ARCHIVED -  Decision CRTC 99-43

Decision

Ottawa, 26 February 1999

Decision CRTC 99-43

WIC Premium Television Ltd.

Edmonton, Alberta - 199616231

Application processed by
Public Notice CRTC 1998-83
dated 6 August 1998

Licence for "Home Theatre" pay-per-view television service amended and renewed

1. The Commission renews the broadcasting licence held by WIC Premium Television Ltd. (WPT) (formerly Allarcom Pay Television Limited) for "Home Theatre", an English-language general interest pay television programming undertaking for the distribution of a pay-per-view (PPV) service via satellite. The new licence term will be from 1 March 1999 to 31 August 2005, and the licence will be subject to the conditions specified in this decision and in the licence to be issued.

Proposed amendments and interventions

2. As part of WPT's renewal application for Home Theatre, the licensee proposed to amend three conditions of licence. Those conditions relate to the nature of the service provided by Home Theatre, the number of Canadian-based events shown on the service, and the amount of investment in the production of Canadian films.

3. With respect to the nature of service, the existing condition of licence sets out the nature of the service as consisting primarily of feature films, but including a variety of specials such as musical concerts and sporting events.

4. The proposed condition includes more specific details of the main categories of programming to be offered on the service, and the Commission is satisfied that no noticeable change to the nature of the programming will result from the proposed amendment. It therefore approves the request to alter the condition of licence related to the nature of service, and the text of the new condition is set out below.

5. The existing condition of licence related to the number of Canadian feature films and dramatic features to be exhibited requires that the licensee distribute on the service in each broadcast year a minimum of 12 Canadian feature films, all new Canadian dramatic features suitable for PPV that meet the Pay Television Programming Standards and Practices Code, and a minimum of two Canadian-based events.

6. The requested amendment to this condition of licence increases the number of Canadian-based events to four in each broadcast year while the requirements for feature films and dramatic features remain the same. The Commission approves this amendment, and the text of the condition is set out below.

7. The licensee also requested a change to its existing condition of licence with respect to the investment in the production of Canadian films. Currently, the licensee is required to invest over the course of the licence term, the greater of $2.4 million or 30% of its share of the gross revenues derived from the exhibition of feature films and events distributed by the broadcasting distribution undertaking (BDU) affiliates of the PPV service. That investment was to be exclusive of any promotional expenses made by the licensee for those films.

8. The proposed condition of licence indicates that the greater of $3.5 million or 5% of gross revenues derived from the exhibition of movies and events would be invested in the production of Canadian films over the licence term.

9. The Alberta Motion Picture Industries Association (AMPIA) submitted an intervention in opposition to this proposal. The intervener expressed the concern that the proposed change could result in a lower annual commitment than that provided under the existing condition of licence. The AMPIA also proposed that WPT's commitment be earmarked for projects in which at least 50% of the interest is owned by Western Canadian independent producers.

10. In response to the intervention, WPT indicated that, under the proposed condition, it would invest a minimum of $500,000 annually in Canadian productions. It added that the current 30% formula was developed when PPV was still an experimental undertaking, and that the "5% of gross" formula is the benchmark currently applied by the Commission to other direct-to-home PPV and video-on-demand (VOD) undertakings.

11. The Commission is of the opinion that the licensee has not demonstrated that any financial harm will result from the maintenance of the existing condition of licence. The Commission is concerned that approval of the amendment would have a significant negative effect on Canadian programming expenditures to be made by the licensee, and the amendment of the condition of licence related to those expenditures is therefore denied. The text of the condition of licence is set out below and reflects the existing financial commitment.

12. Bell Satellite Services Inc. also submitted an intervention expressing concern related to this renewal application. The intervener opposed the application unless the applicant agreed to accept conditions of licence related to the acquisition of exclusive or preferential rights, primarily for the distribution of feature films and sporting events.

13. In response to the intervention, WPT maintained that the concern raised in the intervention has no bearing on its renewal application.

