ARCHIVED -  Public Notice CRTC 1998-44

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Public Notice


See also: 1998-44-1, 1998-44-2, 1998-44-3

Ottawa, 6 May 1998

  Public Notice CRTC 1998-44
  Canadian Television Policy Review - Call for Comments
  Table of Contents


  Use of Canadian resources 2
  Canadian Content Regulations for Conventional Television 4
  Canadian Program Recognition 11
  Expenditure and Exhibition Requirements 12
  The Underrepresented Program Categories 27
  Ensuring a Viable Private Broadcasting Sector 33
  The Role of Multi-station Ownership Groups 43
  The Role of the National Public Broadcaster 50
  Diversity 54
  Independent Production 67
  The Role of Canadian Pay and Specialty Services 81
  The Impact of Digital Television Technology on Program Production 86
  i. The attached public notice sets out the issues and concerns the Commission wishes to discuss as part of a broad and fundamental review of its policies relating to television at a public hearing scheduled to begin on 23 September 1998.
  ii. This important public process, announced in the Commission's October 1997 Vision Action Calendar, recognizes the restructuring taking place in the broadcasting environment and the increasingly competitive domestic and global marketplace. Following its examination of the need for additional national networks in November 1997, the Commission noted the growth of large multi-station ownership groups, and concluded that these groups have the capacity to provide support for Canadian programming at a level comparable to that of traditional networks (see Public Notice CRTC 1998-8). The upcoming review of Canadian television policy provides an opportunity to explore, in detail, effective strategies for realizing that support. It is an integral part of the Commission's overall approach to Canadian broadcasting and its ongoing assessment of the effectiveness of the regulatory framework in an evolving communications environment.
  iii. Canadians have reason to be proud of their television system. In the years since the last major review of the Commission's television policies, the quality and quantity of Canadian programs has significantly increased. While viewers are offered an extraordinary range of foreign choices, they are increasingly turning to Canadian programs for information and entertainment. Private broadcasters and independent producers have achieved many creative and business successes, both at home and abroad. Our system is admired throughout the world for its ability to provide Canadians with distinctive Canadian programs and services, despite our proximity to the world's most prolific exporter of popular culture. In the Commission's view, we must explore ways to build upon these achievements by ensuring that our regulatory framework continues to be effective in a rapidly changing communications environment.
  iv. The Commission's goals for this review of its regulatory and policy framework for television are straightforward - further the development of a strong and viable programming industry; ensure that Canadians receive a wide range of attractive and distinctive Canadian program choices; facilitate the growth of strong broadcasting undertakings; ensure that the Canadian broadcasting system meets the needs of Canadian viewers and reflects their values; and, implement the public interest objectives of the Broadcasting Act (the Act). In particular, the Commission wishes to explore how all participants in the system can work effectively to strengthen the Canadian presence on our television screens, and to support a healthy broadcasting and production industry capable of competing successfully at home and abroad. At the same time, the Commission will wish to be assured that the public interest objectives of the Act are well served.
  v. The Commission recognizes that a strong and competitive private sector is essential to fulfilling the goals of the Act, as is the public broadcasting sector and an effective regulatory framework.
  vi. Programming that reflects the views and values of Canadians, strengthens cultural sovereignty and national identity, that is designed for a competitive Canadian marketplace and is positioned for success in foreign markets, will depend upon a flexible regulatory framework. A regulatory framework designed to ensure a dynamic Canadian programming industry will acknowledge the roles and responsibilities of conventional (over-the-air), specialty and pay television undertakings, other broadcasters (both private and public), distributors, artists, creators, producers, viewers and other participants in the Canadian broadcasting system. The Act states that English- and French-language broadcasting, while sharing common aspects, operate under different conditions and may have different requirements. The regulatory framework for the television system must take into account the linguistic duality of Canada and the different realities under which English- and French-language broadcasters operate.
  vii. Success in achieving our goals will require a cooperative approach on the part of all sectors of the television system. For that reason, the Commission will take every step to ensure that, in addition to its consideration of specific regulatory issues, this public process will provide an opportunity for a broad and fundamental evaluation of Canadian television in all its forms.
  viii. In the time since the Commission completed its last major review of its television policies and regulations in the mid 1980s, the Canadian television environment has undergone significant change. These changes, which continue at a rapid pace, include ownership consolidation, the licensing of new Canadian pay and specialty services, the availability of more non-Canadian television and specialty services, the development of a strong independent production sector and the increasing opportunities and challenges posed by the globalization of television production and distribution. The forthcoming review will provide an opportunity for the Commission and other participants to reassess the existing framework in light of the changes identified, forecast the pressures and possibilities that the evolving communications environment will bring, and articulate challenging, but achievable goals for the system as a whole. The Commission encourages participants to bring to the hearing imaginative and effective strategies for achieving such goals and for ensuring that the system continues to fulfil the objectives of the Act.
