ARCHIVED - Decision CRTC 2000-3

• For Newsworld, the maximum monthly wholesale rate per subscriber in Anglophone markets will increase from $0.55 to $0.63, effective 1 September 2000.

• For RDI, the maximum monthly wholesale rate per subscriber in Francophone markets will increase from $0.90 to $1.00, effective 1 September 2000.

1. The Commission renews the licences for the specialty programming undertakings Newsworld and Le Réseau de l’information (RDI) operated by the Canadian Broadcasting Corporation (CBC) from 1 September 2000 to 31 August 2007. The licences will be subject to the conditions set out in the Appendix to this decision and to those specified in the licences to be issued. A preamble to this decision is set out in Public Notice CRTC 2000-1 issued today.

2. Both Newsworld and RDI have established themselves as important elements in the national public broadcaster’s overall service to Canadians. According to the CBC’s 1998 annual return, Newsworld can be received in approximately 7.8 million households and RDI can be received in approximately 6.5 million households across the country. Each week, over 30% of Anglophones in households served by cable tune to Newsworld, and over 40% of Francophones in households served by cable tune to RDI.

3. The Broadcasting Act (the Act) requires the CBC to provide programming that informs, enlightens and entertains. The two 24-hour news services offer a panoply of information programming choices that the main services could not duplicate. They provide a second window for important news and public affairs programs and create programs of their own that are regularly replayed on the main services. Though their operations are based on commercial revenues and subscriber fees rather than primarily on public funding, and though Newsworld and RDI report to the Commission as distinct and separately licensed entities, there exists a healthy symbiosis between core and specialty services on both the French and English sides of the CBC. They cooperate and share personnel and equipment in an effort to maximize every production dollar available for the benefit of their viewers.

4. At no time are the advantages of this strategic partnering more apparent than when RDI, Newsworld and their respective main services join forces to bring viewers live coverage, from a Canadian perspective, of the most important and compelling events of the day. Newsworld and RDI are thoroughly Canadian services that capitalize and build on one of the greatest strengths of our national public broadcaster -- its team of experienced and highly professional journalists.

5. Over the past licence term, both Newsworld and RDI were subject to a number of conditions of licence. These included conditions relating to Canadian content, the nature of their programming, advertising, financial reporting, simultaneous distribution of programs, closed captioning and compliance with industry codes.

6. In each case, the Commission has found that Newsworld has met or exceeded the requirements of these conditions of licence. The Commission further found RDI to be in compliance with all conditions except that which set out the percentage of programming that must be closed-captioned or signed for the benefit of the hearing impaired. This matter is discussed later in this decision.

7. The CBC proposed a rate increase of $0.08 for Newsworld, which, if granted, would increase its current maximum monthly wholesale rate per subscriber from $0.55 to $0.63 in Anglophone markets. No increase was proposed where Newsworld is carried in Francophone markets.

8. The Commission last renewed the licence for Newsworld in Decision CRTC 92-529. In that decision, the Commission approved an increase in wholesale rates, effective 1 January 1993, of $0.23 in Anglophone markets and $0.05 in Francophone markets. The Commission, however, denied additional annual increases that the Corporation had proposed to cover inflationary costs.

9. This is the first licence renewal for RDI. The CBC has requested an increase of $0.10 for this service which, if granted, would increase its current maximum monthly wholesale rate per subscriber from $0.90 to $1.00 per month in Francophone markets. No increase was proposed where RDI is carried in Anglophone markets.

10. The CBC based the current rate increase applications on the following hypotheses:

• A projected decrease in advertising revenues due to audience fragmentation and downward pressure on rates.

• No significant projected increase in subscribers during the licence term.

• The implementation of a number of new programming initiatives.

11. Newsworld proposed to use the revenues received as the result of the rate increase to:

• Expand live programming.

• Create a network of video journalists.

• Develop more joint projects with RDI.

• Provide increased support for independent production.

• Train a new generation of video journalists.

12. It would achieve these goals by:

• Originating programming from a larger number of locations in Canada.

• Establishing a Newsworld presence in five new locations: the interior of British Columbia, Southern Ontario, the Far North, Northern Manitoba, and Atlantic Canada.

• Increasing the number of episodes of Culture Shock, a joint production with RDI.

• Creating a weekly program that will provide a better window on French-language life in Canada.

• Increasing its annual funding of documentaries by $10,000.

• Finding and training eight video journalists per year, beginning in the third year of the licence term.

13. RDI proposed to use the revenues received as the result of the rate increase to:

• IIncrease live coverage of events.

• Better reflect the different regions of Canada.

• Provide programming of interest to young Canadians.

14. It would achieve these goals by:

• Increasing live coverage of events in Northeastern Quebec, Southern Ontario and Western Canada.

• Taking the program En Direct outside the studio at least once per week.

• Producing a monthly debate program in the regions.

• Producing live programming outside Canada.

• Increasing the number of episodes of Culture Choc, a joint production with Newsworld.

• Broadcasting six Canadian documentaries each year.

• Acquiring the rights to and adapting six documentaries originally produced in English.

• Producing a daily magazine program for young people between nine and twelve years old.

15. A common commitment running through the future plans of both RDI and Newsworld is to pursue the goals listed above in partnership with each other rather than in isolation. The Commission applauds this approach to maximizing the effectiveness of scarce resources.

16. The Commission considers that the programming initiatives that both Newsworld and RDI are committed to implement if this rate increase is approved, incorporate the goal of greater regional reflection underlying all the decisions relating to the CBC released today. Implementation of these initiatives will serve to ensure that these two services reflect, to an even greater extent, the experience of Canadians in all parts of the country.

17. Newsworld anchor and Senior Correspondent, Allison Smith, speaking in support of Newsworld's application, stated her service's vision succinctly: "Canadians want to see themselves and they want to see the news not only happening in their neighbourhood but around the world, and we have to be there when it happens..."

18. Mr. Renaud Gilbert, Executive Director of RDI, emphasized the importance of broadcasting from all parts of Canada. He stated: (Translation) "If we want to display the country, if we want to adequately reflect each of the regions and communities, we have to get out of our studios not only to cover events but the experiences of our citizens."

19. The Commission considers that the programming initiatives proposed by Newsworld and RDI will help turn this vision into reality. Further, the Commission is of the view that this additional revenue may also provide further resources for covering international stories from a Canadian perspective, thus helping RDI and Newsworld to become, to an even greater extent, Canada’s "windows on the world."

20. The Commission acknowledges, as well, the unique nature of news and information broadcasting where the highest audience figures are typically for dramatic and unexpected events (the death of Princess Diana, the Swiss Air disaster, the 1998 ice storm); events which dictate that advertising must give way to live coverage. The bigger the story, the less revenue generated. Giving Canadians the high quality news service they quite properly demand, where being there when a story breaks is fundamental, may actually hurt the bottom line. Regularly-scheduled programs and the advertisements that finance them must be pre-empted to make room for live coverage that is expensive to produce but which generates less income. The Commission therefore considers that these services must have adequate funding from subscribers if they are to be able to provide this type of programming.

21. The rate increases will have, among other things, the effect of expanding Newsworld and RDI's abilities to cover events in the regions of Canada and of increasing the quantity and quality of documentary programs produced by the licensees both individually and as strategic partners. Further, the Commission notes that while the rate increases granted in these licences will go to Newsworld and RDI, the Corporation's over-the air services will also benefit indirectly. Such benefits will come either through repeats of Newsworld and RDI programs or through the improved infrastructure and journalistic services which, on occasion, will be available to the main services.

22. In light of the above, the Commission approves the CBC’s proposal to increase Newsworld’s maximum monthly wholesale rate per subscriber in Anglophone markets from $0.55 to $0.63 when distributed as part of the basic service, effective 1 September 2000. It further approves the CBC’s proposal to increase RDI’s maximum monthly wholesale rate per subscriber in Francophone markets from $0.90 to $1.00 when distributed as part of the basic service, effective 1 September 2000.

23. In renewing these licences and approving the rate increases proposed by the Corporation, the Commission expects Newsworld and RDI to expand their journalistic reach into every region of the country and as far internationally as possible. It expects these services to keep faith with their mandates and the legitimate expectations of the subscribers who fund them not only by meeting the service goals stated in their renewal applications but by exceeding them. It further requires the CBC to fully implement each of the programming initiatives for both Newsworld and RDI that it proposed in relation to these rate increases.

24. From the time they were issued, RDI and Newsworld’s respective licences have included conditions requiring the licensees to maintain separate accounts from the CBC's television networks. The licensees file an annual statement of accounts relating to their specific revenues and expenditures.

