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ARCHIVED - Decision CRTC 2000-386

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 Decision CRTC 2000-386

Ottawa, 14 September 2000

Canadian Broadcasting Corporation, Télé-Québec, BCE Média inc., La Sept ARTE and L’Équipe Spectra, on behalf of a company to be incorporated – (La Télé des Arts)
 Across Canada – 200006743

CHUM Limited and Astral Média inc., on behalf of a company to be incorporated – (Rendez-vous des artistes)
 Across Canada – 200006751

27 June 2000 Public Hearing in Montréal

Summary

The Commission approves a new French-language specialty television service called "la Télé des Arts", to be available to distribution undertakings across Canada. This service will provide programming devoted to the arts and culture. The licence will expire on 31 August 2007. The Commission denies the competing application (Rendez-vous des artistes).
The Commission considers that widespread distribution of the service will provide the licensee with the resources necessary to offer programming of the quality necessary to ensure the success of an arts service.
The distribution terms and conditions are set forth in this decision and in the accompanying Public Notices CRTC 2000-128 and 2000-129 of today's date. In Francophone markets served by Class 1 cable distribution undertakings, Télé des Arts will receive mandatory distribution as part of the existing discretionary tier with the highest penetration. The same terms and conditions will apply to Class 2 cable distribution undertakings that choose to distribute this service. Multipoint distribution system (MDS) must offer the service on a mandatory basis to any subscriber who selects at least three French-language specialty services on a discretionary basis. The service must be offered to distributors in those markets at a monthly wholesale rate of $0.55 per subscriber.
Further, direct-to-home satellite services (DTH) must offer Télé des Arts in the package containing the greatest number of French-language services. The service must be offered to DTH distributors at a monthly wholesale rate of $0.55 per subscriber.
In Anglophone markets, the service will be distributed under modified dual status, meaning that is must be provided on a discretionary basis, unless both the distributor and service provider agree that it be carried as part of the basic service. As incentive measures, the service must be offered free of charge to distributors that distribute the service in analog mode, or at a maximum monthly wholesale incentive rate of $0.25 when distributed in digital mode. Further, the Commission has added a question based on its preliminary opinion to be considered as part of the current public process dealing with the availability of French-language specialty services outside Quebec. The question, seeks to determine if it should grant priority distribution status on a digital basis to Télé des Arts (see Public Notice 2000-74-2 of today's date).
Licensing criteria

1.

In its report on the establishment of a national French-language arts television service (Public Notice CRTC 1999-187), the Commission announced that such a service could, if certain conditions were fulfilled, make a significant contribution to achieving the objectives of the Broadcasting Act (the Act). In particular, it could contribute to the enrichment and diversity of the high-quality French-language cultural programming provided by the Canadian broadcasting system, and could create new opportunities and revenue sources for Canadian producers, creators and artists.

2.

In its call for applications (Public Notice CRTC 2000-18), the Commission stated that it would consider the applications filed in the light of a number of licensing criteria as well as the objectives set out in the Act. Those criteria include:
  • reflection of the unique character of Quebec culture and the needs and circumstances of French-language communities in other parts of Canada;
  • the complementarity of programming and its impact on existing services;
  • Canadian content and expenditures on Canadian programming; and
  • methods of financing and marketing and supporting studies.

3.

The Commission received the two applications mentioned above in response to the call. Following its examination of the applications filed by the two applicants, the Commission concluded that Télé des Arts is the service that will contribute most to achieving the objectives of the Act, and will best meet the aforementioned licensing criteria. The Commission thus approves the application filed by the CBC, Télé-Québec, BCE Média inc., La Sept ARTE and L’Équipe Spectra (on behalf of a company to be incorporated). As a result, the Commission denies the competing application filed by CHUM Limited and Astral Média inc. on behalf of a company to be incorporated.

4.

Given the importance that it places on the role that an arts service can play in the broadcasting system, the Commission has sought to ensure that Télé des Arts would be made available to the greatest possible number of Canadians at the most affordable cost, while not losing sight of the fact that to offer quality programming and contribute to the broadcasting system, the service must be able to generate sufficient revenues. The Commission considers that the terms and conditions for distribution of the service and the conditions of licence set forth below respond to those objectives.
Ownership structure

5.