  ix. In the Commission's view, an effective framework will ensure that conventional, specialty and pay television broadcasters (collectively referred to as broadcasters through the remainder of this document) have the capacity to make an equitable contribution to Canadian programming. The Commission considers that this could well be accomplished by ensuring that broadcasters have more flexibility to pursue unique programming strategies.
  x. The current regulatory framework for Canadian television is based on principles derived from the Act. The principles most relevant to this proceeding may be summarized as follows:
  · Television undertakings shall make maximum, and in no case less than predominant, use of Canadian resources and contribute equitably to the production and exhibition of Canadian programs.
  · The television sector should provide a wide range of programming reflecting the linguistic duality, and multicultural and multiracial nature of Canadian society, including the special place of Aboriginal peoples within that society.
  · The television sector should encourage the production of quality Canadian programs and include a significant contribution from the Canadian independent production sector.
  xiv. Attached as an appendix to this notice is selected information collected by the Commission which may serve as useful indicators of major industry trends between 1993 and 1997 and of the characteristics of the system as it exists today. The Commission will place on the public file, at a later date, additional information of use to parties in the preparation of their submissions. Interested parties are, therefore, encouraged and expected to monitor the content of the public examination file.
  xii. This policy review provides an important opportunity for all interested parties to set out their views with respect to the key characteristics of the environment in which the Canadian television industry can expect to operate in the early years of the next century. The Commission encourages viewers, creators, program distributors, distribution undertakings, broadcasters, independent producers and other interested parties to describe the regulatory and policy framework that they consider will be necessary if all elements of the Canadian broadcasting system are to maintain strong, healthy and successful businesses into the future, while meeting the policy objectives set out in the Act. The Commission calls on all interested parties to assist in providing it with a detailed understanding of the new forces at work in domestic and international communications, and to suggest imaginative means by which these forces can be harnessed to serve the interest of all Canadians. In particular, the Commission wishes to discuss appropriate strategic responses to the following challenges:
  · In a world of expanding communications choices, what types of programming content will Canadians need and demand?
  · In an environment of increasingly fragmented audiences, what economic model would best ensure the creation, acquisition and exhibition of high quality Canadian programs?
  · What domestic and international alliances could be fostered to ensure that high quality Canadian programs are produced, exhibited, promoted and marketed, both in Canada and abroad?
  · In a globalized communications environment, how can Canadians ensure that the broadcasting system meets national public policy objectives?
  · What framework is necessary to allow for different, but equitable contributions by all broadcasters?
  · What framework would best encourage the production, acquisition and exhibition of commercially viable Canadian programs?
  · What is the appropriate contribution of the independent production sector to the evolution of the broadcasting system, and what is that sector's role in achieving public policy objectives?
  xiii. Broadcasters, independent producers and other interested parties are requested to place on the record of this proceeding detailed information concerning the economic models they envisage as most effectively serving the objectives of the Act. In the Commission's view, any such model should give recognition to the expanding importance of independent producers, the complementary roles played by public and private broadcasters, and the important role of broadcasting distributors.
  1. In order to facilitate the discussion at the hearing, the following sections of this notice describe the regulatory mechanisms currently employed by the Commission to ensure that the Canadian television industry serves the objectives of the Act, set out some of the issues related to these mechanisms, and identify some questions that interested parties may wish to address during the review process. The questions raised in this notice are not intended to preclude discussion of any other relevant issues that interested parties may wish to raise, nor are they intended to detract from the broad and fundamental scope of the current review proceeding.
  Use of Canadian Resources
  2. The Act calls upon television undertakings to make maximum, and no less than predominant, use of Canadian resources and contribute equitably to the production and exhibition of Canadian programs.
  3. The Commission seeks to achieve this objective, in part, through its Television Broadcasting Regulations, 1987 (the regulations), through the definition of a Canadian program found in Public Notices CRTC 1984-94, 1987-28 and 1988-105, and through specific conditions of licence or expectations relating either to expenditures by certain private television broadcasters on Canadian programs, or to the exhibition of Canadian programs in underrepresented categories.
  Canadian Content Regulations for Conventional Television
  4. Section 4 (6) of the regulations requires all over-the-air licensees to devote not less than 60% of the broadcast year to the broadcasting of Canadian programs. Private licensees must devote not less than 50% of the evening broadcast period (6:00 p.m. to midnight) to the broadcast of Canadian programs. Public broadcastersmust devote not less than 60% of that period to the broadcast of Canadian programs.
  5. The Commission offers an incentive to broadcast distinctively Canadian dramatic programming in peak viewing periods by, in some instances, awarding licensees who broadcast qualifying drama programs a 150% time credit towards meeting their Canadian content requirements.
