ARCHIVED - Decision CRTC 99-84
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Decision CRTC 99-84 |
| Ottawa, 13 April 1999 |
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Campbell River T.V. Association Campbell River, British Columbia -- 199801626 |
| Application processed by Public Notice CRTC 1998-92 dated 24 August 1998 |
| Summary |
| The Commission, by majority vote, approves the application by the Campbell River T.V. Association (CRTV) for relief from the requirements of section 29 of the Broadcasting Distribution Regulations (the regulations). |
| The Commission considers that the not-for-profit nature of the undertaking, the fact that CRTV provides the only local television programming in the community, and the negative effect that the application of section 29 of the regulations could have on community programming, taken together, are enough to warrant an exception to the regulations. |
| The licensee may, under a condition of licence set out later in this decision, devote 5% of gross revenues derived from broadcasting activities to local expression, in the form of its community channel, on an annual basis. If funding is so directed to the community channel, it will not be required to contribute to recognized Canadian production funds as section 29 of the regulations provides. |
| Discussion |
| The requirements of section 29 |
| 1. Section 29 of the regulations provides that Class 1 broadcasting distribution undertakings (BDUs) must contribute at least 5% of their gross revenues derived from broadcasting activities to Canadian programming unless a condition of licence provides otherwise. BDUs may use a portion of this contribution to support local expression, such as the community channel, if they elect to provide such a service. The balance of the 5% contribution must be paid to funds that support the production of Canadian programming. The specific split between the amount of money that supports local expression and the amount of money to be directed to production funds varies according to the class of the undertaking and the number of subscribers. |
| 2. In Campbell River, CRTV operates a Class 1 cable system with fewer than 20,000 subscribers. Pursuant to section 29 of the regulations, it must make an annual contribution to funds that support the production of Canadian programming that is not less than the greater of: |
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| 3. Accordingly, section 29 stipulates that if CRTV elects to operate a community channel, it may deduct up to 3.5% of gross revenues derived from broadcasting activities from the total 5% contribution it would otherwise be required to make. In such a case, it must contribute a minimum of 1.5% of gross revenues derived from broadcasting activities to funds supporting the production of Canadian programming. |
| 4. In Public Notice CRTC 1997-150, which was issued with the revised regulations, the Commission stated that it would allow exceptions to section 29 of the regulations on a case-by-case basis related to the special circumstances of a licensee’s operations. The regulations provide that such exceptions may be granted by condition of licence. |
| The applicant’s position |
| 5. CRTV considered that it should be permitted to allocate the entire 5% of its gross revenues derived from broadcasting activities to community programming. Accordingly, there would be no requirement to make a contribution to production funds. CRTV maintained that contributions to production funds would not benefit its subscribers. |
| 6. CRTV noted that it is a not-for-profit organization dedicated to offering low-cost cable service to its members. It also indicated that there is strong support among its subscribers for the community channel. There is no local conventional television station offering local programming in Campbell River, so the community channel provides the only local television service. |
| 7. CRTV argued that, if it made the required payments to production funds, there would be a significant negative impact on its community channel because it would have to reduce the budget of its community channel by 28%. This reduction would lead to the elimination of two of four part-time positions, reduce the current full-time program director to part-time status and significantly lower the budget for program production. |
| The Commission’s decision |
| 8. Section 3(1)(e) of the Broadcasting Act (the Act) stipulates that "each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming." The regulations provide that distributors should contribute a minimum of 5% of their gross annual revenues derived from broadcasting activities to achieve this fundamental objective, unless a condition of licence provides otherwise. |
| 9. The Commission explored, during an extensive public process that resulted in the adoption of the regulations, the appropriate split between money that may be allocated to local expression and money that would be paid to production funds to support Canadian programming at a national and regional level. |
| 10. The Commission appreciates the important service that community channels provide, especially in areas such as Campbell River where they are the only source of local television programming. That is why section 29 of the regulations allows smaller cable systems to reduce their contribution to production funds if they operate community channels. In this context, the Commission notes comments set out in eighteen interventions supporting the application. These comments indicated that Campbell River residents rely on the community channel for local information. Interventions also noted that the community channel provides valuable training for students, members of CRTV and the community at large. |
| 11. The Commission, however, continues to believe that contributions by broadcasting distribution undertakings to production funds provide essential support for the production of Canadian programming. Such support is necessary if Canadian programming is to continue to have a strong presence in a more competitive broadcasting environment. It disagrees with CRTV that its subscribers do not benefit from such contributions. The Commission considers that subscribers will benefit from higher quality and more diverse Canadian programming on the services distributed by CRTV as a result of these contributions. It therefore wants to ensure that production funds receive broad support from BDUs. |
| 12. On the other hand, the Commission recognizes that CRTV is different from most cable systems in that it is operated by a not-for-profit organization rather than on a profit-making basis, as are most cable systems. As such, this system is more highly oriented to serving the specific needs of its local community. The Commission considers that failure to grant the licensee's request could, in the particular circumstances of CRTV, have a significant negative impact on the amount and quality of community programming available in this area. |
| 13. The Commission therefore considers that the not-for-profit nature of the undertaking, the fact that CRTV provides the only local television programming in the community, and the negative effect that the application of section 29 of the regulations could have on community programming, taken together, are enough to warrant an exception to the regulations. Therefore, the Commission amends the licence for CRTV by adding the following condition of licence: |
| 14. It is a condition of licence that the licensee make a contribution to Canadian programming in the broadcast year ending 31 August 1999, and in each broadcast year thereafter, of an amount not less than 5% of its gross revenues derived from broadcasting activities in that year, less any contribution to its community channel made by the licensee in that year. |
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Related CRTC document
• Public Notice 1997-150 dated 22 December 1997: Broadcasting Distribution Regulations |
| Secretary General |
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This decision is to be appended to the licence. It is available in alternative format upon request, and may also be viewed at the following Internet site:
www.crtc.gc.ca |
- Date modified: