higher fees and investment requirements to offset the tax changes that have made Canadian programs less attractive to private-sector investors. Increased competition, including that from specialty services, could also result in increases in the cost of non-Canadian programming, according to the CAB.
Finally, the CAB pointed out that, towards the end of the projected licence period, additional capital spending may be required to finance the introduction of high definition television (HDTV). While the CAB considers that the transmission of HDTV in Canada is unlikely during the next five years, it believes that private sector broadcasters will be required to make decisions on studio and production equipment compatible with an HDTV format to be established for North America.
Although it was not raised as a major issue by the CAB, several applicants noted that the CBC has become much more aggressive in its pursuit of advertising revenue in the past few years. Indeed, the CBC's corporate plan of October 1988 indicates a 24% year-over-year increase in time sales revenue for the fiscal year ending 31 March 1988. However, the Corporation does not expect this growth rate to continue. The CBC says it has almost reached the limits of its inventory and the impact of its Canadianization policy could diminish the CBC's attractiveness to advertisers on the English-language service in the future. Nevertheless, the applications for renewal of CBC owned and operated stations contained revenue growth projections for the new licence period indicating the Corporation intends to maintain its current share of advertising revenues.
The Commission recognizes that the broadcasting industry in Canada is faced with a degree of uncertainty over the next five years. However, the Commission considers that this uncertainty is no greater than for other service industries or other players in the Canadian economy as a whole. Moreover, many of the uncertainties which faced broadcasters over the past four or five years have now been resolved. The Canada/U.S. free trade legislation has been passed by Parliament and does not affect the Commission's regulations concerning the simultaneous substitution of broadcast signals or the income tax provisions governing the deductibility of expenses incurred by Canadians advertising on U.S. border television stations. The government's policies with respect to copyright are also public knowledge.
Indeed, there are reasons for Canadian broadcasters to be optimistic about the future. The audience viewing share of conventional television stations has remained relatively stable over the past several years. Although television's share of total advertising revenues may have declined slightly, it appears that television's total advertising revenues are continuing to increase and that private sector stations are, on average, experiencing growth in pre-tax profits. In fact, according to unaudited financial statements provided at the time of the hearings, the majority of licensees achieved much better results for the reporting year ending 31 August 1988 than those projected at the time of filing their renewal applications. Furthermore, revenues for the last four months of calendar year 1988 indicated much better results than those forecast by the licensees in June 1988. At the same time, the reported expenses of the majority of licensees were entirely consistent with those forecast earlier in the year.
In addition, as the CBC withdraws from the purchase of U.S. programs, competition for such programs may be reduced to the benefit of private sector broadcasters seeking to confirm increases in program acquisition costs.
The Commission considers that some caution in forecasting the future is prudent business practice and has therefore examined with the licensees ways of ensuring that spending on Canadian programs reflects changes in advertising revenues over the new licence term, should actual revenue growth exceed licensees' forecasts.
2. Programming
The information in the applications and the discussion at the fall 1988 public hearings indicate that local television programming has improved significantly in both quality and quantity over the last five years. Sustained economic growth has allowed broadcasters to allocate a growing proportion of their revenue to Canadian programs. The wide variety of television services competing for viewers' attention has obliged even the smallest licensees to ensure that local programs are competitive in content and production value. As one small market broadcaster said, "there is no place to be bad anymore".
The licensees whose renewal decisions accompany this Public Notice have fulfilled their Canadian content requirements and, in many cases, exceeded them by a considerable margin. Furthermore, the programming of network affiliates in the evening broadcast period is largely supplied by network operators whose performance requirements have been addressed in recent network licence renewal decisions.
While most English-language private sector broadcasters schedule more Canadian programming in the spring and summer than in the fall and winter, the differences are much smaller than in the past. Finally, all of the independent stations and most of the CTV affiliates have made an effort to schedule some local entertainment programming in the evening broadcast period.
There is a clear consensus among the vast majority of licensees that the key to success in the local market lies with programming that is highquality and relevant to viewers. Local news programming is appropriately considered most relevant to local audiences and most likely to ensure their continuing support.
(i) News and Information
Local news and information programs provide the central focus of local television licensees' programming strategy. These programs establish a local station's identity within its service area and are the primary means by which a station reflects the nature and concerns of the community. The Commission commends licensees for the efforts made to improve their local news and information programming since the last licence renewal hearings. These efforts have, in most cases, resulted in more programs, higher production standards, greater program quality, larger audiences, and improved financial performance.
For most private sector broadcasters, between 70% and 80% of local programs belong to the information category. Almost all licensees now provide some level of local news on weekends -- an improvement over the recent past but an area in which there remains scope for more and better service. There is also a trend on the part of many licensees to provide local newscasts in the morning and at noon in addition to early and late evening programs. In keeping with this, the news and information budgets of private broadcasters have generally increased over the years.
With respect to information programming other than news, most stations broadcast between six and twelve long-form documentary programs or news specials each year relating to specific community concerns or events. Many licensees incorporate short documentary segments into their evening newscasts. For some, this type of "event programming" has proven to be of interest and more successful in terms of production quality and audience levels than regularly-scheduled public affairs or documentary programs.
The Commission considers the approach of licensees with respect to news and information programs as appropriate considering their role as local television stations. No interventions focused on deficiencies in the quality or quantity of this category of programming. The Commission considers that, overall, local television broadcasters are providing a valuable service to their communities through their news and information programs and encourages licensees to continue to find ways to improve this kind of programming.
(ii) Music and Entertainment
With respect to local music and entertainment programming, including drama, the experience of local stations and their plans for future involvement were discussed with licensees appearing at the hearings. These discussions reflected a common approach to some issues. Many of the network affiliates expressed the view that the production of entertainment programming for adults is best left to the networks which have the resources and expertise to develop and produce successful program concepts. Drama programming, in particular, was felt to be too expensive for local broadcasters to produce on a regular basis, unless produced in co-operation with other licensees or as a co-production with external funding. Specials are, however, becoming popular and are being developed by stations in every region of the country. Some broadcasters, particularly in central Canada, maintained that variety programming was a dying genre, superseded by music videos and the occasional music/comedy special. Many traditional variety acts now appear as segments within local information and human interest programs.
With consideration to the above, the Commission is reasonably optimistic regarding the future of local entertainment programming. In the area of local drama production, in addition to a number of projects recently commissioned or acquired by networks, private sector stations have participated in first-class projects, often through co-operative efforts or in co-production with independent producers. Series such as "Chestnut Avenue" and "Emergency Room" involve several stations together with an independent producer. A number of broadcasters, such as CHEK-TV Victoria and CITY-TV Toronto, are producing dramatic series targeted to children and youth. In addition to series, local efforts in drama production also focus on specials.
