ARCHIVED -  Public Notice CRTC 1990-57

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Public Notice

Ottawa, 5 June 1990
Public Notice CRTC 1990-57
Community Channel Policy Review
Related Documents: "Policies Respecting Broadcasting Receiving Undertakings (Cable Television)" dated l6 December 1975; "A Review of Certain Cable Television Programming Issues" dated 26 March 1979; "Bicycled Programs on the Community Channel" Circular No. 286 dated 6 December 1982; "Community Channel Policy Review" Circular No. 297 dated l2 June 1984; "Complementary Programming on the Community Channel" Public Notice CRTC 1985-l5l dated l8 July 1985; "Regulations Respecting Broadcasting Receiving Undertakings" Public Notice CRTC 1986-l82 dated l August 1986; "Sponsorship Messages on the Community Channel" Circular No. 348 dated 27 July 1988; "Balance in Programming on Community Access Media" Public Notice 1988-l6l dated 29 September 1988; and "Policy Regarding Open-Line Programming" Public Notice CRTC 1988-213 dated 23 December 1988.
The Commission's current community channel policy has been in effect for l5 years. In that time, some policy revisions have been made reflecting the growing maturity of the cable industry and the evolution of social needs and expectations. The policy has not, however, undergone any comprehensive review.
The purpose of this notice is to present for public comment certain policy issues and proposals relating to the community channel. The first part of the notice provides an overview of the current community channel policy, including the underlying objectives that motivated its development. The second part examines a number of issues currently affecting the community channel and presents the Commission's proposals on these issues. The Commission invites all interested parties to submit their views and comments on the specific matters dealt with herein, or on other matters concerning the community channel.
It should be noted at the outset that the Commission is intent on preserving the fundamental principles and spirit of the 1975 community channel policy, and on ensuring that the community channel remains a vital and important component of the broadcasting system.
In its 1975 document "Policies Respecting Broadcasting Receiving Undertakings (Cable Television)", the Commission stated that "the community channel must become a primary social commitment of the cable television licensee." The provision of an effective community channel remains the cable licensee's principal return to the public for the privilege of holding a cable licence and plays an important role in achieving the objectives of the Broadcasting Act. The 1975 policy states that the nature of community programming should be distinctly different from that provided by conventional broadcasting services. Cable licensees are required to identify the various communities of interest present within their licensed service areas. Licensees should encourage citizen groups and individuals to play an active role in presenting innovative program ideas and alternative views, and are expected to provide training programs and establish advisory groups from the community to assist in the operation of the community channel.
Community programming should also reflect, where appropriate, the bilingual nature and ethnic composition of the community. Licensees are expected, as their individual circumstances permit, to decentralize production facilities, provide mobile equipment and, with the approval of the Commission, interconnect their facilities with those of adjacent systems to allow simultaneous transmission of relevant programming.
One of the key issues identified in the 1975 policy statement was the financial support that cable licensees should provide to the community channel. In that document the Commission considered that l0% of gross subscriber revenues would be a useful benchmark in this regard. Of equal significance, licensees were not permitted to include any advertising material on the community channel. Since 1975 the Commission has introduced some flexibility and modifications to the community channel policy in recognition of the growing maturity of the industry and the success of community programmers in achieving the policy's original objectives. The Commission relaxed its restrictions on bicycled programming in 1982, and in 1985 permitted smaller systems to distribute complementary programming on the community channel.
The most significant alteration to the original policy was introduced with the Cable Television Regulations, 1986 (the regulations). The regulations allowed for the first time limited forms of contra and sponsorship advertising. The Commission stated at that time that the additional revenues derived through such advertising would enable licensees to improve the quality and quantity of community programming. To this end, the licensees were required to reinvest these advertising revenues in the operation of the community channel, in addition to licensees' financial contributions to the channel.
Over the past fifteen years, the community channel has emerged as an integral element of the broadcasting system, highly valued by the thousands of Canadians who actively contribute to, and benefit from, its programming and operations. The Commission is satisfied that, with few exceptions, cable licensees, programming staff, and many volunteers provide a valuable service and have largely succeeded in meeting the original objectives of the 1975 policy.
