ARCHIVED -  Decision CRTC 97-560

Decision

Ottawa, 26 September 1997

Decision CRTC 97-560

The Partners of Viewer's Choice Canada, a general partnership, on behalf of a corporation to be incorporated

Acquisition of assets

1. Following a Public Hearing in the National Capital Region beginning on 19 August 1997, the Commission approves the application for authority to transfer the 40% interest held in Canal Indigo, (licensee of a French-language pay-per-view service and a French-language direct-to-home pay-per-view service) from the Partners of Viewer's Choice Canada (a general partnership of Netstar Enterprises Inc., Rogers Pay-Per-View Inc. and TMN Networks Inc.), to a corporation to be known as Viewer's Choice Canada Inc. The new corporation will have shareholdings identical to that of the partnership. TMN Networks Inc. will hold 50.1% while Rogers Pay-Per-View Inc. and NetStar Enterprises Inc. will each hold 24.95%.

2. The Commission will issue new licences to Canal Indigo, expiring 31 August 2001 in the case of the pay-per-view undertaking, and 31 August 2002 in the case of the direct-to-home pay-per-view undertaking, upon surrender of the current licences issued to Canal Indigo. The licences will be subject to the same conditions as those in effect under the current licences, as well as to any other condition specified in the appendices to this decision and in the licences to be issued.

3. The Commission notes that this licensee is subject to the Employment Equity Act that came into effect on 24 October 1996 (1996 EEA), and therefore files reports concerning employment equity with Human Resources Development Canada. As a result of a consequential amendment to the Broadcasting Act, the Commission no longer has the authority to apply its employment equity policy to any undertaking that is subject to the 1996 EEA.

This decision is to be appended to each licence.

Laura M. Talbot-Allan
Secretary General

This document is available in alternative format upon request.

APPENDIX I / ANNEXE I

The following conditions of licence are applicable to the national French-language pay-per-view service licensed to Canal Indigo.

For the purpose of the following conditions, the licence term is deemed to have commenced on 20 December 1995.

1. The licensee shall distribute on its programming undertaking, in each broadcast year, a minimum of 20 Canadian feature films in the original French-language version or dubbed in French which have been exhibited in theatres in French-language markets (including all new Canadian features that are available and suitable for PPV and meet the Pay Television Programming Standards and Practices Code), and a minimum of six Canadian-based events targeting the French-language market in years 1 and 2, eight in years 3 and 4, ten in years 5 and 6, and twelve in year 7.

2. The licensee shall maintain a film ratio of no less than 1:12 with respect to Canadian:non-Canadian "first run" feature films exhibited on its service in each broadcast year and a ratio of no less than 6:20 for Canadian events for the first 2 years of the licence term, 8:20 in years 3 and 4, 10:20 in years 5 and 6 and 12:20 in year 7, on each channel used for their broadcast.

3. All drama series (series, mini-series, films for television, etc.) and educational television programs shall be Canadian.

4. The licensee shall remit all gross revenues derived from the broadcast of Canadian feature films on its service to distributors and providers, with a minimum of 60% to the programming providers.

5. The licensee is required, over the licence term, to invest at least 10% of its gross revenues in the production of Canadian feature films and Canadian events. These investments are in addition to the commitment made by the licensee to promote these feature films and events. For the period from the commencement of operation of the service to 31 August 1996, the licensee shall contribute at least 10% of its current year's gross revenues and for the subsequent years at least 10% of its previous year's gross revenues. This contribution shall be remitted to a fund which shall be administered independently from the licensee.

6. The licensee shall retain control at all times over the scheduling of films and events exhibited on the cable television undertakings operated by its affiliates. Further, the licensee shall provide to the Commission, upon request, a list of programs distributed by each of its cable affiliates.

7. The licensee shall not enter into an affiliation agreement with the licensee of a DTH distribution undertaking, unless the agreement incorporates a prohibition against linkage of the Canal Indigo service with any non-Canadian discretionary service.

8. The licensee shall adhere to the guidelines on gender portrayal, set out in the Canadian Association of Broadcasters' Sex-Role Portrayal Code for Television and Radio Programming as amended from time to time and accepted by the Commission.

9. The licensee shall adhere to the Pay Television Programming Standards and Practices Code, as amended from time to time and accepted by the Commission.

