ARCHIVED -  Decision CRTC 96-274

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Ottawa, 4 July 1996
Decision CRTC 96-274
Westcom TV Group Ltd.
Victoria, Sooke, River Jordan, Port Alberni, Coal Harbour and Campbell River, British Columbia - 951993500
Licence renewal for CHEK-TV Victoria and its transmitters
Following a Public Hearing held in Vancouver beginning on 27 February 1996, the Commission renews the broadcasting licence for the television programming undertaking CHEK-TV Victoria and its transmitters CHEK-TV-1 Sooke, CHEK-TV-2 River Jordan, CHEK-TV-3 Port Alberni, CHEK-TV-4 Coal Harbour and CHEK-TV-5 Campbell River, from 1 September 1996 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.
In Decision CRTC 95-99 dated 17 March 1995, the Commission renewed the broadcasting licence for CHEK-TV Victoria for a period of one year only, from 1 September 1995 to 31 August 1996. The decision noted that "This one-year licence term reflects the Commission's serious concerns regarding, most particularly, the practices followed by the licensee in the accounting of its Canadian programming expenditures." The Commission expected Westcom TV Group Ltd. (Westcom) to prepare and file, by no later than 1 September 1995, an application for the renewal of the broadcasting licence for CHEK-TV that would respond fully to concerns related to those accounting practices, as well as to other concerns set out in Decision CRTC 95-99.
In Decision CRTC 95-99, the Commission set out its determination that intra-corporate transfers between Artray (the in-house production organization used by the licensee for all local production other than news production), and CHEK-TV had resulted in a significant overstatement of the funds actually spent on Canadian programming for CHEK-TV. It was noted, for this reason, that the Commission had great difficulty in finding the licensee to have been in compliance with its conditions of licence governing the Canadian programming expenditures by CHEK-TV.
It was the Commission's view that the payments from CHEK-TV to Artray, specifically the equipment charges, far exceeded Artray's depreciation costs and expenditures on new equipment over the licence term, and therefore included a substantial profit to Artray. The Commission also noted that the intra-corporate payments had the effect of artificially deflating the reported profitability of CHEK-TV.
Revised Accounting Practices
The application for the renewal of CHEK-TV's broadcasting licence submitted by Westcom provided a detailed description of the revisions made to the licensee's accounting practices, in response to the Commission's concerns. Among other things, the revised practices will eliminate the Artray mark-ups and any indirect profits included in the equipment charges.
The Commission has reviewed the revised accounting practices submitted by the licensee and is satisfied that the concerns noted in Decision CRTC 95-99 have been adequately addressed by the licensee.
The licence term granted herein, while less than the maximum of seven years permitted by the Broadcasting Act, will enable the Commission to consider the next licence renewal of this undertaking in accordance with the Commission's regional plan and to better distribute the workload within the Commission. The term is not reflective of any continuing Commission concern regarding the licensee's performance.
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 licensed to serve.
In this regard, the Commission expects the licensee to adhere to the commitment in its renewal application to broadcast, at a minimum, an average of 13 hours and 20 minutes per week of original local news during the new licence term.
The Commission also notes the licensee's plans for the reflection of the local community, through the broadcast of programs such as "Nanaimo Report", "CHEK Around", "Home Check" and "Up and Coming".
Children's programming
With respect to programming directed to children, the Commission notes the licensee's commitment to broadcast on CHEK-TV an average of one hour per week of Canadian programming directed to children aged 2-11.
Exhibition of Canadian programming
As announced in Public Notice CRTC 1995-48, the Commission has adopted a policy, according to which the licensees of most private English-language television stations earning over $10 million in total annual advertising revenues and network payments are being offered the option of either adhering to a condition of licence on Canadian programming expenditures similar to the existing condition, or adhering to a condition of licence requiring the licensee to exhibit a specific number of hours of Canadian drama (category 7), music (category 8) and variety programming (category 9) during the evening broadcast period for each year of the new licence term. The options and the Commission's policy rationale are described more fully in that public notice.
The licensee stated in its renewal application that it would prefer to accept a condition of licence related only to the exhibition of a specific number of hours of drama, music and variety programs. Accordingly, the option chosen by the licensee is set out in the appendix to this decision as a condition of licence.
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 allocate $70,000 annually to program development.
Service to the deaf and hard of hearing
Consistent with its policy approach for closed captioning announced in Public Notice CRTC 1995-48, the Commission requires the licensee, from 1 September 1998 to the end of the term of this licence, 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 requires the licensee to close caption not less than 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 "Imple-mentation 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 the licensee's particular initiatives with regard to the hiring of aboriginal persons, as encouraged in Decision CRTC 95-99, and further encourages the licensee to continue its efforts in the area of employment equity.
An intervention in opposition to this application was submitted by the Canadian Association of Captioning Consumers, and the Commission is satisfied with the licensee's response to the concerns raised.
The Commission also acknowledges and has considered the interventions submitted in support of this application.
A copy of this decision is to be appended to the licence of CHEK-TV.
Allan J. Darling
Secretary General
Conditions of licence for CHEK-TV Victoria
1. The licensee shall operate this broadcasting undertaking as part of the network operated by CTV Television Network Ltd.
2. The licensee shall broadcast in the evening broadcast period (between 6:00 p.m. and midnight) the following average number of hours per week of Canadian drama, music or variety programming in each year of the licence term:
1996-1997 6:00 hours
1997-1998 6:00 hours
1998-1999 6:00 hours
1999-2000 6:30 hours
2000-2001 6:30 hours
2001-2002 7:00 hours
For the purpose of the above condition, the categories drama, music and variety are defined as set out in Schedule I of the Television Broadcasting Regulations, 1987.
3. 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).
4. 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.
5. 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.

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