Notwithstanding the achievements and successful development of the community channel, the Commission has identified a number of key issues to be addressed in this policy review. First, there is a need to establish consistent and stable financial support for community programming. Secondly, it has become necessary to address contraventions by some licensees of the regulations and policies respecting sponsorship advertising. Certain licensees have ignored their responsibilities to encourage broad community participation by restricting access to the channel in instances where community groups were unable or unwilling to attract sponsors. Further, the development of alphanumeric services and complementary programming on the community channel has necessitated a review of their role, particularly on small systems. Finally, the Commission is proposing to revise its assessment criteria with respect to the community channel in keeping with the Commission's overall goal of streamlined regulations and simplified administrative practices. Each of these issues is discussed below.
l.Financial Support
In its 1975 policy, the Commission decided not to impose a fixed funding formula for the community channel. Instead, the Commission established a policy guideline whereby licensees were expected to contribute l0% of gross subscriber revenues to the support of community programming, and noted that, since the cable industry was still in its formative stages, "profits and cash flow available to the licensee will be taken into consideration in judging the adequacy of the resources made available". Since 1975, cable systems have, in general, gained substantial maturity in terms of their subscriber base and financial stability and performance. This maturity is evident in the financial contribution to the community channel which, according to the Statistics Canada Annual Returns, had grown to $55 million in 1988. The Commission notes that this figure may be overstated since it may include costs of operating other local origination services such as the barker channel or special programming channels, and may also include fees paid to alphanumeric services such as Broadcast News. The Commission intends to consult with Statistics Canada to discuss implementing revisions to the Annual Return form that would enable the Commission to identify only those expenses directly related to the operation of the community channel.
A review of financial data provided in the Annual Returns indicates that the average industry allocation to the community channel between 1985 and 1988 remained constant at about 5 per cent of basic service revenues, although contributions by individual licensees range from l.2% to 19%.
The Commission considers that licensees should be required to maintain expenditures on community programming at no less than the industry average of 5 per cent of basic service revenues. Accordingly, the Commission intends to amend the regulations to require Class l systems and Class 2 systems of more than 2,000 subscribers to provide financial support to the community channel of not less than 5% of the revenues derived from the base portion of the basic monthly fee. In making this calculation, licensees will not be required to include, as part of their basic service revenues, any revenues earned as a consequence of fee increases introduced pursuant to subsection 18(6) of the regulations, or revenues derived from specialty service pass-through charges.
With regard to the appropriate types of expenditures, the Commission considers that expenses should relate directly to program production and the provision of staff. Further, this financial contribution should relate solely to expenses on operations and should not include capital expenditures since capital expenditures are provided for separately in subsection l8(6) of the regulations. Finally, the Commission intends to limit expenditures on overhead and other indirect expenses to a maximum of 30% of community programming expenses.
The Commission may allow exceptions to the 5% funding level via condition of licence, where for instance, adherence to the benchmark would substantially impact subscriber monthly fees as a result of a rate increase pursuant to subsection 18(8) of the regulations.
In its 1975 policy statement, the Commission emphasized the unique nature of the community channel as a complementary broadcast service to conventional broadcast services. The Commission noted that "the continued development of cable television must be accompanied by measures to maintain and strengthen the over-the-air broadcasting system" and therefore insisted that "no advertising material, including contra advertising, will be allowed on the community channel". The issue of advertising was again examined in the 1979 Review of Certain Cable Television Programming Issues and again in the 1984 Community Channel Policy Review, Circular No. 297, dated 12 June 1984. In both instances, the Commission decided to maintain its policy against the distribution of advertising on the community channel.
With the release of the new regulations in 1986, the Commission permitted limited forms of sponsorship and contra advertising. Cable licensees are now permitted to distribute simple oral or written acknowledgements in return for financial assistance or the provision of goods or services. As noted in Public Notice CRTC 1986-l62 announcing the introduction of the regulations, all revenues generated by such advertising must be reinvested in the operation of the community channel in addition to the licensee's responsibility to provide financial support to the community channel.
It should be noted that the definition of sponsorship allows the mention of the address or telephone number while the definition of contra advertising does not. In response to a request from the National Programming Committee of the Canadian Cable Television Association (CCTA), the Commission intends to amend the regulations to permit the mention of the address or telephone number in contra advertising. The Commission is also proposing, by regulation, to impose a time limit of l5 seconds for each contra or sponsorship message.
The introduction in 1986 of advertising on the community channel was followed by a period of enthusiastic experimentation with the result that some licensees went well beyond the intended limit of the regulations. With the release of Circular No. 348 Sponsorship Messages on the Community Channel, dated 27 July 1988, the Commission clarified the parameters of the regulations:
 In the case of "sponsorship" and "contra" messages, a moving visual presentation cannot be included because it consists of more than "an oral or written acknowledgement". Similarly, the still visual or pictorial display of goods sold by a sponsor cannot be included because a pictorial display of goods is clearly in excess of "an oral or written acknowledgement".
