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Across Canada - 199802161
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Public hearing held on 20 July 1998
National Capital Region
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· The Commission approves the national distribution of the French-language television service of TVA Group Inc. (TVA Group). The applicant's adherence to its commitments to reflect the interests of francophones outside Quebec is required by conditions of licence which are set out on pages 14 and 15 of this decision.
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· Class 1 and Class 2 distribution undertakings (including multipoint distribution system radiocommunication distribution undertakings - MDS) and direct-to-home (DTH) distribution undertakings are required to distribute the TVA network. Class 3 distribution undertakings are strongly encouraged to do so. If Class 3 distribution undertakings are not prepared to offer this service in communities having a significant population of francophones, the Commission would be prepared to intervene, if necessary.
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· The Commission has issued Public Notice CRTC 1998-115 today, which includes a proposed order, with a view to implementing this decision, effective 1 April 1999, in accordance with section 9(1)(h) of the Broadcasting Act (the Act).
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· Approval of TVA Group's application will help increase the availability of French-language television services across Canada, in keeping with the objectives of the Canadian broadcasting policy as set out in section 3 of the Act. This approval is also consistent with the process for the establishment of additional national networks, as set out in Public Notice CRTC 1998-8.
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· The Commission also took into consideration the diversity of programming carried by the TVA network as a general interest television service, and its exceptional contribution to Canadian content. This contribution surpasses that of all other private conventional broadcasters, whether operating in the French or English language. This approval is also based on commitments made by the applicant with respect to reflecting French-speaking communities outside Quebec, and the fact that the application responds to a long-standing desire on the part of these communities to have access to greater diversity in French-language television services.
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· As the Alliance des radios communautaires du Canada noted in its intervention, this approval is also consistent with the objectives the Commission identified in its Vision Statement, including the promotion of choice and diversity in communications services and ensuring a strong Canadian presence in programming content that reflects Canadian society.
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1. The application by TVA Group was filed following the Commission's Public Hearing in November 1997 regarding the possibility of establishing additional national television networks (see PN 1998-8). This proceeding was initiated pursuant to Order in Council P.C. 1997-592, in which the Government asked the Commission to examine this matter.
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2. In PN 1998-8, the Commission agreed that increased access to existing French-language services by viewers across Canada would contribute to promoting Canada's linguistic duality and cultural diversity, thus furthering the objectives of the Act.
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3. In this context, the Commission noted the intention of TVA Group to apply for national distribution of its network. It recognized the important contribution made by the TVA network to Canada's broadcasting system, and particularly to the broadcast and promotion of quality Canadian programming. The Commission also indicated that, in considering such an application, it would take into account the specific characteristics of the French-language market, as required by the Act, and the applicant's plans to respond to the needs and interests of francophone communities outside Quebec.
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4. The Commission considered the application by the TVA Group to amend the TVA network broadcasting licence at the Public Hearing held on 20 July 1998. Specifically, the applicant requested status as a national network, and mandatory carriage of its programming service as part of the basic service of Class 1 and Class 2 distribution undertakings, pursuant to section 17(5) of the Broadcasting Distribution Regulations (the regulations). It also requested distribution on the basic service of DTH distribution undertakings, and of Class 3 distribution undertakings whose licensed areas include a population that is at least 5% francophone.
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5. According to TVA Group, its proposal would, in particular, assist in:
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· enhancing diversity in Canada's broadcasting system;
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· providing francophones outside Quebec with a French-language, general interest television service;
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· increasing access to diverse, high-quality programming; and
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· achieving certain objectives of the Act by:
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a) making a concrete contribution to enriching and strengthening Canada's broadcasting system; and
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b) contributing to the creation and exhibition of programming that makes extensive use of Canadian creative resources.
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6. Following its consultations with francophone communities outside Quebec, the applicant also proposed a number of commitments to ensure that these communities are better reflected in its programming. These commitments are discussed below.
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7. The Commission questioned the applicant at the hearing about whether the two components of its application, namely the question of national network status and the matter of mandatory distribution, could be severed. The CEO of TVA Group replied [TRANSLATION]: "Our objective is mandatory distribution to enable more francophones and francophiles across Canada to receive our signal."
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8. A number of interveners supported TVA Group's proposal. The Commission received 20 interventions, in addition to 372 letters of support. Thirteen interveners appeared at the Public Hearing. Most interveners supported mandatory national distribution of the TVA network service. Those who did not agree with such an approach acknowledged, nevertheless, that it would be in the public interest to increase the availability of French-language television services to francophone communities outside Quebec.
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9. In their opposing interventions, Rogers Cablesystems Limited and Shaw Communications Inc. proposed that the TVA network service be added to the List of Part II Eligible Satellite Services, thereby allowing Class 1 and Class 2 distribution undertakings to distribute it where demand warrants. For its part, ExpressVu Inc. supported the application subject to conditions, notably that TVA's service be offered in a basic French-language package at a moderate cost for subscribers who choose an English-language basic service.
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10. Most interveners indicated that they were satisfied with TVA Group's proposed commitments. Many, however, urged, that conditions be attached to the Commission's approval. They proposed that these conditions be tied primarily to the applicant's contribution to the reflection of francophone communities outside Quebec and to ensuring that mandatory distribution of the TVA network not come at the expense of other Canadian services, operating in either French or English, currently carried in markets outside Quebec. Some interveners also suggested that the TVA network's national programming and operating structures should take into consideration the multicultural and multiracial character of Canadian society, including the specific role of Aboriginal peoples.
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11. The Commission considered the merits of TVA Group's proposal by first examining the current environment, having regard to the objectives set out in the Act and the benefits that would result for Canada's broadcasting system. It next considered the means to enable the implementation of the applicant's proposal in the most timely and effective manner possible.
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12. The TVA network has been providing a French-language television service for nearly 40 years. It is the largest, private, French-language, general interest television undertaking in Canada. It owns six regional stations and has agreements with four other affiliates across Quebec. The TVA network signal can also be received over the air in areas of Ontario and New Brunswick bordering on Quebec, and it is available via satellite in eastern Canada on a discretionary basis.
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13. The TVA network has enjoyed remarkable success in many areas. It is by far the most popular French-language television network in Canada, despite its current, limited distribution outside of Quebec. In 1997, TVA viewing across Canada exceeded the combined total viewing of its two French-language network competitors. In Quebec, the TVA network has a leading market share of nearly 40%, and it attains this share while devoting a predominant portion of its programming budget to Canadian productions. TVA leads all other private Canadian broadcasters, whether operating in English or in French, in the broadcast of original Canadian programming in all categories.
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14. The Commission first considered the possibility of the TVA network assuming responsibility for fulfilling a national mandate in the late 1970s. In Decision CRTC 79-277 renewing TVA's licence, the Commission stated:
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Given we are on the threshold of the 1980s and in view of the importance and wide coverage of the TVA network which already extends beyond the borders of Quebec, the Commission considers that the orientation of this network, increasingly, should be towards providing a viable programming alternative, on a national basis, to the French-language television network service of the CBC.
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15. Despite the hopes expressed by the Commission, and the TVA network's growing success since that time, TVA has attained less than full national distribution. As the applicant indicated at the hearing, its service currently remains unavailable in most major Canadian cities outside Quebec, whereas most English-language services have long been available in Quebec.
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16. In considering approval of the mandatory national distribution of the TVA service, the Commission also took into account the specific characteristics of the French-language market, as stipulated by the Act. Section 3(1)(c) of the Act recognizes that "English and French language broadcasting, while sharing common aspects, operate under different conditions and may have different requirements." In this regard, section 5(2) of the Act stipulates that the regulation and supervision of the Canadian broadcasting system must be flexible and, in particular:
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· be adaptable to the different characteristics of English and French language broadcasting and the different conditions under which broadcasting undertakings that provide English or French language programming operate; and
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· facilitate the provision of Canadian programs to Canadians.
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17. At present, the only national, general interest television networks are those offered by the Canadian Broadcasting Corporation (CBC/SRC) and by CTV Television Inc. (CTV). They were granted national television network status on the basis of geographic criteria. Through the gradual addition of affiliates, these networks have achieved national coverage, and thus are better able to serve the public interest. In the case of the CBC's English- and French-language networks, this was made possible through the support of Parliamentary appropriations.