  6. Over the years, there has been general agreement that the Canadian content regulations for conventional television have been an effective mechanism to ensure a predominance of Canadian programming in the schedules of Canadian broadcasters. Generally, all conventional television broadcasters meet the regulated minimum levels of Canadian content, and the CBC and French-language private broadcasters frequently exceed them. Conventional broadcasters can meet the 50% evening broadcast requirement by scheduling news programming in the 6:00 p.m. to 7:00 p.m., and 11:00 p.m. to midnight time periods, and by broadcasting an average of one additional hour of Canadian programming during the peak viewing hours of from 7:00 to 11:00 p.m.
  Questions for consideration
  7. Do the Canadian content requirements for conventional broadcasters, as contained in the existing regulations, remain an effective mechanism for achieving the objectives of the Act? Are there any changes to the current regulatory requirements that would make these requirements more effective in achieving these objectives. If so, how should any such changes be brought into force?
  8. What incentives would be effective to ensure that a greater quantity of high quality Canadian programs is scheduled during peak evening viewing hours?
  9. Should the regulations be amended to include minimum requirements for Canadian content within peak viewing hours? How should peak viewing hours be defined, and should this definition be applied to all broadcasters?
  10. Is the 150% time credit currently available to conventional broadcasters who schedule distinctively Canadian dramatic programs in peak viewing hours an effective incentive for the broadcast of quality Canadian drama? Are there alternative incentives that should be considered?
  Canadian Program Recognition
  11. The criteria used in defining a Canadian program are set out in Public Notices CRTC 1984-94, 1987-28 and 1988-105. In Public Notice CRTC 1984-94, the Commission indicated that it would conduct periodic reviews of the criteria in order to evaluate their continuing effectiveness. While the definition of a Canadian program is clearly central to a regulatory framework focussing on Canadian content, the Commission considers that a detailed examination of the current approach would be best undertaken in a separate, but parallel, proceeding. Accordingly, in a public notice to be issued in early June 1998, the Commission will seek written comment with respect to various aspects of its existing approach to providing recognition and certification for Canadian television programs.
  Expenditure and Exhibition Requirements
  12. In addition to the regulations' Canadian content requirements, the Commission has imposed requirements on many private, conventional English-language television broadcasters with respect to spending on Canadian programs and the exhibition of Canadian programs in the entertainment categories. Most private, conventional English-language broadcasters earning more than $10 million dollars per year in advertising revenues may choose between a condition of licence requiring a minimum level of expenditure on Canadian programs tied to their advertising revenues, or a condition requiring a minimum level of exhibition of Canadian entertainment programs in the evening broadcast period. This option reflects a view that the regulatory emphasis should be on Canadian entertainment programming, as broadcasters already have a business incentive to provide high quality news and other programs in non-entertainment categories. Certain conventional broadcasters, such as the CTV Television Network Ltd. and Global Communications Limited (CIII-TV), have conditions of licence relating to both Canadian expenditures and the exhibition of underrepresented Canadian program categories. Private, conventional English-language television broadcasters whose annual revenues are below the $10 million threshold are generally expected to adhere to a revenue-based formula for Canadian program expenditures.
  13. The Commission is aware of concerns expressed by conventional broadcasters that the existing expenditure and exhibition requirements are complex and may not provide them with the increased flexibility they will need to adapt their programming strategies to the demands of a highly competitive marketplace. Conventional broadcasters have also stated publicly that the key to their future success lies in their ability to provide audiences with high quality and distinctive Canadian programming, and that they are seeking ways to make Canadian programming of all genres a viable business opportunity.
  14. Independent producers point out that the demand for Canadian programs generated under the existing CRTC regulations, combined with the funding provided by government support programs, has helped to create a vibrant independent production sector capable of producing high quality television programming and marketing it throughout the world. Producers have expressed concerns that, without specific requirements for the scheduling of Canadian drama programs, conventional broadcasters may resort to meeting their Canadian content obligations through less expensive, and hence more profitable, information and sports programming. Most would appear to agree that the regulatory framework should ensure that the contributions of private conventional broadcasters to Canadian programs are equitable.
  15. The Commission wishes to explore with all interested parties the best ways to ensure the availability of Canadian programs that serve the needs and interests of Canadian viewers, that succeed in international markets and that are profitable for broadcasters and independent producers alike.
  16. The Commission also wishes to address the appropriate accountability structures and responsibilities of the various players in the continuing evolution of Canadian programming.
  Questions for consideration
  17. In the future broadcasting environment, what approaches are most likely to result in the increased availability of, and the largest audiences for, high quality Canadian programming?
  18. What regulatory mechanisms would be most effective in ensuring that broadcasters contribute equitably to the exhibition of Canadian programs in category 7 (drama), category 8 (music and dance) and category 9 (variety)?
  19. Are there additional incentives or alternative mechanisms that would be effective in ensuring that these categories of programs are both made available to Canadians and viewed by them?
  20. Should large, multi-station ownership groups and networks be required to schedule on conventional television a minimum amount of Canadian drama during peak viewing periods? If so, how should these peak viewing periods be defined and what might be an appropriate minimum requirement?
  21. Current spending requirements are generally linked to a conventional broadcaster's advertising revenues. Do these requirements provide an effective mechanism for ensuring equitable contributions by all players?
  22. Are there other elements within the broadcasting system that, while unlicensed, should contribute, either directly or indirectly, to the development, exhibition and promotion of Canadian programs?
  23. Are there incentives or alternative mechanisms that would ensure that expenditures by all broadcasters on Canadian programs, particularly on entertainment programming (categories 7, 8 and 9), are appropriate and equitable?
  24. If spending requirements remain a part of the regulatory framework, should they apply only to Canadian entertainment programming?
  25. Where spending requirements exist, should promotion expenditures related to Canadian programming count as Canadian spending for the purpose of meeting those requirements? If so, what criteria should be used to determine qualifying promotion expenditures?
  26. Independent producers, broadcasters and other interested parties are requested to place on the record of this proceeding detailed information on the various models for funding, financing and equity structures available for the production, promotion and export of Canadian programming, divided by category of programming.
  The Underrepresented Program Categories
  27. The Commission has focused attention on those categories of Canadian programming that tend to be underrepresented in the schedules of Canadian broadcasters. These program categories are primarily drama, music, variety, children's and documentary. Currently, the Commission expects all conventional broadcasters to have appropriate strategies in place to develop programming in these underrepresented categories. In recent years, however, regulatory mechanisms have tended to concentrate more specifically on the entertainment categories of drama, music and variety.
  28. The Commission wishes to discuss with interested parties whether a regulatory focus on underrepresented program categories is necessary in the future broadcasting environment and, if so, how it might be adapted to provide broadcasters with greater scheduling flexibility, while ensuring equitable contributions in these areas and increasing Canadian viewership.
  29. In addition, the Commission will wish to explore what role television broadcasters should play in supporting the production and exhibition of Canadian feature films, as a complement to other kinds of television drama programming.
  Questions for consideration
  30. Currently, the Commission generally considers Canadian drama, variety, children's and documentary programs to be underrepresented on Canadian conventional television. Is it necessary for the regulatory framework to continue to focus on increasing the availability of programs in these categories? Should the Commission place a greater emphasis on the scheduling of Canadian documentary programs?
  31. Should all broadcasters and independent producers be expected to contribute to the development, production and exhibition of Canadian programs in these categories? If so, can this be done in a manner that permits the flexibility necessary to react to changing audience demands and to develop unique programming strategies?
  32. Given the presence of Canadian pay, pay-per-view and specialty services, is there a need for a regulatory requirement that conventional television broadcasters present Canadian theatrical feature films?
  Ensuring a Viable Private Broadcasting Sector
  33. The Commission recognizes that a strong commercial broadcasting sector is essential to ensure that the Canadian broadcasting system continues to make predominant use of Canadian resources. Over the years, the Commission has developed mechanisms designed to strengthen the ability of the private television sector to fulfil its regulatory obligations. These mechanisms include market protection for existing over-the-air broadcasters; non-competitive licence renewals and transfers of ownership; priority carriage on distribution systems; and, protection of program rights through simultaneous program substitution requirements.
  34. In addition, the Commission's regulations and policies impose certain restraints on broadcasters. These restraints include a regulatory maximum of 12 minutes per hour of advertising material; the Commission's policy of limiting a person to ownership of no more than one conventional television station in one language in a given market; and, its policy of requiring significant benefits when the ownership or control of a television undertaking is transferred from one party to another.
  35. This review provides an opportunity to review these policies and to assess their relevance and effectiveness for the future.
  Questions for consideration
  36. In assessing applications for new, over-the-air television licences, is it necessary for the Commission to continue to consider the impact that new services may have on existing services? If so, what weight should such analysis carry in deciding whether or not to licence a new service?
  37. Do the Commission's existing policies with respect to the authorization of foreign television services respond to the public's desire for choice and meet the need for a strong Canadian broadcasting system? If not, what other approaches might be more effective?
  38. Do the existing simultaneous program substitution rules effectively protect the program rights purchased by Canadian broadcasters? If not, what changes should be made?
  39. Are there regulatory policies that would be effective to address concerns with respect to the trend by non-Canadian entertainment companies towards purchasing or retaining North American rights to certain programs, thus limiting the access of Canadian broadcasters to distinct Canadian rights.
