ARCHIVED -  Decision CRTC 95-472

Decision

Ottawa, 20 July 1995

Decision CRTC 95-472

Learning and Skills Television of Alberta Limited

Calgary and Edmonton, Alberta - 941920100 - 941918500 - 941919300

Acquisition of assets and licensing of a new educational programming service for Alberta; and the inclusion of limited advertising material in the proposed service - Approved, subject to conditions of licence governing the nature of the service and the quantity and type of permissible advertising material.

Following a Public Hearing in Edmonton on 6 April 1995, the Commission approves the applications by Learning and Skills Television of Alberta Limited (LTA) for authority to acquire the assets of The Alberta Educational Communications Corporation (ACCESS), and for a broadcasting licence to continue the operation of the undertakings currently authorized to provide educational programming in Alberta.

The Commission will issue a single licence for a satellite-to-cable programming undertaking, including existing television retransmitters at Edmonton and Calgary, authorizing LTA to carry on an English-language television service responsible for delivering educational programming throughout the Province of Alberta.

The licence, to expire 19 July 2002, will be subject to the conditions specified in the appendix to this decision and in the licence to be issued.

The licence will only be issued, and authorization to operate the undertaking will only be effective, (a) upon surrender of the current licences held by ACCESS in respect of its satellite-to-cable programming undertaking and of its television retransmitters CJAL-TV Edmonton and CIAN-TV Calgary, and (b) upon receipt of documentation confirming that LTA has been granted the designations of provincial educational broadcaster and provincial authority for the Province of Alberta, within the meaning of the Direction to the CRTC (Ineligibility to Hold Broadcasting Licences) (SOR/85-627) dated 27 June 1987 (the Direction to the CRTC).

As discussed with LTA at the hearing, the licensee, by condition of licence, shall maintain the above designations throughout the term of its licence by statute or by order of the Lieutenant Governor in Council of the Province of Alberta, as contemplated by the Direction to the CRTC (Condition 1).

The licensee, by condition of licence, shall also adhere to the Television Broadcasting Regulations, 1987 (the regulations), with the exception of section 11 (Condition 2). This condition reflects the fact that there are no CRTC regulations otherwise applicable to the class of programming undertaking (satellite-to-cable) to be operated by LTA. Section 11 of the regulations will not apply in the case of this undertaking; this section pertains to advertising material. In its place, other conditions of licence have been imposed restricting the quantity and type of other advertising material that LTA may broadcast. These and other conditions are discussed later in this decision.

Background to the Transaction

The purchaser, LTA, is a private, for-profit corporation controlled by CHUM Limited (CHUM) through its ownership of 60% of LTA's voting shares. CHUM is controlled in turn by Mr. Allan Waters of Toronto. In 1994, CHUM ranked as Canada's fifth largest broadcaster by revenues (radio and television combined), and was the country's largest radio broadcaster. It is the licensee of a number of undertakings, including CITY-TV Toronto, and the specialty services MuchMusic and Bravo! It also holds a 50% interest in MusiquePlus. In Alberta, CHUM currently owns radio stations in Brooks, Drumheller and Stettler, although applications have been received by the Commission for the sale of these properties to a third party.

The vendor, ACCESS, is the independent corporation currently responsible for broadcasting educational programming in Alberta. It is controlled by its Board of Directors appointed by the Lieutenant Governor in Council of Alberta on behalf of Alberta's Ministry of Education and Ministry of Advanced Education and Career Development (the Ministries). Provision for the licensing of ACCESS, and of other such provincial educational broadcasters, is set out in the above-mentioned Direction to the CRTC.

ACCESS was originally licensed as a television network in 1974 to provide educational programming for insertion in the schedules of certain Alberta television stations. It now offers approximately 117 hours of programming per broadcast week, delivered over the air to television viewers in Edmonton and Calgary. The programming is also distributed, via satellite, to cable systems in Alberta which carry the service as a priority in accordance with the Cable Television Regulations, 1986.