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18. On the other hand, the private French-language networks have developed under entirely different conditions. The fact that 86% of Canada's francophone population is concentrated in Quebec suggests, in itself, an inescapable economic reality: the French-language market outside Quebec is clearly unable to support the creation of viable affiliates.
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19. Moreover, without affiliates in markets outside Quebec, the private French-language networks cannot take advantage of the rights to priority distribution that the regulations grant stations operating in these markets. These networks must therefore rely on the good will of the distribution undertaking licensees in order to secure distribution of their signals.
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20. In view of the increasing distribution capacity since 1980, the Commission considers it anachronistic that, on the eve of the year 2000, the TVA's network service still remains unavailable to all Canadians. The Commission is mindful of the importance of the TVA network's contribution to the Canadian broadcasting system, and particularly to the broadcast and promotion of high-quality Canadian programs in all categories. The Commission is persuaded that national distribution of this television service will contribute to promoting Canada's linguistic duality and cultural diversity and will thus further the objectives set out in section 3 of the Act. It will make a private, French-language, general interest television service available to francophones outside Quebec and give them access to a greatly expanded amount of Canadian programs in their language. Accordingly, the Commission approves the national distribution of the French-language television service of the TVA network.
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21. To achieve its national distribution objectives, the application by TVA Group sought national network status as well as mandatory carriage, the latter under section 17(5) of the regulations.
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22. Section 17(5) of the regulations reads as follows:
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(5) If the Commission has determined that a programming service is of national public interest and has licensed the service as a mandatory service, the licensee shall distribute the service as part of the basic service.
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23. As noted above, TVA Group confirmed at the hearing that its principal objective is to obtain mandatory carriage of its service across Canada. The Commission, for all of the reasons addressed above, is satisfied that national distribution of the TVA network is warranted and, accordingly, has approved such distribution on a mandatory basis. In the Commission's view, however, the mechanism proposed by TVA Group, in the circumstances, might not be the most appropriate. Accordingly, the Commission has decided, on a preliminary basis, to opt for a mechanism that, in its view, would achieve the objective of national distribution in a more direct and effective manner.
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24. Details of the mechanism described below were not discussed at the Public Hearing. Consequently, the Commission today announces a proceeding to seek comments in Public Notice CRTC 1998-115 concerning the use of section 9(1)(h) of the Act as the means to implement this decision. It invites the public and other interested parties to submit to it, by 30 November 1998, their comments on the proposed order which is attached to PN 1998-115 issued today. This order would require Class 1 and Class 2 distribution undertakings (including MDS radiocommunication distribution undertakings) and DTH distribution undertakings to distribute
the TVA network signal as part of their basic service, effective 1 April 1999.
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25. The Commission proposes this proceeding pursuant to section 41 of its Rules of Procedure and its general powers under section 9(1)(h) of the Act. Section 41 of CRTC Broadcasting Rules of Procedure reads as follows:
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41. The Commission may approve the whole or any part of an application or grant such further or other relief, in addition to or in substitution for that applied for, as to the Commission seems just and proper.
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26. Section 9(1)(h) of the Act stipulates that "the Commission may, in furtherance of its objects,
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(h) require any licensee who is authorized to carry on a distribution undertaking to carry, on such terms and conditions as the Commission deems appropriate, programming services specified by the Commission."
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27. In the proposed order issued today, the Commission sets out in detail the proposed distribution terms that would apply to distribution undertakings. Once the above-mentioned consultation process has been completed, the Commission intends to publish its final decision, without delay, giving effect to this decision.
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28. In requiring DTH distribution undertakings to distribute the TVA network signal nationally, the Commission took into account the fact that these undertakings already offer this service in eastern Canada. At the hearing, the applicant confirmed that the signal now distributed by DTH undertakings is that of its mother station, CFTM-TV Montréal. The Commission considers that, by their use of a satellite transponder that covers all of Canada, DTH distribution undertakings should be able to distribute the TVA network service without incurring excessive costs. This decision is also consistent with the Commission's objective of fair and equitable competition among broadcasting undertakings, as set out in its Vision Statement.
