ARCHIVED -  Decision CRTC 95-62

Decision

Ottawa, 24 February 1995

Decision CRTC 95-62

Télé-Métropole Inc.

Quebec City, Quebec - 940683600

Licence renewal for CFCM-TV

Following a Public Hearing in Montréal beginning on 11 October 1994, the Commission renews the broadcasting licence for the television programming undertaking CFCM-TV Quebec City from 1 September 1995 to 31 August 1997, subject to the conditions in effect under the existing licence except that relating to local programming, which has been revised as indicated below, and subject to the other conditions specified in this decision and in the licence to be issued. For the reasons stated below, the Commission denies the licensee's request to decrease CFCM-TV local production from 21 hours to 17 hours 23 minutes a week.

This short-term renewal reflects the Commission's serious concerns regarding the non-compliance by the licensee with the existing condition of licence stipulating the minimum local production requirements for CFCM-TV. As discussed at the hearing, this two-year term will also enable the Commission to consider the next renewal of this licence at the same time as that of the other television stations in Quebec City. The Commission will thus be able to assess the contribution of each station to the local reflection of the community it is licensed to serve, in accordance with the Policy for Local Television Programming (Public Notice CRTC 1991-22).

In Decision CRTC 92-545 the Commission renewed the CFCM-TV licence for only three years, until 31 August 1995, because of the similar failure of the then licensee (TM Multi-Régions Inc., a wholly owned subsidiary of Télé-Métropole Inc.) to honour the local production commitments in its Promise of Performance. In the same decision the Commission denied the licensee's request to decrease CFCM-TV local production from 21 hours to 10 hours a week and required, by condition of licence, minimum production levels of 15, 18 and 21 hours a week by 31 August 1993, 1994 and 1995, respectively. The Commission also reminded the licensee of the obligations relating to conditions of licence, and indicated that it intended to monitor CFCM-TV's performance in the ensuing months.

At the 11 October 1994 Public Hearing, the licensee acknowledged that it failed to comply with the above condition of licence on at least three occasions, ie, during one week in January 1994 containing a statutory holiday, during two to three weeks in February 1994 while broadcasting the Winter Olympic Games, and during the program schedule changes between late August and early September 1994. The licensee acknowledged some confusion regarding the policy on local television programming, particularly with respect to the current condition of licence, and acknowledged that it [TRANSLATION] "may have interpreted the situation too broadly". The licensee also acknowledged that it did not give the Commission advance notice that it would be unable to comply with its condition of licence during these periods, and that some special programs produced at Quebec City had not been reported as such in the CFCM-TV program log.

Later, on 8 December 1994, the licensee filed a report of programs produced and originally broadcast by CFCM-TV between 5 September and the end of November 1994. The licensee stated that the station did not comply with its condition of licence on three other occasions during that period. It indicated that CFCM-TV had already taken steps to increase the weekly level of local production to 21 hours before the end of the current licence term. It stated that it planned to add one program in March 1995 to that end.

The Commission is greatly concerned by the persistent failure by this licensee to adhere to the condition of its licence stipulating minimum levels of local production. It therefore puts the licensee on notice that any recurrence of such non-compliance may result in the licensee being called to a public hearing to show cause as to why the Commission should not issue a mandatory order.

In this regard, the Commission reminds the licensee that the Broadcasting Act (the Act) provides for the enforcement of conditions of licence. For example, the Act empowers the Commission to issue mandatory orders, which may be made orders of the Federal Court or of any superior court of a province and are enforceable in the same manner as an order of the court. Under the Federal Court Rules, anyone found guilty of disobeying an order of the Court can be found in contempt of court and is liable to a fine.

Relevant policies

In its policy on local television programming, the Commission stated that the policy changes contained therein did not affect the quantitative programming commitments accepted by the Commission as benefits arising from an ownership transaction. The Commission indicated that, in such cases, it would continue to define local programming in accordance with the criteria outlined in Public Notice CRTC 1989-27 and would expect licensees to honour fully their obligations in this regard throughout the period specified in the applicable decisions. In Public Notice CRTC 1989-27 entitled "Overview - Local Television for the 1990s", the Commission stated that programs produced by a local station for a network are aimed at a national audience and, consequently, it would not accept them as local programs for the purposes of the station's Promise of Performance.