25. The purpose of these conditions of licence is to ensure that specialty services funded largely through subscriber fees, are not underwritten by the CBC’s parliamentary grants; tax dollars intended to fund the over-the-air radio and television services. This rationale is still valid and the Commission has re-imposed these conditions.

26. This separate accounting rule was not intended to prevent Newsworld or RDI from sharing resources and programs with the main service. In fact, as noted earlier, the Commission considers that such resource sharing is clearly in the public interest.

27. The Commission requires that the CBC file, by 30 November of each year of the licence term, an Annual Report, in a format approved by the Commission, containing the information specified in Appendix 1 of Public Notice CRTC 2000-1 issued today.

28. The CBC requested amendments to conditions of licence with respect to the financial statements it submits for Newsworld. The purpose of the proposed amendments was to reduce the Corporation’s administrative burden incurred in preparing and filing two financial statements for two different year-end dates.

29. The Commission considers that the amendments proposed by the CBC will not reduce the accuracy or usefulness of the data provided. The Commission therefore approves the revised financial reporting requirements proposed by the Corporation and will apply them to both Newsworld and RDI. The revised conditions of licence are set out in the Appendix to this decision.

30. The condition of licence currently in effect for Newsworld requires that a minimum of 75% of all programming distributed on the service be either closed captioned or signed. In its licence renewal application, the Corporation proposed that the condition of licence be amended so that, beginning 1 September 2002, a minimum of 90% of all programming distributed on the service must be either closed captioned or signed. The Commission approves this revised condition of licence, which is included in the Appendix to this decision.

31. During the past licence term, a condition of licence required RDI to ensure that, until 31 August 1996, a minimum of 28% of all programming broadcast each year be either closed captioned or signed. The condition increased these minimum levels to 34%, 37% and 50% respectively for each of the last three years of the licence term. The licensee, however, did not meet the required levels, even though it actually exceeded its commitments with respect to the amount of money that would be spent on captioning. During the licence term, the levels of closed captioning actually achieved by RDI were 18% in 1995-96, 23.7% in 1996-97, 32% in 1997-98, and 35% in 1998-99.

32. At the hearing, the licensee indicated that the shortfall was caused by two factors. First, RDI found that programming obtained from independent producers was not delivered to it in captioned form as it had originally anticipated. Second, since most of RDI’s programming is broadcast live, employees had to be hired and trained to do captioning in "real time." This involves a training period of about two years. Thus, employees hired in 1997 to do captioning are only now completing their training and taking up their duties.

33. For the new licence term, the licensee has proposed minimum levels of signed or closed captioned programming for RDI ranging from 36% in 2000-2001 to 56% in 2006-07. The Commission approves the proposed condition of licence, which also contains the licensee’s expenditures for captioning or signing. Conditions of licence related to these commitments are set out in the Appendix to this decision.

34. The licences for both RDI and Newsworld currently include conditions of licence that generally prohibit the simultaneous broadcast of their own regular programming on the Corporation’s television networks or on any other CBC owned and operated or affiliated undertaking. A few specific exceptions are made for each service where simultaneous broadcasting may occur.

35. At the hearing, the TVA network expressed concern that RDI was interpreting the condition in a way that permitted it to simultaneously broadcast programs that originated with the CBC’s French-language television network, rather than with RDI. In the conditions of licence imposed herein, the Commission clarifies that while RDI and Newsworld may simulcast each other's programming, they may not simultaneously broadcast regular programming with other CBC services regardless of whether or not the programming is originated by them or by another CBC service. The new conditions set out in the Appendix to this decision also include the same exceptions to this general rule that are set out in the current conditions of licence for each service.

36. The Commission acknowledges the contribution of all interveners. It notes the analysis provided by the Canadian Cable Television Association and the Association des câblodistributeurs du Québec in opposition to the proposed rate increases.

• Public Notice CRTC 2000-1 – A distinctive voice for all Canadians: Renewal of the Canadian Broadcasting Corporation's licences

• Decision CRTC 94-285 – Approval of national French-language television news service

• Decision CRTC 92-529 – Licence renewal for Newsworld

Appendix to Decision CRTC 2000-3

Part I

1. The programming provided by the licensee on the news and information service Newsworld shall be dedicated exclusively to programs drawn from the following categories as set out in Schedule I to the Specialty Services Regulations, 1990:

News (category 1);
Analysis and Interpretation (category 2);
Reporting and Actualities (category 3);
Religion (category 4);
Education, informal (category 5b); and
Sports (category 6).

