ARCHIVED -  Decision CRTC 96-608

Decision

Ottawa, 4 September 1996

Decision CRTC 96-608

CITY-TV, a division of CHUM Limited - on behalf of a company to be incorporated and known as Star Entertainment Inc.

Across Canada - 199600941

Star-TV - 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 CITY-TV (the licensee), a division of CHUM Limited, on behalf of a company to be incorporated and known as Star Entertainment Inc., for a broadcasting licence to carry on a national English-language programming undertaking (Specialty Television Service) to be known as Star-TV.

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). As proposed by the licensee, and by condition of licence, the authorized maximum monthly wholesale rate shall be $0.05 per subscriber in cases where Star-TV is distributed as part of the basic service.

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 Star-TV 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

The licensee will be owned and controlled by CHUM Limited (CHUM) which will hold all of the proposed company's issued voting common shares. CHUM, a publicly-traded company, is indirectly controlled by Allan Waters of Toronto. It is the licensee of various radio and television stations across Canada as well as of MuchMusic and Bravo!, English-language specialty television services focusing on music and performing arts, respectively. With Radiomutuel Inc., CHUM is co-owner of MusiquePlus, a French-language music specialty television service. CHUM also owns the Atlantic Satellite Network, a satellite-to-cable programming undertaking serving communities in the Atlantic region and the eastern Arctic.

Programming

Nature of Service

The licensee will offer a 24-hour-a-day specialty television service devoted to delivering information, lifestyle and human interest programming related to the world of entertainment. The schedule will consist of a 6-hour program block aired once and, repeated three times daily. 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 Star-TV will be drawn from the following program categories as defined in the Specialty Services Regulations, 1990: category 1 (News), category 2 (Analysis and interpretation), category 3 (Reporting and actualities), category 7(d) (Feature film/Theatrical releases), category 8 (Music and dance), category 9 (Variety) and category 11 (Human interest).

As discussed with the licensee at the hearing, by condition of licence, no more than 5% of all the programs broadcast by Star-TV may be from category 7(d) (Feature film/Theatrical releases). The licensee is prohibited, by condition of licence, from broadcasting any programming or material from category 7(d) (Feature films/Theatrical Releases) between 6:00 p.m. and 11 p.m. Furthermore, the Commission has required as a condition of licence that all feature films broadcast by the licensee conform to the following definition proposed by the licensee at the hearing:

Movies or feature documentaries that are about the art and industry of show business featuring topics such as the biographies of significant personalities, or stories set in the world of filmmaking, television and entertainment.

Canadian Content

During the first year of operation, a minimum of 30% of the original and repeat programs to be distributed by Star-TV over the broadcast year will be Canadian. The licensee will increase the level of Canadian content over the licence term reaching a minimum of 50% during the seventh broadcast year. A condition of licence is set out in the appendix to this decision specifying the minimum level of Canadian programs that Star-TV must broadcast during each year of the licence term.

Over the first year of operation, a minimum of 25% of the programs broadcast by Star-TV during the evening broadcast period will be Canadian. In the third and in each subsequent broadcast year, the licensee will increase the level of Canadian content offered during the evening broadcast period, rising to a minimum of 40% in the seventh year. The licensee is required to adhere to levels of Canadian content specified in the condition of licence set out in the appendix to this decision.

The program schedule in the application indicated that during the first year of operation only 19.6% of Star-TV's original programs will be Canadian. At the hearing, the licensee explained that it will not be able to establish an inventory of programs because the proposed service will be presenting timely, up-to-date information on what is happening in Canada's entertainment sector. The licensee also argued that it can not afford to do more original Canadian programs because it does not expect to attract more than half a million subscribers and because the expenses required to present its proposed daily newscast are high. Nevertheless, the Commission notes that the increases in Canadian content outlined above will ensure that an increasingly strong Canadian presence is developed on Star-TV over the licence term.

Canadian Programming Expenditures

Consistent with the approach set out in Public Notice CRTC 1996-120 concerning requirements for Canadian programming expenditures, 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 broadcast year, devote to expenditures on Canadian programs at least 39% of the previous year's gross revenues derived from the operation of this service. Some flexibility in the accounting of these expenditures is provided for in the condition of licence on Canadian programming expenditures attached to this decision.

Advertising

Consistent with the licensee's commitments, it is a condition of licence that all paid advertising material distributed on Star-TV 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 has developed its own policy in this regard. The Commission notes the licensee's statement in its application that it is "committed to the advancement of women, disabled persons, members of visible minorities and aboriginal people both in front of and behind the camera, in all levels of responsibility and in all job functions." The Commission encourages the licensee to implement this commitment and will review its 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 the introduction of Star-TV will contribute to the overall diversity of Canadian programming services available to viewers across the country. The Commission also considers that Star-TV will foster greater awareness of the accomplishments of Canadian artists and performers.

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 Star-TV

1. (a) The licensee shall provide a national English-language specialty service whose main purpose is to inform its audience on all aspects of the entertainment industry, and shall draw programs exclusively from category 1 (News); category 2 (Analysis and interpretation); category 3 (Reporting and actualities); category 7(d) (Feature film/Theatrical releases); category 8 (Music and dance); category 9 (Variety) and category 11 (Human interest) as set out in item 6 of Schedule I of the Specialty Services Regulations, 1990.

(b) The licensee shall devote to programming drawn from category 7(d) (Feature films/Theatrical releases), as set out in item 6 of Schedule I of the Specialty Services Regulations, 1990 no more than 5% of the broadcast year and shall not broadcast such material between 6 p.m. and 11 p.m.

(c) Programs drawn from category 7(d) shall be limited to "Movies or feature documentaries that are about the art and industry of show business featuring topics such as the biographies of significant personalities, or stories set in the world of filmmaking, television and entertainment."

2. The license shall devote to the distribution of Canadian programs:

(a) In each of its first and second years of operation, not less than 30% of the broadcast year, and not less than 25% of the evening broadcast period.

(b) In each of its third and fourth years of operation, not less than 35% of the broadcast year, and not less than 30% of the evening broadcast period.

(c) In each of its fifth and sixth years of operation, not less than 40% of the broadcast year, and not less than 35% of the evening broadcast period.

(d) In the seventh year of operation, not less than 50% of the broadcast year, and not less than 40% 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 39% of the previous broadcast year's gross revenues derived from the operation of this 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 underexpenditure.

(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 of the licence term, 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 of the licence term, an amount not exceeding the difference between the overexpenditure and any amount deducted under (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.

(a) Subject to subsection b) and d), the licensee shall not distribute more than twelve (12) 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. From the date of commencement of service, the licensee shall charge each exhibitor of this service a maximum wholesale rate of $0.05 per subscriber per month, where the service is carried as part of the basic service.

6. 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.

7. 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.

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

10. 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.

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 Star TV 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.