ARCHIVED -  Decision CRTC 95-900

Decision

Ottawa, 20 December 1995

Decision CRTC 95-900

Canal Première, a general partnership consisting of Canal Première/Viewer's Choice Canada, Cogeco Radio-Télévision inc., Réseau de télévision Quatre Saisons inc. and Télé-Métropole inc.

Across Canada - 951602200

New national French-language general interest pay-per-view service

Following a Public Hearing held in the National Capital Region, beginning 18 September 1995, the Commission approves the application by Canal Première/Viewer's Choice Canada, Cogeco Radio-Télévision inc., Réseau de télévision Quatre Saisons inc. and Télé-Métropole inc. for a broadcasting licence to carry on a national, French-language pay television programming undertaking which will provide a general interest pay-per-view (PPV) service, distributed by cable and to be known as Canal Première.

The Commission will issue a licence expiring 31 August 2002 to the partners of the service Canal Première. The licensees will be Canal Première/Viewer's Choice Canada, Cogeco Radio-Télévision Quatre Saisons inc. and Télé-Métropole inc., referred to as the licensee or Canal Première. The licensee will be regulated pursuant to the Pay Television Regulations, 1990. The licence will be subject to the terms and conditions set out in the appendix to this decision and in the licence to be issued. The licence will only be issued upon receipt, by the Commission, of the agreement reached between the four partners in the service, in accordance with the application in all material respects and signed by them.

The Commission is not prepared to allow cable television licensees to link the proposed service with any non-Canadian discretionary service or services. The Commission notes in this regard that neither the applicant nor any of the prospective cable affiliates proposed that there be any such linkage. Accordingly, by condition of licence, the Commission requires Canal Première to ensure that all affiliation agreements entered into between it and cable television licensees incorporate a prohibition against linkage.

Ownership

Canal Première is the product of an agreement between four French-language broadcasters, namely, Canal Première/Viewer's Choice Canada, Cogeco Radio-Télévision inc., Réseau de télévision Quatre-Saisons inc., and Télé-Métropole inc. The parties' holdings in Canal Première are 40%, 20%, 20% and 20%, respectively. None of the parties will control the partnership. Control will be exercised by a six-member board of directors composed of three representatives of Canal Première/Viewer's Choice Canada and one representative of each of the other three parties. Some of Canal Première's partners and other associates will, under a management contract, supply various administrative services related to programming, marketing and program broadcasting.

Canal Première's proposal

The programming proposed by the applicant consists mainly of feature films and special events (sports, concerts, performances). First-run drama series and educational and learning programs will be added during the licence term.

The applicant made a commitment to distribute in each broadcast year a minimum of 20 Canadian feature films available in the original, French-language version or dubbed in French which have been exhibited in theatres in French-language markets (including all new Canadian feature films which are available and suitable for PPV and meet the "Pay Television Programming Standards and Practices"), and a minimum of six Canadian-based events targeting the French-language market in years 1 and 2, eight in years 3 and 4, ten in years 5 and 6, and twelve in year 7. The Commission requires, by condition of licence, that the licensee adhere to these commitments.

Canal Première also made a commitment to maintain a ratio of no less than 1:12 with respect to Canadian:non-Canadian first-run feature films exhibited on its service in each broadcast year and a ratio of no less than 6:20 for Canadian events in years 1 and 2, 8:20 in years 3 and 4, 10:20 in years 5 and 6, and 12:20 in year 7, on each channel used for their broadcast. The Commission requires, by condition of licence, that the licensee adhere to this commitment.

The Commission also notes the applicant's commitment that all drama programs (series, mini-series, made-for-TV feature films, etc.) and learning and training programs that it broadcasts will be Canadian. The Commission also requires, by condition of licence, that the licensee adhere to this commitment.

At the hearing, the applicant made a commitment not to acquire exclusive rights for the distribution of pay-per-view programming in Canada.

With regard to the scheduling of Canadian programming, the Commission expects the applicant to honour its commitment to give Canadian films the same treatment as non-Canadian films.

The Commission expects that the exhibition window to be given Canadian films will be at least equal to the minimum length of the window given to non-Canadian films.

The Commission expects the applicant to ensure that there is equity in the promotion of Canadian and non-Canadian feature films and events.

Canal Première intends to distribute its programming on four channels (including the barker channel) during the first two years of operation. In the third year, the applicant will offer 10 channels, rising to 20 channels in the fifth year. The applicant will offer the barker channel in each year of the licence term.

The service will be transmitted via fibre optic cable from the Teleport broadcast centre in Montreal, where it will be offered to the three major Quebec cable distributors that now use fibre, namely, Vidéotron, CF Câble and Cogeco. The applicant estimates that these three undertakings serve about 85% of the households in Quebec that receive cable television service. Cable subscribers will need an addressable decoder to receive Canal Première's PPV service. They will place their order by telephone with a customer service representative before the scheduled broadcast time of a desired film or event. The service charge will be added to their monthly cable bill. The applicant estimates that the number of addressable households will increase from 304,900 in the first year of its licence term to 527,920 in the seventh year. The Commission encourages the applicant to take measures necessary to make its service accessible to viewers in areas which either are not served by fibre or are served by small cable operators.

Canal Première made a commitment to remit all gross revenues derived from the broadcast of Canadian feature films on its service, to distributors and providers, with a minimum of 60% to the providers. The Commission requires the licensee, by condition of licence, to adhere to this commitment.