14. At issue is whether the acquisition of exclusive or preferential rights confers undue preference or undue disadvantage. The Broadcasting Distribution Regulations (which govern distribution undertakings such as cable distributors)prohibit licensees from giving undue preference to any person, including itself, or subjecting any person to an undue disadvantage. The comparable regulations governing pay television undertakings such as WPT do not currently contain such a clause, although the Commission has indicated that it intends to initiate a proceeding to seek public comment on a proposal to amend the Pay Television Regulations, 1990 by adding a provision to address the issue of acquiring programming rights on an exclusive basis.

15. In its application, WPT indicated that it would not purchase any programming on an exclusive basis. In the current situation, the Commission is satisfied that there is no need to impose a condition of licence related to the acquisition of programming on an exclusive basis. The Commission has, however, included the licensee's commitment in this regard as an expectation in the following section.

16. The Commission also acknowledges and has considered all of the interventions submitted with respect to this application.

Expectations

17. In Decision CRTC 92-28 dated 31 January 1992, which granted the original licence for this service, the Commission expressed a number of expectations regarding the licensee's performance. In the new licence term, the Commission expects that WPT shall:

· adhere to its commitment not to purchase the rights to films or events on an exclusive basis.

· provide an exhibition window for Canadian films at least equal to the minimum length of the exhibition window given to non-Canadian films; and continue to exhibit on the service any Canadian film that is performing as well as, or better than, any non-Canadian film that is also being offered at the same time.

· ensure that its marketing efforts on behalf of Canadian films exhibited on the service are at least equal to its efforts in respect of non-Canadian films.

· maintain a film ratio of no less than 1:20 in respect of Canadian to non-Canadian "first-run" titles and a ratio of no less than 1:7 in respect of Canadian to non-Canadian concerts and events distributed and available in each broadcast year, on each channel.

· notwithstanding the distribution and linkage requirements referred to in subsection 22(1) of the Broadcasting Distribution Regulations, ensure that the service provided by the licensee shall not be linked with any non-Canadian discretionary service, and that the licensee shall not enter into any affiliation agreement with a BDU affiliate that does not incorporate this prohibition against linkage.

· ensure that, as a minimum, closed captions are provided for all feature films exhibited on the service having a window of longer than one week.

· adhere to the Pay Television Programming Standards and Practices Code, as amended from time to time and approved by the Commission.

Conditions of licence

18. As conditions of licence, the licensee must:

(1) ensure that the service consists primarily of programs from Categories 6 (Sports), 7 (Drama) and 8 (Music and Dance), but will also include programming from all categories set out in item 6 of Schedule 1 of the Pay Television Regulations, 1990.

(2) distribute on its undertaking a minimum of 12 Canadian feature films and all new Canadian dramatic features that are suitable for PPV and meet the Pay Television Programming Standards and Practices Code (the code), and a minimum of four Canadian-based events in each broadcast year. The broadcast year shall be a 12-month period ending 31 August. During the period of 1 March 1999 to 31 August 1999, the licensee shall distribute on its undertaking a minimum of six Canadian feature films and all new Canadian dramatic features that are suitable for PPV and meet the code, and a minimum of two Canadian-based events.

(3) invest in the production of Canadian films over the course of the licence term, the greater of $2.4 million or 30% of WPT's share of the gross revenues derived from the exhibition of feature films and events distributed by the broadcasting distribution undertaking (BDU) affiliates of the PPV service. This investment shall be exclusive of any expenditures made by the licensee on the promotion of such films.

(4) remit to the rights holders of all Canadian films exhibited on the service, 100% of WPT's share of gross revenues derived from the exhibition of these films by the BDU affiliates.

(5) upon request by the Commission, provide to it a record of the pay-per-view programming distributed by individual BDU affiliates.

(6) retain control at all times over the scheduling of films and events exhibited on the BDUs operated by its affiliates.

(7) adhere to the Pay Television and Pay-Per-View Programming Code Regarding Violence, as amended from time to time and approved by the Commission.

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

Secretary General

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:

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