  40. In a highly competitive broadcasting environment, is it necessary to retain the limitation of 12 minutes per hour on advertising material? What impact would the relaxation or elimination of this regulation have on broadcasting revenues and on the viewing public? How would such a change affect the on-air promotion of Canadian programs which is generally exempted from the advertising restriction? What would be the impact of such a change on the Commission's policy regarding the scheduling of infomercials?
  41. In the future broadcasting environment, is it necessary for the Commission to maintain its policy of limiting a person to ownership of no more than one over-the-air television station in one language in a given market? Would a relaxation of this policy raise significant concerns with respect to concentration of ownership or the diversity of voices in a market?
  42. In considering applications for authority to transfer ownership or control of a television undertaking, the Commission generally expects significant tangible and intangible benefits, commensurate with the size and nature of the transaction, to be offered to the communities served and to the Canadian broadcasting system. The Commission no longer requires such benefits in the case of transfers of ownership or control relating to broadcasting distribution undertakings. Should the Commission consider changing its policy with respect to benefits in the case of television programming undertakings?
  The Role of Multi-station Ownership Groups
  43. In its report to the government on the establishment of new national television networks (Public Notice CRTC 1998-8 dated 6 February 1998), the Commission concluded that, at this time, it would not serve the objectives of the broadcasting policy for Canada, or the priorities set out in Order in Council P.C. 1997-592, to call for applications for additional national television networks.
  44. The Commission noted, however, that there was general support from all parties for a licensing approach that would allow large multi-station ownership groups to present a corporate strategy at a single licence hearing for all elements within the ownership structure. Such an approach could provide such groups with an opportunity to present their strategies for serving both local and national audiences. It would also permit the Commission to ensure that each group made an equitable contribution towards increasing the quality and quantity of Canadian programs and towards the promotion of these programs, while encouraging diversity among the players. Finally, a group approach should result in regulatory and administrative efficiencies.
  45. On 4 March 1998, Commission staff consulted on these matters with representatives of private and public broadcasters and the independent production sector. At the consultation, broadcasters proposed that, rather than through issuing new group licences, the Commission's objectives could be met by requiring all conventional television stations under common ownership to appear for their licence renewal at the same time. At such a group renewal hearing the Commission could evaluate the local programming commitments made in respect of each station, as well as the corporate commitments for programming that would appear on all the stations in the group. As a result, the Commission would be able to continue to issue individual licences for each station in the group, and to vary local programming requirements as appropriate. Common conditions of licence or expectations reflecting the corporate programming commitments could be reproduced in each licence. The correspondence relating to the above consultation and the transcripts of the meeting of 4 March 1998 have been placed on the public record of this proceeding.
  46. A corporate approach to licence renewals might permit the Commission to assess both local and national programming commitments, and to ensure thereby that the contributions of the large multi-station ownership groups are both appropriate and equitable.
  47. The current proceeding provides an opportunity for interested parties to comment on the most effective licensing approach for large multi-station ownership groups.
  Questions for consideration
  48. Would a corporate approach to the licence renewals of large multi-station ownership groups be an effective means for the Commission to ensure that such groups contribute appropriately and equitably to Canadian programming?
  49. What are the advantages and disadvantages of such a corporate renewal approach compared to issuance of a new group licence?
  The Role of the National Public Broadcaster
  50. In the spring of 1999, the Commission intends to hear applications for renewal of the network television licences issued to the CBC. At that time, the Commission expects to conduct a comprehensive review of the role of the national public broadcaster.
  51. Nevertheless, in the context of the upcoming review of its television policies, it is important that the Commission consider, in general terms, the role of CBC television and how it can best complement the private sector in fulfilling the objectives of the Act.
  Questions for consideration
  52. What strategies would be most effective in encouraging private and public broadcasters to cooperate more effectively to provide Canadians with the best possible Canadian programming?
  53. How can the CBC best work with, and complement the role of, private broadcasters, particularly in the development of talent and the promotion of Canadian programs?
  54. The television sector, under the Act, should provide a wide range of programming reflecting the linguistic duality, and multicultural and multiracial nature of Canadian society, including the special place of Aboriginal peoples within that society.
  55. The Commission has developed a number of policies to ensure that television programming fulfils the objectives of the Act with regard to diversity. In the past, when Canadians had access to relatively few conventional television services, the obligations to provide a varied and diverse programming service were placed on all local stations and networks. Given the introduction of a large number of pay and specialty services in English, French and other languages, most of which are designed to appeal to a comparatively narrow range of interests and tastes, the role and obligations of general interest conventional services may need to be reassessed.
  56. The Commission wishes to explore with interested parties the most effective mechanisms to ensure that Canadians continue to have access to programming reflective of their local, regional and national concerns in the official language of their choice; and that television programming is of a high standard and balanced with regard to matters of public concern.