In 1993, the Government of Alberta undertook a re-evaluation of all provincially-funded activities, and announced that it would not provide direct funding for ACCESS beyond 1994. To date, no applications for licence renewal beyond the current expiry date of 31 August 1995 have been filed by ACCESS with the Commission. A spokesperson appearing on behalf of the Province and ACCESS at the April 1995 hearing stated that if the present applications are denied "... all expectations are that the Alberta Government will not maintain the licence, that this would be the end of the service...

" In its applications to the Commission, LTA explained that the proposal whereby it would replace ACCESS as the provincial authority grew out of discussions between the Board of Directors of ACCESS and the principals of Canadian Learning Television Ltd. (CLT). CLT, whose ownership structure is identical to that of LTA, was an applicant whose proposal for a new, national specialty service was denied by the Commission in Decision CRTC 94-287. The discussions were held to investigate the possibility of CLT assuming responsibility for providing educational programming in Alberta. Subsequently, it was decided that a new Alberta company (LTA) should be incorporated to perform this role. At the hearing, LTA emphasized that, despite the corporate links between itself and CLT, the proposed acquisition of ACCESS is neither conditional nor dependent on the approval of any future application by CLT for a licence to carry on a national educational specialty service.

The Agreements Between LTA, ACCESS and the Ministries

The transaction will take place, and the subsequent operations of LTA will be largely carried out, under the terms and provisions of four main agreements between the parties, all leading to the privatisation of the provincial service, the removal of direct funding by the province, and continuation of a service under LTA's ownership designed to meet the learning objectives of the Ministries. The service will be financed through the sale of commercial advertising time and program sponsorships, and through the Ministries' purchase from LTA of air time and of programming to be produced, co-produced or acquired by the applicant on the Ministries' behalf.

In the interim period from 1 November 1994 up to completion of the sale of assets, the undertakings owned by ACCESS are being managed by LTA in accordance with the terms of a Management Agreement. This agreement stipulates that, until the sale is completed, LTA's management services shall remain subject to the overall policy, control and direction of the vendor.

Under the Purchase and Sale Agreement between the parties, the assets involved in this transaction will be transferred to LTA for the nominal sum of one dollar, contingent on CRTC approval of the applications. Based on the evidence filed with the applications, including the terms of the agreements between the parties, the applicant's projections as to advertising and other revenues, and the resources available to LTA's owners, the Commission has no concerns with respect to the availability or the adequacy of the financing that will be required by LTA to maintain the service in operation.

Under an Air Time Agreement signed by the parties and covering a period of five years, the Ministries have contracted to purchase, and LTA has agreed to sell, a weekly minimum of 47.5 hours of air time on the service for the delivery of educational and instructional programming to Albertans. The agreement may be extended for a second period of five years, at the Ministries' option.

According to this agreement, the specific time periods to be purchased by the Ministries will be determined annually. The Commission understands that, within the broadcast week (the cumulative total of the hours between 6:00 a.m. and midnight each day), these allocations will represent a minimum of 42.5 hours, consisting of not less than 10 hours per week in "Prime Time", a minimum of 2.5 hours in "pre-Prime Time", and not less than 30 hours per week during "Daytime" hours. The remainder of the broadcast week (up to 83.5 hours) will consist of educational programming that LTA will produce, co-produce or acquire on its own behalf. The Ministries expect to utilize LTA's facilities for a certain number of additional hours each week, outside of the broadcast day, for downloading programming to institutions, for data transmission and for other purposes.

The terms of a Production Agreement provide that LTA shall carry out the production, co-production and acquisition of all educational programming, on behalf of the Ministries, for a period of four years. Where LTA undertakes such production activities on behalf of the Ministries, priority shall be given to independent producers in Alberta. At the beginning of the fourth year, and for the remainder of the agreement's five-year term, the Ministries shall have the option of employing other parties to carry out all or some of these activities.