Several stations have made specific drama commitments, separate from their network contributions. CFTO-TV Toronto has committed at least $1 million per year for special drama projects such as "The History of Canada" and "Courage of the Early Morning" during the next licence term. Other stations have promised comparable levels of funding for local drama development and production.
Specials also seem to be the format of choice for the presentation of local musical talent. A number of licensees have demonstrated that local talent, and talent from other localities, can be presented in program formats that attract audiences when scheduled and promoted appropriately. In fact, the production quality of such specials often allows not only for local broadcast, but also for syndicated or network distribution throughout the country.
Many licensees intend to continue broadcasting regular music or variety programming. In western Canada, there appears to be a continuing demand for local music/variety series directed to adult audiences. Programs such as Canwest's "Big Sky Country", CFCN-TV Calgary's "One Night Stand" and CFRN-TV Edmonton's "Tommy Banks Show" are scheduled in the mid-evening hours. In addition to this, some local performers are regularly featured in segments of local information or human interest programs. A large proportion of music and variety programming is also directed towards children and youth.
The Commission also notes the initiative of CHEK-TV and four CBC affiliates in British Columbia in the development and production of the "B.C. Music Project", a 13-part series featuring videos of local musical groups. Co-operative ventures such as this, the televised portions of Mid-Canada Communications' "Mid-Canada Talent Caravan" and the "Coast-to-Coast Talent Search" concept being developed by CITV-TV in Edmonton, in co-operation with the ATV stations in the Maritimes among others, are examples of the role that local stations can play in the development and promotion of local and regional music talent.
The Commission encourages the initiatives of many private sector stations in the production of local children's or youth programming, particularly in the music and entertainment category. Co-operative series are produced by the Baton Broadcasting Limited and Canwest Broadcasting Ltd. stations, while some CTV affiliates, such as CKCO-TV Kitchener and CKY-TV Winnipeg, specialize in children's programming and have succeeded in placing their productions on the CTV network. The scheduling of Canadian programs directed to children and youth has improved at the network level, particularly on weekends. However, the Commission notes that few private sector licensees broadcast local programming directed towards young people in the 4:00 to 6:00 p.m. period on weekdays. Decision CRTC 87-200, renewing the CTV network's licence, commented on this issue and the Commission will continue to encourage licensees to develop suitable Canadian programming for young people to be scheduled during this time period.
The Commission does not expect every station to produce local programming in all categories. In some instances, the high cost of producing quality entertainment programming makes it unreasonable for smaller television stations to produce certain kinds of programs. In other instances, a station's production team may have developed expertise in a particular category of programming and the station may find it more efficient to utilize fully this expertise than to attempt to produce programming in all categories.
The Commission considers, however, that all broadcasters have a role to play, appropriate to their particular market and financial circumstances, in the development, production and broadcasting of local entertainment programming. In the renewal decisions accompanying this Public Notice, the Commission, where appropriate, encourages stations to find ways of reflecting and promoting local and regional talent through local entertainment programs, particularly music/dance, variety and drama.
(iii) Program Development
To promote local talent and assist in the development of local programs, the Commission asked licensees to identify their annual expenditure forecasts on program development for the new licence term. The majority of licensees provided the Commission with specific dollar commitments for the development of under-represented program categories. In particular, the development commitments of most CTV affiliates and independent stations exceed $100,000 per station each year. On the other hand, several licensees, often because of the small size of their operations, maintained it was difficult to separate development expenditures from on-going expenditures.
In Decision CRTC 87-200, the Commission provided guidelines with respect to the objectives, definition and administration of the CTV network's program development fund. The Commission included similar guidelines in Decision CRTC 88-275 approving the acquisition of the assets of CJOH-TV Ottawa by Baton Broadcasting Limited. In order to ensure an accurate assessment of licensees' contributions to such important activities, the Commission considers that all licensees should work towards common objectives and employ similar definitions with respect to development funds. The following paragraph sets out guidelines with respect to development funds which the Commission considers to be appropriate for local stations.
The objective of program development funding is to ensure continuous investment in the script and concept development phases of entertainment and documentary projects. Emphasis should be upon providing "seed" money to less experienced writers, directors, performers and producers in order to encourage the development of innovative projects and Canadian creative talent. Script and concept development expenses should be restricted to those expenses incurred prior to the commencement of preproduction before the financing of the project is in place. Spending on programs that are assured of going to air at the time of the expenditure will not be considered as program development.
The Commission considers that licensees' commitments on development expenditures relating to the underrepresented program categories are important to the future success of Canadian television broadcasting. In aggregate, the total value of such commitments by private broadcasters whose licences are renewed today amounts to more than $10 million for the next five years. Such an investment in the development of Canadian talent from all regions will help to build a strong television industry in the years to come.
(iv) Definition of a Local Program
The Commission notes the significant increase in recent years of co-operative productions among two or more broadcasters and of co-productions with independent producers. Such ventures have had a positive impact on both the volume and quality of Canadian entertainment programming broadcast on local stations.
In Public Notice CRTC 1985-58, the Commission introduced a measure of flexibility into the definition of local television programming. To encourage the production of better quality, more attractive and more expensive programs in underrepresented categories such as drama, music/dance, variety and children's programming, the Commission stated that any program produced co-operatively by two or more broadcasters would be considered as a local program, provided the program responds to the needs and interests of the audiences in the areas served by the licensees involved. The Commission also said that such co-operative programming should not result in a diminution of the total volume of spending on local programming as set out in a licensee's Promise of Performance, particularly in the licensee's local news and public affairs programming.
During the course of the licence renewal hearings, the Commission noted some instances in which licensees are co-operatively producing programs in the information or sports categories and claiming these as "local" in their Promises of Performance. Although the information and sports categories were not specifically excluded from the policy, Public Notice CRTC 1985-58 indicated the Commission's intent to limit the policy to under-represented categories of programming. Accordingly, the Commission will no longer accept co-operatively produced information and sports programs as "local" programs on more than one station. However, in fairness, during the next licence period the Commission will continue to consider as local programs those co-operatively produced information and amateur sports programs which are being broadcast at the time of the publication of this Public Notice. Any new information or sports programs which may be co-operatively produced in the future will not be considered as a local program on more than one station.
The Commission encourages licensees to explore new ways to co-operate in the production of high-quality programming of all kinds. With respect to co-operatively produced programs, however, it will only consider under-represented programs in the music and entertainment categories as eligible for consideration as local programs for the purposes of Schedule I in each licensee's Promise of Performance.
