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ARCHIVED -  Decision CRTC 99-546

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Decision CRTC 99-546

  Ottawa, 17 December 1999
  CanVideo Television Sales (1983) Limited and Global Communications Limited, partners in a general partnership known as Prime TV
Across Canada – 199813283
  Application processed by Public Notice CRTC 1999-115 dated 16 July 1999
  Summary
  Currently, the drama series that Prime TV carries have to be at least ten years old. This requirement is set out in condition of licence 1(b). The licensee has requested an amendment to this condition that would allow it to broadcast any Canadian or foreign television drama series except those aired by affiliates of foreign conventional networks (ABC, CBS, NBC and FOX) during the same year.
  The Commission considers that the amendment, as originally proposed and as revised in the licensee’s response to the interventions, would fundamentally change the nature of Prime TV’s service licensed in 1996 and launched in October 1998. In the Commission’s view, such a change is not warranted only a few months more than a year after Prime TV went on air following a competitive process. The Commission is also concerned that approval would have the potential to generate a competitive imbalance in the broadcasting system. Moreover, contrary to the Commission's licensing policies for specialty services, the proposed condition would give Prime TV unparalleled scope among specialty services to broadcast large amounts of recent foreign drama, thereby lessening diversity in the broadcasting system. For these reasons, the Commission has denied this application.
  Background
  1. In its original licence application, Prime TV stated that it would broadcast encore presentations of world-class entertainment series, movies, and mini-series. It indicated that it would offer nostalgic programming not available to Canadian audiences from any Canadian television service. Prime TV assured the Commission that its service would be complementary and that it would not compete with other Canadian television licensees. It asserted that Prime TV would expand the diversity of high quality programming available to Canadians.
  2. In Decision CRTC 96-604, the Commission licensed Prime TV as a specialty service directed towards men and women 50 years of age and over. The programming would include a mix of new information programs of interest to the target audience and "entertainment programs from the past." Essentially all of the information programs would be Canadian, while most of the entertainment programs would be foreign.
  Licensee’s rationale for the application
  3. The licensee argued that the addition of 19 new foreign services in recent years to the Commission’s lists of eligible satellite services has narrowed the inventory of attractive foreign programming available to Prime TV. Allowing Prime TV to acquire recent foreign drama would effectively bar some U.S. services from the lists of eligible satellite services because, to be included on the lists, foreign services must retain Canadian rights to programs. Prime TV maintained that the current condition prohibits it from broadcasting recent Canadian drama programming. In addition, it noted that Decision CRTC 96-604 highlighted its plans to devote 65% of its Canadian programming expenditures to co-productions. According to the licensee, however, the current condition requires it to direct its expenditures to Canadian non-drama programming that it claims is less attractive to audiences.
  Interventions
  4. Cable Atlantic, Mediabridge Entertainment Corporation, RDA Productions, the Idea Factory and GPI Corporation submitted interventions in support of this application. They argued that the proposed condition would enable Prime TV to access more recent Canadian and foreign programs and would create new opportunities for Canadian independent producers.
  5. The Women’s Television Network, Alliance Atlantis Broadcasting, CTV Television Inc., CHUM Limited, the Canadian Broadcasting Corporation, Craig Broadcast Systems and WIC Television Ltd. filed opposing interventions. They argued that the current condition of licence is a cornerstone of Prime TV’s licence because it clearly defines the programming offered by the service and distinguishes it from conventional, independent television services. Furthermore, they contended that approval of the proposed condition would fundamentally change the nature of Prime TV’s service.
  6. The opposing interveners also claimed that the proposed condition would greatly increase competition for programming. CanWest Global Communications Corp. (CanWest), which ultimately controls Prime TV, would allegedly gain a significant advantage because it could negotiate concurrently rights for both national network and national cable telecast for any particular program or series. Programs which CanWest purchased for broadcast on its conventional network could be offered the following year on Prime TV and the costs associated with these rights could be apportioned between the two services in the manner most expedient for CanWest. Because program distributors prefer to negotiate both conventional and specialty sales with a single purchaser, CanWest would enjoy unfair advantage, not only in the price, but also in the exclusion of any other services from the negotiation process.
  7. In response, Prime TV, among other things, argued that, rather than changing the nature of its service, the proposed amendment would enable it to develop a strong Canadian specialty service dedicated to its target audience. Prime TV contended that the opposing interveners had not substantiated their claims that approval of the application would harm them. The licensee maintained that, while most Canadian specialty and pay television services have an U.S. counterpart that provides them with programming, the current condition of licence prevents Prime TV from acquiring programming from U.S. services such as The Nostalgia Network. As an alternative to its proposed condition of licence, the licensee stated that it would accept a revised condition that would ensure that U.S. drama broadcast on ABC, CBS, NBC, FOX, WB and UP affiliates and distributed on Prime TV would be at least five years old. According to the applicant, this condition would still allow Prime TV to distribute recent Canadian drama and programming produced specifically for and broadcast by U.S. cable channels.
  The Commission’s decision
  8. As noted earlier, two key components of Prime TV’s proposed service when it was licensed were that it would offer "entertainment programs from the past" and that it would target people 50 years and older. The Commission considers that the amendment, as originally proposed and even as revised in the licensee’s response to the interventions, would fundamentally change the nature of the service licensed in 1996 and launched in October 1998. Furthermore, the licensee did not provide compelling arguments to justify an amendment to a fundamental condition a few months more than a year after it went on air following a competitive process.
  9. The Commission is concerned that granting Prime TV the amendment as originally proposed might generate a competitive imbalance in the broadcasting system. Moreover, given the service's 50% Canadian content requirements which would mainly be fulfilled by information programming, the Commission considers that approval would give Prime TV unprecedented latitude among specialty services to air large amounts of recent foreign drama, thus reducing the diversity in the broadcasting system. Allowing Prime TV such scope would be contrary to the Commission’s licensing policies for specialty services.
  10. For all these reasons, the Commission has denied Prime TV’s application to replace condition of licence 1(b).
  Secretary General
  This document is available in alternative format upon request, and may also be viewed at the following Internet site: www.crtc.gc.ca
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