In Decision CRTC 92-545, and with reference to Public Notice CRTC 1991-22, the Commission expected the licensee to reflect in its local programming the cultural, economic, political and social reality of the Quebec City area, in accordance with the requirements set out in the policy on local television programming and the clarifications provided in Public Notice CRTC 1992-53. The latter notice was issued as a preamble to Decisions CRTC 92-544 to 92-565 renewing the licences of the private television stations in the province of Quebec, including that of CFCM-TV. The Commission indicated in that preamble that the aim of its policy for local television programming was not to centralize the production of programs that can be produced anywhere, but to ensure that most local and regional programs serve, first and foremost, the residents of each station's coverage area.

Existing commitments

As stated in Decision CRTC 92-545, the current local production requirements pertaining to CFCM-TV arise directly out of the commitments made in 1990 by Télé-Métropole Inc. (Télé-Métropole) as benefits deriving from its acquisition of the television stations then owned by Réseau Pathonic Inc. and Pathonic Communications Inc. (Pathonic), ie, CFCM-TV Quebec City, CHLT-TV Sherbrooke, CHEM-TV Trois-Rivières and CFER-TV Rimouski. The licences of these stations contained conditions of licence requiring a minimum aggregate of 50 hours per week of local production, including minimum quotas of 21 hours for CFCM-TV, 13 hours for CHLT-TV and 5 hours for each of CHEM-TV and CFER-TV (Decisions CRTC 86-976 to 86-979); the remainder was to be produced locally by any of these stations for broadcast on the Pathonic network.

The Commission notes that it initially approved an application to transfer all subordinate shares from Pathonic to Télé-Métropole (Decision CRTC 89-499). Regarding Télé-Métropole's plan to establish a program development fund for TVA affiliates, the Commission reminded it in the same decision that any program produced through such an initiative would have to meet the criteria set out in Public Notice CRTC 1989-27 in order for the program to qualify as a local program for the purposes of the producing station's Promise of Performance. Moreover, Télé-Métropole committed at that time to acquire, during the fall-winter season, a minimum of 5 hours a week of programs produced by the Pathonic network for network broadcast.

Subsequently, the Commission approved an application to transfer effective control of Pathonic to Télé-Métropole (Decision CRTC 90-631). At that time, Télé-Métropole offered the assurance that the transaction would have no negative impact with respect to adherence to the conditions of licence of the Pathonic stations, including the requirement to produce 50 hours of local programming per week. With regard to CFCM-TV specifically, Télé-Métropole pledged to make Quebec City a major production centre by significantly strengthening the role of CFCM-TV, particularly in the news sector. The purchaser also committed to expand CFCM-TV production by adding a daily, one-hour magazine on the activities, talents and resources of Quebec City and surrounding area, to be broadcast province-wide from Monday to Friday.

Licensee's proposal

At the October 1994 hearing the licensee stated that the new programming plan it was proposing for CFCM-TV emphasized quality and relevance in local programming instead of simply the quantity of local production. It argued this would allow it to offer programs that are more relevant to the Quebec City area; at the same time, it acknowledged that this was not always true of some programs broadcast from that city during the current licence term. The licensee added that the basis of this plan is its very firm commitment to maintain the levels of financial, physical and human resources allocated to programming, and that it had absolutely no intention of decreasing these resources.

The Commission notes, however, that the licensee's proposal would effectively result in fewer hours of local production in comparison with previous commitments. Details provided by the licensee at the hearing indicate that, under its programming plan, CFCM-TV would produce 7 hours 45 minutes of local programming for exclusive broadcast by the station, and 9 hours 38 minutes of programs or program segments to be produced by the station for broadcast by the TVA network, for a total of 17 hours 23 minutes of local production per week.