Programs from the sports category shall include no live programming.

2. The licensee shall devote no less than 90% of the broadcast week to the distribution of Canadian programs.

For the purpose of this condition, broadcast week means seven consecutive broadcast days, beginning on Sunday.

3. (a) Subject to subsections (c) and (d), the licensee shall not distribute more than 12 minutes of advertising material during each clock hour.

(b) For the purpose of this condition, advertising material does not include a promotion for a Canadian program to be broadcast by the licensee, notwithstanding that a sponsor is identified in the title of the program or is identified as a sponsor of that program, where the identification is limited to the name of the sponsor only and does not include a description or representation of the products or services or any attributes of the sponsor's products or services.

(c) In addition to the maximum of 12 minutes of advertising material referred to in subsection (a), the licensee may broadcast, during each clock hour, a maximum of 30 seconds of additional advertising material that consists of unpaid public service announcements.

(d) Where a long-form live program that is not regularly-scheduled occupies time in two or more consecutive clock hours, the licensee may exceed the maximum number of minutes of advertising material set out in subsection (a) during any of those clock hours, up to a maximum of 14 minutes in any clock hour, provided that the average number of minutes of advertising material broadcast during the clock hours occupied by the program does not exceed 12 minutes.

4. The licensee shall not distribute any paid advertising material other than national advertising material.

5. (a) The licensee shall charge exhibitors of this service a maximum monthly wholesale rate per subscriber of $0.63 when distributed as part of the basic service.

(b) Notwithstanding subsection (a), the licensee shall charge exhibitors of this service in Francophone markets a maximum monthly wholesale rate per subscriber of $ 0.15 when distributed as part of the basic service.

(c) For the purpose of this condition, an exhibitor will be considered to be operating in a Francophone market where the population claiming the French language as its first language represents more than 50% of the total population of all cities, towns and municipalities encompassed in whole or in part by the licensed area of the exhibitor, according to the most recent population figures published by Statistics Canada.

6. For each of the first two years of the licence term, the licensee shall ensure that a minimum of 75% of all programming distributed on the service is either closed captioned or signed. For each of the five remaining years of the licence term, the licensee shall ensure that a minimum of 90% of all programming distributed on the service is either closed captioned or signed.

7. The licensee shall file, by 30 November of each year, unaudited financial statements for the twelve-month period ending the preceding 31 August in a format consistent with previous years. The licensee shall also report the total incremental revenues and total incremental costs incurred by Newsworld within the notes to the audited financial statements of the CBC at the end of each fiscal period. CBC management shall certify that these financial statements have been reviewed in accordance with section 8200 of the Canadian Institute of Chartered Accountants Handbook.

8. The licensee shall keep separate accounts, which set out for each fiscal year ending 31 August,

(a) the gross revenues of its operations under this licence; and

(b) the amounts expended by it on the acquisition of and/or the investment in Canadian programs intended for distribution on the undertaking, including a breakout of the amount expended for closed captioning and/or signing for the deaf and hearing-impaired of programs distributed on the news and information service.

9. The licensee shall file with the Commission, on or before 30 November of each year, a statement of the accounts referred to in the preceding condition of licence.

10. (a) Subject to subsection (b), the licensee shall not engage in the simultaneous distribution of programming from either Newsworld's regular schedule, the CBC Television Network, or a CBC-owned-and-operated or affiliated undertaking other than RDI on any of these services.

(b) Notwithstanding subsection (a), the licensee may continue the simultaneous distribution of two hours of the six-hour weekday news program entitled "The CBC Morning News."

11. 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 Canadian Association of Broadcasters’ (CAB) Sex-Role Portrayal Code for Television and Radio Programming, as amended from time to time and approved by the Commission.

12. 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 CAB's Code on Broadcast Advertising to Children, as amended from time to time and approved by the Commission.

13. 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.

Part II

1. The programming provided by Le Réseau de l’information (RDI) shall be dedicated exclusively to programs drawn from the following categories as set out in Schedule I to the Specialty Services Regulations, 1990:

News (category 1);
Analysis and Interpretation (category 2);
Reporting and Actualities (category 3);
Religion (category 4);
Education, informal (category 5b); and
Sports (category 6).

