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ARCHIVED - Decision CRTC 2000-139

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Decision CRTC 2000-139
Ottawa, 4 May 2000
Les Chaînes Télé Astral inc. (formerly Les Réseaux Premier Choix inc.)
Across Canada
– 199903422 – 199908373
Application processed by
Public Notice CRTC 1999-177
dated 2 November 1999
Summary
The Commission renews the licence for Canal Famille to 31 August 2006. However, it denies the licensee’s application to broaden its mandate by offering programs for all members of the family instead of only to an audience consisting of children and youth up to age 14. Consequently, the licensee’s request to introduce advertising to its service is denied. Since the other proposed modifications were conditional upon approval of advertising, the Commission denies them also, with the exception of the amendment to the definition of "first-run" program and the application of the industry codes regarding sex-role portrayal and violence in television programming.
The application

1.

The Commission renews the broadcasting licence for the French-language specialty programming undertaking Canal Famille, property of Les Chaînes Télé Astral inc. (Astral), from 1 June 2000 to 31 August 2006, subject to the conditions specified in the appendix to this decision and in the licence to be issued.

2.

In its licence renewal application, the licensee proposed:
  • to modify its service by including programs for all members of the family;
  • to amend the definition of "broadcast day" to provide its programming service 24 hours a day;
  • to continue distributing at least 60% Canadian programming during the broadcast day and devote at least 50% of the evening broadcast period (6 p.m. to midnight) to Canadian programming; and to devote at least 60% of its programming to children and youth up to age 17;
  • to increase its distribution of original, first-run Canadian programs from 104 to 150 hours, and amend the definition of "first-run" to include the following programs acquired in pre-production:

- programs distributed previously by a Canadian discretionary service (pay-TV or pay-per-view); and

- programs distributed for the first time by a Canadian specialty or pay-TV service in a language other than the language in which it was originally distributed by another broadcaster;
  • to distribute a maximum of 12 minutes of advertising material per clock hour during programs other than those directed to children (0-11 years);
  • to amend the condition of licence relating to the maximum monthly wholesale rate excluding the portion allowing annual increases due to inflation;
  • to attach conditions of licence relating to industry codes for broadcast advertising to children, television violence, and sex-role portrayal.
Nature of the service

3.

Le Groupe TVA inc. (TVA) filed an intervention with the Commission opposing the licensee’s proposal to modify the nature of the Canal Famille service. The licensee had proposed to modify its programming by broadening its target audience to include youth up to age 17, the 18-24 age group, and family audiences. TVA argued that Canal Famille was initially licensed because the programming it proposed addressed the needs of an audience that was inadequately served by conventional general interest television, namely children.

4.

According to the intervener, including programs for the whole family would change the basic objective of the service. TVA submitted that the programs proposed by the licensee would not be just for viewers between the ages of 12 and 24; rather, the programs are classified by conventional broadcasters as general audience material. The intervener argued that Canal Famille would become more similar to a conventional general interest service whose programming would overlap that of existing conventional French-language broadcasters, and they could be adversely affected by it.

5.

In reply, Astral argued that the programs it proposed are aimed at a "family" audience, not a "general" audience. It noted that it had committed to devote at least 60% of its programming to an audience composed of children and youth from 12 to 17. Astral maintained that the changes to its service will enhance its complementarity by enriching and diversifying the quality programming aimed at Francophone youth and young adults.
Introduction of advertising

6.

TVA opposed the proposal by Canal Famille to introduce advertising in its programming. TVA noted that the specialty and pay-TV services of Groupe de radiodiffusion Astral inc., through broadcasting distribution undertakings, generate guaranteed subscription revenues amounting to over 75% of its total revenues. The intervener added that the many distribution outlets available to Astral enable it to amortize its acquisition costs while increasing its purchasing power. Finally, TVA submitted that given the financial performance of Canal Famille and Astral, the proposal to introduce advertising cannot be justified.

7.

The Canadian Cable Television Association (CCTA) and Vidéotron ltée (Vidéotron) filed interventions in favour of the Canal Famille application, but with reservations. The CCTA considers that specialty services should have access to diverse sources of revenue to finance their operations. The interveners submitted that in view of the scale of the advertising revenues at issue, and the fact that Canal Famille is a very profitable undertaking whose service is distributed on basic cable, a downward revision of its authorized wholesale fee should be considered.

8.

Replying to the interveners, Astral submitted that it needs advertising revenue to finance a significant increase in broadcast time and to offer greater diversity and higher quality in Canal Famille programming.

9.

The licensee argued that the mechanism of annual increases based on the Consumer Price Index always prevented it from raising its monthly rate, and as a result its rate has been the same since 1990. The licensee therefore considers it unfair and unreasonable to require it to reduce the Canal Famille wholesale rate even further.

10.

Astral further submitted that, although there are possible synergies between its services, they would not have a significant economic impact because the scale of any synergies achieved would be limited owing to the particular nature of each service. Astral added that no original Canadian programs acquired for exhibition on one of its French-language specialty services will be exhibited on any other of its French-language specialty services during its first commercial run.
The Commission's determination

11.

The Commission considers that the proposed change in the nature of the Canal Famille service would make it more like general interest television, thus making it less complementary. Consequently, the Commission denies the licensee’s proposal to modify the nature of its service.

12.

Since the introduction of advertising was directly linked to the modification of the nature of the service, this portion of the application is also denied.

13.

