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ARCHIVED - Decision CRTC 2000-274

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  Decision CRTC 2000-274
  Ottawa, 28 July 2000
  Canadian Broadcasting Corporation
St. John's, Newfoundland –199813738
  25 May 1999 Public Hearing
National Capital Region
  Licence for CBNT-TV St. John's and its transmitters renewed for a full term

1.

The Commission renews the broadcasting licence to carry on the television programming undertaking CBNT-TV and its transmitters as listed in the appendix, from 1 September 2000 to 31 August 2007, subject to the conditions set out in the appendix to this decision, as well as to those conditions specified in the licence to be issued.

2.

In Decision CRTC 2000-1 dated 6 January 2000, the Commission renewed the licences of most CBC English-language television and radio stations, as well as the licences of the English-language radio and television networks. Public Notice CRTC 2000-1 of the same date served as a Preamble to Decision 2000-1 and other decisions related to the CBC. In that public notice, the Commission set out its overall views and concerns regarding the CBC, drawn from a public hearing beginning on 25 May 1999 as well as cross-Canada consultations held to examine the role of the CBC in the Canadian broadcasting system. The overall views and concerns as well as the specific requirements, expectations and encouragements applicable to CBC owned and operated stations set out in these documents are also applicable to the renewal of CBNT-TV's licence.

3.

The licence renewal of CBNT-TV St. John's and its transmitters was not disposed of in Decision CRTC 2000-1. That decision noted that the Commission would instead rule on the renewal of the licence for CBNT-TV at a later date. The delay allowed the Commission to investigate a matter raised in an intervention dated 7 May 1999 submitted during the licence renewal process by Newfoundland Broadcasting Company (NTV), licensee of CJON–TV St. John's.

4.

NTV alleged that CBNT-TV has breached the specific conditions of its licence respecting advertising sales practices. NTV also appeared at the oral phase of the public hearing to present its intervention. The CBC subsequently filed a response on 17 June 1999 and NTV filed a reply thereto on 22 July 1999.

5.

On 29 November 1999, the Commission sent a letter to both the CBC and NTV, requesting supplemental information from both parties to permit further examination of the allegations of breach of condition of licence. In addition, the Commission requested that both parties submit comments on whether it would be appropriate to re-impose the conditions of CBNT-TV's licence that were implemented nearly 20 years ago, specific to advertising practices.

6.

A multi-part condition of licence respecting local advertising sales is currently in place on CBNT-TV's licence. It was imposed in 1982, in response to concerns from NTV. NTV, which was newly licensed at that time, was of the opinion that a restriction of the CBC's advertising practices would reduce the difficulties faced by NTV in providing a second television service to the scattered population of Newfoundland. In Decision CRTC 82–665, the Commission agreed with this view and imposed the following condition that specifies that the CBC may continue to solicit and broadcast local commercials on television in Newfoundland on the condition that:
 

a) CBC rates charged for commercials will be fair and competitive with the private sector, and will be based on current industry criteria such as cost-per-thousand and/or cost-per-rating point;

 

b) The CBC will not expand its sales force for the purpose of increasing its proportional share of the television advertising market in Newfoundland;
 

c) Rates, discounts and conditions of sale as formally authorized and published will be strictly observed;
 

d) The CBC will ensure that its commercial practices in Newfoundland are consistent with those in other parts of the country;
 

e) The CBC will not vary its discount prices in Newfoundland from the framework consistently applied to all its stations;
 

f) The Run-of-Schedule discount plan which applies uniformly to all CBC local sales operations, may be subject to minor adjustments from time to time in Newfoundland but will not substantially change character or impact.
  The NTV position

7.

NTV alleged that CBNT-TV is in breach of its condition of licence regarding its advertising rates and practices. NTV charged, among other things, that CBNT-TV's advertising rates are priced significantly below the market rate. For example, CBNT-TV sells advertising during its top rated news program at a significantly lower rate than charged by NTV for its news show. In support of its allegations, NTV submitted copies of selected past CBNT-TV invoices along with some comparative analysis of CBNT-TV/CJON-TV advertising pricing.