With respect to co-productions involving independent producers, it is clear that urban centres such as Montreal, Toronto and Vancouver support a sizeable community of independent producers. However, broadcasters in smaller markets are also seeking local co-production opportunities. The Commission commends broadcasters for the relationships they have established with local independent producers and for the generally successful programs which have resulted. Such arrangements, particularly when they involve Telefilm Canada or provincial funding agencies, have the potential to provide quality Canadian programs to each broadcaster at a fraction of total program cost. Furthermore, the Commission notes that Telefilm intends to increase its allocations to independent producers who are located outside the major network production centres.
In Public Notice CRTC 1986-177, the Commission provided broadcasters with additional flexibility by agreeing to consider as "local", programs produced by an independent producer, provided such programs were commissioned by a broadcaster and the broadcaster was the only equity investor, aside from government funding agencies such as Telefilm Canada.
During the licence renewal hearings, the Commission noted that some broadcasters were claiming as "local", in their Promises of Performance, projects in which independent producers have various levels of equity participation. Such co-productions with the independent production community are generally less concerned with meeting local needs and the Commission therefore considers that such programs should not be identified as "local" programs for the purpose of Schedule I in the Promise of Performance.
The Commission reaffirms its policy with respect to independent productions, as described in Public Notice CRTC 1986-177 and, where necessary, is requesting licensees to submit a revised Schedule I of their Promise of Performance in keeping with this policy. Where such an adjustment results in a reduction in the total number of hours of local programs in a licensee's Schedule I, the licensee is not required to make up the difference, unless otherwise discussed at the hearing. The revised Schedule I will reflect more accurately the actual volume of local programming broadcast. At the same time, the Commission encourages all licensees to continue to develop working relationships with independent producers in their regions.
A further issue relating to local programming which was discussed at many of the renewal hearings concerns programs produced for broadcast by a network. In the past, the Commission has accePted several such programs as "local" programs. With a view to a more consistent approach, the Commission considers that programs produced by a local station for a network are targeted to a national audience and will not therefore consider them as local programs for the purposes of a station's Promise of Performance. Where necessary, in the accompanying licence renewal decisions the Commission is requesting licensees to submit a revised Schedule I of their Promise of Performance in keeping with this approach. Where such an adjustment results in a reduction in the total number of hours of local programs in a licensee's Schedule I, the licensee is not required to make up the difference, unless otherwise undertaken at the hearing. As indicated in the network licence renewal decisions, the Commission continues to encourage an increase in the volume of regionally-produced programming on the networks and the recent hearings have allowed several local stations to demonstrate their successful contributions in this respect.
The above clarification of the interpretation of a local program should provide consistent information and a more accurate measure of the efforts licensees are making to serve their local communities. The successful production of programs designed for network broadcast or international sales is a clear sign of the production capability of many local licensees. However, the primary role of a television station remains one of service to the local market. This is the most effective way of maintaining audience loyalty and market share.
(v) Infomercials
The Commission also discussed the issue of "infomercials" with the licensees at most hearings. This program format generally combines information or entertainment material with the selling of goods or services. In CRTC Circular No. 350 dated 8 August l988, the Commission described its approach to such programming and advised licensees to ensure their proposed schedules for the new licence term would not contain programming which might contravene the Commission's regulations in this respect. While the Commission did not note any regularly-scheduled infomercial programming in the licensees' proposed schedules, it will continue to monitor developments in this area.
3. Canadian Program Expenditures
In recent years, the Commission has placed increased emphasis on licensees' expenditures on Canadian programs. While a program's costs are not always proportional to its quality, there is generally a relationship between the two. As a result, an evaluation of program expenditures provides the Commission with an indication of a broadcaster's priorities. At the fall 1988 licence renewal hearings, the Commission discussed with the licensees their commitments to Canadian programming in both qualitative and quantitative terms.
With respect to the quantity of Canadian programs including local programs, acquired programs and network programs, licensees indicated that the requirements of the Television Broadcasting Regulations, 1987 are appropriate. Canadian programs enable the local broadcaster to offer viewers an identifiable alternative within the competitive environment provided by cable television and other forms of program distribution. The program diversity provided by the Canadian component of a broadcaster's schedule helps to ensure the showcasing of Canadian talent, the discussion of local issues of public concern, and a comprehensive choice of program material.
With respect to the quality of Canadian programming, the Commission notes the variety of creative programming initiatives undertaken by licensees located in markets of different sizes. The Commission recognizes that no single element will guarantee the success of a television program. Nevertheless, there is a growing interest and commitment on the part of licensees to become involved in the production of categories of programs which, until recently, were produced exclusively by networks. Broadcasters at the licence renewal hearings indicated a commitment to the production and broadcast of high-quality Canadian entertainment programming as well as to traditional news and information programs. In this context, Baton Broadcasting Limited, licensee of CFTO-TV Toronto, stated:
We recognized that we had achieved our maximum audience with our non-Canadian programming. Producing excellence in Canadian broadcasting is the strategy we decided to follow to further increase our audience within our market. With over 60% of our program schedule being Canadian, it makes good business sense for us to concentrate on maximizing our audience with our Canadian programming.
In virtually all cases, licensees' commitments to spending on Canadian programs closely reflect their revenue forecasts. As noted above, many licensees provided advertising revenue forecasts that were relatively conservative, reflecting an average growth rate of 5% to 6.5% per year over the new licence term. Based on the licensees' assumptions of an inflation rate of 4% to 5% per year, these forecasts signify minimal real growth in revenues and Canadian program expenditures.
Many licensees indicated the difficulties they experienced in forecasting revenues for the coming licence term and proposed program expenses in keeping with their modest revenue growth assumptions. At the hearings, several licensees indicated they would increase their Canadian programming expenses in relation to any unanticipated revenue increase. At the Vancouver hearing, for example, British Columbia Broadcasting Television System Limited, licensee of CHAN-TV Vancouver and CHEK-TV Victoria, stated:
... if our revenues are to go up, then our Canadian programming commitments can obviously follow .. We are prepared to commit to a constant of our Canadian expenditures to revenues.
Historically, a relationship has been maintained between spending on Canadian programming and financial performance. In the absence of firm commitments from all licensees, the Commission discussed with licensees at the hearings the possibility of imposing a condition of licence which would ensure that each licensee's program expenditures varied directly with its financial performance.
At the Toronto hearing, the licensees of independent television stations, CITY-TV Toronto and CHCH-TV Hamilton, said they would not object to such a condition of licence and the licensee of CFTO-TV Toronto indicated that its projected expenditures represent commitments that would be met regardless of whether its revenue forecasts were achieved. Many licensees stated that a condition of licence relating increases in Canadian program expenditures to increases in revenues would be acceptable.
