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Ottawa, 7 March 1991
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Decision CRTC 91-119
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Western Manitoba Broadcasters Limited
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Portage La Prairie/Winnipeg,Manitoba - 900753500
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Following a Public Hearing commencing 23 October 1990 in Regina, the Commission renews the licence to carry on the television broadcasting transmitting undertaking for CHMI-TV Portage La Prairie/Winnipeg from 1 September 1991 to 31 August 1994, subject to the conditions specified in this decision and in the licence to be issued. This term will enable the Commission to consider the renewal of this licence at the same time as that of other television stations in the region.
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Background
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The licensee, Western Manitoba Broadcasters Limited (Western), is also licensee of the CBC-affiliated station CKX-TV Brandon and its rebroadcasters at Foxwarren, Melita and McCreary, and of CKX and CKX-FM Brandon. Western was granted the licence for the independent station CHMI-TV in 1986 (Decision CRTC 86-433), to provide a fourth television service to the Portage La Prairie/Winnipeg area. Prior to reaching its 1986 decision, the Commission examined carefully what impact the addition of a fourth English-language television station might be expected to have on the Portage La Prairie/Winnipeg market. Western had proposed in its licence application that it be permitted to compete against existing Winnipeg television stations for selective national advertising revenues, but made a commitment not to solicit local advertising in that city. Nevertheless, concerns were expressed in interventions filed against Western's licence application by, among others, the licensees of CKY-TV and CKND-TV Winnipeg, who questioned the validity of certain marketing assumptions and economic indicators used by Western to support its case.
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The Commission, following consideration of all of the available evidence, concluded that the Portage La Prairie/Winnipeg market had "the capacity to support an additional television service projecting modest revenues, as proposed by Western". The Commission, however, expected Western "to abide by its commitment to restrict solicitation of local advertising to communities outside of Winnipeg".
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In its 1986 decision, the Commission noted Western's plans for a television service that would be essentially regional and rural in its orientation, and quoted the statement by the company's President, Mr. A. Stuart Craig, that the proposed station would be:
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...distinctively different from any of the existing stations in the market. [It] will have its own personality, will be intensively local, regional, neighbourly... We have designed a program schedule for Portage La Prairie and surrounding area with a special makeup of urban - including Winnipeg - and rural audience.
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In its decision, the Commission also highlighted Western's plans to distribute live programming between its stations reflecting the views, interests and lifestyles of people living in the four centres of Portage La Prairie, Winnipeg, Dauphin and Brandon. Further, the Commission emphasized Western's plans to develop Manitoba-based drama programming, to provide exposure for Manitoba talent and to support the independent production industry.
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In line with the applicant's commitments, the Commission imposed a condition of licence requiring Western to "...adhere to the regional and agricultural orientation it has proposed throughout its licence term, through the implementation of the Prairie Pulse Network, providing 24 hours per week of regional news, and other rural programs". As had also been proposed by the applicant, it was made a condition of licence that Western contribute a minimum of $500,000 to Manitoba drama productions over five years. Further, the Commission expected Western to contribute $1.75 million to independent program production over the first five years of operation.
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The October 1990 public hearing in Regina was the Commission's first opportunity to review Western's performance in meeting the various commitments and responsibilities described in Decision CRTC 86-433, and to assess the licensee's program plans and future direction. At the hearing, the Commission also considered a request by the licensee for authority to begin soliciting local advertising in the City of Winnipeg, effective 1 September 1991. These matters are addressed below, beginning with the licensee's past performance and future plans.
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Past Performance and Future Plans
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The Commission has assessed the licensee's performance during the first four years of its licence term and is satisfied that, on the whole, Western is meeting its commitments and responsibilities for the provision of a programming service with a strong regional and rural orientation. It notes and expects the licensee to adhere to its undertaking at the hearing to maintain and strengthen this focus in CHMI-TV's programming.
