ARCHIVED -  Decision CRTC 95-417

Decision

Ottawa, 7 July 1995

Decision CRTC 95-417

CHUM Limited

Halifax, Nova Scotia - 941318800

Renewal of licence for Atlantic Satellite Network (ASN)

Following a Public Hearing in Halifax beginning on 4 April 1995, the Commission renews the broadcasting licence for the satellite-to-cable programming undertaking known as Atlantic Satellite Network (ASN), from 1 September 1995 to 31 August 2000, subject to the conditions in effect under the current licence, as well as to those conditions specified in the appendix to 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 CIHF-TV Halifax and its transmitters. The Commission considers that it would be appropriate to do so, given the issues discussed later in this decision regarding the solicitation of local advertising in Halifax, and the implications of these issues for both ASN and CIHF-TV.

ASN is wholly-owned by CHUM Limited which is ultimately controlled by Mr. Allan Waters of Toronto. In the Atlantic region, CHUM Limited is also the licensee of Halifax radio stations CJCH and CIOO-FM and The Atlantic Television System (ATV), consisting of CJCH-TV Halifax, CJCB-TV Sydney, CKCW-TV Moncton and CKLT-TV Saint John.

Originally licensed in Decision CRTC 81-253 dated 14 April 1981, ASN is an advertiser-supported satellite-to-cable service authorized for the transmission and distribution of regional television programming designed to provide an alternative programming choice to viewers. ASN provides a blend of news, educational and general entertainment programming to subscribers of various cable systems.

At the time of ASN's licence renewal in 1990, CHUM Limited made a commitment to broadcast an average of 9 1/2 hours per week of original news production on ASN, not including news updates. Monitoring of ASN during the current licence term revealed a failure by the licensee to comply with this commitment. At the hearing, the applicant admitted that it broadcast approximately 8 hours of original news production weekly, not including updates, during the 1992-93 and 1993-94 broadcast years.

The Commission acknowledges the very significant increase in non-news original programming on ASN's service chiefly contained in the programs "Breakfast Television" and "Lunch Television", and is pleased to affirm that this expansion in the amount of original programming has greatly enlarged ASN's capacity to reflect its "regional community". The Commission also notes the licensee's commitment, revised at the hearing, of 8 1/2 hours per week of original news, including news updates, in the new licence term, and expects the licensee to adhere to this commitment throughout the licence term. The Commission reiterates the importance of compliance with all commitments made by a licensee.

Solicitation of local advertising

As a part of this application, the licensee requested the deletion of the condition of licence prohibiting ASN from soliciting local advertising in the Halifax/Dartmouth area.

An intervention expressing opposition to this aspect of the application was submitted by CanWest Maritime Television Inc. (CanWest Maritime), licensee of CIHF-TV Halifax and its transmitters, collectively known as MITV. CanWest Maritime objected to the deletion of the ASN condition of licence, based on the argument that the Halifax economy is not strong enough to withstand the entry of another local broadcaster without this causing financial harm to existing undertakings. The intervener also expressed concern that CHUM Limited's projected revenues for local sales are unrealistically low, and that revenues higher than those forecast would likely come at the expense of MITV. CanWest Maritime also argued that CHUM Limited owns AM, FM and TV stations in the Halifax market, and thus already enjoys a very strong position in the market; the intervener added that ASN's mandate is to provide a regional programming service, and not to function as a local broadcaster.

In response to the concerns raised in the CanWest Maritime intervention, CHUM Limited stated that it does not expect ASN to become an active player in the local Halifax/ Dartmouth market, since it only wishes to provide access to advertisers who wish to market their services on the full ASN network. CHUM Limited argued further that a very small number of Halifax-based advertisers, namely those that derive substantial business from the Atlantic region outside of Halifax, would be likely to advertise on ASN. It added that the revenues projected by CanWest Maritime for such activity are greatly exaggerated.

The Commission has carefully considered the views of both the licensee and the intervener. It notes that, at a previous hearing, the licensee projected revenues ten times higher than those projected currently, and remains concerned that any incremental revenues that would accrue to ASN as a result of approval of this request would be at the expense of existing local broadcasters. In view of the uncertain economic situation in the region, and the negative financial position of other local undertakings, the Commission is not prepared, at this time, to delete the condition of ASN's licence related to local solicitation. It therefore remains a condition of licence that the licensee not solicit local advertising in the Halifax/Dartmouth area.

Simultaneous substitution

As a further part of this application, the licensee requested that cable licensees that distribute ASN be authorized to substitute ASN programming in place of identical programming broadcast simultaneously by non-Canadian sources.

Simultaneous signal substitution is a measure designed to ensure that a priority television service, together with the advertising it carries, is delivered to Canadian viewers. Since ASN does not qualify as a "television station" for the purposes of section 20 of the Cable Television Regulations, 1986, simultaneous substitution is not practised by the cable undertakings that distribute ASN. The licensee argued, however, that allowing cable licensees to do so by condition of licence would ensure that viewers are not lost to foreign signals in general, and that tuning to ASN in particular would increase.

