ARCHIVED -  Decision CRTC 96-607

Decision

Ottawa, 4 September 1996

Decision CRTC 96-607

Your Channel Television Inc. - on behalf of a company to be incorporated

Across Canada - 199600701

HGTV-TV Canada (Home and Garden Television) - Approved

Following a Public Hearing held in the National Capital Region beginning on 6 May 1996, the Commission approves, by majority vote, the application by Your Channel Television Inc. (the licensee), on behalf of a company to be incorporated, for a broadcasting licence to carry on a national English-language programming undertaking (Specialty Television Service) to be known as HGTV Canada (Home and Garden Television) (HGTV).

This service will be available via satellite to all broadcasting distribution undertakings across the country. In the case of those distribution undertakings that are subject to the Commission's distribution and linkage requirements, it will be available on a modified dual status basis, as explained in Public Notice CRTC 1996-120, which introduces this and other decisions released today, and in accordance with the provisions set out in the distribution and linkage public notice also issued today (Public Notice CRTC 1996-121).

The Commission will issue a licence, expiring 31 August 2003, subject to the conditions specified in the appendix to this decision and in the licence to be issued.

This authority will only be effective and the licence will only be issued at such time as the Commission receives documentation establishing that an eligible Canadian corporation has been incorporated in accordance with the application in all material respects and that it may be issued a licence.

In Public Notice CRTC 1996-120, the Commission outlined a licensing approach that grouped English-language services into two categories. The Access Rules will apply to the second group of services, to which HGTV belongs, at the earliest of the following: the deployment of digital technology by the distributor, or 1 September 1999. The service of this programming undertaking must, by condition of licence, be in operation within 36 months of the date of this decision unless the service provider, prior to the expiry of this period, applies for and receives an extension of time within which to commence operations.

Ownership

HGTV will be controlled by Your Channel Television Inc. which will hold 80.2% of the licensee's voting shares. Your Channel Television Inc. is controlled by Atlantis Television Ventures Inc. which, in turn, is controlled by Atlantis Communications Inc. (Atlantis), a publicly traded company. Atlantis is ultimately controlled by Messrs. Edward Riley, Michael MacMillan, Seaton McLean and Peter Sussman.

The remaining 19.8% of the voting shares will be held by Scripps Howard Broadcasting Company, a U.S. corporation and a wholly-owned subsidiary of E. W. Scripps Company. The latter corporation operates a similar home and garden television programming service in the U.S. as well as daily newspapers, television stations, cable systems groups and United Media, a licensor and syndicator of news features and comic strips.

Programming

Nature of Service

The licensee will offer a 24-hour-a-day specialty service devoted to programming that presents practical, hands-on advice and instruction about homes and gardens. The programming will revolve around five key themes: building and remodelling, decorating and interior design, gardening and landscaping, crafts and hobbies and special interests.

As described by the licensee and as set out as a condition of licence in the appendix to this decision, all of the programs broadcast by HGTV will be drawn from the following program categories as defined in the Specialty Services Regulations, 1990: category 2 (Analysis and interpretation); category 3 (Reporting and actualities); category 5(b) (Informal education); category 9 (Variety); and category 11 (Human interest).

Your Channel Television Inc. is the licensee of the Canadian specialty service known as the Life Network which offers broad-based lifestyle programming in areas of health, cooking, nutrition, travel, wildlife, relationships and leisure sports. The licensee confirmed that none of the programming broadcast by HGTV would duplicate that presented by the Life Network. Further, the Commission notes that 80% of programming to be broadcast by HGTV will be original programming never before seen in Canada.

Canadian Content

Throughout the licence term, by condition of licence, the licensee will devote at least 50% of the broadcast year, and at least 50% of the evening broadcast period to the distribution of Canadian programs.

Canadian Programming Expenditures

Consistent with the approach set out in Public Notice CRTC 1996-120 and as discussed with the licensee at the hearing, by condition of licence, the licensee shall, in the broadcast year following its first year of operation and in each subsequent year of operation, devote to expenditures on Canadian programs at least 50% of the previous year's gross revenue derived from the operation of the service. Some flexibility in the accounting of these expenditures is provided for in the condition of licence on Canadian expenditures attached to this decision.

Independent Production

Atlantis, the controlling shareholder of Your Channel Television Inc., is a Canadian communications company that creates, produces and distributes programs for television markets throughout the world. The licensee confirmed that Atlantis does not currently produce in-house programming featuring themes related to homes and gardens. In addition, the licensee indicated that Atlantis has not produced or supplied programming for the Life Network, nor does it intend to provide programming for HGTV. As a member of HGTV's Board of Directors, Atlantis will be involved in decisions affecting the proposed service as a whole; however, Atlantis will not participate in decisions respecting the acquisition of specific programs.

The Commission notes the licensee's commitment to contribute $200,000 each year for script and concept development. As discussed with the licensee, it is prohibited, by condition of licence, from allocating any monies from its annual $200,000 contribution for script and concept development to Atlantis.

Advertising

Consistent with the licensee's commitments, it is a condition of licence that all paid advertising material distributed on HGTV shall be national paid advertising, and shall be restricted to 12 minutes per clock hour, with some flexibility for the placement of advertising material in longer programs.