As for the licensee's commitment to maintain the same level of financial resources devoted to programming, the Commission noted at the hearing that the licensee's projections for 1992, when it was proposing only 10 hours of local production, and the projections contained in the current renewal application, make provisions for expenditures on local programming at approximately the same level. This amount would, in fact, decrease over the years with the deduction of the funds to be allocated to CKMI-TV, the licensee's English-language station serving the Quebec City area.

The licensee, however, drew attention to the difficult economic environment in which it is operating and which it expects to persist in the years to come. The licensee stated that, given its current financial situation, the arrival of new specialty programming services, and other revolutionary developments expected in the telecommunications industry, it will be confronted with a [TRANSLATION] "pessimistic scenario" in the future. The Commission notes in this regard that the licensee's 1992 projections for CFCM-TV forecast over 16% in profits before interest and taxes for the following seven years; in its current application, however, it is forecasting a slight deficit in each of the next four years. Similarly, in 1992 the licensee projects an average 3% growth in CFCM-TV advertising revenues from 1993 to 1999, while it now projects barely 1% annual growth after 1995.

The Commission, having analyzed all of the financial data in the application file, considers that the licensee may have been overly pessimistic in its forecasts and may not have fully assessed this same information. Based on the available economic indicators, taking only a moderately optimistic stance regarding growth in the Quebec City market, the Commission is of the view that CFCM-TV revenues could well increase at a significantly greater rate than the licensee forecasts over the coming years. In addition, the Commission notes that, in previous decisions, the circumstances relating to French-language television in general, as well as those relating more specifically to the licensee's overall situation and that of its Quebec City station, were taken fully into account.

The Commission notes that, when it authorized new specialty programming services in the summer of 1994, it approved only two French-language specialty programming services, including one non-commercial service (Public Notice CRTC 1994-59). This, again was in specific recognition of the characteristics of the French-language television market and its relatively limited resources. With particular regard to CFCM-TV, in 1992 the Commission allowed it to return gradually to 21 hours a week of local production over a period of three years in order to lessen the financial impact on the licensee, even though it was in non-compliance with one condition of licence at that time. In the same decision (CRTC 92-545), the Commission stated that, in approving the acquisition of the Pathonic stations in Decision CRTC 90-631, it had accepted Télé-Métropole's argument that the transaction and, in particular, its acquisition of CFCM-TV serving the second largest market in the province of Quebec, would better enable Télé-Métropole to compete against the other French-language television undertakings and would give it the financial resources to improve the quality of programming offered by TVA stations at the local and provincial levels.

The Commission's Position

As noted earlier, in Public Notice CRTC 1991-22 the Commission stated that it expects licensees to honour fully all programming commitments accepted as benefits of an ownership transaction. In 1992, and again in 1994, the Commission has determined that the commitments relating to the broadcast of local production on CFCM-TV were not fully honoured. Consequently, as stated at the outset of this decision, it again denies the licensee's request to reduce the station's local production requirement and maintains the requirement that it broadcast a minimum of 21 hours per week of local production, not including repeats, during the new licence term.

However, following discussions at the hearing and subsequent correspondence concerning certain possible definitions that would serve to avoid a recurrence of the confusion alluded to by the licensee, the Commission has clarified its requirements by revising the condition of licence to read as follows:

 It is a condition of licence that the local production of CFCM-TV be maintained at a minimum of 21 hours per week (not including repeats) throughout the new licence term. Total local production shall consist exclusively of programs on subjects of local interest aimed at viewers residing in the area served by the station. In addition, at least 11 hours of this local programming shall be programs broadcast exclusively by CFCM-TV and which reflect, first and foremost, the activities and interests of the residents of Quebec City and the area.

The Commission considers that this condition of licence is consistent with the provisions applicable to CFCM-TV contained in Public Notices CRTC 1992-53, 1991-22 and 1989-27 and with the requirements of the previously-noted decisions.