In addition to the gross revenues derived from the broadcast of Canadian feature films that it will remit to distributors and providers, the applicant made a commitment to devote 10% of the annual gross revenues of the service to fund Canadian feature films and Canadian events for French-language PPV television. For the first year of operation, the applicant proposes to contribute 10% of the current year's gross revenues. For subsequent years, the applicant will contribute 10% of the previous year's gross revenues. The Commission requires the licensee to adhere to this commitment, by condition of licence. At the hearing, the applicant indicated that it expects that [TRANSLATION] "this contribution, paid to an independent fund administered by a third party, could accumulate up to $6.4 million in seven years. The fund will be devoted entirely to financing Canadian feature films and events produced by the independent sector".

At the hearing, the applicant indicated that [TRANSLATION] "the public broadcasters, CBC and Radio-Québec, will be associated with the undertaking and will be able to offer their programming to Canal Première without discrimination and subject to terms and conditions comparable to those offered to independent producers or to the shareholder broadcasters". In addition to ensuring that the CBC and Radio-Québec can offer their programming, the parties made a commitment to inform the CBC and Radio-Québec periodically of completed or planned activities related to the undertaking's programming. Information could be exchanged through annual meetings of certain members of the board of directors, Radio-Québec and the CBC or in any other manner considered appropriate. The applicant indicated that this agreement was designed to include major French-language broadcasters in the PPV market.

The applicant further indicated that [TRANSLATION] Réseau des sports (RDS) and Premier Choix:TVEC will contribute to the project. RDS will contribute as operator under contract of the broadcast centre for events and Premier Choix as operator of the broadcast centre for films, drama series and educational programs. Independent producers of films, programs, concerts and performances will be, in large measure, the principal suppliers of Canadian programming to Canal Première.

In its application the applicant indicated that it would like to be able to devote up to 20% of its program schedule to programming produced by its partners or such proportion as the Commission may consider reasonable. In this regard, the Commission reminds the applicant that, pursuant to paragraphs 3(2)(e) and (f) of the Pay Television Regulations, 1990, no licensee shall distribute programming:

* other than filler programming, that is produced by the licensee after the date of publication in the Canada Gazette of the initial decision of the Commission granting a licence to the licensee; or

* other than filler programming, that is produced by a person related to the licensee after the later of

 o the date of publication in the Canada Gazette of the initial decision of the Commission granting a licence to the licensee, and

 o the day on which the person became related to the licensee.

However, as stated in Public Notice CRTC 1995-209, the Commission is currently seeking public comment on a proposed amendment to the pay television regulations that would permit pay television licensees, by condition of licence and in certain circumstances, to include some programming in their services that is either produced by themselves or by others with whom they are related.

Service to the deaf and hard of hearing

In its application, the applicant made a commitment to contribute to the close-captioning of Canadian feature films, amounts ranging from $135,000 in the first year of the licence term to $307,000 in the seventh year. The applicant also pledged that 50% of all the feature films it broadcasts in the first year will be closed captioned, increasing to 100% in the seventh year. The Commission expects the licensee to adhere to its commitments regarding closed captioning.

The Commission notes that the applicant will acquire, in the first year of the licence term, a telecommunication device for the deaf (TDD), and will ensure that the TDD number is well publicized.

Employment Equity

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled "Implementation of an Employment Equity Policy", the Commision announced that the employment equity practices of broadcasters would be subject to examination by the Commission. The Commission encourages Canal Première to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources.

The Commission acknowledges the many interventions filed in regard to this application.

Allan J. Darling
Secretary General

APPENDIX TO DECISION CRTC 95-900

Conditions of Licence

1. The licensee shall distribute on its programming undertaking, in each broadcast year, a minimum of 20 Canadian feature films in the original French-language version or dubbed in French which have been exhibited in theatres in French-language markets (including all new Canadian features that are available and suitable for PPV and meet the "Pay Television Programming Standards and Practices"), and a minimum of six Canadian-based events targeting the French-language market in years 1 and 2, eight in years 3 and 4, ten in years 5 and 6, and twelve in year 7.

2. The licensee shall maintain a film ratio of no less than 1:12 with respect to Canadian:non-Canadian "first run" feature films exhibited on its service in each broadcast year and a ratio of no less than 6:20 for Canadian events for the first 2 years of the licence term, 8:20 in years 3 and 4, 10:20 in years 5 and 6 and 12:20 in year 7, on each channel used for their broadcast.

3. All drama series (series, mini-series, films for television, etc.) and educational television programs shall be Canadian.

4. The licensee shall remit all gross revenues derived from the broadcast of Canadian feature films on its service to distributors and providers, with a minimum of 60 % to the programming providers.

5. The licensee is required, over the licence term, to invest at least 10 % of its gross revenues to the production of Canadian feature films and Canadian events. These investments are in addition to the commitment made by the licensee to promote these feature films and events. For the period from the commencement of operation of the service to 31 August 1996, the licensee shall contribute at least 10 % of its current year's gross revenues and for the subsequent years at least 10 % of its previous year's gross revenues. This contribution shall be remitted to a fund which shall be administered independently from the licensee.

6. 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. Further, the licensee shall provide to the Commission, upon request, a list of programs distributed by each of its cable affiliates.

7. The licensee shall not enter into an affiliation agreement with the licensee of a DTH distribution undertaking, unless the agreement incorporates a prohibition against linkage of the Canal Première service with any non-Canadian discretionary service.

8. 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.

9. The licensee shall adhere to the "Pay Television Programming Standards and Practices Code", as amended from time to time and approved by the Commission.

10. 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.