The licensee company will be a share capital corporation whose shares will be held by:

37 %

Canadian Broadcasting Corporation

37%
25 %

Télé-Québec

25%
16 %

BCE Média inc.

16%
15 %

La Sept ARTE

15%
7 %

L'Équipe Spectra

7%

6.

The two largest shareholders are Canadian public television broadcasters. BCE Média inc. is a wholly-owned subsidiary of BCE inc. L’Équipe Spectra is a private Montréal firm that produces shows, special events and festivals as well as television programs in the cultural sector. La Sept ARTE, a television production company in France, is the French production arm of ARTE, the European cultural channel that broadcasts programs with a multicultural perspective, mainly in Germany and France.

7.

The undertaking will ultimately he controlled by the Board of Directors, and no shareholder will have the power to ensure the election of a majority of board members. The Board will be composed of eight members, three of whom will be appointed by the CBC, two by Télé-Québec and one by each of the other three shareholders.

8.

The undertaking, however, expects to enter into a management and operating agreement with the CBC whereby the Corporation would provide technical distribution and broadcasting services as well as services related to research, sales and marketing.

9.

The Commission notes the CBC’s commitment to limit its shareholdings in Télé des Arts to less than 50% and to ensure that the shareholders’ agreement reflects that commitment. The Commission requires the licensee to submit a final copy of the articles of incorporation of the new company, the shareholders’ agreement and the management contract with CBC, as per the licensee’s commitment. The licence will not be granted until the Commission has received these documents. Further, the Commission expects the licensee to fulfil its commitment to implement a cost separation formula for the CBC similar to that of Réseau de l’information (RDI). The Commission reminds the licensee that, as specified in the Specialty Services Regulations, 1990, any change that results in one party acquiring effective control of the undertaking must first be approved by the Commission.
Alliances and partnerships

10.

In PN 1999-187, the Commission indicated that it:
will be receptive to applications from partnerships involving independent producers and Canadian broadcasters, such as between French- or English-language private and public broadcasters, and broadcasters in different categories, to the extent that such partnerships will result in synergistic effects favourable to the financing and broadcast of high-quality Canadian programs. Similarly, the Commission will be receptive to partnerships between Canadian and foreign broadcasters, to the extent that the applicant can demonstrate that such partnerships will facilitate the acquisition of high-quality foreign French-language programs and, conversely, foreign broadcast and international exposure for Canadian programming.

11.

The Commission considers that meeting this objective will be greatly facilitated by the unique public/private partnership proposed by the applicant, and by the roots that some of its partners have in Quebec and other parts of Canada. Moreover, the applicant plans to enter into agreements with other Canadian programming partners, such as the National Arts Centre in Ottawa, the National Film Board, Cinémathèque québécoise and the Ex-Centris complex in Montréal.

12.

In addition to the partnership with Sept ARTE, the applicant has established programming agreements with Télévision suisse romande (TSR), Radio-télévision belge de la communauté française (RTBF), Société nationale de télévision France 2 and Conseil international des radios télévisions d’expression française (CIRTEF). These agreements will foster the broadcast of Canadian programming, including shows, music, theatre, films and documentaries, and information on artists and their works, in the international Francophone community.
Programming

13.

As stated in the Commission’s report and call for applications, the arts service should reflect the unique character of Quebec culture and the needs and circumstances of Francophone communities in other parts of Canada.

14.

Télé des Arts programming should provide a Francophone perspective on a wide range of cultural events that take place across the country. Programs dealing with Francophone communities outside Quebec will not be limited to particular programming blocks, but will cover all types of programming, from the daily cultural magazine to artist portraits, documentaries and major cultural events for broadcast in the evening during prime time.

15.

The applicant proposed a balanced schedule covering a broad range of cultural and artistic themes. The applicant also stated that the synergies among the various Télé des Arts partners will allow it to go much further towards offering high-quality original programming that will complement the programming currently available from other sources. The CBC and Télé-Québec have also confirmed that the presence of Télé des Arts will not in any way reduce the presentation of cultural programming on their respective television channels.

16.