The Commission notes the commitment made by the licensee at the hearing and in its letter of 8 December 1994 to comply with the existing condition of licence requiring CFCM-TV to broadcast a minimum of 21 hours per week of original local programming by 31 August 1995. The Commission will, as in the case of all other television broadcasters, continue to assess the licensee's compliance with the condition of licence on local programming on a weekly basis, rather than annually or on the basis of two separate seasons, as had been proposed by the licensee. The licensee is further reminded that it is required to enter all local productions correctly in the program log, indicating which productions are for network broadcast and which are exclusively for local broadcast.

Regarding the proposal to air late-night local newscasts first noted in Decision CRTC 92-545, the licensee stated at the hearing that it had never intended to carry a late-night local newscast, but that its statements concerning this matter had been aimed at increasing regional content on TVA's late-night network newscast in order to better reflect all regions of the province. It added that it also intends to enhance the local newscasts aired by CFCM-TV during the early evening on Saturdays and Sundays by extending each newscast to 30 minutes beginning in January 1995. The Commission notes further the licensee's statements at the hearing regarding the commitments noted in Decision CRTC 92-545 relating to the addition of three new weekly half-hour programs during the current licence term.

In view of the requirements set out in this decision, the Commission expects the licensee to file a revised program schedule not later than 60 days before the beginning of the new licence term. The licensee is reminded that all provisions of the policy for local television programming contained in Public Notice CRTC 1991-22 apply to CFCM-TV, except as regards quantitative commitments arising out of ownership transactions, as explained above. The licensee must also take account of the clarifications contained in Public Notice CRTC 1992-53 regarding the policy, including those relating to local talent development and the scheduling of programs providing local reflection during peak viewing periods.

It is a condition of licence that the applicant adhere to the guidelines on sex-role portrayal 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. This condition of licence shall be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council.

It is a condition of licence that the licensee adhere to the CAB's Code on Broadcast Advertising to Children, as amended from time to time and approved by the Commission.

The licensee is required by condition of licence to adhere to the CAB's Voluntary Code Regarding Violence in Television Programming, as amended from time and approved by the Commission. This condition of licence shall be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council.

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled "Implementation of an Employment Equity Policy", the Commission announced that in future the employment equity practices of broadcasters would be subject to examination by the Commission. The Commission notes Télé-Métropole's plans to hire a director of human resources with the principal task of implementing an employment equity program at its licensed regional stations. The Commission intends to review with the licensee the results of this program at the regional level in the context of the next licence renewal for these stations.

With regard to closed captioning, the Commission notes that CFCM-TV will install a computerized captioning system by August 1995. The Commission expects Télé-Métropole to file a report on this system confirming that it has been installed as indicated in the application.

Conclusion

The Commission received more than 70 interventions concerning the CFCM-TV licence renewal application. As in 1992, the interventions came from a broad spectrum of organizations, associations and individuals in the Quebec City area. While reiterating their attachment to the station and acknowledging the efforts made in recent years, notably with regard to news and information, many interveners were firmly opposed to any diminution or softening of the licensee's commitments in the area of local production. Interveners stated that CFCM-TV's local programming, including programs currently broadcast and those proposed in the new programming plan, does not adequately reflect the cultural vitality of the province's second largest market and does little to exploit the wealth of talent available in the area.

The Commission concurs fully with the position of these interveners. As stated in Decision CRTC 92-545, it is precisely because of the unique character of Quebec City, as the provincial capital, and its tremendous cultural vitality, that the Commission has consistently required CFCM-TV to maintain a significant level of local production. Further, the Commission has expected CFCM-TV, as the main regional affiliate of the TVA network, to make a meaningful contribution to the network by adequately reflecting the greater Quebec City area to the entire province.

For all the reasons outlined above, the Commission continues to require Télé-Métropole to honour the commitment it made in 1990 to make Quebec City a major production centre. It also requires the licensee to comply fully with all conditions and requirements set out in this decision, and reminds the licensee once again of the potential consequences of any further incidents of non-compliance in this regard, as set out earlier in this decision.

Allan J. Darling
Secretary General