Mid-Canada Communications, among others, suggested that averaging revenue growth over three years would tend to dampen the effects of any large fluctuations in revenues. The licensees of CKX-TV Brandon and CKY-TV Winnipeg acknowledged they could accept such a condition of licence as long as the Commission was flexible in its approach and took into account the particular circumstances of each market. The licensees of CKVU-TV Vancouver, CKND-TV Winnipeg, CITV-TV Edmonton and CFCN-TV Calgary argued that it would be preferable to tie required expenditures to the level of profits. Thunder Bay Electronics Ltd., licensee of CHFD-TV and CKPR-TV, provided the Commission with a discussion paper outlining its position with respect to several possible approaches to a condition of licence.
The Commission considers that the level of spending on Canadian programming is a vital element in ensuring the quality of Canadian programs. At the same time, the Commission acknowledges the suggestions made by various licensees and is aware of the importance of flexibility, simplicity and fairness in the application of any condition of licence based on a formula. For this reason, the Commission has decided to impose on the largest television stations under consideration a condition of licence relating each licensee's Canadian program expenditures to the station's financial performance as measured by its total advertising revenues in previous years.
The Commission considers that the application of the same approach to all private sector licensees is the most equitable way to ensure an appropriate level of expenditure on Canadian programs. The condition of licence applies to the seventeen television stations appearing at the fall 1988 public hearings whose total advertising revenues exceeded $10 million in the broadcast year ending 31 August 1988. All other privately-owned stations under consideration at the fall 1988 hearings will be expected to meet the same requirements, though not as a condition of licence. Privately-owned stations who are not subject to the condition of licence will be expected to spend no less on Canadian programs than the amounts indicated by the wording of the condition of licence.
Over the proposed licence term, the condition of licence requires the following expenditures on Canadian programming:
Year 1: the dollar amount committed by the licensee in its Promise of Performance for the year ending 31 August 1990 (unless otherwise determined by the Commission);
Year 2: the dollar amount established for Year 1 adjusted to reflect the annual growth rate of the licensee's time sale revenues plus network payments for the year ending 31 August 1990;
Year 3: the dollar amount established for Year 2 adjusted to reflect the average annual growth rate of the licensee's time sale revenues plus network payments for the previous two years ending 31 August 1991;
Year 4: the dollar amount established for Year 3 adjusted to reflect the average annual growth rate of the licensee's time sale revenues plus network payments for the previous three years ending 31 August 1992;
Year 5: the dollar amount established for Year 4 adjusted to reflect the average annual growth rate of the licensee's time sale revenues plus network payments for the previous three years ending 31 August 1993;
The expenditure requirements are based on an average of annual changes in the total of three revenue components: local time sales, national time sales and network payments to the station (if any). An example of the averaging process follows:
                       Total               Average
Year Ending     Advertising       Annual
31 August        Revenues        Change(%)

1989              $ 10,000,000      ---
1990              $ 11,000,000     + 10.0
1991              $ 12,000,000     + 9.1
1992              $ 13,000,000     + 8.3
By this example, the average annual change would be 9.1% i.e. (10.0 + 9.1 + 8.3) divided by 3, and the licensee in question would be required to increase its Canadian program expenditures by 9.1% for the year ending 31 August 1993 (Year 4).
The precise wording of the requirement is set out in the Appendix to this Public Notice.
The Commission's approach is designed to minimize any year-to-year fluctuation in Canadian program expenditures resulting from a sharp increase or decrease in advertising revenues by averaging the growth rate of the licensee's revenues over three years. In Years 2 and 3, however, a shorter time span for averaging has been chosen to remove the year ending 31 August 1988 from the calculation. Since the broadcast year ending 31 August 1989 is the first year in which the full impact of the new CTV affiliation agreement is expected to take effect, the Commission has opted to eliminate the preceding years in its averaging approach.
The Commission also notes that since the amounts required to be spent in Years 2 through 5 are based on the required expenditure in the previous year, there is no subsequent "penalty" for spending more than the minimum amount that the condition requires in any given year.
In determining the amounts to be expended on Canadian programming, the Commission has taken into consideration the commitments set out in the renewal applications and any revisions thereto as presented at the hearings. Licensees should follow the same method of reporting their Canadian program expenditures as used in their Annual Returns. The Commission intends to monitor further the relationship between television stations and their associated production companies in order to better understand these relationships.
The Commission notes the flexibility and fairness built into this condition through the linkage of Canadian program spending to revenues. As licensees' revenues increase, so will their Canadian program expenditures; should advertising revenues decline, so will the required level of spending.
4. Capital Expenditures
Collectively, the renewal applications contain projected expenditures of approximately $120 million for improvements to physical plant and equipment over the next five years. More than 85% of this will be allocated to improvements in production facilities and equipment including new or renovated buildings, state-of-the-art videotape facilities, electronic newsgathering capacity and mobile equipment.
The remaining commitments are directed to transmitter replacement and distribution facilities with a relatively small portion related to the extension of service. Less than 2% of Canadians remain beyond the reach of at least two conventional television signals.
At the hearings, the Commission questioned many of the licensees about their plans for stereophonic sound and their opinions regarding the impact of high definition television (HDTV). Most private licensees are now broadcasting in stereophonic sound or plan to do so within the next licence term. Stereo broadcasting generally commences with the originating station; rebroadcasting stations are converted at a later date. Only the major market stations are currently producing local programs in stereo. However, all stations plan to replace existing monophonic audio production equipment with stereo when existing equipment reaches the end of its operating life.
With respect to HDTV, all licensees are aware of the implications for capital planning and expenditures of any agreement on an HDTV standard for North America. However, only a few licensees forecast any expenditures related to HDTV production equipment during the new licence term. None foresees transmission in HDTV as a possibility during this period.
The Commission notes that the volume of complaints from the public relating to the quality and reliability of television signals has declined dramatically in the 1980s and is generally satisfied that licensees have provided reasonable plans regarding capital and technical expenditures for the new licence term.
5. Social Issues
At each public hearing, licensees were questioned with respect to their past performance and future plans relating to a variety of important social issues.
(i) Closed Captioning
Regarding service to the deaf and hearing impaired, the Commission discussed licensees' plans to provide closed captioning in local news programs. The Commission is generally satisfied with the progress made in closed captioning services provided by television networks and in the level of Canadian and non-Canadian captioned programming acquired by many local stations. The CTV and CBC networks both indicated they telecast over 1000 hours of closed captioned programming each year and an equivalent level of service is provided by some of the large independent stations. Some local affiliates also supply varying quantities of local captioned material, ranging from 130 to 500 hours per year. Until recently, however, very few local programs, particularly in the news category, were available with closed captions. Several broadcasters do provide a signing service for local news headlines but signing is understood by only a small percentage of hearing impaired persons. Closed captioning is clearly the method preferred by most hearing impaired viewers and the Commission is of the view that the demand for this service will increase as the proportion of older persons in the Canadian population increases.
