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Crossroads Television System
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Hamilton, Burlington, St. Catharines and Toronto, Ontario - 199703319Toronto, Ontario - 199706545
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New over-the-air television station devoted to religious programming - Approved
Competing application - Denied
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1. Following a Public Hearing in Toronto held on 11 December 1997, the Commission approves the application by Crossroads Television System (Crossroads) for a broadcasting licence to carry on an English-language television programming undertaking to serve Hamilton, Burlington, St. Catharines and Toronto. The new station will broadcast religious programming from local studios and other Canadian sources as well as programming obtained from foreign sources. It will operate on channel 36 with an effective radiated power of 473,000 watts.
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2. Subject to the requirements of this decision, the Commission will issue a licence expiring 31 August 2004. This licence will be subject to the conditions specified in the appendix to this decision and in the licence to be issued.
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3. For reasons set out later in this decision, related chiefly to the applicant's business plan and its potential effect on the general quality of the programming proposed, as well as the applicant's commitments to balance programming, the competing application by Trinity Television Inc. (Trinity) is denied.
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4. Crossroads is a federally-incorporated, non-profit corporation without capital stock. It is controlled by its members through their ability to elect the Board of Directors. Each member has one vote. Crossroads is associated with Crossroads Christian Communications Incorporated, a registered charitable organization that is primarily engaged in the production and broadcast of religious television programming, including "100 Huntley Street".
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5. Trinity, incorporated in 1975 in the province of Manitoba, is controlled by its Board of Directors, and is also a non-profit, charitable corporation without capital stock. Trinity is involved in the production and distribution of religious television and radio programs, primarily in Western Canada.
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6. Under its policy on religious broadcasting set out in Public Notice CRTC 1993-78, the Commission established guidelines for the licensing of single-faith groups to carry on broadcasting undertakings devoted entirely to religious programming.
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7. In Decision CRTC 95-129 dated 4 April 1995, the Commission awarded a licence to carry on a television programming undertaking at Lethbridge, Alberta, to Victory Christian Fellowship of Lethbridge (1983) Inc. (OBCI). This licensee is now known as Canada for Christ Broadcasting Association (CJIL-TV).
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8. Both of the current applicants have, in the past, proposed single-faith television undertakings for the Toronto and Hamilton/Burlington areas. In Decisions CRTC 96-773 and 96-774, these earlier applications were denied. In making its determination in those cases, the Commission emphasized that it was not satisfied that either applicant had provided clear evidence that the proposals in its application would be implemented and consistently maintained. In addition, the Commission expressed concern that neither application demonstrated adequate plans for the representation and reflection of other faiths. The Commission's policy to ensure such balance is derived from the Broadcasting Act (the Act), which requires that programming provided by the Canadian broadcasting system provide opportunities for the expression of differing views on matters of public concern.
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9. The Commission heard the current Crossroads and Trinity applications under a competitive licensing process.
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10. Both applicants indicated in their written proposals that their business plans were based on only one licence being awarded. At the hearing, when again asked to comment on the feasibility of licensing both applicants, a representative of Crossroads stated: "I believe it would jeopardize the economic viability of both operators, and the market at this point, both as startups at the same time in the same marketplace would be economically unfeasible". Trinity suggested at the hearing that perhaps two licences could be granted; one for Crossroads to serve Hamilton, and one for Trinity to serve Toronto. Crossroads, however, emphasized that it did not consider the possibility of receiving a licence to serve only the Hamilton area to be feasible.
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11. Interventions in opposition to both the Crossroads and Trinity applications were submitted by, among others, Rogers Cablesystems Limited (Rogers), CHUM Limited (CHUM) (licensee of CITY-TV Toronto), and Baton Broadcasting Incorporated (Baton) (on behalf of its wholly-owned subsidiary BBS Incorporated, licensee of CFTO-TV Toronto). Rogers, CHUM and Baton all expressed the concern that the licensing of one or more new local television stations could result in disruption to cable channel placement in Toronto, Hamilton and surrounding areas.