  57. Canadian society is becoming increasingly culturally diverse. Consistent with the objectives of the Act, the Commission will wish to explore the role of mainstream conventional broadcasters (both public and private) in meeting the needs of cultural and racial minorities and Aboriginal peoples, and reflecting Canada's cultural diversity.
  58. Further, the Commission wishes to examine the appropriate framework within which television programming can be made reasonably reflective of, and accessible to, persons with disabilities.
  Questions for consideration
  59. In an increasingly competitive environment, will it be necessary to continue to ensure the provision of high quality local services by requiring local television stations to broadcast minimum quantities of local news and information?
  60. What incentives would be effective in encouraging conventional broadcasters to invest more heavily in local and regional programming?
  61. Should all large multi-station ownership groups be required to broadcast both local and national news and information programming? If so, should these groups be encouraged to extend over-the-air coverage throughout the areas they serve?
  62. Is it necessary for the Commission to define more precisely the nature of a local news program in order to ensure that broadcasters allocate appropriate news gathering resources to the communities they are licensed to serve and from which they draw revenue?
  63. Are Canadian cultural and racial minorities and Aboriginal peoples well served by mainstream conventional television broadcasters (both public and private)? What are the most effective means to ensure that Canadian television appropriately reflects Canada's cultural diversity?
  64. Has the Commission's approach to violence on television been effective in addressing the concerns of viewers?
  65. Are the Commission's policies dealing with other social concerns, such as gender portrayal and employment equity, effective?
  66. Commission policies are designed to ensure that broadcasters provide certain minimum amounts of closed captioning for the benefit of viewers who are deaf or hearing impaired. Is there a need for more to be done to assist these and other groups, for example, through the provision of descriptive video services for the blind or those who have low vision?
  Independent Production
  67. The television sector, under the Act, should encourage the production of quality Canadian programs and include a significant contribution from the Canadian independent production sector.
  68. Canadian independent producers are responsible for the creation of the majority of Canadian drama, entertainment and documentary programs scheduled by private broadcasters. In recent years this sector has significantly increased in strength throughout the country, due in part to incentives and funding programs instituted by federal and provincial governments and to indirect support from the Commission through its policies.
  69. Those policies include requirements that conventional television broadcasters schedule Canadian drama and other entertainment programs in peak viewing hours, and the further requirement that broadcasting distribution undertakings contribute to production funds accessed by Canadian independent producers. In addition, the Commission's policy of requiring significant public benefits when the ownership or control of a television programming undertaking is transferred has resulted in additional contributions to production funds. Finally, some Canadian independent producers either own or have interests in companies that have been granted licences for specialty programming services.
  70. As the Canadian broadcasting system prepares for a more competitive global environment, it will be necessary to marshal resources from all elements of the Canadian broadcasting system to produce more high-quality programming that attracts Canadian audiences and is exportable to world markets. Achieving this will require, among other things, cooperation between broadcasters and independent producers.
  71. Private and public production funds offer financial assistance to independent producers wishing to create distinctively Canadian programs. These funds also make it possible for Canadian broadcasters to acquire rights to such programs at a relatively low cost.
  72. Canadian broadcasters have expressed the view that they are disadvantaged by not having direct access to production funds. In addition, they consider that, if the production of Canadian entertainment programming is to become an attractive business opportunity, rather than just a regulatory obligation, broadcasters must be able to share in the ownership of these programs and benefit from their sales in foreign markets.
  73. The production of quality Canadian programming involves both significant risk and potentially significant rewards. A successful policy framework for television programming should enable those who take the risk to reap the rewards in fair proportion.
  74. At the forthcoming policy review, the Commission expects broadcasters, independent producers and other interested parties to propose ways by which the Commission's policies can encourage the creation of Canadian programs (produced for domestic and international markets) that serve to further the cultural objectives of the Act, while supporting vibrant and profitable businesses in both sectors.
  Questions for consideration
  75. How might the regulatory framework better support the export of Canadian programs?
  76. Public and private production funds are currently a key element in the financing of independent Canadian entertainment and documentary programs. Is it appropriate for the regulatory framework to continue to rely on this source of funding as we move into the next century?
  77. Production funds are currently available, for the most part, only to independent producers. What would be the impact if broadcasters, or broadcaster-controlled production companies were provided with direct access to these funds?
  78. Should broadcasters be encouraged to make equity investments in Canadian programs? What impact might this have on the independent production sector?
  79. What role should independent producers, program distributors and broadcasters play, respectively, in the promotion of Canadian programs? How can these sectors work together to ensure that Canadian programs are well-promoted at home and abroad?