Other Matters

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. In its application, the licensee indicated that it had not yet adopted a plan but that it would have one, modelled on the Life Network's plan, in place by the time of HGTV's launch. The Commission encourages the licensee to consider equity issues in its hiring practices and in all other aspects of its management of human resources. In particular, the Commission encourages the licensee to promote equitable representation in on-air staff positions and in voice-overs of station-produced commercial messages. The Commission will review the licensee's performance in implementing employment equity practices at the time of licence renewal.

Closed Captioning

In accordance with the policy announced in Public Notice CRTC 1996-120, the Commission requires the licensee to close caption not less than 90% of all programming over the broadcast day by the end of the licence term.

Conclusion

In approving this application, the Commission is satisfied that HGTV will contribute to the overall diversity of Canadian programming services available to viewers across the country.

The Commission acknowledges and has considered the interventions submitted with respect to this application.

This decision is to be appended to the licence.

Allan J. Darling
Secretary General

APPENDIX/ANNEXE

Conditions of licence for HGTV-TV Canada (Home and Garden Television)

1. The licensee shall provide a national English-language specialty service dedicated solely to advice and instruction about homes and gardens and shall draw programs exclusively from category 2 (Analysis and interpretation); category 3 (Reporting and actualities); category 5(b) (Education - informal); category 9 (Variety); and category 11 (Human interest), as set out in item 6 of Schedule I of the Specialty Services Regulations, 1990.

2. The licensee shall devote to the distribution of Canadian programs not less than 50% of the broadcast year, and not less than 50% of the evening broadcast period.

3. In accordance with the Commission's position on Canadian programming expenditures as set out in Public Notices CRTC 1992-28, 1993-93 and 1993-174:

(a) In the broadcast year following the first year of operation, and in each subsequent broadcast year, the licensee shall expend on Canadian programs not less than 50% of the previous broadcast year's gross revenues derived from the operation of the service.

(b) In the broadcast year following the first year of operation and in each subsequent broadcast year, excluding the final year, the licensee may expend an amount on Canadian programs that is up to five percent (5%) less than the minimum required expenditure for that year calculated in accordance with this condition; in such case, the licensee shall expend in the next broadcast year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underspending.

(c) In the broadcast year following the first year of operation, and in each subsequent broadcast year where the licensee expends an amount on Canadian programs that is greater than the minimum required expenditure for that year calculated in accordance with this condition, the licensee may deduct:

(i) from the minimum required expenditure for the next broadcast year, an amount not exceeding the amount of the previous broadcast year's overexpenditure; and

(ii) from the minimum required expenditure for any subsequent broadcast year, an amount not exceeding the difference between the overspending and any amount deducted under paragraph (i) above.

(d) Notwithstanding the above, during the licence term, the licensee shall expend on Canadian programs, at a minimum, the total of the minimum required expenditures calculated in accordance with the licensee's condition of licence.

4. (a) Subject to subsection b) and d), the licensee shall not distribute more than twelve minutes of advertising material during each clock hour.

(b) In addition to the twelve minutes of advertising material referred to in subsection a), the licensee may distribute during each clock hour, a maximum of 30 seconds of additional advertising material that consists of unpaid public service announcements.

(c) The licensee shall not distribute any paid advertising material other than national paid advertising.

(d) Where a program occupies time in two or more consecutive clock hours, the licensee may exceed the maximum number of minutes of advertising material allowed in those clock hours if the average number of minutes of advertising material in the clock hours occupied by the program does not exceed the maximum number of minutes that would otherwise be allowed per clock hour.

5. The licensee may require access to distribution undertakings, in accordance with the Access Rules contained in Public Notice CRTC 1996-60 at the earliest of the following:

(a) at such time as the distribution undertaking makes use of digital technology for the delivery of programming to subscribers; or

(b) 1 September 1999.

6. This undertaking shall be in operation within thirty-six (36) 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 implementation before the expiry of this period and that an extension is in the public interest, within such further period of time as is approved in writing by the Commission.

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 provisions of the CAB's "Broadcast Code for Advertising to Children", as amended from time to time and approved by the Commission.

9. 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 approved by the Commission.

10. The licensee shall not remit any program development funds to its shareholders or affiliated corporations.

For the purpose of these conditions of licence, the terms "broadcast day", "broadcast year", "evening broadcast period" and "clock hour" shall have the same meaning as those set out in the Television Broadcasting Regulations, 1987; "first year of operation" shall mean the first broadcast year in which the licensee is in operation for a period exceeding 90 days, excluding any free trial period; and "national paid advertising" shall mean advertising material as defined in the Specialty Services Regulations, 1990 and that is purchased at a national rate and receives national distribution on the service.

Dissent of Commissioner Andrée Wylie

Commissioner Andrée Wylie dissents from this and from all of the other decisions issued today in respect of applications for licences to carry on new English-language specialty television programming undertakings whose services fall within the second category, namely those to whom the Access Rules will apply at the earliest of the following: the deployment of digital technology by the distributor, or 1 September 1999. The rationale underlying the Commissioner's dissent is presented at the conclusion of Public Notice CRTC 1996-120.