The Circular further noted that company slogans or jingles are not permitted, unless a slogan was trademarked and thus considered part of the name of the sponsor. Words that promote goods or services are not permitted, but company logos and the still depiction of the sponsor's building are permitted as long as they do not include the display of material that actively promotes goods or services.
The Commission is confident that most licensees are currently complying with the regulations respecting advertising. However, there is some concern that certain licensees are employing moving video and, in extreme cases, are engaging in conventional spot advertising. The Commission emphasizes that it will not tolerate such activity.
Moreover, the Commission will continue to insist that the orientation of the community channel must remainthat of a public service vehicle for free and open access and community expression. Licensees must not deny, restrict or reduce access opportunities if a community citizen group or individual is unable or unwilling to attract a sponsor. Under no circumstances should a licensee charge a fee for providing access programming, or insist that programs have sponsorship.
The Commission emphasizes that it is committed to retaining its prohibition against commercial spot advertising on the community channel. With the implementation by regulation of secure and stable funding levels as described earlier, the Commission is confident that financial pressures will ease and programmers will be able to focus their attention on creating programs and training volunteers.
3.Bicycling and Interconnection
The regulations define community programming as programming that is produced
(a) by the licensee of that undertaking or by members of the community served by that undertaking,
(b) by the licensee of another undertaking or by members of the community served by that undertaking that is relevant and of particular interest to the community referred to in paragraph (a), or
(c) by a network operator licensed to provide programming to a licensee for distribution on a community channel. Paragraph (b) allows for the bicycling of programs among licensees, and paragraph (c) allows for the interconnection of adjacent systems to facilitate simultaneous distribution of programs.
The Commission recognizes the benefits of program sharing among systems, and acknowledges the particular benefit that interconnection provides by enabling, for example, live open-line programming to several adjacent systems, particularly within common metropolitan boundaries.
At the same time, however, interconnection has the potential to interfere with the scheduling of local programs if program managers are not diligent in ensuring the priority distribution of local programs. The Commission is concerned that the community programming of small systems on the outskirts of large metropolitan areas may, once interconnected by microwave or by other means to larger systems, be overshadowed and squeezed out by the programming of the larger systems.
There are a number of options to resolve this concern. The Commission could establish a benchmark with respect to the percentage of an individual licensee's schedule to be devoted to programs originating with another licensee. In this regard, the Commission considers that a level of 40% may be appropriate. Alternatively, the Commission could require systems that intend to utilize interconnection to a significant extent to apply for a network licence. The Commission is interested in receiving comments on these options or alternative suggestions to deal with this issue.
4.  Sharing the Community Channel with Complementary Programming
Pursuant to the regulations and Public Notice CRTC 1985-l5l, the Commission allows Class 2 cable systems to share the community channel with other complementary programming, consisting of community programs produced by other cable television licensees, government or public service information material, NFB productions, children's programs, educational programs not provided by the Provincial Education Authority, alphanumeric services such as Broadcast News, the Question Period portions of the House of Commons or provincial legislatures and multicultural programs.
Local programs must retain scheduling priority. Foreign programs and commercial programs may not be distributed.
The Commission acknowledges that, unlike licensees of conventional television stations, cable licensees must, for the most part, originate all their community channel programs. This creates a high proportion of repeat airings and has motivated program managers to seek to diversify their sources of programming. In this regard, the National Programming Committee of the CCTA has requested that Class l systems be permitted to distribute limited amounts of "government or public service information material". While the Commission appreciates the concerns expressed by the CCTA and other licensees respecting local program production, the Commission nevertheless considers that the local orientation of the community channel must be maintained. Consequently, the Commission is seeking comments on the appropriate nature and extent of "government or public service material" that should be allowed on the community channel for Class 1 systems. Those commenting on this issue should address the manner in which such programming would meet the objectives of the Broadcasting Act and enhance the value of the community channel. The Commission would also be interested in receiving comments on how best to authorize the carriage of such programming, whether through an amendment to the regulations or by condition of licence on a case-by-case basis.