The Commission notes the clear and unequivocal confirmation at the hearing, both by the applicant and by representatives of the Ministries, that control over the undertaking, including ultimate responsibility for the scheduling of programs and for the program content broadcast during the air time periods purchased by the Ministries, will remain with LTA at all times.

LTA's Eligibility to Hold a Licence

The Direction to the CRTC precludes licensing by the Commission of provincial governments, their agents and municipal governments. The Commission, however, may license an independent corporation, as that term is defined in the Direction to the CRTC. The Commission must be satisfied that the corporation is not directly controlled by the province, its agents or municipal governments, and that it has been designated by the province for the purpose of broadcasting educational programming that is subject to supervision or assessment by a provincial authority. The Commission, having reviewed this matter, is satisfied that LTA meets these licensing requirements.

In an intervention to these applications, CanWest Global Communications Corporation argued that the absence of any public body to supervise the applicant's programming places LTA outside of the definition of "independent corporation". The intervener stated that LTA thus cannot be designated as the educational broadcaster by the Province of Alberta, nor can it be licensed as such by the Commission.

The Commission notes that each province has wide discretion in designating the provincial authority responsible for supervising educational programming; there are simply no restrictions of the type described by the intervener. At the hearing, LTA indicated that it would be receiving that designation. As for the Commission, it is free under the Direction to license any corporation provided it is satisfied that the corporation meets the eligibility requirements noted above. The Commission thus is not persuaded by the intervener's argument.

The Benefits Test

Because the Commission does not solicit competing applications for authority to transfer effective control of broadcasting undertakings, the onus is on the applicant to demonstrate to the Commission that the application filed is the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature. As a first test, the applicant must demonstrate that the proposed transfer will yield significant and unequivocal benefits to the community served by the broadcasting undertaking and to the Canadian broadcasting system as a whole, and that it is in the public interest.

In particular, the Commission must be satisfied that the benefits, both those that can be quantified in monetary terms and others that may not easily be measured in terms of dollar value, are commensurate with the size of the transaction and take into account the responsibilities to be assumed, the characteristics and viability of the broadcasting undertakings in question, and the scale of the programming, management, financial and technical resources available to the purchaser.

Despite the value of the assets it would be acquiring, LTA proposed very little by way of tangible benefits. According to the applicant, the value attached to the access the service will have to the technical, operational, marketing and promotional resources of LTA's principals, would represent incremental benefits amounting to between $1.25 million and $2.5 million over five years. In the Commission's view, however, these items fall within the categories of proposed benefits that have generally been rejected as such for reasons outlined in Public Notice CRTC 1989-109 dated 28 september 1989. Accordingly, the Commission has assessed the applications, based on the intangible benefits identified by the applicant.

In Public Notice CRTC 1993-68 entitled "Application of the Benefits Test at the Time of Transfers of Ownership or Control of Broadcasting Undertakings", the Commission stated that intangible benefits, such as the promise to maintain or improve a struggling service, "...may be as significant as tangible benefits and, in some cases, of primary importance, in the approval of transactions". The Commission added that it might, therefore, "...accept a package consisting solely of intangible benefits in cases where the survival of the service is at stake..."

The Commission agrees with the applicant that the single most consequential and unequivocal intangible benefit associated with this transaction is that it will allow a service of significant importance to remain in operation, that being the only educational television programming service available in the Province of Alberta. The service now offered by ACCESS is not for profit, and thus cannot be described as "struggling" financially in the same sense that the term was used by the Commission in Public Notice CRTC 1993-68. Nevertheless, given the decision taken by the Government of Alberta to cease all direct funding for ACCESS beyond 1994, the survival of the service is clearly at stake. In the circumstances, the Commission is convinced that approval of the present applications is in the public interest.