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12. The Commission notes that any new, over-the-air television station would be entitled, under the provisions of the Broadcasting Distribution Regulations (the regulations), to carriage on the basic band (channels 2-13) of local cable companies. However, each applicant stated that it would be prepared to waive that right, provided that cable distributors place the signal of its proposed service on a cable channel no higher than 36.
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13. The Commission has examined the potential impact of a new religious television station in the Toronto/Hamilton market and acknowledges that the addition of a new local television signal will require some alteration of cable channel placements in the Toronto/Hamilton region.
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14. An intervention in opposition to both the Crossroads and Trinity applications was also submitted by Vision TV: Canada's Faith Network (Vision), licensee of the national English-language specialty programming undertaking known as Vision TV. This licensee provides interfaith religious programming to distribution undertakings across Canada.
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15. Vision's opposition was based on the potential economic impact that either Trinity's or Crossroads' service would have on Vision TV, if licensed in the present distribution environment. Among other things, Vision expressed concern that, should a religious television station be licensed, cable distributors might discontinue carriage of Vision TV, or place that service on a less accessible cable channel.
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16. With respect to the issue of potential economic harm to Vision TV, the Commission notes that, under its Access Rules set out in the regulations, all cable distribution undertakings with more than 6,000 subscribers are required to distribute Vision TV, so long as channel capacity is available. The Commission also notes that Vision TV is a national service that is supported primarily by subscriber revenues and brokered time sales from across Canada as well as by national advertising revenues. The Commission is satisfied that a new, strictly-local television service in the Toronto/Hamilton area will have no undue financial impact on a nationally-distributed service such as Vision TV. The Commission further notes the commitment made by Crossroads at the hearing, to maintain its support for Vision TV by continuing to purchase air time for its production "100 Huntley Street", carried nationally on Vision TV.
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17. With respect to the financial impact on existing local licences of a new religious television service, the Commission is of the opinion that such a service is likely to attract a niche audience that would be much smaller than that attracted to a conventional television service. In addition, the Commission notes the claims made by both applicants that a significant portion of the advertising revenue generated by a new religious television station is likely to be derived from new advertisers. For these reasons, the Commission is satisfied that the addition of a new religious television undertaking to serve the Toronto/Hamilton market will not have any undue negative effect on existing local television broadcasters.
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The applicants' business plans
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18. Both applicants expected that total revenues would be made up of advertising revenues as well as brokered time sales. However, the business plans for Crossroads and Trinity differed markedly in their revenue projections. Crossroads' business plan forecasts a first-year local advertising revenue of $2.1 million, rising to $3.9 million in year seven. This is compared to Trinity's projections of local plus national advertising of $8.3 million, increasing to $12.9 million over the same period. Crossroads' projection for revenues from first-year brokered time sales was $3.9 million, increasing to $6.3 million over a seven-year licence term, while Trinity estimated such brokered time sales revenues to be $1.6 million in year one, rising to $1.7 million in year seven.
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19. Both Crossroads and Trinity stated that their proposed undertakings would not have charitable tax status, and would not receive any revenue from solicitations. In addition, both applicants stated that while on-air fund-raising on behalf of specific causes and registered charities was proposed, the revenues from such solicitations would be handled by the individual charities.
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20. The Commission is satisfied that the projections contained in Crossroads' business plan are realistic and that the forecast revenues will be adequate to fulfill the programming commitments made in its application. The Commission notes that, as a non-profit institution, Crossroads will reinvest any profits into programming for subsequent years. Should revenues be higher than anticipated, more original programming will be produced or acquired.
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21. At the hearing, Trinity proposed two adjustments to its projected Canadian programming expenditures. The first adjustment was a reduction of $1.2 million in the first year of operation, due to facilities costs included incorrectly in its original projected programming costs. The Commission notes that, extended over a seven-year licence term, this adjustment would reduce Canadian programming expenditures by approximately $11 million.
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22. The second change was a contingency plan adjustment, to be implemented if actual revenues from advertising were lower than anticipated. Trinity explained that, should realized first-year advertising revenue be only 50% of that projected (approximately $4 million), Canadian programming expenditures would also be reduced by 50%, approximately $2 million. The Commission notes that, under this contingency adjustment, projected Canadian programming expenditures could be further reduced by as much as $18 million over a seven-year term of licence. Taking into account both adjustments described above, the originally projected seven-year Canadian programming expenditures could be reduced from approximately $55 to $26 million. At the hearing, the applicant stated that in a contingency situation, it would probably find it necessary to place a greater reliance on brokered programming sales and to make a reduction in high-cost programming such as drama. Trinity also stated at the hearing that any alteration to its business plan would have no impact on proposed balance programming.