8.

In addition, NTV argued, among other things, that the socio-economic conditions that prompted the application of the conditions continue to exist, and that the CBC's practices have resulted in a serious devaluation of the advertising market in Newfoundland. In NTV's view, the fact that one of the two local television broadcasters operating in Newfoundland is publicly-funded and so does not rely on advertising revenue to survive, necessitates the imposition of the condition of licence to ensure that the CBC's local advertising rates are fair and reasonable. NTV argued that CBNT-TV has been consistently charging rates that are not fair and competitive with the private sector, and that such behaviour should not be rewarded.

9.

NTV acknowledged that the signal of CJON-TV is distributed nationally by satellite, but stated that no extra revenue is derived from this availability. It further stated that simultaneous substitution is practised, but that its effectiveness is limited by the fact that large numbers of viewers in Newfoundland are customers of Class 2 and 3 cable systems, where substitution is not required.

10.

NTV also countered CBC's argument that it provides a full local service with the contention that, due to budget cuts, the CBC's service has been reduced to little more than local news.

11.

In summary, NTV stated that, "without the continuation of these conditions on CBNT's licence, NTV may not survive."
  The CBC's position

12.

The CBC objected to the allegations made by NTV and argued that there has been no breach of its condition of licence. In summary, the CBC argued that its rates reflect coverage in the St. John's market only and that NTV's foreign programs can justify higher advertising rates. CBC stated that NTV's intervention is a continuation of a series of complaints that were dismissed by the Commission.

13.

In addition, the CBC asserted that the concerns and conditions that prompted the application of conditions specific to advertising sales no longer exist, and therefore the reimposition of those conditions is not necessary. It stated that NTV has completed the extension of its signal coverage throughout Newfoundland and Labrador via retransmitters and satellite and that, over the past 17 years, NTV has had "more than sufficient time…to establish and stabilize the basis on which it operates".

14.

The CBC added that the addition of CJON-TV to the satellite eligibility list provides it with regional and national exposure, with additional advertising opportunities. It also contended that CJON-TV's real competition for audience comes from out-of-market stations, and NTV can therefore use tools such as simultaneous substitution to mitigate the impact of that competition.

15.

The CBC stated that CBNT-TV continues to provide a full local television service, and therefore should be permitted unrestricted access to local advertising. It also noted that the recent Canadianization of its prime-time schedule has further differentiated CBNT-TV from CJON-TV, and lessened the potential for competitive impact.
  The Commission's decision

16.

In its examination of this matter, the Commission carefully reviewed all of the submissions filed by parties, including a sample of the CBC's published retail advertising rates and records of advertising sales from both CJON-TV and CBNT-TV, relating to periods in the fall of 1998 and the summer of 1999. The advertising sales records were also compared with the audience reach for the programs on which the ads aired. While the Commission's study revealed some differences in advertising rates between the two stations, it is of the opinion that any discrepancies seen could have been due to a variety of factors. Moreover, CBNT-TV's rates are, in the Commission's view, consistent overall with its published rates.

17.

Based on the record, the Commission cannot conclude that there has been a breach of any portion of CBNT-TV's condition of licence.

18.

The Commission further concludes that after nearly 20 years since the imposition of this condition of licence, NTV has had sufficient time to adapt its business practices in order to maximize its opportunities to increase audiences and revenues. The Commission also notes that the general market situation in Newfoundland has changed. The overall real growth in the Newfoundland economy in 1998, 1999 and the projections for the next several years all exceed the levels achieved in any year since 1982, with the exception of 1988. The Commission has decided that the reimposition of the condition of licence in question is unnecessary. The Commission therefore finds that the condition is not appropriate for the implementation of the broadcasting policy set out in subsection 3(1) of the Broadcasting Act. Nonetheless, the Commission expects CBNT-TV to price its local advertising in a fair and equitable manner.
  Secretary General
 
This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca 
Conditions of licence for the regional English television station CBNT-TV St. John's and its transmitters, as listed below.