The Commission is not convinced that the loss of audience during programs that might otherwise be subject to substitution adversely affects the revenues of ASN to any significant degree. Accordingly, the Commission is not prepared to authorize cable undertakings to perform simultaneous substitution for ASN programming at this time. The Commission does note, however, that the issue of simultaneous signal substitution was discussed in its report to the Minister of Industry, titled "Competition and Culture on Canada's Information Highway: Managing the Realities of Transition", dated 19 May 1995. In that report, the Commission stated:

 The Commission recognizes the importance to all Canadian licensees of protecting the program rights that they have purchased. Accordingly, the Commission intends to conduct a public proceeding with a view to examining the feasibility of implementing simultaneous substitution for all distributors, and exploring options with respect to advanced, or non-simultaneous, substitution.

Canadian programming expenditures

In Public Notice CRTC 1989-27 dated 6 April 1989, the Commission stated that licensees of private, English-language television programming undertakings earning $10 million or less in total advertising revenues and network payments annually would be expected to adhere to their projected first-year expenditures for Canadian programming, at a minimum, and adjust such expenditures in subsequent years in accordance with the prescribed formula linked to the station's advertising revenues.

As stated in Public Notice CRTC 1995-48 dated 24 March 1995, the Commission shall continue to expect such licensees to expend on Canadian programming in accordance with the formula. The Commission will continue to apply this expectation in a seamless fashion moving from the current term into the new licence term. All policies pertaining to the formula as set out in Public Notices CRTC 1989-27, 1992-28, 1992-89, 1993-93 and 1993-174 will continue to apply, with the clarification that licensees will not be permitted to credit any overexpenditure made in the previous licence term towards Canadian programming expenditures in any year or years within the upcoming licence term.

Accordingly, inasmuch as the licensee's advertising revenues and network payments in the broadcast year ending 31 August 1994 were less than $10 million, the Commission expects the licensee to expend, in the first year of the new licence term, at a minimum, the amount it was expected to expend in the 1994-1995 broadcast year, before consideration of any overexpenditures or underexpenditures from prior years, increased or decreased in accordance with the prescribed formula linked to the station's advertising revenues and network payments. In each subsequent year of the licence term, the Commission expects the licensee's Canadian programming expenditures to be adjusted in accordance with the Commission's prescribed formula.

The Commission notes that the licensee has elected to average the percentage increase in total advertising revenues and network payments over a period of three years. In accordance with the provisions contained in Public Notice CRTC 1995-48, the Commission expects the licensee to adhere to this same three-year averaging mechanism throughout the new licence term.

Program development

The Commission reminds the licensee of the Commission's expectations set out in Public Notice CRTC 1989-27 dated 6 April 1989 and entitled Overview: Local Television for the 1990's, regarding the important role that local television stations play in program development.

Service to the deaf and hard of hearing

The Commission reiterates the importance it attaches to the provision of captioned programs to serve deaf and hard-of-hearing viewers.

Consistent with its policy approach for closed captioning announced in Public Notice CRTC 1995-48 dated 24 March 1995, the Commission expects the licensee to caption all of the news programming produced by the licensee, including live segments, using real time captioning or another method capable of captioning live programming, by the end of the new licence term. In addition, the Commission expects the licensee to close caption 70% of its programming during the broadcast day by the end of the licence term.

The Commission authorizes the licensee to continue 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)".

Employment equity

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled "Implementation of an Employment Equity Policy", the Commission announced that the employment equity practices of broadcasters would be subject to examination by the Commission. In this regard, the Commission encourages the licensee to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources.

In addition to the appearing intervention discussed above, the Commission acknowledges and has considered all of the interventions submitted with respect to this application.

Allan J. Darling
Secretary General

APPENDIX / ANNEXE

Conditions of licence for Atlantic Satellite Network (ASN), the regional television programming service:

1. The licensee shall adhere to the Television Regulations, 1987.

2. The licensee shall not solicit local advertising in the Halifax-Dartmouth area.

3. The licensee shall adhere to the provisions of the Canadian Association of Broadcasters' (CAB) "Broadcast Code for Advertising to Children", as amended from time to time and accepted by the Commission.

4. The licensee shall adhere to the guidelines on gender portrayal set out in the CAB's "Sex-Role Portrayal Code for Television and Radio Programming", as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC).

5. The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's "Voluntary Code Regarding Violence in Television Programming", as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC.

6. In addition to the 12 minutes of advertising material permitted by subsection 11(1) of the Television Broadcasting Regulations, 1987, the licensee may broadcast infomercials as defined in Public Notice CRTC 1994-139 and in accordance with the criteria contained in that public notice, as amended. For clarification purposes, criterion 7 described in Public Notice CRTC 1994-139 applies to commercial messages exceeding 2 minutes in length.