  80. How might the Commission's regulatory framework serve to support the Canadian independent production sector? How might this framework serve to encourage independent producers, program distributors and broadcasters to work together to ensure that the greatest possible resources are devoted to the production, marketing and export of Canadian programs?
  The Role of Canadian Pay and Specialty Services
  81. Over the past ten years, the Commission has licensed over 40 Canadian pay and specialty services. These services, available to Canadians through cable and other distribution undertakings, contribute significantly to the Canadian programming available to viewers. Some specialty services are effectively controlled by the licensees of conventional television services or otherwise form part of the same corporate groups. These specialty services provide an additional window for conventional services to exhibit Canadian and foreign programs. The Specialty Service Regulations, 1990 do not specify a minimum required amount of Canadian programming for specialty licensees. Rather, the Commission imposes requirements for the exhibition of, and for contributions to, Canadian programming as a condition of licence of each service, taking into account the nature of the service in question and the fact that specialty services, unlike conventional television, have access to subscriber revenues as well as to revenues from the sale of advertising.
  82. In reviewing its policies for television, the Commission intends to explore the role of Canadian pay and specialty services with a view to assessing their contributions to Canadian programming, and their impact on the broadcasting system as a whole and on conventional broadcasters in particular.
  Questions for consideration
  83. As a maturing segment of the broadcasting system, is the contribution of pay and specialty services to the production and exhibition of Canadian programs appropriate to the size and nature of the revenues they receive?
  84. What has been the impact of pay and specialty services on conventional broadcasters with respect to fragmentation of audiences, competition for program rights and access to programming supported by production funds?
  85. In the context of a broad review of television policies, should the Commission adjust its regulatory framework for pay and specialty services in order to increase their contribution to Canadian programming?
  The Impact of Digital Television Technology on Program Production
  86. It is clear that a major characteristic of the new broadcasting environment will be the increasing use of new digital technology in program production and service delivery.
  87. In the United States, the major television networks are expected to begin digital transmission in selected markets at the end of this year. The U.S. Federal Communications Commission has proposed that all broadcasters complete the transition to digital transmission by 2006. In Canada, the government's Task Force on the Implementation of Digital Television has recommended that Canadian broadcasters begin digital transmission by no later than 2004, and that all analog over-the-air transmission cease at the end of 2007.
  88. Making the transition to digital television will entail major expenditures by broadcasters and producers. It is not clear at this time what additional revenues will be available to assist in defraying these costs. The Commission intends to begin a public process, at a later date, for the purpose of developing a regulatory framework to accommodate the transition to digital television. In the context of the forthcoming review of television policies, however, the Commission will wish to begin to explore issues relating to the impact that the transition to digital television will have on the ability of broadcasters and producers to create, fund and schedule Canadian programs.
  Questions for consideration
  89. How will the transition to digital television affect the ability of broadcasters to fulfil their Canadian programming obligations?
  90. What should be the Commission's role in supporting the production of Canadian programs in digital formats?
  91. What new revenue streams, if any, might be available to broadcasters once the transition to digital television is completed?
  92. The Commission will hold an oral public hearing to consider the matters addressed in this notice commencing at 9:00 a.m. on Wednesday, 23 September 1998. The Public Hearing will take place at The Conference Centre, Phase IV, 140 Promenade du Portage, Hull, Quebec. Interested parties are advised that the Commission may consider sitting as well on Saturday, 26 September 1998.
  93. The Commission invites written comments on the matters for consideration set out above. The deadline for filing written comments is Tuesday, 30 June 1998.
  94. Following the oral public hearing, interested parties will have an opportunity to file brief final written comments. These final comments must be filed no later than two weeks following the adjournment of the public hearing. The Commission expects that the hearing will be completed by no later than Friday, 2 October 1998.
  95. The Commission will only accept submissions that it receives on or before the prescribed dates noted above.
  96. In order to encourage participation by a broad cross-section of the Canadian public, the Commission will allocate time during the public hearing to hear individuals and groups representing various elements of Canadian society. Teleconferencing facilities may be available to accommodate those unable to travel to the National Capital Region.
  97. Parties wishing to appear at the public hearing or to participate through teleconferencing arrangements must state their request on the first page of their written submissions. Parties requesting appearance or teleconference arrangements must provide clear reasons, on the first page of their submissions, as to why the written submission is not sufficient and why an appearance or teleconference arrangement is necessary. The Commission will subsequently inform parties whether their request to appear has been granted. While submissions will not otherwise be acknowledged, they will be considered by the Commission and will form part of the public record of the proceeding, provided the procedures set out herein have been followed.
  98. Parties filing submissions that are over five pages in length are asked to include a short executive summary.
  99. To ensure effective use of time at the public hearing, the Commission may use a written question process, prior to the commencement of the oral hearing, to obtain additional information from those who have filed written submissions. The questions and answers will form part of the public record and may be consulted by other interested parties. Interested parties are therefore encouraged and expected to monitor the content of the public examination files.
