ARCHIVED -  Decision CRTC 95-634

Decision

Ottawa, 29 August 1995

Decision CRTC 95-634

Craig Broadcast Systems Inc.

Portage La Prairie/Winnipeg, Manitoba - 940949100 - 941581100

Licence renewal for CHMI-TV Portage La Prairie/Winnipeg; and relief from the expectation that CHMI-TV not solicit local advertising in Winnipeg - Approved

Following a Public Hearing held in Winnipeg beginning on 5 June 1995, the Commission renews the broadcasting licence issued to Craig Broadcast Systems Inc. (Craig) for the independent television programming undertaking, CHMI-TV Portage La Prairie/Winnipeg, from 1 September 1995 to 31 August 2002, 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.

Local reflection

On 24 March 1995, the Commission issued Public Notice CRTC 1995-48 in conjunction with the release of decisions renewing the licences of privately-owned, English-language television stations in British Columbia, Ontario and Quebec. In that public notice, the Commission reiterated the importance of the principle of local reflection and reminded television licensees that they have a special responsibility to serve the public within the particular geographic areas they are licenced to serve.

In this regard, the Commission expects the licensee to adhere to the commitment made in its licence renewal application to broadcast, at a minimum, a weekly average of 15 hours 4 minutes of original, local news during the new licence term.

Other local programming

CHMI-TV produces two regularly-scheduled programs that reflect the native community, namely "The Western Hour", a 60-minute weekly aboriginal talent program, and "Sharing Circle", a 30-minute weekly magazine which portrays the accomplishments of native people and addresses concerns such as land claims and self government. During the current licence term, the licensee also contributed to the production of programs such as "The 12 Steps: Recovering from Addictions" and "Meeting the Crisis".

Canadian children's programming

The Commission notes the licensee's commitment to continue to broadcast, during each week of the new licence term, 7 hours 30 minutes of Canadian programming directed to children (ages 2 to 11), and one hour of Canadian programming directed to youth (ages 12 to 17) increasing to one hour 30 minutes starting in the third year of the new licence term. In this regard, the Commission notes the licensee's plans to continue to produce "The MTN Kids' Club".

Expenditures on Canadian programming

In Public Notice CRTC 1989-27 dated 6 April 1989, the Commission stated that licensees of private, English-language television stations 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 to adjust such expenditures in subsequent years in accordance with the prescribed formula linked to the station's advertising revenues.

More recently, in Public Notice CRTC 1995-48, the Commission stated that it would expect such licensees to continue 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 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 of the upcoming licence term.

As part of its licence renewal application, Craig requested that the 1991-1992 base amount used to calculate CHMI-TV's expenditures on Canadian programming for the current licence term, as expected under the formula, be decreased from $2,130,000 to $2,023,287. Craig explained that its original 1991-1992 base amount was based on revenue projections which, in fact, have not been realized. The licensee proposed a base amount that reflects the actual revenues CHMI-TV earned during the current licence term.

The Commission considers that Craig's requested adjustment to the formula's 1991-1992 base amount is reasonable and, therefore, approves the licensee's request.

In addition, consistent with adjustments permitted by the Commission in the case of other licensees, the Commission has decreased the base amount by a further $36,500, this being the amount projected by the licensee for master control expenses that were included in CHMI-TV's proposed Canadian programming expenditures for 1991-1992. Accordingly, the adjusted 1991-1992 base amount to be used in determining CHMI-TV's Canadian programming expenditures for the current licence term is $1,986,787.

The Commission reminds Craig that, in future, it should not include master control expenses in its Canadian programming expenditures for the purposes of financial reporting.

In its licence renewal application, Craig requested a further adjustment to the amount of Canadian programming expenditures expected under the formula in the first year of the new licence term. In the Commission's view, however, the proposed adjustment is not warranted, since the change it would represent would be inconsequential. Furthermore, the Commission considers that this additional adjustment would unnecessarily complicate the calculation of CHMI-TV's Canadian programming expenditures expected under the formula.

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 would be 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 1990s" regarding the important role that local television stations play in program development. In this regard, the Commission notes the licensee's commitment to spend $26,000 on program development during the first year of the new licence term, rising by $1,000 in each subsequent year to $32,000 in the seventh year.

Service to the deaf and hard of hearing

The Commission notes the concerns expressed in the interventions by Closed-Captioning & Subtitles, as well as by the Winnipeg Community Centre of the Deaf and The Manitoba Chapter of the Canadian Hard of Hearing Association. The Commission has noted the licensee's responses thereto.

Consistent with its policy approach for closed captioning announced in Public Notice CRTC 1995-48, the Commission expects the licensee, by the end of the licence term, to caption all local news programming, including live segments, using either real-time captioning or another method capable of captioning live programming.

The Commission also expects the licensee to close caption at least 90% of all programming during the broadcast day by the end of the licence term.

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. The Commission notes that Craig has implemented a policy outlining the organization's goals in this respect. In addition, CHMI-TV made a commitment to undertake a formal audit of its policy during the summer of 1995 and to file a report on its findings with the Commission. The Commission encourages the licensee to continue its efforts to achieve employment equity within its organization.

Solicitation of local advertising in Winnipeg

Following a competitive process, the Commission, in Decision CRTC 86-433 dated 8 May 1986, granted Craig's predecessor, Western Manitoba Broadcasters Limited, the licence for CHMI-TV to provide a fourth television service to the Portage La Prairie/Winnipeg area. In approving that application, the Commission expected the new licensee "to abide by its commitment to restrict solicitation of local advertising to communities outside of Winnipeg".