5.Small Class 2 Systems
The regulations require all Class l and Class 2 systems to distribute community programming on the community channel. Many small Class 2 systems lack the financial resources necessary to program the channel actively, and instead provide an alphanumeric service consisting of local public service announcements.
In keeping with its objective of reducing the regulatory burden on small licensees, the Commission proposes to amend the regulations to permit Class 2 systems with fewer than 2,000 subscribers to be relieved of the requirement to provide community programming on the community channel as long as a local non-commercial alphanumeric message service is provided. These licensees will be encouraged to begin programming a full service community channel actively when financial circumstances permit.
The community channel has been described as the electronic equivalent to neighbours talking over their backyard fence. The cornerstone of the community channel policy is to ensure the ability of the average citizen to access the television medium.
The community channel would not be successful, and in many instances, could not exist, without the extensive and valuable contributions of volunteers. It is this participation that shapes the identity of the community channel and provides its most organic element.
The Commission is satisfied that , for the most part, licensees have succeeded in their efforts to animate their communities and foster citizen involvement. However, as stated earlier, the Commission requires that access to the community channel should be free and open, and that under no circumstances should access depend on the availability of a sponsor for a program.
Licensees are reminded that the community channel should reflect the bilingual and multicultural natures and characteristics of their communities. Licensees should also make special efforts to meet the needs of the disabled and visible minorities. Licensees are expected to provide regular training programs for volunteers and to publicize the availability of access opportunities and production training programs.
Furthermore, the Commission considers that community programmers should continue to strive for innovation in programming concepts and communications methods. The Commission encourages licensees to tap the potential resources represented by the large number of those who own video camera equipment and are community oriented.
The Commission feels that it is necessary to update its community channel assessment mechanisms. The 1975 policy statement specified a number of criteria to be used in assessing the performance of licensees with respect to the community channel at the time of licence renewal, and indicated that the Commission would develop performance specifications to establish benchmarks for these criteria.
In Circular No. 297, the Commission stated that it "considers that community programming has evolved in harmony with the spirit of the Commission's policies, and that the imposition of performance specifications is unnecessary at this time".
The Commission continues to be satisfied that, with few exceptions, licensees have met their responsibilities. The Commission notes too that licensees have been greatly assisted by the dedication of community channel staff and volunteers. In light of this performance, and in keeping with the objective of streamlined regulation, the Commission feels that a complex mechanism to assess the performance of licensees respecting their community channel, such as a promise of performance, is not warranted. Instead, the Commission intends to adopt a simplified procedure, as follows:
l) Class 1 licensees and Class 2 licensees with greater than 2,000 subscribers will be required, by regulation, unless otherwise authorized pursuant to a condition of licence, to adhere to a funding requirement of not less than 5% of the revenues derived from the base portion of the basic monthly fee. Class 2 licensees with fewer than 2,000 subscribers would have the option to provide a local non-commercial alphanumeric service;
2) licensees must provide regular training programs for volunteers and must publicize their existence; and
3) licensees must develop and publicize an access policy and must file it with the Commission.
The Commission intends to implement a monitoring program whereby Class l and Class 2 licensees will be required to submit video tapes periodically upon request from the Commission. This monitoring program is to ensure that licensees are in compliance with the community channel policy, particularly with respect to advertising, citizen access and the overall orientation of the community channel. In addition to this monitoring program, the Commission will take into account any complaint letters on file at the time of licence renewal.
The 1975 policy respecting special programming channels prohibits the distribution of advertising material within locally-originated programs.
Hence, licensees wishing to distribute community programs containing sponsorship messages on a special programming channel have been required to apply for a condition of licence. The Commission considers that this restriction is no longer necessary and intends to amend its policy respecting special programming channels to permit the distribution of community programs complete with sponsorship or contra messages.
Finally, the Commission intends to amend the regulations to include the same content standards that apply to conventional broadcasters, and that were recently adopted for the Pay Television and Specialty Services licensees, as follows:
Programming Content
A licensee shall not distribute
(a) anything in contravention of the law;
(b) any abusive comment or abusive pictorial representation that, when taken in context, tends or is likely to expose an individual or a group or class of individuals to hatred or contempt on the basis of race, national or ethnic origin, colour, religion, sex, age or mental or physical disability;
(c) any obscene or profane language or obscene or profane pictorial representation; or
(d) any false or misleading news.
Comments on the Commission's proposals must be sent to the Secretary General, CRTC, Ottawa, KlA ON2 by 30 September 1990.
Rosemary Chisholm
Acting Secretary General

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