  100. Submissions filed in response to this notice must be addressed to the Secretary General, CRTC, Ottawa, K1A 0N2.
  101. All submissions must be filed in hard copy format. The Commission, however, also encourages parties to file electronic versions of their submissions. Such submissions should be in the HTML format; as an alternate choice, "Microsoft Word" may be used for text and "Microsoft Excel" for spreadsheets. Each paragraph of the document should be numbered. In addition, as an indication that the document has not been damaged during electronic transmission, the line ***End of Document*** should be entered following the last paragraph of each document. The Commission's Internet e-mail address for electronically filed documents is In order to facilitate access by the public, submissions filed in electronic form will be available, in the language and format in which they are submitted, on the Commission's web site at
  Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage, Room 201
Hull, Quebec K1A ON2
Tel: (819) 997-2429 - TDD: 994-0423
Telecopier: (819) 994-0218
  Bank of Commerce Building
Suite 1007
1809 Barrington Street
Halifax, Nova Scotia B3J 3K8
Tel: (902) 426-7997 - TDD 426-6997
Telecopier: (902) 426-2721
  Place Montréal Trust
1800 McGill College Avenue
Suite 1920
Montréal, Quebec H3A 3J6
Tel: (514) 283-6607 - TDD 283-8316
Telecopier: (514) 283-3689
  Kensington Building
Suite 1810
275 Portage Avenue
Winnipeg, Manitoba R3B 2B3
Tel: (204) 983-6306 - TDD 983-8274
Telecopier: (204) 983-6317
  530-580 Hornby Street
Vancouver, British Columbia V6C 3B6
Tel: (604) 666-2111 - TDD 666-0778
Telecopier: (604) 666-8322
  Laura M. Talbot-Allan
Secretary General
  This document is available in alternative format upon request.

Appendix to Public Notice CRTC 1998-44

  In $ millions 1993 1994 1995 1996 1997
  Private Conventional Television *
Advertising 1,315 1,342 1,418 1,463 1,562
Other 119 115 122 85 107
Total 1,434 1,457 1,540 1,548 1,669
Profit before interest and taxes
(PBIT) 174 162 234 211 264
  Canadian program expenditures
Categories 1 to 5
(Information) 254 268 281 278 283
Category 6
(Sports) 43 76 42 55 43
Categories 7 to 9
(Entertainment) 80 78 85 81 81
Categories 10 & 11
(Games, Human Interest) 51 42 55 57 55
Total Telecast 428 464 463 471 462
Other Canadian 5 5 5 6 4
Total Canadian 433 469 468 477 466
Foreign program expenditures 253 253 276 297 330
  Specialty and Pay Television *
Advertising 185 205 286 341 358
Subscription 229 241 255 284 313
Other 15 15 18 20 22
Total 429 461 559 645 693
PBIT 78 96 96 97 122
  Canadian program expenditures 136 152 200 256 257
Foreign program expenditures 47 53 64 72 77
  Educational Television
Canadian program expenditures n.a. 67 42 77 64
Foreign program expenditures n.a. 3 6 8 8
Canadian program expenditures 278 276 247 341 353
Foreign program expenditures 33 39 66 29 26
Indirect costs (Canadian programs) 538 581 560 544 414
Total 849 896 873 914 793
*excludes ethnic licensees
Source: Commission's financial database
FALL 1993 TO FALL 1997
All Persons 2+ -- ALL CANADA
  1993 1994 1995 1996 1997

CONVENTIONAL 43.4 42.6 41.5 40.2 38.7
EDUCATIONAL 0.8 0.9 0.9 1.0 1.1
PAY & SPECIALTY 4.7 4.5 6.8 7.3 10.0

CONVENTIONAL 16.9 16.6 15.5 15.2 12.8
PAY & SPECIALTY 4.0 4.7 4.4 5.1 5.6

CONVENTIONAL 20.6 20.1 19.8 19.4 19.2
EDUCATIONAL 0.8 1.0 0.7 0.4 0.3
PAY & SPECIALTY 1.6 1.7 2.4 2.9 3.0

CONVENTIONAL 0.9 1.1 0.9 0.8 0.7
PAY & SPECIALTY 0.1 0.2 0.3 0.3 0.3
  VCR 5.1 5.5 5.5 5.8 5.5
  OTHER* 1.1 1.1 1.3 1.6 2.8
  TOTAL VIEWING 100.0 100.0 100.0 100.0 100.0
  *Viewing to 'OTHER' includes viewing to community channels, CPAC and other unidentifiable tuning
  Source: MicroBBM Fall 1993-Fall 1997
Marketing Research, Broadcast Analysis, CRTC
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