Subsequently, in Decision CRTC 91-119 dated 7 March 1991, the Commission denied the licensee's request to be permitted to solicit local advertising in Winnipeg. In denying the licensee's request, the Commission noted the concerns expressed in the opposing interventions by, among others, the licensees of CKY-TV and CKND-TV Winnipeg that the added competition for Winnipeg local advertising could potentially have a negative effect on their operation.

In its current application, Craig reiterated the arguments presented in its previous request to be relieved from the expectation that it not solicit local advertising in Winnipeg. Among other arguments, Craig contended that, since CHMI-TV is licensed to serve Winnipeg and provides a local programming service to that city, it should be permitted to solicit local advertising there. Craig also claimed that approval of its request is now justified because of recent changes in the Winnipeg market, most notably the co-operation that now exists between its principal competitors, CKY-TV and CKND-TV, who have formed the Television Marketing Group ("TMG"). According to Craig, "TMG", which consolidates advertising time sales, commercial production and sales promotion for CKY-TV and CKND-TV, puts CHMI-TV at a significant competitive disadvantage.

The licensees of CKY-TV and CKND-TV again submitted interventions opposing Craig's request that it no longer be expected to refrain from soliciting local advertising in Winnipeg. The interveners argued that approval of this request would not only cause them to lose a significant amount of advertising revenues, but would also deflate local advertising rates in Winnipeg. In addition, the interveners claimed that permitting CHMI-TV to solicit local advertising in Winnipeg would result in the station deviating from its regional and agricultural mandate. CKY-TV and CKND-TV further contended that CHMI-TV has not always adhered to the Commission's expectation that it not solicit local advertising in Winnipeg.

The licensees of Winnipeg radio stations CJOB/CJKR-FM and CIFX/CHIQ-FM also filed interventions opposing Craig's request on the grounds that allowing CHMI-TV to sell local advertising in Winnipeg would harm the Winnipeg radio market.

In its intervention, CKY-TV noted that it allows Craig to delete local Winnipeg commercials from the intervener's undertakings CKYB-TV Brandon, CKYB-TV-1 McCreary and CKYD-TV Dauphin and to substitute on these undertakings local commercials sold by Craig's station CKX-TV Brandon. CKY-TV stated that it would terminate this arrangement if CHMI-TV were allowed to sell local advertising in Winnipeg. The Commission discusses this issue in greater detail in a related decision released today (Decision CRTC 95-635).

In response, Craig stated that the interveners have overstated the impact that removal of the expectation would have on their respective operations because the existing expectation applies solely to local advertising for customers that serve Winnipeg only.

With regard to the claim by CKY-TV and CKND-TV that Craig has solicited local advertising in Winnipeg, the Commission has reviewed CHMI-TV's performance during the current licence term and is satisfied that the licensee has complied with the expectation. The Commission has also considered the interveners' concerns regarding the financial impact that removal of the expectation could have on their operations as well as Craig's response to these interventions. Based on all of the evidence on the record of the proceeding, the Commission is satisfied that removal of the expectation restricting CHMI-TV from soliciting local advertising in Winnipeg is now warranted. Accordingly, the Commission approves the licensee's request to be relieved from the expectation that CHMI-TV not solicit local advertising in Winnipeg.

CHMI-TV's mandate

With regard to the claim by CKY-TV and CKND-TV that removal of the existing expectation would result in a change in CHMI-TV's mandate, the Commission notes that at the time it originally licensed CHMI-TV in Decision CRTC 86-433, the Commission, in line with the licensee's commitments, imposed a condition of licence that it:

 ... 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 ...".

In CHMI-TV's first licence renewal decision (Decision CRTC 91-119), the Commission stated that it was satisfied that CHMI-TV was providing a "programming service with a strong regional and rural orientation". Accordingly, the Commission replaced the condition noted above with an expectation that:

 the licensee adhere to its undertaking ... to maintain and strengthen the [regional and rural] focus in CHMI-TV's programming.

The Commission is satisfied that, throughout the current licence term, the licensee has consistently provided a television service with a strong regional and rural orientation. At the June 1995 hearing, Craig emphasized its commitment:

 to provide a rural/regional news service without a Winnipeg-dominated perspective.

Craig also stated that CHMI-TV provides:

 a service to Portage and the rural areas of Manitoba ... This is still our principal mandate and we are committed to that mandate.

Specifically, Craig indicated that, during the new licence term, it will continue to reflect regional and rural interests and concerns through programs such as "The Country Video Show", "The Manitoba Farm Report" and "The Manitoba Journal", a prime-time news magazine broadcast weekly that focuses on rural and regional issues.

At the hearing, the licensee also stated that CHMI-TV's rural and regional orientation will be enhanced by the introduction of a new microwave system linking Manitoba Television Network's newsrooms in Brandon, Portage La Prairie and Winnipeg. The licensee further stated that its electronic news gathering truck will allow live coverage throughout CHMI-TV's entire coverage area.

The Commission is satisfied that Craig is committed to maintaining CHMI-TV's regional and rural orientation during the new licence term.

The Commission acknowledges the many interventions submitted in support of CHMI-TV's licence renewal.

Allan J. Darling
Secretary General

APPENDIX / ANNEXE

Conditions of licence for CHMI-TV Portage La Prairie/Winnipeg

1. The licensee shall adhere to the guidelines on gender 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 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).

2. 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.

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