The Commission acknowledges the firm commitments in this respect from most private sector stations appearing at the renewal hearings. All but the smallest stations and the CBC owned and operated stations indicated they had plans to begin the closed captioning of local news programs during the next licence term. In most cases, these plans were accompanied by specific financial commitments ranging from $25,000 to Sl30,000 per year. The Commission has been informed that a capital investment of approximately $10,000 is sufficient to purchase appropriate hardware and an English-language software package for the closed captioning of local news programming.
The Commission considers it necessary for local broadcasters to make an effort to close caption as many local programs as possible during the course of the new licence term. In the case of broadcasters that have indicated their commitment to provide a reasonable service, the Commission has noted such commitments in the renewal decisions. Where broadcasters have not made such a commitment, the Commission expects those licensees who appeared at the hearings to close caption at a minimum, the headlines and appropriate scripted portions of their local early evening newscast during the course of the new licence term. For licensees who were not requested to appear at the hearings, the Commission encourages them, as a minimum, to provide hearing-impaired viewers with access to local news and headlines through captions (open or closed) or signing during the new licence term.
At the Vancouver hearing, an intervention was made on behalf of the Greater Vancouver Association of the Deaf and the B.C. Chapter of the Canadian Hard of Hearing Association. They submitted that the provision of full access to the television broadcasting system for deaf and hard of hearing persons is a legal requirement and that the partial access currently being provided is discriminatory in light of the Canadian Charter of Rights and Freedoms and the Canadian Human Rights Act. The interveners asked that any licence approvals be made conditional upon the broadcasters providing 100% access to their programs for deaf and hard of hearing people, to be realized over a three-year transitional period.
While the Commission is sympathetic to this request, shares the goal of total access for the deaf and hard of hearing, and encourages broadcasters to achieve this objective, it does not believe the imposition of the condition requested is a reasonable solution at this time.
In addition to closed captioning, an important concern of the deaf and hearing impaired viewers relates to their ability to communicate with the local station. In many instances, licensees have installed a telephone device for the deaf (TDD). These devices, or their equivalents, provide an important service to the hearing impaired. In some areas of Quebec, Ontario and British Columbia, a relay centre exists that can provide a similar service without the purchase of special equipment. However, such centres have a limited capacity and the Commission considers that their existence does not reduce a broadcaster's obligation to have a TDD. The Commission therefore expects all licensees to install a TDD within the first year of the new licence term. Licensees should ensure that such equipment is installed in an appropriate location within the station and that the telephone number is well publicized among the hearing impaired communities in their broad-cast area and published in the local] telephone directory.
(ii) Reflection of the Community
At the hearings, the Commission discussed with the applicants how they planned to meet the needs of the various social and cultural groups in their broadcast areas and how ethnic and native groups are reflected in the licensees' local programming. Few community groups intervened at the hearings and the Commission notes the increasing sensitivity of licensees to the need to reflect all aspects of their local communities.
The Commission notes there is an important role for some thirdlanguage ethnic programming on local television stations. However, the depiction of Canada's cultural diversity so as to facilitate the integration of ethnic groups into the mainstream and reflect racially distinct groups to the population at large is a separate issue.
The priority for most licensees should be the fair and accurate reflection of the cultural diversity and ethnic participation in the community within mainstream programming. The Commission notes the successful efforts of many licensees in recruiting and training on-air staff from different ethnic communities. Most stations have committed to continue their coverage of local events of importance to ethnic communities both through regular news and information programs and through special programs highlighting such events. The Commission continues to encourage all licensees to develop close links with representatives of the ethnic communities in their areas and to keep abreast of any concerns these communities may have. Further, the Commission emphasizes to all broadcasters the necessity for all media, and television in particular, to reflect accurately the community they served.
The Commission notes that most of the major stations in western Canada provide some local programming of particular relevance to native peoples. Although only two stations offer access to native-produced programming on a regular basis, virtually all licensees are prepared to provide such access upon reasonable request.
Of greater concern to the Commission is the extent to which licensees accurately reflect the presence of ethnic and native peoples in their broadcast area and address their concerns through mainstream local programming. The Commission encourages all licensees to make greater efforts to ensure that the issues and concerns of ethnic and native Canadians are accurately reflected in mainstream programming, where appropriate.
(iii) Sex-role Stereotyping
The Commission has long been concerned with the issue of sex-role stereotyping on television. In the last decade, important progress has been made to eliminate the most offensive forms of sex-role stereotyping and to ensure that women have equal access to all sectors of the television industry.
At the licence renewal hearings, few interventions raised sex-role stereotyping as an issue. All stations now report internal mechanisms to review and resolve public concerns or complaints and most licensees have formed internal committees to handle such matters or pre-screen programs and commercials. A national organization, MediaWatch, reported good relationships with most broadcasters. Furthermore, many licensees reported on their progress in increasing the proportion of women on their staff. In this context, several stations noted that over half of their production and on-air personnel are women. Finally, although some licensees felt that a condition of licence regarding sex-role stereotyping was no longer necessary, all private sector licensees indicated they would adhere to the CAB's Code Regarding Sex-Role Portrayal in Television Programming.
The Commission is currently conducting a replication of its 1984 study of sex-role stereotyping in the broadcast media with the objective of determining the extent to which programming has improved with regard to the presence and role of women in Canadian programs and advertising. Nevertheless, the Commission considers it necessary to ensure that broadcasters remain sensitive to these issues and will continue to require adherence, by condition of licence, to the CAB's code on this subject.
(iv) Depiction of Violence
With respect to excessive violence in television programming, the Commission notes that no serious concerns were raised at any of the hearings. All licensees described adequate procedures for the identification and scheduling of programs containing violent scenes and for dealing with complaints from viewers. The Commission notes with some concern, however, the increasing trend in the United States towards the use of violence, or the threat of violence, in the so-called "trash" or "tabloid" television formats. The Commission will continue to monitor closely developments in this area to ensure that broadcasters continue to exercise their responsibilities in this regard.
(v) Advertising to Children
Finally, in the area of advertising to children, the Commission notes that no complaints or interventions were received on this subject and that all of the licensees have agreed to adhere to the CAB's Broadcast Code for Advertising to Children. However, as a result of the Commission's monitoring, it appears there are instances where some broadcasters fail to adhere to all aspects of the Code. The Commission intends to increase its monitoring and to discuss its concerns with the broadcasters involved at an appropriate time in the future.
The Commission will impose, as a condition of licence, the requirement that private licensees 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 accepted by the Commission.
As set out in Public Notice CRTC 1988-159 dated 22 September 1988, the Commission has approved a proposal by the CAB to establish the Canadian Broadcast Standards Council which will address several of the social issues identified above.