The CRTC's Objectives in Licensing LTA

The Commission's primary purpose in approving these applications is, as stated above, to ensure the long term presence of a viable educational programming service for Albertans. The Commission notes in this regard the many thoughtful interventions filed in respect of these applications by educational institutions, educators and individual Albertans from across the province, as well as by broadcasters, independent producers, elected officials and other interested parties. All but a very few of these interventions urged the Commission to approve the applicant's plans for a service dedicated exclusively to educational programming, one that will supply a significantly greater amount of elementary and secondary school core curriculum programs than is currently broadcast by ACCESS, as well as more post-secondary programs offering the opportunity for university accreditation.

Mr. Larry Shorter, who was the founding President of ACCESS and served in that capacity from 1973 to 1982, was one of several who appeared at the hearing in support of LTA's applications. Mr. Shorter noted that ACCESS was established to accomplish many objectives, but especially the delivery of educational programming to assist Alberta residents in learning the core subjects taught in the province's schools, colleges and universities. According to the intervener, despite the many other accomplishments of ACCESS, the service never became significantly involved in the teaching of core subjects for school credit. Instead, in Mr. Shorter's words, ACCESS simply "...drifted to more and more arts and entertainment programming":

 Never has ACCESS had [the support of the Ministries] to produce, acquire and distribute K to 12 credit programming, and only occasionally has ACCESS secured the cooperation of post-secondary institutions in the broadcasting of credit courses. Now the two Departments have committed themselves to huge chunks of credit programming and have contracted to finance such programs for at least a five-year period.

 It is vital that this commitment proceed for the sake of thousands of poorly served learners in this Province.... Now with the clear-cut objectives and lean structure, and a straightforward, non-mystifying commercial relationship with its educational clients, [LTA] stands ready to deliver what ACCESS never could.

The Commission shares the views expressed in the many supporting interventions regarding the importance to Albertans of maintaining and strengthening Alberta's educational television service, one whose programming, particularly its increased instructional and distance learning components, should ensure that the service remains distinctly different from that currently provided by conventional television licensees. It commends LTA on its initiative and innovation in coming forward with a unique and well-conceived model for accomplishing these goals.

Nevertheless, the Commission acknowledges that the licensing of a private, for-profit, corporation as a provincial educational broadcaster is without precedent. In the view of some interveners, LTA's applications raise concerns that must be addressed in order to ensure that the objectives discussed above are realized and upheld over the long term.

The Alberta Broadcasters' Association (ABA) submitted a written intervention and appeared at the hearing to present what it described as:

 ...constructive suggestions as to conditions of licence which the Commission could utilize to give LTA the flexibility it is seeking while ensuring that LTA will offer programming that is truly educational and alternative to what conventional broadcasters provide...

Although the ABA intervention touched on a variety of issues, the intervener's primary concern is that, over time, the nature of the service could shift away from the educational programming service described in the applications, and come increasingly to resemble the type of service provided by conventional, commercial television broadcasters. The intervener claimed that, without specific safeguards and restrictions regarding such matters as the amount and type of permissible advertising material, definitions of the types of programming LTA is permitted to classify as educational programming, and restrictions governing the exhibition of feature films, the service would have the potential to attract advertising revenues far beyond the applicant's projections, to a degree that could create significant undue hardship for conventional broadcasters, particularly for the licensees of Alberta's struggling radio stations.

Among other things, the intervener requested that conditions of licence be attached to any licence granted to LTA, prohibiting the applicant from soliciting local advertising, and from broadcasting any advertising directed to children.

Qualified support for LTA's applications was expressed in a written intervention filed by Craig Broadcast Systems Inc. (Craig). The intervener is owner/operator of two television stations in Manitoba and is the controlling shareholder of a company whose applications for licences to operate new commercial television stations in Alberta were denied by the Commission in June 1994.
Craig stated in its intervention that it "continues to be interested in the potential for expansion into Alberta" and that it "expects that it may reapply to the CRTC for such licences".

