ARCHIVED -  Decision CRTC 96-543

Decision

Ottawa, 28 August 1996

Decision CRTC 96-543

CHUM Limited

Ottawa, Ontario - 950197400

Licence amendment for CITY-TV Toronto

Following a Public Hearing in the National Capital Region beginning on 15 April 1996, the Commission approves the application to amend the broadcasting licence for the television programming undertaking CITY-TV Toronto, by authorizing the licensee to add a transmitter at Ottawa, operating on channel 65, with an effective radiated power of 100,000 watts.

CHUM Limited (CHUM), is the licensee of several radio and television undertakings across Canada, as well as specialty television services MuchMusic and Bravo! CHUM is owned by Allan Waters Limited (82%), Fred Sherratt Limited (11%) and the remaining 7% is held by others.

CITY-TV was originally licensed by the Commission to provide television service to the Toronto area in Decision CRTC 71-780, dated 15 November 1971, and a request to add a transmitter at Woodstock was approved by the Commission in Decision CRTC 86-216, dated 13 March 1986. Off-air reception of CITY-TV currently reaches
approximately 73% of Ontario viewers and, as a result of the approval granted herein, will reach approximately 84% of Ontario viewers. The programming of CITY-TV has traditionally targeted an urban audience looking for an alternative style of local television.

In submitting this application, the licensee stated that its goal is for CITY-TV to provide the same programming alternative and have the same positive effect in the community of Ottawa as CITY-TV has had in Southwestern Ontario.

Interventions to this application were submitted by several parties, including CanWest Global Communications Corp. (CanWest), licensee of the regional Ontario broadcaster CIII-TV (Global) and Baton Broadcasting Incorporated (BBS), licensee of CJOH-TV Ottawa and CHRO-TV Pembroke. Both CanWest and BBS argued that the addition of a CITY-TV rebroadcaster in Ottawa would compromise the Commission's policy requiring the provision of local programming serving the particular needs and interests of those living in the geographic areas served by television undertakings. Such approval would indicate, according to the interveners, that TV stations could henceforth expand their coverage to non-contiguous areas without the obligation to serve their new audiences. CanWest and BBS also argued that it would be unfair for CITY-TV to expand its coverage area, bringing it into competition with Global, without agreeing to alter its fundamental
nature by assuming the type of special programming obligations that Global has, together with a restriction on airing local advertising.

In its application, CHUM set out its intention not to sell any local advertising in the Ottawa market while continuing to sell locally in its current coverage area, and not to engage in local Ottawa programming. The licensee stated at the hearing that the changing landscape of the Ontario television industry has led advertisers to prefer purchasing commercial time on the five most widely-received regional services (Global, the BBS stations, CBC, CFMT-TV and WUTV (FOX Buffalo)). CHUM set out its belief that CITY-TV was at a competitive disadvantage to these other undertakings, based on the reluctance of national advertisers to utilize its substantially smaller market. The applicant argued that the largest part of incremental revenues related to the reception of CITY-TV in the Ottawa market would be realized by an increase in national advertisers wishing to reach CITY-TV's expanded market.

The Commission has carefully considered the arguments of the applicant and of all the interveners. It is of the opinion that the proposal meets the requirements of the Distant Canadian Television Signals Policy, as set out in Public Notice CRTC 1985-61.

The Commission notes that Ontario can be described as a television market with a unique structure. The undertakings which make up the Ontario television landscape include a large number of local stations providing local programming and selling local advertising, many of which are controlled by a single strong licensee, BBS, which capitalizes on its many licences by also selling advertising regionally. Ontario also has local/regional undertakings with local programming and local advertising sales related to their core markets, but also with the ability to sell regional advertising in some markets. Finally, a major force in Ontario television is Global, a very strong regional licensee with a strictly regional mandate, and no local advertising.

The Commission is satisfied that, within the unique broadcasting structure in Ontario, an expanded regional reach for CITY-TV is appropriate, and does not threaten the Commission's policy requiring the provision of local programming. The Commission is satisfied that the addition of the CITY-TV service in Ottawa will increase the diversity of Canadian programming provided to Ottawa viewers while maintaining adherence to the local programming commitments in its existing licence. The Commission is also convinced that, since no local Ottawa programming will be provided and, consequently, no local advertising will be solicited, there will be no undue harm to local broadcasters. The Commission notes in this regard that in the case of BBS, recent approvals of applications have significantly increased its strength and consequently enhanced its ability to withstand competitive pressures.

As discussed with the applicant at the hearing, and consistent with the Commission's policy linking the authority to solicit local advertising to the provision of local programming, the Commission prohibits CHUM, by condition of licence, from soliciting local advertising in Ottawa.

In a related decision published today (Decision CRTC 96-544), the Commission has approved, in part, an application similar to the CHUM application herein approved, submitted by Niagara Television Limited (Niagara), licensee of CHCH-TV Hamilton, to amend the broadcasting licence for CHCH-TV, by authorizing the licensee to add transmitters at various Ontario locations, including Ottawa.

As a part of its application, Niagara put forward a commitment to increase its spending on Canadian programming for CHCH-TV. This enhanced programming commitment will result in the level of such expenditures on behalf of CHCH-TV increasing to a level in line with the industry average for comparable stations.

In its application for approval of the Ottawa transmitter, unlike Niagara, CHUM made no commitment to increase the level of CITY-TV spending related to Canadian programming expenditures. In discussions at the public hearing, the Commission raised the issue of the possibility of enhanced programming commitments for CITY-TV, in the event that approval of the application was granted. The applicant declined to commit to any increased spending commitment at this time, and stated that "increased commitments, conditions of licence, or contributions to Canadian programming, Canadian expenditures should be a direct result of increased revenue and profitability of the station".

The Commission is satisfied that the existing level of Canadian programming expenditures undertaken by CHUM on behalf of CITY-TV is already in line with the industry average for such stations. Further, the Commission notes that any increased revenues associated with the addition of the Ottawa transmitter will be automatically reflected in increased spending on Canadian programming, in accordance with the existing condition of CITY-TV's licence.

The Commission, however, will wish to examine the level of Canadian programming expenditures and the appropriateness, in some cases where overall Canadian programming expenditures have been below average, of additional programming commitments, in the light of circumstances at the time of the next renewal of CITY-TV's licence, as well as that of all similar local/regional Ontario broadcasters.

This authority will only be effective and the licence will only be amended at such time as construction of the transmitter is completed and it is prepared to commence operation. If the construction is not completed within twelve months of the date of this decision or, where the licensee applies to the Commission within this period and satisfies the Commission that it cannot complete construction and commence operation before the expiry of this period, and that an extension of time is in the public interest, within such further periods of time as are approved in writing by the Commission, the licence will not be amended. The licensee is required to advise the Commission (before the expiry of the twelve-month period or any extension thereof) in writing, once it has completed construction and is prepared to commence operation.

The Commission acknowleges and has considered all of the interventions submitted with respect to this application.

This decision is to be appended to the licence.

Allan J. Darling
Secretary General