The applicant also considered that Télé des Arts will be, first and foremost, a "first-run service" since 80% of its initial program schedule will be devoted to first-run programs. The applicant stated that on occasion it intends to show exceptional and unique programs that are also broadcast on its partners’ services. The Commission expects the applicant to limit to the extent possible the duplication of CBC, Télé-Québec and Télé des Arts programs. The Commission expects that repeats of programs obtained from the archives of the CBC to be limited to a maximum of 10% of the total programming on Télé des Arts.
Canadian content and expenditures on Canadian programming

17.

The applicant committed to broadcast a 47% level of Canadian content during the broadcast day in its first year of operation, increasing to 55% in the seventh year. During the evening broadcast period, the level of Canadian content will be 45% in year one, increasing to 60% in year 7 (see conditions of licence in the appendix).

18.

Consistent with the approach set out by the Commission in Public Notices CRTC 1992-28, 1993-93 and 1993-174 concerning requirements for Canadian programming expenditures, the licensee is required to spend a minimum of $5,800,000 on the acquisition of and/or investment in Canadian programs in the broadcast year following the first year of operation, as defined in the condition of licence set out in the appendix. Further, in each subsequent broadcast year the licensee shall expend on Canadian programs a minimum of 46% of the previous year's gross revenues derived from the operation of the service.
Independent production

19.

The Commission wishes to ensure that an equitable percentage of the amounts that the applicant committed to devote to independent production is allocated to regional productions, i.e., production from outside Montréal and outside Quebec.

20.

As stated in the appendix, the applicant’s commitment to reinvest all of Télé des Arts profits in independent production, half of which will go to productions outside Montréal, is a condition of licence. The Commission further requires that at least 25% of profits be allocated to productions from outside Montréal, and 25% be invested in production from outside Quebec.

21.

The applicant also made a commitment to allocate a percentage of its independent production expenditures to independent production outside Montréal, without, however, specifying what percentage would be allocated to independent production outside Quebec. The Commission considers that the mandate of an arts service, particularly one that reflects Francophone communities outside Quebec, would be better fulfilled by firming up some of the commitments made by the applicant.

22.

The Commission therefore requires, by condition of licence, that at least 15% of annual budgets for original Canadian production be allocated to programs produced outside Quebec during the first four years of the service’s operation. The Commission also requires, by condition of licence, that this percentage increase to 20% beginning in the fifth year of operation.

23.

Of those amounts, a minimum guaranteed annual amount of $200,000 must be allocated to original independent Canadian production from outside Quebec.

24.

The Commission also requires, by condition of licence, that the licensee provide the Commission, by no later than 31 December of each year, with a report itemizing expenditures on original Canadian programming, including the amounts allocated to independent production a) in Montréal, b) outside Montréal and c) outside Quebec. The reports must also list total expenditures on original production from outside Quebec.

25.

The Commission believes that these additional requirements will help Télé des Arts to better reflect the needs and circumstances of Francophones outside Quebec, consistent with its mandate and in light of the considerable support that the proposed service received from those communities.

26.

Given the ownership structure of the Télé des Arts service, the Commission must also make certain that there are mechanisms available to protect the interests of Canadian independent producers who are not shareholders of Télé des Arts. These producers must have an equitable opportunity to provide programs for the service. In reply to the Commission's concerns in this area, the licensee committed at the hearing to allocate a maximum of 25% of its annual expenditures for the acquisition of broadcast rights for first-run original Canadian programming to programming produced by L'Équipe Spectra or its affiliates. The licensee is required to adhere to this commitment by condition of licence.
The program Quoi de neuf?

27.

In its call for applications, the Commission stated its expectation that the programming of the proposed service not consist primarily of information programs on current events in the arts community or cultural magazine programs, a type of programming that is already very present on French-language television.

28.

The Commission considers that the broadcast of works, events and cultural activities from across Canada should be the trait that distinguishes a national arts service. On this matter, during the public hearing, the Commission expressed its concerns regarding the daily program Quoi de neuf? and its place in the program schedule.

29.

The applicant stated that the program Quoi de neuf? will be different from that which is currently offered on conventional television and that broadcasting the information contained in the program is a key objective of the service. The applicant added that to fulfil its mandate to promote the arts and to artists and to showcase artists across the country, the service needs the anchor provided by an information program.

30.

The Commission recognizes the importance of an information program of this type to promote Francophone culture. However, the Commission is of the opinion that a specialty arts service should devote as much time as possible to actual cultural events.