1. The licensee shall caption all local/regional news programming, including live segments, using either real-time captioning or another method capable of captioning live programming.

2.a) The licensee shall adhere to the standards for children's advertising set out in the Corporation's Advertising Standards Policy C-5 dated 9 May 1990 and entitled Advertising directed to children under 12 years of age, as amended from time to time and approved by the Commission. As a minimum, the licensee shall adhere to the standards set out in the Canadian Association of Broadcasters' (CAB) Code on broadcast advertising to children, as amended from time to time and approved by the Commission.

b) The licensee shall not broadcast any commercial message during any child-directed programming, nor broadcast any child-directed commercial message between programs directed to children of pre-school age. For the purpose of this condition, programs directed to children and scheduled before 12:00 noon during school-day morning hours will be deemed to be programs directed to children of pre-school age.

3. The licensee shall adhere to its self-regulatory guidelines on sex-role portrayal, as amended from time to time and approved by the Commission and, as a minimum, to the CAB's Sex-role portrayal code for television and radio programming, as amended from time to time and approved by the Commission.

4. 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.

The transmitters of CBNT-TV St. John's:
CBNAT-1 Baie Verte
CBNAT-24 Baie Verte
CBNT-27 Bay L'Argent
CBNT-23 Belleoram
CBNAT-18 Brent's Cove
CBNAT-2 Buchans
CBNAT-7 Carmanville
CBNT-10 Clarenville
CBNAT-16 Coachman's Cove
CBNAT-8 Conche
CBNT-7 Elliston
CBNT-5 Fermeuse
CBNT-38 Ferryland
CBNAT-20 Fleur de Lys
CBNAT-6 Fogo Island
CBNT-33 Fortune
CBNAT-10 Fox Harbour
CBNT-14 Gambo/Middle Brook
CBNT-13 Glovertown
CFLA-TV Goose Bay
CBNAT Grand Falls
CBNAT-23 Hampden
CBNT-22 Harbour Breton
CBNT-29 Harbour Mille
CBNAT-19 Harbour Round
CBNT-24 Hermitage
CBNT-18 Hickman's Harbour
CBNLT Labrador City/Wabush
CBNT-35 Lamaline
CBNAT-21 La Scie
CBNT-36 Lawn
CBNT-8 Little Hearts Ease
CBNT-34 Lord's Cove
CBNT-20 Lumsden
CBNT-3 Marystown
CBNAT-5 Millertown
CBNAT-14 Ming's Bight
CBNAT-9 Mount St. Margaret
CBNAT-11 Musgrave Harbour
CBNT -17 Musgravetown
CBNT-11 Northwest Brook
CBNAT-17 Pacquet/Woodstock
CBNT-37 Petty Harbour
CBNT-2 Placentia
CBNT-32 Port Blandford
CBNAT-12 Port Hope Simpson
CBNT-1 Port Rexton
CBNT-25 Ramea
CBNT-19 Random Island
CBNT-40 Riverhead
CBNAT-22 Roddickton
CBNAT-15 Seal Cove
CBNAT-13 Springdale
CBNT-4 St. Albans
CBNAT-4 St. Anthony
CBNT-30 St. Bernard's
CBNT-12 St. Jones Within
CBNT-28 St. Lawrence
CBNT-6 St. Mary's
CBNT-26 St. Vincent's
CBNT-41 Sunnyside
CBNT-31 Swift Current
CBNT-39 Trepassey
CBNT-16 Trinity/Wareham
CBNT-15 Dover/Hare Bay/Wellington
CBNT-9 Wesleyville, Newfoundland, and
CBMRT Fermont, Quebec
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