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In this regard, the Commission reminds the licensee of its obligation to proceed with and complete the allocation of $1.75 million for independent program production, and the expenditure of a minimum of $500,000 on Manitoba drama productions, within the first five years of the station's operation. The Commission notes, in this context, that Western is currently in the pre-production stage of a new series entitled "The Twelve Steps". The series, to be produced in co-operation with several other Canadian stations, will be a dramatized examination of the various stages of recovery from alcoholism. At the hearing, the Commission raised as a concern with Western the fact that, according to its renewal application, a disproportionate amount of the Canadian programming it proposes to broadcast in prime time appears to be scheduled during the summer months, a time of year when audiences tend to be smaller than average. The Commission notes Western's undertaking to correct this imbalance in its scheduling of Canadian content.
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CHMI-TV's Promise of Performance contains a commitment to broadcast 26 hours 30 minutes of original local program production per week, including 14 hours 30 minutes of news. Consistent with the Commission's new policies on local television programming, it expects Western to maintain the level of news programming on CHMI-TV at a minimum of 14 hours 30 minutes per week throughout the new licence term.
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The Commission's sampling of Western's news programming indicates that, consistent with the station's mandate, coverage is predominantly regional in focus, and includes relatively few stories that could be described as relating solely to Winnipeg. Regular news features include a call-in poll, an investigative series and an entertainment segment. Other regularly-scheduled programs of regional interest include "Made in Manitoba", "Prairie Lifestyles", "Manitoba Farm Report" and "Manitoba Midday". The Commission also notes that CHMI-TV has been successful in selling one local production, the exercise program entitled "F.I.T.", to the CBC. In the new licence term, Western plans to work with an independent producer on a new weekly half-hour program, to be entitled "Canada Farm Report", which it hopes to introduce in April 1991 and to syndicate across Canada.
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In the under-represented categories of drama, and music and entertainment, CHMI-TV broadcasts "Music From Brandon", a program produced in co-operation with CKX-TV Brandon, and "The Western Hour", a program acquired from a local independent producer. The renewal application indicates that CHMI-TV has also been involved with independent producers in various other drama projects, including "Super Conductor", a two-hour movie, "No Admittance", a half-hour music and drama pilot, and "The Castleavery Explosion", a half-hour docu-drama. The Commission notes that, according to the licensee's projections, CHMI-TV will spend approximately $1,927,000 on Canadian dramatic programming over the next five years.
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CHMI-TV's projected expenditures on Canadian programming in the first year of the new licence term are $2,130,000. As stated in Public Notice CRTC 1989-27 dated 6 April 1989, as well as in several television renewal decisions issued at that time and subsequently, the Commission expects licensees of television stations earning less than $10 million annually in total advertising revenues to adhere to their projected first-year expenditures on Canadian programming, at a minimum, and to adjust such expenditures in subsequent years in accordance with a formula linked to station advertising revenues. The Commission is satisfied that this approach continues to offer a fair means of ensuring that the Canadian program expenditures of each television station keep pace with changes in its revenues. Consistent with this approach, and inasmuch as CHMI-TV's annual advertising revenues are less than $10 million, the Commission expects Western to adhere to the prescribed expenditure formula.
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As stated in Public Notice CRTC 1989-27, the Commission considers that all television licensees have an obligation to ensure that their local programming is accessible to deaf and hearing-impaired viewers.
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In this context, the Commission notes the licensee's commitment to acquire a telecommunications device for the deaf (TDD), and to have this device installed at the station before the end of 1991. The Commission expects Western to adhere to this commitment, and to ensure that the TDD is installed in an appropriate location, such as in the master control room, to provide access to the station by deaf and hearing-impaired viewers at all times throughout the broadcast day.
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The Commission further expects the licensee, within the first year of the new licence term, to close caption, at a minimum, the headlines and appropriate scripted portions of its early evening newscast.
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It is a condition of licence that Western adhere to the guidelines on sex-role stereotyping set out in the Canadian Association of Broadcasters' (CAB) Sex-Role Portrayal Code for Television and Radio Programming, as amended from time to time and approved by the Commission.
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It is also a condition of licence that the licensee adhere to the CAB's Broadcast Code for Advertising to Children, as amended from time to time and approved by the Commission.
