ARCHIVED -  Decision CRTC 96-610

Decision

Ottawa, 4 September 1996

Decision CRTC 96-610

Sportscope Television Network Ltd

Across Canada - 199600800

Sportscope Plus - 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 Sportscope Television Network Ltd. (the licensee), for a broadcasting licence to carry on a national English-language programming undertaking (Specialty Television Service) to be known as Sportscope Plus.

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 $0.10 per subscriber, in cases where Sportscope Plus 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.

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 Sportscope Plus 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

Clairvest Group Inc. (Clairvest), a merchant bank, will hold both majority ownership and control of the Board of Directors of the proposed licensee. Clairvest will, through CVG Programming Inc., own 65.6% of Sportscope Television Network Ltd.'s voting shares. First Control Corporation, an affiliate of the cable company, Western Co-Axial Limited (Western), will hold 28.2% of the voting shares. Digimation Incorporated, a computer software and hardware designer, will hold the remaining 6.2% voting shares.

Sportscope Television Network Ltd. currently operates Sportscope, an alpha-numeric sports information service, that is received by some 1.4 million cable subscribers across Canada.

In its evaluation of this application, the Commission has examined Western's role in the proposed licensee. While Clairvest, through its equity position and dominance on Sportscope Plus' Board of Directors will have legal control of the proposed service, the merchant banker has little experience in the operation of broadcasting undertakings. On the other hand, Western is the licensee of the cable distribution undertaking serving part of Hamilton and some surrounding communities and operates Sportscope Television Network Ltd.'s current alphanumeric sports service. In light of the foregoing, the Commission is of the view that Western could exercise significant influence in decisions regarding the proposed service's daily operations and programming.

In its report, "Competition and Culture on Canada's Information Highway: Managing the Realities of Transition" dated 19 May 1995, ("the Convergence Report"), the Commission stated that, until there is sufficient channel capacity on cable networks, and until transparent access rules are in place to prevent undue preference, cable companies are not permitted to control programming undertakings, other than over-the-air radio and television undertakings. The Commission is satisfied that the Access Rules, announced in Public Notice CRTC 1996-60 dated 26 April 1996, can address any potential abuse with regard to cable shareholders granting preferential treatment to programming services in which they hold an equity interest. Nevertheless, the Commission still has concerns regarding the adequacy of channel capacity on cable systems across Canada at the present time.

The Commission questioned the licensee regarding the measures it would take to ensure that Western will not give Sportscope Plus preferential treatment on its cable systems over competing programming services in the pricing, placement and packaging of services. In response, Western stated, among other things, that it will adhere to the Access Rules contained in Public Notice CRTC 1996-60. Furthermore, Western stated that it plans to build its cable system to its fullest capacity over a three year period. Western expects that by the time the proposed service is in operation, channel capacity will no longer be of concern in relation to its cable systems.

The Commission expects that Sportscope Plus will not be given preferential treatment or accesss to distribution systems by any distributor that holds an ownership interest in the licensee company.

Programming

Nature of Service

The licensee will offer a 24-hour-a day specialty television programming service devoted to video highlights of sports events as well as text and graphic displays that provide sports scores and schedules.

Throughout the broadcast day, Sportscope Plus will present "Sports Ticker", a constantly updated stream of information on sports along the bottom quarter of the television screen. On each quarter hour, the proposed service will broadcast "Scoreboard", a full-screen graphic, lasting from two to four minutes, displaying sports results and listings of sports events distributed on other television services. In addition, Sportscope Plus will broadcast video highlights of sports events, previews of games and short features on sports personalities and events.

Sportscope Plus will contain some local and regional information in alphanumeric form. For example, as described in the application, while Sportscope Plus viewers in the Toronto area will see the score of the Toronto Varsity Blues hockey game, viewers in the Ottawa region will see the score of a game played by Carleton University.

Along with the programming service offered by Sportscope Plus, once digital video compression technology is deployed, the licensee will provide four companion alphanumeric services that will offer a variety of in-depth, sports-related information.

All of the programs provided by Sportscope Plus will be drawn from category 1 (News) and category 6 (Sports), as set out in the Specialty Services Regulations, 1990. The service will not provide coverage of live sports events.

Canadian Content

Throughout the licence term, by condition of licence, the licensee shall devote not less than 100% of the broadcast year, to the distribution of Canadian programs.

Canadian Programming Expenditures

Consistent with the approach set out in Public Notice CRTC 1996-120 and as discussed 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 45% 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 Sportscope Plus shall be national paid advertising, and shall be restricted to 8 minutes per clock hour.

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 stated that it had not developed plans in this regard. The Commission expects the licensee to develop and implement a plan in this regard by the time the service begins operation. 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 this regard at the time of licence renewal.

Closed Captioning

In accordance with the policy announced in Public Notice CRTC 1996-120, and recognizing that significant parts of the programming provided by Sportscope Plus will be text, the Commission expects the licensee to close caption, by the end of the licence term, not less than 90% of all programming over the broadcast day that does not consist of alpha-numeric text. The Commission notes the licensee's commitment to work co-operatively with groups representing the interests of the deaf and hard-of-hearing to ensure that the Sportscope Plus service is captioned effectively.

Conclusion

In approving this application, the Commission is satisfied that Sportscope Plus will contribute to the diversity of the programming services available to viewers by offering up-to-date sports information. The Commission also notes that Sportscope Plus will promote sports programming by publicizing the schedules of sports events broadcast on other television services.

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 Sportscope Plus

1. The licensee shall provide a national English-language specialty service that is dedicated solely to the broadcast of sports results and information in a video and textual form and shall draw its programs exclusively from category 1 (News) and category 6 (Sports), as set out in item 6 of Schedule 1 of the Specialty Services Regulations, 1990. The licensee shall not broadcast any live sports event coverage.

2. The licensee shall devote to the distribution of Canadian programs not less than 100% of the broadcast year.

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 45% of the previous broadcast year's gross revenues derived from the operation of this service.

(b) In the broadcast year following its 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, in addition to the minimum required expenditure for that year of the licence term, 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.

4. (a) Subject to subsection b), the licensee shall not distribute more than eight (8) minutes of advertising material during each clock hour.

(b) In addition to the eight 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.

5. From the date of commencement of service, the licensee shall charge each exhibitor of the service a maximum wholesale rate of $0.10 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 accepted 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 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.