Craig, as did the ABA in its intervention, requested that any licence issued to LTA be subject to a condition of licence restricting the amount of feature films that may be broadcast on the service. It also proposed that LTA be required, by condition of licence, to establish an independent advisory committee responsible for providing "advice, counsel and direction to the applicant concerning the service and the programming with a view to ensuring sustained long-term educational benefits to Albertans".

The Alberta Motion Picture Industry Association (AMPIA) appeared as an intervener at the hearing to express support for LTA's applications, but also to call upon the applicant to increase its commitments for the exhibition of, and expenditures on, Canadian programming beyond the levels specified in its applications. The intervener also proposed that a mechanism be created to audit the applicant's performance in fulfilling the requirement set out in the Production Agreement that LTA accord priority consideration to Alberta-based independent producers for the programming it produces, co-produces or acquires on the Ministries' behalf.

The Commission has considered the views expressed by these interveners, and the proposals they have advanced as remedies for their various concerns. The Commission is also mindful of the applicant's stated purpose, reiterated frequently throughout this proceeding, "...to do our best for the educational system and for the people of Alberta", and of the applicant's concern that it not be so constrained by licensing requirements that it is impeded in its efforts to achieve that purpose.

The Commission considers that certain of the more specific concerns raised by interveners could be most effectively resolved by expecting the applicant to adhere to its commitments given at the hearing, while still others could best be addressed by requiring LTA to adhere to certain conditions of licence, as it stated it was willing to do at the hearing. In this decision, the Commission therefore directs LTA to adhere to some of its commitments, as expectations, and to abide by others by condition of licence. In addition to these, the Commission has found it necessary to impose conditions of licence that depart somewhat from the licensing requirements it has applied in the case of other provincial authorities and, to a degree, go beyond those the applicant indicated it would have no difficulty accepting.

The Commission considers that all of the licensing requirements it has imposed are necessary. This is based on the unprecedented nature of the applications, particularly the unique attributes of the applicant as the only privately-owned, for-profit commercial enterprise to be licensed as a provincial educational broadcaster.

The Commission also considers that the ABA's concerns regarding the potential competitive impact of the proposed service, notably on the radio industry in Alberta, are justified. The radio industry's share of local advertising revenues in this province has been shrinking for well over a decade, and its average margin of profit before interest and taxes of 3.8% in 1994 can only be described as precarious.

In 1991, the Commission denied an application by ACCESS to broadcast a maximum of eight minutes per hour, and not more than a weekly average of six minutes per hour, of commercial messages; that decision was based in part on the negative impact that such activity might have had on the rate structure for broadcasting advertising revenues in Alberta. The current applications arise from a fundamental change in circumstances from those present four years ago, and the Commission recognizes that LTA must be permitted to derive revenues from a limited amount of commercial activity in order to ensure its viability over the long term. At the same time, if LTA's programming were permitted to shift away from its proposed educational focus to encompass programming more akin to that found on conventional, mass appeal television services, and if there were no restrictions on the quantity and type of permissible advertising revenues broadcast by the service, the Commission is concerned that LTA's advertising income could expand significantly beyond its projections and cause undue harm to Alberta's radio industry.

Notwithstanding certain of the other specific recommendations and suggestions of the ABA and AMPIA, the Commission is satisfied that the licensing requirements discussed below are sufficient guarantee that the service proposed by LTA will create no undue harm to existing broadcasters. The Commission, with reference to the Craig intervention, also considers that these requirements should eliminate LTA's commercial activity as a factor of any significance in the Commission's deliberations with respect to future applications that may come before it for licences to operate a third commercial television service in Alberta.

