ARCHIVED -  Decision CRTC 95-67

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Decision

See also: 95-67-1

Ottawa, 28 February 1995

Decision CRTC 95-67
Premier Choix: TVEC Inc.
Montréal, Quebec - 932003700
Licence renewal for "Super Écran"
Following a Public Hearing in the National Capital Region beginning on 25 April 1994 and Decision CRTC 94-607 dated 12 August 1994, the Commission renews the broadcasting licence to carry on a French-language pay television programming undertaking issued to Premier Choix: TVEC Inc. to distribute the service known as Super Écran, from 1 March 1995 to 31 August 2001, subject to the conditions specified in the appendix to this decision and in the licence to be issued.
Performance
The Commission notes that over the current licence term, the licensee has complied with all of its conditions of licence and commitments and met all Commission expectations, with the exception of one minor shortcoming relating to the percentage of Canadian programs to be distributed by the licensee. This incident was caused by a computer malfunction which has since been corrected.
In assessing this renewal application, the Commission considered the licensee's performance and financial projections, as well as written interventions filed by some fifteen representatives of the motion picture, cable and broadcasting industries, in support of this application.
Exhibition of Canadian programs
In the new licence term, the licensee will maintain the current level of Canadian program distribution, that is, not less than 30% of the time from 6:00 p.m. to 11:00 p.m. (Eastern time) and 25% of the remainder of the time during which it distributes programming.
The Commission expects the licensee to continue to license for distribution all Canadian feature films that comply with the general interest pay television licensees' "Pay Television Programming Standards and Practices", and to schedule these films evenly throughout its programming day.
The Commission expects Premier Choix: TVEC Inc. to co-operate with other Canadian pay television licensees to achieve the widest possible distribution of Canadian feature films and other Canadian programming, including the distribution of subtitled or dubbed versions of Canadian English-language productions.
Expenditures on Canadian programming
In this renewal application, the licensee requested that the percentage it is required to expend on the acquisition of or investment in Canadian programming be based on the revenues of the previous year rather than the current year; in addition, to allow greater flexibility in making these expenditures, it requested authority to carry over a portion of the required minimum expenditures to the following year.
The Commission has decided to adopt the approach based on the revenues of the previous year for all specialty and pay television services and therefore amends the licensee's relevant condition of licence accordingly.
Furthermore, the Commission has decided to extend to licensees of specialty and pay television services the same flexibility already granted to licensees of conventional television stations.
The licensee also proposed to increase its annual expenditures on script and concept development to a maximum of $150,000 in 2000-2001. The Commission amends the relevant condition of licence accordingly.
Under an existing condition of licence, the licensee is required to devote to the acquisition of Canadian programs not less than 50% of its expenditures on the acquisition of, or investment in, Canadian programming during the current year (60% when it no longer has a cumulative deficit). The licensee proposed to commit to expending on acquisition not less than 60% of its expenditures on the acquisition of, or investment in, Canadian programming during each year of the new licence term, irrespective of its cumulative deficit. The Commission amends the licensee's relevant condition of licence accordingly.
The licensee is also required, under its existing conditions of licence, to allocate to Canadian dramatic programs not less than 50% of its expenditures on the acquisition of, or investment in, Canadian programs for that year. The licensee proposed to increase from 50% to 60% the percentage of its expenditures on investment in Canadian dramatic programs. The Commission amends the licensee's relevant condition of licence accordingly.
The licensee further proposed an amendment to the definition of the phrase "expend on acquisition" contained in its existing conditions of licence so as to include expenditures on captioning for the hearing impaired in the amount qualifying as expenditures on Canadian programs.
The Commission notes that it approved a similar amendment in Decision CRTC 92-570 dated 17 August 1992 which renewed the licence of Canal Famille, also owned by Premier Choix: TVEC Inc. It amends the definition of "expend on acquisition" accordingly.
Captioning
The Commission notes that the licensee committed to annual captioning expenditures from $125,000 in the first year to $150,000 in the last year of its licence term.