10. The licensee shall adhere to the Pay Television and Pay-Per-View Programming Code Regarding Violence, as amended from time to time and accepted by the Commission.

11. The licensee is authorized to distribute Canadian programming, other than filler programming, which is produced by the licensee or by a person related to the licensee, but such programming shall not exceed, in each broadcast year, 20% of its Canadian programming schedule.

Definitions

In these conditions:

"broadcast year" means the period from 1 September to 31 August and each twelve-month period thereafter beginning on 1 September.

APPENDIX II / ANNEXE II

The following conditions of licence are applicable to the national French-language direct-to-home pay-per-view television programming undertaking licensed to Canal Indigo.

For the purposes of the following conditions, the licence term is deemed to have commenced on 20 December 1995.

1. The licensee shall adhere to the Pay Television Regulations, 1990, with the exception of paragraphs 3(2)(d), (e) and (f). The definition of "licensee" contained in subsection 2(1) is not applicable.

2. The licensee shall ensure that commercial messages contained in the programming it assembles for distribution by licensed DTH distribution undertakings are restricted to those contained in the live feed of out-of-market programming in the category of sports.

3. The licensee shall not sell, or accept compensation for any commercial message on the service.

4. The licensee shall distribute on its programming undertaking, in each broadcast year, a minimum of 20 Canadian feature films in the original French-language version or dubbed in French which have been exhibited in theatres in French-language markets (including all new Canadian features that are available and suitable for PPV and meet the Pay Television Programming Standards and Practices Code), and a minimum of six Canadian-based events targeting the French-language market in years 1 and 2, eight in years 3 and 4, ten in years 5 and 6, and twelve in year 7. For the period from the commencement of operations of the service to 31 August 1996, the licensee's performance with respect to its commitments regarding Canadian content in feature films and events will be assessed on a pro rata basis.

5. The licensee shall maintain a film ratio of no less than 1:12 with respect to Canadian:non-Canadian "first run" feature films exhibited on its service in each broadcast year and a ratio of no less than 6:20 for Canadian events for the first two years of the licence term, 8:20 in years three and four, 10:20 in years five and six and 12:20 in year seven, on each channel used for their broadcast.

6. All drama series (series, mini-series, films for television, etc.) and educational television programs shall be Canadian.

7. The licensee shall remit all gross revenues derived from the broadcast on its service of Canadian feature films to distributors and to providers, with a minimum of 60% to the programming providers.

8. The licensee is required to contribute a minimum of 10% of the annual gross revenues earned by its DTH pay-per-view programming undertaking to an existing Canadian program production fund administered independently of the undertaking. The licensee is also required to report to the Commission, before the service commences operations, identifying the name of the existing fund to which it will remit its contributions. The licensee is further required to remit its first contribution no later than 45 days following the end of the month in which it commences operations; contributions thereafter shall take the form of monthly instalments remitted within 45 days of month's end and representing a minimum of 10% of that month's gross revenues.

9. The licensee is authorized to distribute programming, other than filler programming, which is produced by the licensee or by a person related to the licensee, but such programming shall not exceed 20% of its overall programming schedule.

10. The licensee shall not enter into an affiliation agreement with the licensee of a DTH distribution undertaking, unless the agreement incorporates a prohibition against linkage of the Canal Indigo service with any non-Canadian discretionary service.

11. The licensee shall not acquire exclusive or any other preferential rights to pay-per-view programming exhibited as part of its service.

12. The licensee shall purchase non-proprietary exhibition rights for feature films from Canadian distributors. This includes any production other than the exceptions specified in the current Investment Canada policy, which defines proprietary rights as those where the world-wide distribution rights to the program are owned by the licensor, or where the licensor has

provided not less than one-half of the cost of the creation of the film.

13. The licensee shall adhere to the guidelines on gender portrayal, set out in the Canadian Association of Broadcasters' Sex-Role Portrayal Code for Television and Radio Programming, as amended from time to time and accepted by the Commission.

14. The licensee shall adhere to the Pay Television Programming Standards and Practices Code, as amended from time to time and accepted by the Commission.

15. The licensee shall adhere to the Pay Television and Pay-Per-View Programming Code Regarding Violence, as amended from time to time and accepted by the Commission.

Definitions

In these conditions:

"broadcast year" means the period from 1 September to 31 August and each twelve-month period thereafter beginning on 1 September.