Licensing Terms, Conditions and Expectations

a)Programming

One of the ABA's recommendations was that LTA be bound, by condition of licence, to its intent to broadcast educational programming that is distinctly different from what is generally available. This was not challenged by the applicant, who agreed to accept a condition requiring all of its programming to conform to the definition of educational programming contained in the Direction to the CRTC. The Commission has imposed the following condition of licence (Condition 3):

 All programming broadcast by the licensee shall be of the types described in the Direction to the CRTC (Ineligibility to Hold Broadcasting Licences).

According to the proposed program schedule filed by LTA with its applications, 60% of all programming to be aired on the service will fall into two categories: one consisting of educational programming directed to pre-school children, and a second, larger category defined by the licensee at the hearing as educational programming "with clear learning objectives and which is part of a formal learning system leading to formal assessment and accreditation by an institution".

When asked whether it would accept a condition of licence specifying 60% as the minimum required level for these two categories of programming combined, LTA replied that it would be uncomfortable with a requirement greater than 55%, given its dependence on the willingness of educational institutions in different parts of the country to supply programming to the applicant rather than to other parties. It stated, however, that its target would always be a level greater than 60%. In the circumstances, the Commission considers that a minimum level of 60% is a necessary requirement and has therefore imposed the following condition of licence (Condition 4):

 Not less than 60% of the broadcast year shall be devoted to the broadcasting of (a) educational programming with clear learning objectives and forming part of a formal learning system that leads to formal assessment and accreditation by an educational institution; or (b) educational programming directed to preschool children.

The ABA and Craig shared a concern regarding the potential impact on conventional broadcasting undertakings that might be brought about by the airing of feature films by LTA. On previous occasions the Commission has stated that drama programming, which would include most feature films, can be a suitable category for broadcast by educational services, provided that the programming contains an educational element and is distinctly different from the programming offered by conventional broadcasters. Although all of LTA's programming will be educational programming by definition, the applicant expressed the opinion at the hearing that such mass appeal drama programs as Anne of Green Gables could be rendered educational and in conformity with the definition, simply through the insertion of an announcement at the conclusion of the program encouraging viewers to write for more information or support materials, or to register for a credit course on subjects connected with or raised by the program.

While LTA emphasized that it would not broadcast any programming, including drama, unless it had clear learning objectives, it argued that it should not be bound by a condition of licence concerning drama that would be any more onerous than the licensing provisions currently applicable to ACCESS or to the Ontario Educational Communications Authority (TVOntario). The Commission notes, however, that neither ACCESS nor TVOntario is permitted to sell advertising, and is concerned that, without the imposition of certain restrictions, the for-profit motivation underlying LTA's proposed service could lead the applicant away from fulfilment of its stated educational mandate and towards an increased reliance on mass appeal programming more capable of attracting advertising revenues. The Commission has therefore imposed the following condition of licence concerning the broadcast of drama programming by LTA (Condition 5):

 The licensee shall not broadcast any programming that would otherwise be characterized as Category (7) Drama in Schedule I to the Television Broadcasting Regulations, 1987, unless such programming is of the type described in Condition 4 above.

The Commission has considered the AMPIA's call for creation of a formal mechanism to monitor LTA's conduct in meeting the provision contained in the Production Agreement requiring LTA to accord priority to Alberta-based independent producers. The Commission has chosen not to include any specific requirement in this area and considers reasonable the applicant's estimate that in excess of 40% of its annual programming expenditures, on average, will flow to the Alberta independent production community. The Commission also notes the following statement by the applicant at the hearing:

 We will be doing a minimum of in-house production. We are maintaining a core in-house production staff for continuity and quality purposes. The rest of our commitments are very serious to the independent production community.

The Commission notes the applicant's further commitment to expend a minimum of $1.4 million over seven years on Canadian program development. LTA stated that all of this spending would be for the development of documentary programs.

LTA's applications indicate that the service will include a minimum of 60% Canadian content over the broadcast day, and a minimum of 50% in the evening broadcast period, as required of all private licensees under the regulations. In the past, the Commission has encouraged educational broadcasters to provide levels of Canadian content that exceed these minimums. In keeping with that approach, and given the fact that the service will receive priority carriage on all Alberta cable undertakings, the Commission encourages LTA to increase the Canadian programming component of its service above the minimum required level of 60% over the broadcast day.

