ARCHIVED -  Decisions CRTC 90-774

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Ottawa, 21 August 1990
Decision CRTC 90-774
CHUM Limited
Halifax, Nova Scotia - 894318500
Following a Public Hearing commencing 3 April 1990 in St. John's, Newfoundland, the Commission renews the licence to carry on the television broadcasting network, known as the Atlantic Satellite Network (ASN), for the satellite distribution of its service to the Atlantic provinces and the Eastern Arctic, from 1 October 1990 to 31 August 1994, subject to the conditions specified in the appendix to this decision and in the licence to be issued.
This term will enable the Commission to renew this licence at the same time as those of conventional television stations in the area.
ASN is wholly-owned by CHUM Limited (CHUM) which is ultimately controlled by Mr. Allan Waters of Toronto. Originally licensed in Decision CRTC 81-253 dated 14 April 1981, the ASN service consists of an advertiser-supported satellite-to-cable network for the transmission and distribution of regional television programming designed to provide an alternative programming choice to viewers. ASN continues to provide a blend of news, educational and general entertainment programming to subscribers of various cable systems. The Commission notes from the information submitted by the licensee that ASN continues to earn less than $10,000,000 in total advertising revenue and, consistent with the Commission's action with regard to licensees of television stations earning less in advertising revenue than the aforementioned amount, it places' an expectation on this licensee in respect of the level of Canadian programming expenditures.
Specifically, the Commission expects CHUM to adhere to its projected first-year expenditure level of $1,905,000 allocated for Canadian programming and to adjust its Canadian programming expenditures in subsequent years according to the Commission's prescribed formula which is linked to changes in advertising revenue and set out in Public Notice CRTC 1989-27 dated 6 April 1989. For the purposes of this expectation, year 1 shall be the broadcast year ending 31 August 1991. The Commission reiterates the importance it attaches to the funding of Canadian programming and is satisfied that this approach offers an appropriate and fair means of ensuring that the Canadian program expenditures of this television service keep pace with changes in its revenues.
In the area of local programming, the licensee had proposed to distribute throughout the current term of licence at least 13 hours of programming each week. The Commission notes, however, that this level of locally-produced programming was not achieved during the current licence period and that, as part of the present renewal application, the licensee has committed to distribute a lesser amount, namely 10 hours 30 minutes per week. This amount is exclusive of a series of news, weather and sports updates which provides on average another 30 minutes of locally-produced programming each week.
At the hearing, the licensee explained the proposed decrease in the amount of local programming, noting that prohibitive operational costs had forced the cancellation of a locally-produced two-hour video program and that a half-hour weekday homemaker's program had also been dropped as a result of CHUM's efforts to emphasize news and public affairs programming. In this respect, the Commission notes the increased human, technical and financial resources which CHUM has allocated for the production of news-oriented programming during the new licence term. The licensee also stated that it will augment its news staff by an additional three persons and expand its popular 'Atlantic Pulse' news program by introducing a half-hour edition each weekday morning.
CHUM also pointed to the fact that ASN will continue to broadcast locally-produced weekly entertainment programming. Such well-regarded programs include 'New Faces', a prime time musical variety program of Atlantic Canadian artists in its seventh year of production. The Commission has also taken note of the licensee's plans to introduce 'Off The Wall', a new weekly entertainment program highlighting local and regional talent from various artistic fields. The Commission commends the licensee for its efforts to provide news coverage relevant to its audience and its promotion and support of Canadian talent. In view of the licensee's intention to improve the production values in respect of news and information programming and taking into account the concrete initiatives to further expand its news programming, the Commission considers that, on balance, the proposed minimum level of 10 hours 30 minutes of local production represents an adequate commitment by this licensee, and expects CHUM to adhere to its undertaking to produce at least this amount of original local programming each week throughout the new licence term.
The Commission has noted the licensee's statement made at the hearing that its ASN staff may draw upon the production and programming experience and the varied resources of the Atlantic Television System (ATV).
As an important component of the ASN service, educational programming has always composed a large percentage of the service's programming. The licensee has committed to provide a total of 23 hours of English- and French-language educational programs during the new licence term. Also, ASN will continue to distribute 'Labradorimiut', which features the lifestyles and cultural heritage of native people.
While there are no formal agreements with independent producers to provide mainstream programming, the licensee distributes many independent productions within the educational portion of its regular schedule. The Commission notes the licensee's commitment that it would continue to include at least one hour of acquired television programming produced for children of pre-school age in the weekday programming schedule.
With respect to program development, the Commission notes that CHUM did not identify any specific budgetary allocations for this purpose as part of its renewal application.
The Commission draws the licensee's attention to the program development funding guidelines set out in Public Notice CRTC 1989-27 and encourages CHUM to review its plans with a view to ensuring that adequate annual funding be allocated for program development, particularly for the production of shows from under-represented program categories.
The Commission notes that the licensee has purchased telephone devices for the deaf (TDD) at its Halifax, Saint John, Moncton and Sydney facilities, making ASN more accessible to the deaf and hearing impaired. The Commission encourages the licensee to ensure that the telephone numbers for the TDD service are listed in the respective local public telephone directories.
With respect to closed captioning, the Commission notes the licensee's commitment that it will caption at least 494 hours annually of locally-produced programming, consisting solely of the scripted portions of its local newscasts.
In renewing this licence, the Commission authorizes the licensee to make use of the Vertical Blanking Interval. The Commission expects the licensee to adhere to the guidelines set out in Appendix A to Public Notice CRTC 1989-23 dated 23 March 1989 entitled 'Services Using the Vertical Blanking Interval (Television) or Subsidiary Communications Multiplex Operation (FM)'.