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23. The Commission is of the opinion that Trinity's original business plan is not viable and contains overly optimistic advertising revenue projections. The Commission has concerns that at least some degree of contingency would have to be implemented, with an inevitable negative impact on the quality of programming in general, and a potential impact on balance programming commitments.
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The applicants' balance proposals
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24. The Act specifies that the programming offered by the Canadian broadcasting system should provide a reasonable opportunity for the public to be exposed to the expression of differing views on matters of public concern. The Commission generally takes the view that balance will be achieved where, within a reasonable period of time, a reasonably consistent viewer or listener is exposed to a spectrum of views on issues of public concern. The Commission expects that, in order to satisfy this requirement, licensees of over-the-air undertakings devoted to religious programming should expose their audiences to different points of view, particularly on religion.
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25. The Commission notes that Crossroads and Trinity both demonstrated that they had taken considerable effort to comply with the guidelines for balance programming as set out in Public Notice CRTC 1993-78 and Public Notice CRTC 1996-152 which accompanied the 1996 denials. Both applicants identified a variety of sources and methods to ensure that religious balance programs would be broadcast. However, the Commission is of the opinion that there is a clear difference in the degree of commitment demonstrated by the prospective third party program producers who were identified by Crossroads and Trinity as sources for much of their balance programming.
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26. Trinity's application included a number of letters which expressed, in general terms, the interest of individuals or groups in participating at the station as a balance program contributor. In contrast, the Crossroads application contained documentation from potential program producers specifying detailed contractual obligations for the delivery of such programming, including the number of original and repeat broadcasts, as well as costs for the projected programs.
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27. As noted above, while both applicants made considerable efforts to satisfy the Commission's guidelines for balance programming, the Commission is of the view that the firm and detailed commitments from balance programming providers contained in the Crossroads application more fully satisfy the Commission's balance guidelines than those included in the Trinity application.
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28. For the reasons noted above with regard to the applicants' respective business plans and commitments to balance programming, the Commission has approved the application by Crossroads, and has denied that by Trinity.
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The nature of the service to be provided by Crossroads
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29. The new undertaking will be a local television station, serving Hamilton, Burlington, St. Catharines and Toronto. Consistent with Crossroads' plans, and as set out in a condition of licence in the appendix to this decision, the new service will broadcast only religious programming, as defined in Public Notice CRTC 1993-78.
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30. The new service will offer programs targeted to youth, teens, and seniors as well as music programs. Multi-cultural programs will also be included in the schedule. In order best to reflect the local service area, all balance programs will be locally-produced and will include multi-faith broadcasts.
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31. Crossroads proposes to broadcast a total of 20 hours of balance programming weekly, including 12 hours during the evening broadcast period. In addition, 18 of the 20 hours per week will consist of original programming. The weekly balance programming will include ten hours of open dialogue among all religions in an interactive telephone call-in program, seven hours of multi-faith news, and three hours of documentaries created by non-Christian producers. Crossroads' adherence to its commitments with respect to these totals of weekly balance programming is the subject of a condition of licence set out in the appendix to this decision.
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32. In order to ensure that the balance requirements of the Act are consistently met, the licensee proposes the formation of a Compliance Committee. The Committee will include six members, consisting of three Christians and three non-Christians, and will be appointed by Crossroads' Board of Directors. The Committee will meet on a monthly basis and will monitor performance, ensure enforcement of all program guidelines, deal with complaints and carry out "spot checks" of programming. The Committee will also review any new programs before they are broadcast.
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33. The Commission notes the licensee's plans in this regard, and expects the licensee to maintain the Committee as a mechanism to ensure compliance with the balance commitments noted above.
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34. The new service will, to a large extent, reflect a single-faith Christian viewpoint. However, the Commission encourages the licensee not only to satisfy the requirements for balance but also to explore in its programming the full spectrum of diversity that exists within both the Christian and non-Christian religious experiences.