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29. The Commission considers that a more flexible process for licensees of Class 3 distribution undertakings is more consistent with its policy for such undertakings, in recognition of their more limited resources. Nevertheless, it strongly encourages these licensees to carry the TVA network service as part of their basic service. The Commission notes that TVA Group committed to cooperate with small undertakings in order to lighten the financial burden of distributing this service, notably by providing them with decoders. If, despite the offer of financial assistance from TVA Group, licensees of certain Class 3 distribution undertakings are not prepared to offer this service in communities having a significant population of francophones, the Commission would be prepared to intervene, if necessary, upon receipt of complaints from subscribers.
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30. In its intervention, the CBC raised concerns that certain small Class 3 distribution undertakings do not distribute its French-language television service. In its proposed order, the Commission provides that the TVA network service cannot be provided unless the programming of a station that broadcasts the programming service of French-language television station of the CBC is also carried.
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31. Licensees of existing French-language programming services and representatives of francophones outside Quebec expressed concern that French-language services now being distributed might be deleted to make room for the TVA network service. In their interventions, they stated that this would be unacceptable, as it would be inconsistent with the objective of increasing the number of French-language services available to francophones. The Commission accepts these concerns as legitimate. Accordingly, the proposed order stipulates that, if a distribution undertaking must delete a service in order to comply with the order, the service must be one that is currently distributed on an "available channel", as that term is defined in section 1 of the regulations. Moreover, the order requires that the TVA service not be distributed on a restricted channel of a distribution undertaking's basic service, unless TVA Group agrees to such distribution in writing.
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Costs associated with distribution of TVA
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32. During the hearing, the Commission discussed with the applicant the potential impact of its proposal on distribution undertakings and their subscribers. The Commission's concern is with respect to the potential impact of the costs associated with the transmission of the TVA network signal, as most distribution undertakings located outside Quebec will only be able to receive TVA's signal by satellite.
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33. According to the applicant, the financial impact of its service would be minimal for distributors and virtually nil for subscribers. The applicant stated that its assessment is based on discussions held prior to the public hearing and on the new competitive environment for satellite signal carriage. The applicant indicated, however, that no formal agreement on this issue had been reached.
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34. In the Commission's view, distribution of TVA's signal must not be permitted to result in any additional direct or indirect costs to subscribers. It considers that TVA Group should assume responsibility, as do all other conventional broadcasters, for the costs associated with transmitting its service. The Commission therefore requires the applicant to assume the satellite uplink and transponder fees. The proposed order issued today stipulates that the distribution requirements contained therein will only apply provided TVA Group assumes responsibility for these costs. Distributors, however, must bear all costs for the local reception of the service, as they do now for priority conventional services.
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35. The fact that TVA Group will absorb these satellite transmission costs should not affect the commitments it has made, and which are addressed in the following section. These commitments include investing projected excess revenues earned as a consequence of its broader distribution outside Quebec in programming aimed at francophone communities outside Quebec. Should the satellite transmission costs have the effect of reducing the projected excess revenues, this must be shown in the annual reports required as indicated below.
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Conditions of licence based on the commitments
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36. In PN 1998-8, the Commission indicated that its consideration of this application would take into account the applicant's plans to respond to the needs and interests of francophone communities outside Quebec. At the hearing, TVA Group indicated that, in this connection, it had met with over 50 organizations and associations involved in the development of francophone communities in Canada to explain its approach and seek their support.
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37. The applicant's proposal was unanimously supported by representatives of francophone associations outside Quebec that intervened at the hearing. The Fédération des communautés francophones et acadiennes du Canada, the Société nationale de l'Acadie and the Association canadienne française de l'Ontario stated that TVA's application responded to a long-standing expectation for greater access to French-language television services. They noted, however, that the applicant's commitments to better reflect their communities were the result of negotiations between their representatives and TVA Group. Their support of the application therefore hinges on the applicant maintaining those commitments and possibly improving upon them in the long term.