As part of the present application, CHUM has requested the deletion of a condition of its current licence that restrains it from soliciting local advertising in the Halifax-Dartmouth area, claiming that the circumstances which led to the imposition of this condition no longer exist and the restrictions on its ability to generate revenue are now 'unnecessary and unfair'.
In assessing this proposal, the Commission first examined whether the relevant circumstances had changed substantially. In this respect, the Commission notes that Decision CRTC 81-253 stated that the proposed service (at that time identified as ATV-2) will distribute 'regional' television programming to cable subscribers in Atlantic Canada. In that same decision, the Commission acknowledged that it would be considering in the future applications for third television service in the Halifax/Dartmouth area. The licensee, therefore, was fully aware at that time that approval of such an application would result in increased competition for revenue dollars in the Halifax/Dartmouth area. A third Halifax service, namely CIHF-TV, was licensed in January 1987 (Decision CRTC 87-59) and has since commenced operation. Furthermore, the Commission notes that the area's broadcasting environment is today characterized by greater competition through the addition of Canadian specialty services to the distribution schedule of the area's cable systems.
The Commission has also considered the fact that the level of profitability of both television and radio sectors in Halifax has fallen in 1989. Moreover, the Commission is not convinced that the economic conditions will allow these broadcasting markets to recover fully in the next year or so and is concerned that an approval of ASN's request would result in more competition for these broadcasters.
The Commission has also taken into account that, while ASN's financial situation is difficult, the parent company, CHUM, continues to be in a strong financial position. The Commission also notes that CHUM operates the CTV-affiliate in Halifax, CJCH-TV, which, as leader in its market, has enjoyed several years of above-average financial success.
In view of all the foregoing, the Commission is not prepared to allow for an increase in the competition for advertising revenues drawn from the Halifax market at a time which coincides with the early stages of CIHF-TV's development as a local station. The Commission denies the request accordingly.
CHUM also proposed the removal of a condition of licence from the licence for the cable system serving St. John's operated by Cable Atlantic Inc. (Cable Atlantic), formerly Avalon Cablevison Limited, requiring that commercial messages which are likely to have a negative impact on Newfoundland Broadcasting Company Limited (NTV) be deleted from the ASN service before being distributed on that system.
The Commission notes that the commercial deletion issue was discussed at previous public hearings in 1981 and 1984 and that the Commission's concerns for other broadcasters in the St. John's area had consistently outweighed the licensee's arguments in support of the deletion of this requirement. In 1985, upon the renewal of Cable Atlantic's cable licence in Decision CRTC 85-175, the Commission approved the distribution of ASN, subject to the condition that Cable Atlantic delete all commercial messages distributed by ASN that would likely have a negative effect on NTV. The Commission indicated in that decision that it would review the matter with all parties concerned at the licence renewal for ASN. The requirement was maintained in ASN's last renewal in 1985 and was reexamined at CHUM's request at this public hearing.
In the course of the discussion at the hearing, CHUM described its current practice for deleting commercials from its signal which is distributed to St. John's viewers by the Cable Atlantic system. It explained that those designated advertisements are deleted through the triggering, by ASN, of an alphanumeric service which, in effect, replaces this commercial content. The licensee indicated that approval of its request would eliminate the interruptions to the service which, according to its experience, have caused considerable viewer annoyance over the years and would provide for a larger viewer audience in respect of ASN's regional and national advertising.
Several radio and television broadcasters who serve the St. John's market intervened in opposition to CHUM's request on the grounds that CHUM's financial benefit would come at their expense, affecting their abilities to generate local advertising revenues. In response to the concerns from broadcasters who are currently deriving advertising revenues from the St. John's market, the licensee stated at the hearing that it neither had nor has any intention to sell advertising in St. John's and volunteered to adhere to a condition of licence that would, in effect, restrict it from soliciting such local advertising.
Some interveners further argued that ASN, which is licensed as a regional service, should not be allowed to draw local revenues, a privilege usually reserved for broadcasters who provide local programming. Others pointed to the fragile economy and the potential negative impact on existing broadcasters in respect of further fragmentation of a television market which has seen the introduction in the past two years of specialty services.
For its part, Cable Atlantic, appearing at the St. John's hearing for its own licence renewal was neither in favour of nor opposed to CHUM's request. It referred to a recent research study it had undertaken before the hearing, wherein 65% of all the subscribers who were surveyed indicated that they preferred the current practice of commercial deletion that provided them with news information as compared to the distribution of ASN advertisements.
The Commission also notes that, despite the interruptions of its programming service, ASN's audience share has risen in recent years.
After careful consideration of all of the above, the Commission is of the view that the circumstances surrounding the imposition of the condition of licence on Cable Atlantic's cable licence for St. John's have not changed in favour of its removal and that, considering the delicate economic environment of the area, the Commission is not convinced that a modification to the condition is appropriate at this time. Accordingly, ASN's request to have the aforementioned condition of licence removed from the cable operator's licence is denied. The decision renewing Cable Atlantic's cable licence is also released today (Decision CRTC 90-773).
The Commission reaffirms its position that all cable systems in the Atlantic provinces carrying ASN should do so on an unimpaired channel of the basic service.
Alain-F. Desfossés
Secretary General
Conditions of licence for Atlantic Satellite Network (ASN), the regional television programming service:
1. It is a condition of licence that the licensee adhere to the Television Regulations, 1987.
2. It is a condition of licence that the licensee not solicit local advertising in the Halifax-Dartmouth area.
3. It is a condition of licence that the licensee adhere to the Canadian Association of Broadcasters' (CAB) self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.
4. It is also a condition of licence that the licensee adhere to the provisions of the CAB's Broadcast Code for Advertising to Children, as amended from time to time and approved by the Commission.

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