ARCHIVED -  Decision CRTC 95-71

Decision

See also: 95-71-1

Ottawa, 28 February 1995

Decision CRTC 95-71

Viewer's Choice Canada, a General Partnership consisting of Rogers Pay-Per-View Inc., First Choice Canadian Communications Corp. and TSN Enterprises

Eastern Canada - 932004500

Licence renewal for Viewer's Choice

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 issued to Viewer's Choice Canada (VCC) to carry on an English-
language pay television programming undertaking to provide a general interest pay-per-view (PPV) service via satellite to cable affiliates in Eastern Canada (Ontario, Quebec and the Atlantic provinces), from 1 March 1995 to 31 August 2001, subject to the terms and conditions set out in the appendix to this decision and in the licence to be issued.

The Commission is satisfied that VCC has complied with the terms and conditions of its licence. In evaluating VCC's proposals and commitments for the new licence term, the Commission has taken into account the distinct characteristics of the pay television service marketplace and has given consideration to the licensee's past performance and progress, including the competitive impact of VCC on the performance of pay and specialty services, the assumptions underlying VCC's revenue projections, and its plans for the new licence term.

As part of this application, VCC also requested a licence to carry on a video-on-demand (VOD) undertaking, in addition to its authorized PPV service. The Commission denies this request.

In Public Notice CRTC 1994-118 dated 16 September 1994, the Commission issued an Order exempting from licensing requirements those persons carrying on VOD undertakings on an experimental basis, subject to certain criteria. Accordingly, so long as the licensee meets the specified criteria, it is free to operate such an experimental VOD undertaking. The Commission acknowledges the interventions submitted regarding the licensee's plans for a VOD service, and the licensee's replies thereto.

The Commission approves VCC's proposal to amend its conditions of licence to increase the number of yearly Canadian-based events to a minimum of 4; and to change the Canadian to non-Canadian ratio for events being shown on each channel from 2:14 to 1:7.

Concerning its contribution towards Canadian programming, the Commission also approves the licensee's proposal to change the condition of licence to remit 100% of its net revenues from the exhibition of all Canadian films and Canadian events per year to holders of programming rights of such films and events; and to add a definition of the term "net revenue".

With respect to script and concept development funding, the Commission approves VCC's proposal to amend this condition of licence by changing its contribution to the Foundation to Underwrite New Drama for Pay Television (FUND) from $3 million over the previous three-year term to the greater of $7 million over a seven-year licence term or 5% of its net revenues. The Commission notes that this amendment will allow the licensee some flexibility in recognition of the fact that the number and quality of projects will vary on a yearly basis but that this will not affect the minimum total sum allocated. In the appendix, condition of licence 4 states $6,500,000 based on the approved 61/2 year term of licence.

Expectations

In decision CRTC 91-160 dated 26 March 1991 which originally approved VCC's licence, the Commission expressed a number of expectations regarding VCC's future performance. It hereby sets out the following expectations to govern VCC's performance in the new licence term.

The Commission expects VCC to adhere to its commitment to treat distributors on an equitable and non-discriminatory basis, with no preferential treatment being given to the productions distributed by Astral Communications Inc. (Astral).

The Commission expects VCC to give Canadian films fair and equal treatment with respect to their promotion, the number of showings or repeats and the frequency with which they are rotated in the schedule.

The Commission expects VCC to adhere to its commitment not to purchase films or events on an exclusive basis, thereby maintaining the same "orderly market" that existed prior to VCC's inception with respect to program windows.

The Commission expects VCC to be marketed as a "value-added" service to existing pay television and specialty services in order to minimize the competitive impact of PPV on these services.

The Commission expects VCC not to use a "buy-through" requirement that would oblige householders wishing to access the PPV service to subscribe to a premium pay television service.

The Commission expects VCC to maintain its commitment to distribute all films and all live events other than music concerts, on a closed caption basis.

The Commission expects that VCC's use of repeat channels would be consistent with the authorization given to cable licensees pursuant to paragraph 10(1)(l) of the Cable Television Regulations, 1986.

The Commission expects VCC to adhere to the "Pay Television Programming Standards and Practices" as amended from time to time and approved by the Commission.

Depiction of violence

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. The Commission encourages VCC 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 submitted regarding VCC's renewal application and has noted the licensee's reply to concerns raised in some of these interventions.

Interventions submitted by TEE-COMM Electronics Inc. and the Canadian Association of Small Cable Operators (CASCO) raised a number of issues including the reception of this service by small cable systems and Direct-To-Home (DTH) satellite dishes. In this regard, the Commission notes the licensee's commitment "to ensuring its service be available in the Canadian DTH market" and expects the licensee to charge Master Antenna Television Systems (MATV) operators the same wholesale rates as those charged to cable operators.

In addition, the Commission acknowledges the intervention submitted by Closed-Captioning & Subtitles requesting VCC to caption 100% of concerts and musical events. In this regard, the Commission notes the licensee's commitment to review the captioning of concerts and musical events carried by VCC, and to consult with associations of the hearing impaired in this regard.

Allan J. Darling
Secretary General

APPENDIX / ANNEXE

CONDITIONS OF LICENCE FOR VCC

1. The licensee shall distribute on its programming undertaking, in each broadcast year, a minimum of 12 Canadian feature films (including all new Canadian features that are suitable for PPV and meet the "Pay Television Programming Standards and Practices"), and a minimum of four Canadian-based events.

2. The licensee shall retain control at all times over the scheduling of films and events exhibited on the cable television undertakings operated by its affiliates, and shall, in each broadcast year, maintain a minimum Canadian to non-Canadian ratio of 1:20 for first-run film titles, and 1:7 for events, on each channel used for their exhibition.

3. The licensee shall remit to the rights holders of all Canadian films and to the rights holders of Canadian-based events, in each broadcast year including the partial broadcast year ending 31 August 1995, 100% of the net revenues earned from the exhibition of these Canadian films and Canadian-based events.

4. The licensee shall contribute to FUND, for FUND's equity investment in Canadian films, the sum of $6,500,000 or 5% of the licensee's net revenues whichever amount is greater, over the licence term.

5.(a) The licensee shall not distribute any film or video production with respect to which Astral Communications Inc. (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 such financial approvals as are normally required in such circumstances, remains the full responsibility of an independent Canadian production company.

6. Notwithstanding the distribution and linkage requirements referred to in subsection 10(2) of the Cable Television Regulations, 1986, the service provided by the licensee shall not be linked with any non-Canadian discretionary service, and the licensee shall not enter into any
affiliation agreement with cable affiliates that do not incorporate this prohibition against linkage.

7. 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.

8. 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:

 "broadcast year" means the period from 1 September to 31 August and each twelve-month period thereafter beginning on 1 September.

 "net revenue" means gross revenue received from the distribution of all programming on the licensee's service less any amount retained by the cable affiliate or other distribution affiliate for the carriage of programming distributed by the licensee.

 "remit" means actual cash outlay.