1. The CBC's Corporate Plan
At the 3 October 1988 hearing in Toronto relating to the licence renewal application of the CBC owned and operated station CBLT, the CBC submitted a copy of its Corporate Plan for the period 1989/90 to 1993/ 94. The plan, prepared in accordance with Treasury Board guidelines, was approved by the CBC Board of Directors in September 1988. Included in the plan is the order of priority for the allocation of any additional funding the Corporation might receive in fiscal year 1989/90. These priorities were presented to the Commission by CBC President Pierre Juneau, and discussed at the licence renewal hearings in Toronto and Montreal.
In Decision CRTC 87-140 renewing the CBC television network licences, the Commission set out a number of expectations in order of priority that were to be achieved by the national broadcasting service during the new licence terms. The Commission notes the priorities identified in the CBC's Corporate Plan are in keeping with the Commission's expectations.
2. Canadianization and Regional Production
A corporate priority of considerable importance to CBC owned-and-operated stations concerns funding the Canadianization of the English-language network service and increased financial support for French-language television services.
The CBC's Canadianization plan is a primary objective of English-language television over the next three to five years. The plan was developed by the network in co-operation with the regions and received approval from the CBC Board of Directors in September 1987. The CBC began implementing the plan in 1988/89 and all regions consider the achievement of these objectives a top priority. The objectives include:
° 95% Canadian content on the English-language television schedule in "prime time" (7:00 p.m.11:00 p.m.);
° 90% Canadian content on the English-language television schedule over the full broadcast day; 
° an increase in regional production for the network from approximately 25% in 1986/87 to 40% when the Canadianization plan is complete in three to five Years;
° a priority emphasis on drama, information and pre-school children's programming;
° the maintenance of existing audience shares.
In order to achieve these objectives, and since no additional resources were available for the year ending 31 March 1989, the CBC withdrew approximately $5 million from regional television programming budgets. These funds have been allocated to programming for the network produced in the regions. Network representatives at the renewal hearings noted that, after six months, the plan had resulted in the development of 7 new regionally-produced series and 28 regional dramas.
In addition, budgets for local programs produced and broadcast in the regions for regional audiences have been increased by $3 million -- the first such increase in five years. In 1988/89, the CBC's Englishlanguage owned and operated stations lost a half-hour per week to network scheduling in the evening broadcast period which had previously been devoted to local programs. This has left the regions with a total of only 30 minutes per week of local programming in the evening broadcast period, aside from news. However, at the hearings, the CBC said that neither regional program budgets nor airtime for local programs would be further reduced. The network is, in fact, hopeful that the 30 minutes per week taken away in 1988/89 will be restored to regional stations in 1989/90.
The increase in regional production for the network, which is a major objective of Canadianization, will be achieved through a process of competition among the regional stations, rather than by allocation. The network will define in general terms its programming needs and solicit proposals from the regions. Successful proposals will be fully funded by the network. The goal is to have production from every region and the network has undertaken a number of measures designed to ensure that competition is fair. For instance:
° development offices have been opened in Vancouver and Halifax. These offices will work with regional writers and producers in order to develop program proposals from the regions;
° training programs for regional writers, directors and technical crews are being developed and will be in place within one year;
° a director of co-funding has been appointed by the network to work with regional officers to seek new sources of money for programs;
° the creative management of English-language television has been reorganized to allow programmers to spend all their time developing proposals, including proposals from the regions;
° funds have been set aside for script write-offs, for pilots, and for program testing so that every production has a reasonable chance of success.
The Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) and the Canadian Television Producers & Directors Association (CTPDA) intervened at all of the licence renewal hearings. Both organizations expressed concern about the CBC's regional mandate. ACTRA pointed out that regional production is vital for the development and maintenance of a professional pool of creative talent outside the major network production centres. Local and regional productions are too often the neglected components of the broadcasting system and ACTRA was particularly concerned about the decline in non-news regional production at the CBC's regional stations. The CTPDA had similar concerns and stated that increased Canadianization of the CBC should not take place if it means the exclusion of programs designed to reflect a region to itself. Several local organizations representing regional performers or producers also intervened on this issue and, in some cases, proposed that the Corporation be required to spend specific development funds on non-network programming involving regional talent from the independent production sector.
The CBC's corporate priority for French-language television, parallel to Canadianization of the Englishlanguage services, was identified as follows:
 the improvement of French network television programming, made necessary by increased competition from new broadcast and cable services, both English and French, and by a concomitant increase in audience demand for more sophisticated programming.
At the public hearing in Montreal, Mr. Juneau, said that, although the French-language network and stations produce almost the same number of hours as their English-language counterparts, the budgets for these programs are significantly less.
The Commission supports the Corporation's plans to improve the quality of the French-language television network's productions by increasing program budgets. However, the Commission is concerned that regional production for French-language services has not received the same attention as regional production for English-language services. CBVT in Quebec City, for example, the second largest francophone market in Canada, plays an especially limited role as a network program provider and as a source of local programs for French-language television when compared to the role played by English-language regional stations such as CBUT Vancouver or CBWT Winnipeg.
In Decision CRTC 87-140, the Commission urged the CBC to "Canadianize the full-day broadcast schedules of the English and French television networks to an average of 90%" and to "attain a fair and equitable balance between network and regional production, distribution and scheduling on both its English and French networks". In the Canadianization plan for the English-language network, the Corporation has clearly decided to surpass these goals. The Commission commends the CBC for its plan and its efforts to proceed with implementation. The Commission considers that the CBC should provide a Canadian service in content and character for all but the smallest portion of its schedule and that an essential element of this should be the presentation of regionally-produced programs, particularly in the music/dance, drama and variety categories.
Nevertheless, the Commission shares some of the concerns of interveners such as ACTRA and the CTPDA. CBC owned and operated stations play an important role in reflecting Canada's regions to themselves. In some instances, the times allotted to local programs now constitute only half of that available in 1983/84. The Commission is concerned that this trend may be having a negative impact upon some local and regional productions, local performers and the local television station's role of reflecting the community it is licensed to serve.
The Commission notes the assurances of CBC corporate management that resources for the regions will increase in the future. The reinstatement by the network of a 30-minute local period in the evening would enable the English-language CBC owned and operated stations to better reflect the varied activities and concerns of their audiences. The Commission encourages CBC regional stations to use this additional time period for local entertainment programming. Regional stations cannot, of course, be expected to provide a full range of high-budget music and entertainment programs, particularly in expensive categories such as drama. In this regard, the network's plans to provide development and production resources for regionally-based entertainment programs seem entirely appropriate. The Commission encourages the CBC to ensure that all of the regional production centres participate in this activity.