The Commission notes the applicant's commitment to provide closed captions for 485 hours of locally-produced and acquired programming in year one at a cost of $40,000, rising to 2,140 hours in year seven at a cost of $140,000.

Consistent with its approach for closed captioning announced in Public Notice CRTC 1995-48, the Commission encourages LTA, by the end of the licence term, to caption all live programming using either real-time captioning or another method capable of captioning live programming. The Commission also encourages the licensee to close caption at least 90% of all programming during the broadcast day by the end of the licence term. Further, the Commission encourages LTA to consult with institutions and agencies that have mandates to serve the deaf and hard of hearing, as well as members of the deaf and hard of hearing community, to ensure that the quality of its captioning is maintained at a high standard.

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 its applications, LTA stated that it expects a final approved employment equity policy to be in place by 31 July 1995. The applicant stated that it has also held discussions with an external employment equity consultant, who will assist in the development and implementation of the plan. The Commission will revisit these matters at the time it considers the licence renewal for this undertaking.

In addition to the conditions of licence, expectations, encouragements and notes discussed above, the Commission has imposed standard conditions of licence requiring adherence to the provisions of existing industry codes concerning sex-role portrayal and violence in programming (Conditions 6 and 7).

b)Advertising

In its applications, LTA proposed to sell a maximum of 8 minutes of advertising per clock hour. As one of its commitments, the applicant stated that it would solicit only what it described as regional and national advertisements, to the exclusion of local advertising.

In line with another commitment made by LTA, and as agreed to by the applicant at the hearing, it is a condition of licence that the licensee not broadcast any advertising material during programming directed to persons under 12 years of age (Condition 8).

The Commission notes the applicant's confirmation at the hearing that its programming, including all advertising material, would be distributed uniformly throughout the province, and that it has neither the technical capacity to insert separate commercials for specific markets nor the intention of doing so.

Under the provisions contained in the agreements between LTA and the Ministries, LTA will not sell advertising for broadcast during air time hours purchased by the Ministries. While LTA stated clearly at the hearing that it will not advertise at all during the Ministries' air time, it noted that "advertising material", including "commercial messages", as these terms are defined by the Commission, will be placed by the Ministries and aired during those hours. However, LTA noted that such advertising material will be limited to the promotion of educational goods, services or activities; they would not be "...Coke commercials or commercials for any product of that nature". A spokesperson for the Ministries offered the following clarification:

 There clearly will be no commercial advertising in the sense that a layperson would consider advertising. What we do want to have the ability to do is to do internal promotions of our products and our courses, and when we are going to be able to provide them and the support materials that go along with them.

The spokesperson further clarified:

 I think the issue here is very much this issue of selling that time. We are not intending to gain any revenues at any time from selling any of that promotional opportunity, only from the end product or the consequences of people taking those courses...

Accordingly, and as accepted by the applicant at the hearing, the Commission has attached the following condition of licence (Condition 9):

 During air time purchased by the Alberta Government Ministry of Education or the Ministry of Advanced Education and Career Development, the licensee shall not (a) broadcast any commercial message, unless it is intended to sell or promote goods, services or activities integrally related to education and learning; or (b) sell, or permit the sale of, air time for the purpose of broadcasting advertising material.

With regard to LTA's proposal to sell 8 minutes per clock hour of advertising outside of the Ministries' air time, the applicant's projections indicate that income from this commercial activity would spell the difference between an overall profit or a deficit, but would represent only 13% of total revenues by year 7. Based on these same projections, however, and despite the relatively low cost structure contained in the applicant's proposed rate card, the Commission notes that LTA's advertising revenue targets would be attained through the sale of less than 6 minutes of advertising per hour.