In Public Notice CRTC 1999-97 entitled Building on success - A policy framework for Canadian television (the Television policy), the Commission stated that it would consider, upon request, amending the definition of "first run" in the licence of any pay or specialty service in order to encourage cooperation among specialty and pay licensees in the production and acquisition of Canadian programs. The Commission has considered this matter and approves the licensee's request. The relevant condition of licence has been amended accordingly and is appended to this decision.

14.

Since Astral indicated that all other proposed amendments were conditional upon the approval of including advertising in its programming, the Commission denies them as well, with the exception of the application of the industry codes regarding sex-role portrayal and violence in television programming, which are discussed below.
Other questions
Cultural diversity

15.

In the Television policy, the Commission expressed its confidence that the Canadian broadcasting system could "better reflect the presence of minority groups in Canadian society, and…portray them accurately and fairly." The Commission encourages the licensee to recognize, respect and actively promote cultural diversity.
Service to the hearing impaired

16.

The Commission notes the licensee's commitments to increase the number of hours of acquired programs that will be closed-captioned from 2,050 during the first year, to 2,300 during years 6 and 7. The Commission encourages Canal Famille to explore ways to caption 90% of all programming during the broadcast day by the end of the licence term.
Employment equity

17.

The Commission notes that this licensee is subject to the Employment Equity Act that came into effect on 24 October 1996 (1996 EEA), and therefore files reports concerning employment equity with Human Resources Development Canada.
Industry codes

18.

As proposed by the licensee, the Commission is applying conditions of licence requiring Canal Famille to adhere to the Canadian Association of Broadcasters' (CAB) codes relating to sex-role portrayal and violence in television programming.
Technical certification

19.

Section 22 of the Broadcasting Act states that the Commission may not renew a licence unless the Department of Industry has certified that the licensee has been or will be issued a broadcasting certificate. Accordingly, this renewal is subject to the issuance of technical certification by the Department of Industry.
Interventions

20.

The Commission acknowledges the interventions submitted concerning this application and has considered all of them in reaching its decision.
Related CRTC documents

• Public Notice 1999-97: Building on success – A policy framework for Canadian television

• Decision 2000-50 Administrative renewal

• Decision 99-128: Administrative renewal

• Decision 97-17: Licence amendment

• Decision 92-570: Last licence renewal

 

Secretary General

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


APPENDIX TO DECISION CRTC 2000-139

Conditions of licence
Nature of the service
The programming provided by the licensee shall have as its target audience only children and youth up to 14 years of age.
The licensee shall not distribute on Canal Famille any programs from the sports category (category 6) set out in Schedule I of the Specialty Services Regulations, 1990.
Exhibition of Canadian programs
The licensee shall devote not less than 60% of the broadcast year to the distribution of Canadian programs.
In each broadcast year, the licensee shall distribute no less than 104 hours of original, first-run Canadian programs. For the purposes of this condition, an original, first-run program means:
  • a program that will be distributed for the first time by the licensee and has never before been distributed by the licensee of any other broadcasting undertaking;
  • a program acquired at the pre-production stage

- that has previously been exhibited by a Canadian discretionary service (pay or pay-per-view), or

- that has been exhibited for the first time on a Canadian pay or specialty service in a language other than the language in which it was initially exhibited by another broadcaster.
Expenditures on Canadian programs
In each broadcast year, the licensee shall incur expenses of not less than 35% of the annual gross revenues, derived from the operation of this service in the preceding year, on Canadian programming rights, development (including the script and pilot program development fund, training grants and funding expended on captioning for the hearing impaired) and promotion expenditures.
Advertising
The licensee shall distribute no advertising material, more specifically, any advertisement intended to sell or promote goods, services, natural resources or activities and includes any advertisement that mentions or displays in a list of prizes the name of the person selling or promoting these goods, services, natural resources or activities, with the exception of:

a) a free public service announcement;

b) a promotion for a program distributed by the licensee;

c) a network identification announcement made by the licensee;

d) a production credit.

Rate
Effective 1 June 2000, the licensee shall charge each exhibitor of this service the maximum monthly wholesale rate of $0.60 per subscriber, when it is distributed as part of the basic service. Effective 1 January 2001, and on 1 January of each subsequent year of its new licence term, the licensee may increase its wholesale rate by an amount equivalent to the Consumer Price Index (CPI), calculated over the period of 1 July to 30 June in the previous year, less 2%. Notwithstanding the foregoing, should the CIP exceed 10%, the corresponding wholesale rate increase shall not exceed an amount equivalent to 80% of the CPI increase.
Industry codes
The licensee shall adhere to the guidelines on gender portrayal set out in the CAB's Sex-Role Portrayal Code for Television and Radio Programming, as amended from time to time and approved by the Commission.
The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's Voluntary Code Regarding Violence in Television Programming, as amended from time to time and approved by the Commission.
Definitions
For the purposes of these conditions of licence:
  • all time periods shall be reckoned according to the eastern time zone;
  • "broadcast day" means the period of up to 18 consecutive hours, beginning each day not earlier than six o’clock in the morning and ending not later than one o’clock in the morning of the following day, as selected by the licensee;
  • "broadcast month" means the total number of hours devoted by the licensee to broadcasting during the aggregate of the broadcast days in a month;
  • "broadcast year" means the total number of hours devoted by the licensee to broadcasting during the aggregate of the broadcast months in a 12-month period, beginning on 1 September in any year.

 

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