3. Commercial Strategy
As noted earlier, the CBC has become increasingly aggressive in its commercial sales strategy in recent years. The CBC's Corporate Plan indicates the Corporation has increased its advertising revenue by making more inventory available, innovative rate setting, and more aggressive selling. For example, the advertising revenues of the French-language network have increased by more than 20% annually over the last six years. At the Montreal hearing, the President of the CBC noted that in the year ending 31 March 1989, 28% of the CBC's total budget would come from the sale of advertising.
Nevertheless, the CBC Corporate Plan forecasts a decline in total television advertising revenues of $35 million by the year ending 31 March 1993 as a result of Canadianization. The CBC expects that one result of the Canadianization of the English-language television network will be a decrease in advertising revenues as U.S. programs are replaced by Canadian programs with no track record and less appeal to advertisers.
The Commission notes the CBC failed to provide differentiated growth rates for each station's advertising revenues relating to the various markets in which it operates its stations. Such projections, which were supplied by the private sector stations, make it possible for the Commission to assess more accurately the diverse markets across the country and reach decisions which reflect the reality of each station's situation.
It is possible, of course, that the constant-dollar value of the CBC owned and operated stations' advertising revenues will not increase over the new licence term, as the CBC suggests. Such a no-real-growth scenario was said to take into account the potential short-term impact of Canadianization, increased competition from new broadcast and cable services, and an expected downturn in the economy in 1990.
In Decision CRTC 87-140, the Commission recognized that advertising revenue is essential if the CBC is to deal with its budgetary problems and stated its expectation that the Corporation adjust its national selective advertising rates to more competitive levels. At the same time, the Commission expected the CBC to continue to schedule commercial free programs. As a long term objective, the Commission urged the Corporation to reduce its reliance on advertising revenues as appropriations from government increase and funding is approved on a longer-term basis.
This objective was based, in part, upon the Commission's concern with a potential threat to the Corporation's traditional role as a public service with a legislated mandate in the Canadian broadcasting system if the requirements of the market-place are allowed to predominate.
The Commission is concerned that market considerations may already be affecting CBC programming decisions in certain instances At the licence renewal hearing for CBFT Montreal, the CBC stated that commercial considerations play a role in the scheduling of culturally-oriented programs such as operas and drama on the French-language network. The French-language network prefers to schedule more commercially-oriented programming whenever possible. As a consequence, several programs have remained on the shelf several years after completion resulting in a significant reduction in the development and production of new cultural or performing arts programming.
While there is no direct evidence that cultural or performing arts programming on the English-language network has been affected in the same way, it seems clear that one result of Canadianization could be to increase the pressure on CBC programmers to compensate for commercial revenues lost as a result of the displacement of popular U.S. programs by reducing such programming on the English-language network as well.
The Commission recognizes that market forces provide a powerful stimulus for broadcasters to schedule high quality popular programs. Nevertheless, the CBC, as a national public service, has a responsibility to meet the needs of various audiences and to reflect and support national accomplishments in the arts. If the CBC does not provide this type of programming, it is unlikely to appear regularly on Canadian television and Canadians as a whole would be the losers. The Commission therefore encourages the Corporation to ensure that commercial considerations do not unduly influence its programming decisions on either of its television networks, particularly as they relate to cultural or performing arts programs.
The Commission has a further concern relating to the CBC's commercial strategy. The success of the Corporation in increasing its advertising revenues to offset shortfalls in its parliamentary appropriation could have a negative impact in the long term. In a period of government restraint and deficit reduction, the CBC's ability to increase commercial revenues could serve as a rationale to reduce further the funds necessary for the Corporation to fulfill its mandate under the Broadcasting Act. As stated in Decision CRTC 87-140, the Commission is convinced that unless and until the mandate of the national broadcasting service is changed, the government should ensure that the CBC has sufficient funds to enable the Corporation to fulfill its objectives as set out in the Broadcasting Act. Given the requirements of the Act, the significance of the CBC within the Canadian broadcasting system, and the high expectations the Canadian public has for the CBC, the Commission considers this a matter of urgent priority.
Finally, the Commission has concerns with respect to the share of total television advertising revenues currently obtained by the CBC, especially as this affects the private sector. Considering the limited volume of advertising revenue available to all television stations, the growing dependence of the government-subsidized public broadcaster upon commercial activity raises issues of equity and fairness.
4. Capital Expenditures
In its Corporate Plan, the CBC indicated that it has adopted a capital planning model which places highest priority on replacing obsolete equipment, secondary priority on the maintenance of industry standards, and lowest priority on extension and improvement of services. At the fall 1988 public hearings, the Corporation provided capital expenditure projections for the regional stations which reflected these priorities.
The Commission recognizes the need for the CBC to replace obsolete production and transmission equipment, but reiterates its statement in Decision CRTC 87-140: by making use of new technological developments, and by co-operation with private sector broadcasters, the Corporation could now be in a position to complete its extension plans initiated under the Accelerated Coverage Plan. The Commission asked the CBC to undertake a study on the implications of extending full service to communities with a population of between 200 and 500 and of replacing its affiliates with "twin-stick" operations, where practicable. In Decision CRTC 88-181, the Commission requested a similar report with respect to CBC radio. The deadline for both reports has been extended until June 1989. Considering the importance of these two reports, the Commission expects the Corporation to file them by this date.
The issue of stereo broadcasting by CBC television was discussed at some of the hearings. The Corporation has no immediate plans to convert its extensive network of transmitters to stereo and the Commission recognizes that this could entail significant expenditures. The CBC is currently assessing the effects of stereo television on audiences and advertising revenues in order to determine whether the benefits justify the costs. The Commission notes that the CBC is behind private sector broadcasters in this area and that the network's lack of stereo transmission facilities also affects CBC affiliates. This has been a source of public complaints in situations where the CBC substitutes the stereo broadcast of a U.S. program with one in monaural sound. The Commission, therefore, encourages the Corporation to complete its studies with respect to stereo broadcasting and to develop a plan for the introduction of stereo broadcasting to its owned and operated stations.
Finally, the Commission acknowledges the Corporation's leading role in various industry research projects and committees regarding high definition television. In its Corporate Plan, the CBC suggests that some expenditure on HDTV production equipment could be required as early as 1991/92. However, the Corporation, as with most private broadcasters, is not yet in a position to project specific expenditures in this area. The Commission encourages the Corporation to continue its planning in this area and to keep the Commission informed of major developments.
5. Social Issues
At the hearings, the CBC owned and operated stations were questioned with respect to their performance and plans regarding several social issues, including the following.
(i) Closed Captioning
The Commission expressed concern that the CBC had proposed no plans to introduce closed captioning of local or regional programs during the next licence term. CBC stations transmit all of the closed captioned programs supplied by the network. However, the owned and operated stations themselves acquire little or no captioned programming on their own and provide no captioning of local productions.
At the hearing in Vancouver, the CBC supplied a detailed statement regarding its position on closed captioning. The Corporation said that, if it were to implement closed captioning of local programs, it would introduce such a service at all of its television stations at the same time. The cost of providing this service would be more than $3 million per year, or approximately $100,000 for each of the Corporation's 31 regional stations. The CBC noted that these cost estimates assume the same quality and method of production as that of the network's captioning system.
At the hearing in Montreal, representatives of the French-language network discussed problems specific to providing captioning in French. They stated that appropriate computer software for French-language captioning is not yet available and that the Corporation is discussing with the federal government the need for financial assistance to develop such software.
The Commission has noted the requests of organizations representing the hearing-impaired that broadcasters should place priority on providing closed captions on their local newscasts and also notes that CBC owned and operated stations have made no commitment in this regard.
The Commission recognizes that the costs of providing closed captioning facilities and operators to all CBC stations at the same time may be prohibitive at this time. However, the Commission notes that in introducing other new technologies such as FM radio, colour television, and the local radio and television services themselves, the Corporation proceeded gradually across the country. Furthermore, the Commission is convinced that the closed captioning of local news can be achieved at a cost far less than the $100,000 per year suggested by the Corporation. Systems which are in operation now at private networks and local stations are providing a very acceptable level of service at reasonable capital and operating costs. The Commission would not wish to discourage the CBC from implementing the best possible system. Nevertheless, hearing-impaired viewers across the country should not be left without a local service because the Corporation cannot afford to implement a more expensive system in all locations at the same time.
As set out in the renewal decisions of today's date, the Commission expects the CBC owned and operated television stations which appeared at the fall 1988 renewal hearings to close caption, at a minimum, the headlines and appropriate scripted portions of their local evening newscasts during the course of the new licence term. For licensees who were not requested to appear at the hearings, the Commission encourages them, as a minimum, to provide hearing-impaired viewers with access to local news and headlines through captions (open or closed) or signing during the new licence term. Further, the Commission expects the Corporation to submit to the Commission, within one year of the date of this Public Notice, a plan outlining an appropriate timetable for the provision of closed captioning at all of its owned and operated stations.
In addition, as noted earlier in this Public Notice, the Commission expects CBC owned and operated stations to be equipped with a telephone device for the deaf (TDD) within the first year of the new licence term. Licensees should ensure that such equipment is installed in an appropriate location within the station and that the telephone number is well publicized among the hearing-impaired communities in their broadcast area and published in the local telephone directory.
(ii) Reflection of the Community
The Commission discussed with the CBC regional stations their accomplishments and plans for the future with respect to the accurate reflection of the various ethnic groups within their service areas. The Commission notes that CBC stations recognize the need to reflect ethnic communities and their concerns within local programming. Furthermore, the Commission heard evidence that many local stations make efforts to employ members of ethnic communities in both on-camera and off-camera positions. The CBC has an important role to play in ensuring that the multicultural nature of Canadian society is reflected in its television programming. The Commission, therefore, encourages all CBC stations to continue to develop close ties with the ethnic communities in their respective communities in order to monitor and respond to their needs and concerns.
With respect to the provision of programming relevant to native peoples and the reflection of native concerns in mainstream programming, the Commission notes some progress on the part of CBC owned and operated stations. CBWT Winnipeg provides access to its northern transmitters for native-produced information programs. CBFT Montreal provides a similar service to native communities in Northern Quebec. However, the Commission is concerned that, in this case, the programming is transmitted at inappropriate times and has requested the CBC to report on solutions to this problem within three months of the date of the renewal decision. The Commission notes that CBC stations have generally expressed a willingness to negotiate similar arrangements with native production groups in their areas.
CBC owned and operated stations in areas where native peoples form a significant population appear to be sensitive to the native community's concerns and are making efforts to reflect them in the stations' mainstream programming. Steps have been taken to implement training programs designed to attract native people and CBWT Winnipeg currently employs one full-time native television news reporter. Nevertheless, the Commission believes that more can and should be done.
All CBC owned and operated stations are encouraged to ensure that ethnic and native issues and concerns are appropriately addressed in the mainstream programming of local stations.
(iii) Sex-role Stereotyping
In Decision CRTC 87-140, the Commission noted that because of its size, importance and special role in the Canadian broadcasting system, the CBC should provide leadership in offering an accurate portrayal of women in its programming. The Commission considers that all broadcasters, including CBC stations, should remain sensitive to this issue.
The Commission notes that no interventions were filed against CBC owned and operated stations on this issue. A national organization, MediaWatch, has reported good relations with CBC stations and the Corporation has agreed to accept the same condition of licence on each CBC owned and operated station as has been applied to the network: that the licensee continue to abide by the corporate guidelines with respect to sex-role stereotyping.
(iv) Other Issues
The Commission notes that no interventions were received with respect to the issues of violence in television programming and advertising to children. The CBC has agreed to the re-imposition of a condition of licence regarding advertising to children.
The Commission wishes to acknowledge the co-operation it received from the licensees at the seven hearings held in the fall of 1988 and to thank the interveners for their contribution to the Public Process.
Overall, the Commission considers that the licensees of Canada's television stations are providing a high quality local programming service to their audiences and are gradually making more significant contributions to the Canadian broadcasting system. In addition to their individual efforts in news and public affairs, licensees are increasingly cooperating with each other in the production of attractive Canadian drama, variety, music/dance and children's programming. While local stations are not expected to produce local programs in every category, each licensee has a role to play, appropriate to the circumstances prevailing in its market, in the development and production of local entertainment programs featuring local talent. Where appropriate in the renewal decisions accompanying this Public Notice, the Commission encourages stations to find new ways of reflecting and promoting local and regional talent through local entertainment programs, particularly music/dance, variety and drama. To ensure adequate funding for these initiatives, the Commission has adopted a new approach which associates requirements concerning Canadian program expenditures with each licensee's financial performance as measured by its total advertising revenues in previous years. This will ensure a level of spending on programming that is essential for continued improvement in the quality of local programs.
Broadcasters have generally demonstrated an increasing sensitivity towards the needs of the various communities in their broadcast areas. The conditions of licence, expectations and encouragements set out in the renewal decisions are designed to ensure that these contributions continue and that all licensees strive to find new ways to improve the service they provide.
Fernand Bélisle
Secretary General


The following is the text of the condition of licence as it will appear in the renewal decisions of the television stations indicated above:
It is a condition of licence that the licensee expend on Canadian programming, at a minimum:
(a) for the year ending 31 August 1990, the amount of $_______;
(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:
(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
(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: 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 this notice.
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