Programs from the sports category shall include no live sports event coverage.

2. Over the broadcast year, the licensee shall devote at least 90% of its programming to the distribution of Canadian programs during the broadcast day as well as during the evening broadcast period.

3. RDI programming shall reflect the concerns of each of the principal Francophone regions in Canada identified by the CBC as: Atlantic Canada, Quebec, Ontario and Western Canada. To this end, the licensee shall ensure that at least one-third of all of the original programs distributed by RDI each broadcast year are regional productions either produced by the CBC’s own stations in the regions or by RDI’s regional associates. Each region concerned shall be identified in the program logs.

4. (a) The licensee shall charge exhibitors of this service in Francophone markets a maximum monthly wholesale rate per subscriber of $1.00 when distributed as part of the basic service.

(b) The licensee shall charge exhibitors of this service in non-Francophone markets a maximum monthly wholesale rate per subscriber of $0.10 when distributed as part of the basic service.

(c) For the purposes of this condition, an exhibitor will be considered to be operating in a Francophone market where the population having French as its mother tongue represents more than 50% of the total population of all cities, towns and municipalities, encompassed in whole or in part within the licensed area of the exhibitor, according to the most recent population figures published by Statistics Canada.

5. (a) Subject to subsections (c) and (d), the licensee shall not distribute more than 8 minutes of advertising material during each clock hour.

(b) The licensee shall not distribute any paid advertising material other than paid national advertising.

(c) In addition to the maximum of 8 minutes of advertising material referred to in subsection (a), the licensee may broadcast, during each clock hour, a maximum of 30 seconds of additional advertising material that consists of unpaid public service announcements.

(d) Where a long-form live program that is not regularly scheduled occupies time in two or more consecutive clock hours, the licensee may exceed the maximum number of minutes of advertising material set out in subsection (a) during any of those clock hours, up to a maximum of 10 minutes in any clock hour, provided that the average number of minutes of advertising material broadcast during the clock hours occupied by the program does not exceed 8 minutes per hour.

6. From 1 September 2000 to 31 August 2001, the licensee shall ensure that a minimum of 36 % of all programming distributed on the service is either closed captioned or signed. During each of the following six twelve-month periods, the licensee shall ensure that a minimum of 47%, 50%, 52%, 52%, 54% and 56% respectively of all programming distributed on the service is either closed captioned or signed.

7. The licensee shall allocate, at a minimum, the amounts indicated below to the captioning or sign-language interpretation of programs for the hearing impaired in each year of the licence term:

8. The licensee shall file, by 30 November of each year, unaudited financial statements for the twelve-month period ending the preceding 31 August in a format consistent with previous years. The licensee shall also report the total incremental revenues and total incremental costs incurred by RDI within the notes to the audited financial statements of the CBC at the end of each fiscal period. CBC management shall certify that these financial statements have been reviewed in accordance with section 8200 of the Canadian Institute of Chartered Accountants Handbook.

9. The licensee shall keep separate accounts, which set out for each fiscal year ending 31 August:

(a) the gross revenues of its operations under this licence; and

(b) the amounts expended by it on the acquisition of and/or the investment in Canadian programs intended for distribution on the undertaking, including a breakout of the amount expended for closed captioning and/or signing for the deaf and hearing-impaired of programs distributed on the news and information service.

10. The licensee shall file with the Commission, on or before 30 November of each year, a statement of the accounts referred to in the preceding condition of licence.

11. (a) Subject to subsection (b), the licensee shall not engage in the simultaneous distribution of programming from either RDI's regular schedule, the CBC Television Network, or a CBC owned-and-operated or affiliated undertaking other than Newsworld on any of these services.

(b) Notwithstanding subsection (a), the licensee may engage in the simultaneous distribution of a maximum of two (2) hours of a news program on Monday to Friday from 7 a.m. to 9 a.m., Eastern time; and of a maximum of thirty (30) minutes of a news program on each of Saturday and Sunday from 12:00 noon to 12:30 p.m., Eastern time.

12. 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 Canadian Association of Broadcasters’ (CAB) Sex-Role Portrayal Code for Television and Radio Programming, as amended from time to time and approved by the Commission.

13. 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 CAB’s Code on Broadcast Advertising to Children, as amended from time to time and approved by the Commission.

14. 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.