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38. In considering approval of mandatory national distribution of the TVA network service, the Commission has placed particular importance on the commitment made by the applicant to reflect francophone communities outside Quebec. During the hearing, the Commission thus sought and received TVA Group's acceptance of a number of its commitments as conditions of its licence. Accordingly, as conditions of licence, TVA Group shall:
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· broadcast a minimum of six (6) special events per year reflecting the francophone reality and experience outside Quebec;
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· include, as part of the TVA network programming, a weekly 30-minute program on francophone life outside Quebec;
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· reinvest at least 43% of the excess of its revenues over expenses related to the expanded distribution of its service outside Quebec in the improvement of programming focusing on francophones outside Quebec; this commitment is over and above any other commitment made in connection with programming expenditures for the six special programs and the weekly program mentioned above, or for the expanded news coverage discussed below;
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· file with the Commission, by no later than 30 November each year, for the broadcasting year ending on the preceding 31 August or portion thereof, a detailed annual report showing revenues and expenditures related to the expanded distribution of its service outside Quebec; this report is to include a detailed breakdown of revenue and expenditure items, as well as an explanation of, and detailed calculations for, the allocation of national advertising revenues earned through the expanded distribution of its service outside Quebec; this report shall also explain the means by which costs are allocated and/or segregated as between activities relating to the existing network operations and those additional activities and obligations relating to its expanded distribution outside Quebec.
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· file with the Commission, by no later than 30 November every year, the results of an audit performed by an independent outside auditor for the broadcasting year ending on the preceding 31 August or portion thereof, certifying that financial statements related to the expanded distribution of its service outside Quebec are accurate; this report shall also certify that stated cost and expenditure allocation methods were applied;
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· file for Commission approval, within 60 days of this decision, the following:
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a) a proposal detailing the formula to be used for calculating and identifying excess revenue from national advertising that will be earned as a consequency of the expanded distribution of its service outside Quebec, and the method used to allocate and/or segregate the costs;
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b) a draft annual report showing revenue and expenditure breakdown.
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39. With regard to the broadcast of the six special events, the Commission notes the applicant's commitment to carry out these projects in collaboration with independent producers outside Quebec. The Commission also notes TVA Group's commitment to establish a programming advisory committee consisting of nine members representing the regions of Canada. The mandate of this committee will be to make recommendations on TVA network programming and to ensure that the interests and concerns of francophones, of all origins, who live outside Quebec are reflected in its programming.
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40. In addition, the Commission expects the applicant to expand its news coverage to better serve the francophone population outside Quebec. In this regard, TVA Group will create within its news department a structure to co-ordinate and facilitate the gathering and broadcast of news. The Commission also notes that TVA plans to work with the Alliance des radios communautaires du Canada and the Association de la presse francophone in this regard.
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41. In their interventions, the CBC and Television Northern Canada Inc. (TVNC) raised questions that go beyond the strict confines of the examination of TVA Group's application.
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42. CBC requested that if TVA's mandatory carriage application is approved, the Commission defer implementation to allow 30 days for the CBC to file applications for the mandatory carriage of the CBC's French-language network service and of its specialty programming service RDI (Réseau de l'information).
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43. The Commission is not persuaded that the public interest would be served by deferring implementation of this decision. The CBC, following its examination of this decision and the proposed order appended to today's Public Notice, will have every opportunity to consider the matter and to decide whether to file applications with the Commission.
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44. TVNC filed an application for authority to operate a new national aboriginal television programming network, to be known as the Aboriginal Peoples Television Network (APTV). The Commission plans to hear this application at a public hearing on 12 November 1998. In its intervention, TVNC stated that, by ruling on the TVA application before hearing its own, the Commission would fetter its discretion with respect to the TVNC application. TVNC therefore asked the Commission to defer its decision on the TVA application.
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45. The Commission is not persuaded by TVNC's arguments that deferral of this decision is warranted. The Commission notes that every public hearing panel is completely free to determine the matters before it. Therefore, the panel at the 12 November hearing will have every opportunity to judge the TVNC application on its merits and reach a decision accordingly.
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This decision is to be appended to the licence.
This document is available in alternative format upon request, and may also be viewed at the following Internet site: http://www.crtc.gc.ca
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