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35. In Public Notice CRTC 1993-78, the Commission set out guidelines on ethics to be adhered to by all religious broadcasters. The Commission is of the view that com-pliance with those guidelines is appropriate in the present circumstances. Accordingly, a condition of licence requiring adherence to the ethics guidelines is contained in the appendix to this decision.
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Expenditures on Canadian Programming
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36. In Public Notice CRTC 1989-27 dated 6 April 1989, the Commission stated that licensees of private, English-language television stations earning $10 million or less in total advertising revenues and network payments annually would be expected to adhere to their projected first-year expenditures for Canadian programming, at a minimum, and adjust such expenditures in subsequent years in accordance with the prescribed formula linked to the station's advertising revenues.
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37. As stated in Public Notice CRTC 1995-48, the Commission shall continue to expect such licensees to make expenditures for Canadian programming in accordance with the formula. All policies pertaining to the formula as set out in Public Notices CRTC 1989-27, 1992-28, 1992-89, 1993-93 and 1993-174 continue to apply.
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38. Accordingly, inasmuch as the licensee's advertising revenues and brokered time sales in the first broadcast year are projected to be less than $10 million, the Commission expects the licensee to adhere to its commitment to expend a total of $3.9 million in the first two years of the licence term, and to increase or decrease expenditures in the third year by the percentage change in total station advertising revenues and brokered time sales from year one to year two, as reported in the relevant Annual Return for the year ending 31 August.
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39. In the fourth year, the licensee shall be expected to expend, as a minimum, the amount specified in year three, increased or decreased by the average percentage change in total station advertising revenues and brokered time sales from year one to year two, and from year two to year three, as reported in the relevant Annual Returns for the years ending 31 August.
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40. In accordance with the election specified by the licensee in its application, the Commission expects the licensee to adhere to a 3-year averaging mechanism commencing in the fifth year of the licence term.
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41. The licensee stated at the hearing that the broadcast of advertising material would not exceed 12 minutes per hour, including solicitation. This maximum, which is the subject of a condition of licence set out in the appendix to this decision, applies to all regular as well as brokered, or "paid-to-air" programming.
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Service to the deaf and hard of hearing
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42. Consistent with its policy approach for closed captioning announced in Public Notice CRTC 1995-48, the Commission expects the licensee, by the end of the licence term, to caption all local news programming, including live segments, using either real-time captioning or another method capable of captioning live programming.
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43. The Commission also expects the licensee to close caption at least 90% of all programming during the broadcast day by the end of the licence term.
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44. This authority will only be effective and the licence will only be issued at such time as the construction of the undertaking 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 applicant 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 issued. The applicant 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.
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45. The Commission acknowledges and has considered the numerous interventions submitted in support of each of the applications discussed above.
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This decision is to be appended to the licence.
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Laura M. Talbot-Allan
Secretary General
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This document is available in alternative format upon request.
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Appendix to Decision CRTC 98-123 / Annexe à la décision CRTC 98-123
Conditions of licence for Crossroads Television System/
Conditions de licence de Crossroads Television System
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1. All programming broadcast by the undertaking shall be religious programming as defined in the Commission's Religious Broadcasting Policy as set out in Public Notice CRTC1993-78.
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2. The licensee shall broadcast a minimum weekly level of 20 hours of balanced programming, 18 hours of which must be original balanced programming. Additionally, of the 20 hour total,12 hours must be broadcast between 6 p.m and 11 p.m.
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3. The licensee shall adhere to the guidelines on ethics set out in Public Notice CRTC 1993-78.
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4. The licensee shall broadcast no more than 12 minutes of advertising material per hour, including solicitation. This condition applies to all regular programming as well as all brokered or "paid-to-air" programming.
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5. The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the Canadian Association of Broadcasters' (CAB) Voluntary Code Regarding Violence in Television Programming, as amended from time to time and accepted by the Commission.
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6. The licensee shall adhere to the guidelines on gender portrayal set out in the CAB's Sex-Role Portrayal Code for Television and Radio Programming, as amended from time to time and accepted by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council.
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7. 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.
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