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CHMI-TV's Request for Authority to Solicit Local Advertising in Winnipeg
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At the hearing, the licensee offered a variety of arguments in support of its request that the Commission remove the expectation that Western restrict solicitation of local advertising to communities outside of Winnipeg. Among other things, Western contended that market conditions have changed in the years since CHMI-TV's original licence application was filed, with vastly increased competition for programming, audiences and revenues brought on by the expansion in the size of existing players and the introduction of new services, such as the Canadian specialty channels. Western stressed the downturn in the local economies of Portage La Prairie and other area communities, but also maintained, based on the results of an independent study, that the local advertising market is underdeveloped in comparison with other Canadian markets. Western also claimed that there is a demand among local Winnipeg advertisers for time on CHMI-TV and argued that, since it is authorized to provide a local Winnipeg service, it should be permitted to meet that demand. Western, if granted its request, undertook to make various capital and operating expenditures associated with the hiring of staff, the purchase of new production equipment, the addition or expansion of production facilities and an increase in the level of locally-produced programming. Among these proposed improvements was an expanded program, news and commercial production facility at Winnipeg, with associated creative writers, editorial and other staff, and a new, Winnipeg-based, ENG crew.
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The request by Western that it be permitted to solicit local Winnipeg advertising was opposed in interventions, including those presented at the hearing by the licensees of CKY-TV and CKND-TV. These appearing interveners agreed with the applicant that the economic climate within the market has changed considerably in the years since CHMI-TV was first licensed. According to the licensees of CKY-TV and CKND-TV, competition and audience fragmentation have increased, as have expenses, with the result that both of these Winnipeg stations expected to report losses for the year ending 31 August 1990. The interveners argued that, if Western is permitted to solicit local Winnipeg advertising, there would be a further erosion of the revenues earned by CKY-TV and CKND-TV, and a further reduction in the ability of the two stations to fulfil their commitments in what is already a difficult market.
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The Commission has examined the financial performance of CKY-TV and CKND-TV and notes that there has, in fact, been a significant decline in the real (i.e. after inflation) revenues earned by these stations in the years since CHMI-TV was first licensed. While the introduction of CHMI-TV may have contributed to this situation, a factor of equal significance may well be the increased commercial activity in recent years of CBWT, the English-language CBC station in Winnipeg. On the other hand, the revenues earned by CHMI-TV in 1989 and 1990 correspond very closely to the projections presented by Western in the application approved by the Commission in Decision CRTC 86-433. Thus, from a revenue standpoint, Western cannot claim to be faced with any unforeseen or unexpected financial circumstances.
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Given the decline in the revenues of CKY-TV and CKND-TV, the Commission considers that these interveners have legitimate cause for concern regarding the potential negative effect on their operations of added competition for local Winnipeg advertising from CHMI-TV.
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As emphasized earlier in this decision, the Commission is satisfied that Western has adhered to its mandate to provide a primarily regional and agricultural orientation in its programming service. Although the Commission acknowledges the licensee's assurances that this focus will be maintained, it notes that a significant portion of the expenditures proposed by Western would be geared to expanding and improving its Winnipeg facilities. It also notes that, with removal of the prohibition against the solicitation of local Winnipeg advertising, Western expects to derive as much as 55% of its local revenues from Winnipeg merchants after four years. Under such circumstances, the Commission considers that there would be greater and unavoidable pressures brought to bear on CHMI-TV to provide a service more closely focused on the needs of Winnipeg viewers, to the possible neglect of the station's regional and agricultural mandate.
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For the above reasons, the Commission is not persuaded that approval of the applicant's request for authority to begin soliciting local advertising in Winnipeg is in the public interest, and it is, accordingly, denied.
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In their interventions, the licensees of CKY-TV and CKND-TV contended that Western has not always adhered to the Commission's expectation that it not solicit local Winnipeg advertising. Both interveners requested that the Commission replace the existing expectation with a condition of licence prohibiting Western from soliciting such advertising. For its part, notwithstanding the complaints of the interveners regarding its sales practices, Western insisted that it has respected the Commission's expectation throughout the licence term.
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The Commission has considered this matter, and is satisfied that CHMI-TV has complied with the expectation. In the Commission's view, any past disagreements between the licensee and the interveners regarding such compliance do not warrant imposition of a condition of licence as suggested by the interveners. Accordingly, it shall remain the Commission's strong expectation that Western continue to restrict solicitation of local advertising to communities outside of Winnipeg.
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Allan J. Darling
Secretary General
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