As proposed in the last licence renewal, Premier Choix: TVEC Inc. established La Fondation Réal-Therrien on 9 February 1989 to promote French-language captioning for the hearing impaired. In addition to managing the funds collected, the licensee contributes financially to the foundation. Since its creation, the foundation has contributed to about 20% of the closed-captioned programming distributed on Super Écran. The foundation also makes its captioning diskettes available to conventional French-language television services.
Standards and practices
The Commission expects the licensee to adhere to the "Pay Television Programming Standards and Practices", as amended from time to time and approved by the Commission.
In Public Notice CRTC 1994-155 dated 21 December 1994, the Commission announced that it had accepted, with certain qualifications, the new code on the depiction of violence on television submitted by the pay television and pay-per-view industry in November 1994. The Commission also stated that at the time of licence renewal, it would require compliance with the code as a condition of licence. Accordingly, the relevant new condition of licence is set out in the appendix to this decision.
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. It encourages the licensee to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources.
Interventions
The Commission acknowledges the many interventions in support of this application and has noted the licensee's reply to the concerns raised in some of these interventions.
Allan J. Darling
Secretary General
APPENDIX / ANNEXE
CONDITIONS OF LICENCE FOR PREMIER CHOIX: TVEC INC.
Nature of Service
1. The licensee shall provide a regional general interest pay television service in the French language with programming intended for all audiences. The licensee shall not distribute programming from categories 1 (news), 4 (religion), or 5 (education) of Item 6 of Schedule I to the Pay Television Regulations, 1990, and shall not devote more than 5% of its programming schedule during each semester to programming from category 6 (sports) of Item 6, with a maximum of 20 hours in any week. The licensee shall devote at least 50% of its programming schedule during each semester to dramatic programs.
Exhibition of Canadian programs
2. Commencing 1 March 1995 and during each semester of this licence term, the licensee shall devote to the distribution of Canadian programs not less than
 (i) 30% of the time from 6:00 p.m. to 11:00 p.m. (Eastern time) and
 (ii) 25% of the remainder of the time during which the service is in operation.
For the purpose of this condition, a 150% credit will be given for time during which the licensee distributes a new Canadian production that commences between 6:00 p.m. and 11:00 p.m. (Eastern time) or, in the case of a new Canadian production intended for children, at an appropriate viewing time between 6:00 a.m. and 9:00 p.m., and the licensee will receive such a credit for each subsequent showing of such a production in the specified time periods within a two-year period from the date of first showing by this licensee.
3. In the period 1 March 1995 to 31 August 1995 and in each subsequent broadcast year of this licence term, the licensee shall devote to the distribution of Canadian dramatic programs not less than 50% of the time that it is required to devote to the distribution of Canadian programs.
Expenditures on Canadian programs
4.(a) During the period 1 March 1995 to 31 August 1995, subject to paragraph (c), the licensee shall expend on the acquisition of or investment in Canadian programs, a percentage of its revenues for the period 1 March 1994 to 31 August 1994 that is not less than the percentage shown in the table below. For the broadcast year beginning 1 September 1995, and in each subsequent broadcast year of this licence term, subject to paragraph (c), the licensee shall expend on the acquisition of or investment in Canadian programs, a percentage of its annual revenues from the operation of this service during the previous broadcast year that is not less than the percentage indicated in the table below:
Average number of residential, bulk
and Satellite Master Antenna television
subscribers (SMATV) in the previous
broadcast year/Nombre moyen d'abonnés du
service résidentiel, de groupe et du
système de télévision par satellite à
antenne collective (STSAC) au cours de Percentage of revenues/
l'année de radiodiffusion précédente Pourcentage des recettes
199,999 or less/ou moins 20%
200,000 - 249 999 22%
250,000 or more/ou plus 24%
(b) As of the month following that in which the licensee no longer has a cumulative deficit, it shall expend on the acquisition of or investment in Canadian programs, an additional 2% of its annual revenues from the operation of this service during the previous year for the balance of the broadcast year and for each subsequent broadcast year.
  To establish the cumulative deficit for the purposes of expenditure on Canadian programming, "profit" means the licensee's net earnings after income tax in accordance with generally accepted accounting principles (GAAP).
(c) In any broadcast year of this licence term, including the partial broadcast year ending 31 August 1995 but excluding the final broadcast year, the licensee may expend on Canadian programming up to 5% less than the minimum required expenditure for that broadcast year as set out and calculated in accordance with this condition of licence. Should the licensee avail itself of this flexibility in any broadcast year of the licence term, including the partial broadcast year ending 31 August 1995, it shall expend in the next broadcast year of the licence term, in addition to the minimum expenditure required for that broadcast year, the full amount of the previous year's underspending.