The figure of 6 minutes of advertising per hour is the same amount that the Commission, in the mid-eighties, permitted Radio-Québec to sell, in light of that licensee's exceptional circumstances. In the present case, given the Commission's concerns regarding the potential impact of LTA's commercial activities on existing broadcasters, it has imposed the following condition of licence (Condition 10):

 The licensee shall not (a) broadcast more than 6 minutes of advertising material in any clock hour in a broadcast day; or (b) broadcast more than 501 minutes of advertising material in a broadcast week, exclusive of commercial messages described in condition 9(a) above.

The 501 minutes stipulated above as the maximum permissible amount of advertising per broadcast week is calculated on the basis of a maximum of 6 minutes of advertising material per clock hour, aired in a broadcast week that would contain a maximum of 83.5 hours of programming produced, co-produced or acquired by LTA on its own behalf (126 hours less a minimum of 42.5 hours per week of Ministry air time). The Commission is satisfied that the permissible levels will provide the applicant sufficient flexibility to achieve its revenue projections and to promote its programming effectively. The Commission notes in this regard that, under the regulations, messages promoting upcoming Canadian programs to be broadcast on the service are not counted as advertising material.

The applicant stated that it plans to position advertisements before and after individual programs so as not to interrupt their content. The Commission encourages LTA to implement such a strategy to avoid the broadcast of advertising material during a program. LTA also stated that it would not broadcast infomercials; in this regard, the Commission notes that LTA would not be permitted to air infomercials during the broadcast day, in any event, without an amendment to condition 10.

The Commission is satisfied that all of the licensing requirements it has imposed are, to the greatest possible extent, consistent with LTA's financial projections, vision and plans for the service, as described in its applications and at the hearing. More particularly, the Commission is convinced that the conditions of licence will allow LTA sufficient opportunity to implement these plans successfully, while ensuring that the nature of the service remains focused on the provision of high quality educational programming.

Allan J. Darling
Secretary General

APPENDIX / ANNEXE

Learning and Skills Television of Alberta Limited - Conditions of licence

1. The licensee shall receive, and maintain throughout the term of its licence, the designations of provincial educational broadcaster and provincial authority for the Province of Alberta, within the meaning of the Direction to the CRTC (Ineligibility to Hold Broadcasting Licences).

2. The licensee shall adhere to the Television Broadcasting Regulations, 1987, with the exception of section 11.

3. All programming broadcast by the licensee shall be of the types described in the Direction to the CRTC (Ineligibility to Hold Broadcasting Licences).

4. Not less than 60% of the broadcast year shall be devoted to the broadcasting of

(a) educational programming with clear learning objectives and forming part of a formal learning system that leads to formal assessment and accreditation by an educational institution; or

(b) educational programming directed to preschool children.

5. The licensee shall not broadcast any programming that would otherwise be characterized as Category (7) Drama in Schedule I to the Television Broadcasting Regulations, 1987, unless such programming is of the type described in condition 4 above.

6. The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' Sex-Role Portrayal Code for Television and Radio Programming, as amended from time to time and accepted by the Commission.

7. The licensee shall adhere to the provisions of the Canadian Association of Broadcasters' Voluntary Code Regarding Violence in Television Programming, as amended from time to time and accepted by the Commission.

8. The licensee shall not broadcast any advertising material during programming directed to persons under 12 years of age.

9. During air time purchased by the Alberta Government Ministry of Education or the Ministry of Advanced Education and Career Development, the licensee shall not

(a) broadcast any commercial message, unless it is intended to sell or promote goods, services or activities integrally related to education and learning; or

(b) sell, or permit the sale of, air time for the purpose of broadcasting advertising material.

10. The licensee shall not

(a) broadcast more than 6 minutes of advertising material in any clock hour in a broadcast day; or

(b) broadcast more than 501 minutes of advertising material in a broadcast week, exclusive of commercial messages described in condition 9(a) above.