(d) In any broadcast year of this licence term, including the partial broadcast year ending 31 August 1995, the licensee may expend on Canadian programming an amount exceeding the minimum expenditure required for that year, set out and calculated in accordance with this condition of licence; in such case, the licensee may deduct:
  (i) from the minimum required expenditure for the next broadcast year of the licence term, an amount not exceeding the amount of the previous broadcast year's overspending; and
(ii) from the minimum required expenditure for any subsequent broadcast year of this licence term an amount not exceeding the difference between the overspending and any amount deducted under paragraph (i) above.
(e) Notwithstanding the above, during this licence term, the licensee shall expend on Canadian programming, at a minimum, the total of the minimum required expenditures as set out and calculated in accordance with this condition.
5. In each broadcast year of this licence term, including the partial broadcast year ending 31 August 1995, the licensee shall devote to the acquisition of Canadian programs not less than 60% of the minimum required expenditure on the acquisition of or investment in Canadian programming, as calculated in condition 4 and irrespective of its cumulative deficit.
6. In each broadcast year of this licence term, the licensee shall expend on script and concept development, excluding overhead costs, the amounts indicated in the table below:
01-09-1994 to/au 31-08-1995 125,000 $
01-09-1995 to/au 31-08-1996 128,000 $
01-09-1996 to/au 31-08-1997 132,000 $
01-09-1997 to/au 31-08-1998 136,000 $
01-09-1998 to/au 31-08-1999 140,000 $
01-09-1999 to/au 31-08-2000 145,000 $
01-09-2000 to/au 31-08-2001 150,000 $
7. In each broadcast year of this licence term, including the partial broadcast year ending 31 August 1995, the licensee shall devote to Canadian dramatic programs not less than 60% of its expenditures on the acquisition of or investment in Canadian programming for that year.
8. For the purposes of conditions 4 to 7, only actual cash outlays shall be taken into account.
Distribution of film and video productions involving Astral Communications Inc. (Astral)
9.(a) The licensee shall not distribute any film or video production with respect to which Astral has carried on activities other than financing or distribution.
(b) Where Astral has carried on financing or distribution activities with respect to a film or video production, the licensee shall not distribute that film or video production unless all actual production and creative control, apart from financial approvals which the pay television licensees normally require, remain the full responsibility of an independent Canadian production company.
Gender portrayal
10. 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 approved by the Commission.
Depiction of violence
11. The licensee shall adhere to the "Pay Television and Pay-Per-View Programming Code Regarding Violence", as amended from time to time and approved by the Commission.
Definitions
In these conditions:
 "acquisition" means to acquire exhibition rights for the licensed territory, excluding overhead costs.
 "broadcast year" means the period from 1 September to 31 August and each twelve-month period thereafter beginning on 1 September.
 "script and concept development expenditures", mean those expenditures, excluding overhead costs, that are incurred prior to the commencement of pre-production and before the financing of the project is in place. Spending on programs that are assured of going to air at the time of the expenditure is not considered as script and development expenditures.
 "expend" and "expenditure" mean actual cash outlay.
 "expend on acquisition" includes to expend on program captioning for the hearing impaired.
 "cumulative deficit" does not include deficits from Direct-to-Home-Satellite Services (DTH) operations.
 "investment" means an equity investment or an advance on account of an equity investment, but does not include overhead costs or interim financing by way of a loan.
  "new Canadian production" means:
(a) a Canadian dramatic program
   (i) which exceeds 75 minutes in duration and in relation to which all financial expenditures made by the licensee were made prior to the commencement of principal photography or taping and in which principal photography or taping was completed after 1 January 1985, or
   (ii) which is intended for children and exceeds 22:30 minutes in duration and in relation to which all financial expenditures made by the licensee were made prior to the completion of principal photography or taping
(b) and which is a program that has never been broadcast in French in the licensed territory.
 "revenue" means revenue from residential, bulk and SMATV subscribers and does not include revenue from DTH subscriber fees or any return on an investment in programming.
 "semester" means a period of six consecutive months beginning on 1 September or 1 March of each year.

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