31.

The Commission notes the commitment made by the applicant at the public hearing that no more than 20% of original broadcast hours (4 p.m. to 1 a.m.) will be devoted to programming from category 1 (News). The Commission, however, considers that the program Quoi de neuf? or any program dealing with information or current events in the arts community falls into category 11 – General entertainment and human interest. At the same time, the Commission wishes to limit the broadcast of information or current events programs on the arts such as Quoi de neuf?

32.

The Commission therefore requires, by condition of licence, that:
  • the licensee not devote more than 20% of its hours of original programming broadcast between 4 p.m. and 1 a.m. to the broadcast of the program Quoi de neuf? or to any program consisting of information or current events in the arts community;
  • the program Quoi de neuf? or any program consisting of information or current events in the arts community not be broadcast in peak time (between 7 p.m. and 11 p.m.); and
  • annual expenditures for the program Quoi de neuf? or any program consisting of information or current events in the arts community not exceed 25% of the annual budget for Canadian programming.
These three conditions do not apply to any other type of category 11 programming.

33.

The Commission also wishes to ensure that information or current events programs on the arts offered by Télé des Arts reflect the realities of Francophone communities outside Quebec and regions of Quebec outside Montréal. The Commission therefore expects one third (33%) of the time allocated per broadcast week to this type of program to address artistic events and news originating from regions of Quebec outside of Montréal, and one third (33%) to reflect the regions outside Quebec.
Mode of distribution

34.

Modes of distribution for a national French-language arts service were the subject of numerous discussions at the public hearing. This aspect is of crucial importance for all Francophone markets. In its report to the government, the Commission stated that the viability of the service would depend in large part on it being distributed in Francophone markets, the majority of which are in Quebec, and on its pricing. The Commission considers that widespread distribution of the service will provide the licensee with the resources necessary to offer programming of the quality necessary to ensure the success of an arts service.

35.

In their initial applications, both applicants proposed distribution arrangements that fit within the parameters originally defined by the Commission in its 1 February 2000 call for applications. The Commission expected the service to be offered on a discretionary basis only, within an existing tier of specialty services offered by Class 1 and Class 2 distribution undertakings in Francophone markets.

36.

In its intervention, Vidéotron expressed a clear preference for purely discretionary distribution in digital mode only. However, Vidéotron said that if the Commission believes that the service is in the public interest and meets the cultural objectives of the Act, the service should be distributed on a mandatory basis, as part of the basic service. According to the intervener, distribution as part of the basic service would have the advantage of making the service accessible to the greatest possible number of subscribers while achieving a balance between the objectives of ensuring viability and maintaining affordability.

37.

Moreover, the cost to subscribers was a major concern raised by several interveners, including the CCTA, Vidéotron, Look and Action Réseau Consommateur.

38.

At the public hearing, the Commission examined with applicants other scenarios for distribution of the service in Francophone markets, including the possibility of mandatory distribution as part of the basic service or as part of a high-penetration discretionary tier. The arguments for distribution as part of the basic service included:
  • wider distribution of an arts service is in the public interest;
  • the specific needs of Francophones and different operating conditions in French-language markets; and
  • changes in the distribution market environment.

39.

With respect to mandatory distribution as part of the basic service, the Commission stated in its report that no Canadian specialty service, whether public, private or a combination of the two, has ever been granted such status. It added that it has never departed from this policy, and was satisfied that that policy remained justified. The arguments presented at the public hearing by the applicants and some inteveners have not convinced the Commission to depart from this policy in the case of Télé des Arts. The service must therefore be offered to subscribers in Francophone markets as part of an existing discretionary tier.

40.

However, the Commission considers that, in the circumstances, a valid alternative is mandatory distribution of Télé des Arts as part of a high-penetration tier in Francophone markets. The Commission notes that according to the interventions of the CCTA and Vidéotron, and statements made at the hearing by the representative for Astral Média, which operates several French-language specialty services, if the Commission licensed one of the two proposed services, a special approach to the distribution of the service could prove necessary to promote its quality and viability.

41.

The Commission specifies that the Télé des Arts service must be distributed in analog mode in Francophone markets on a mandatory basis, on the existing discretionary tier with the highest penetration by Class 1 cable distribution undertakings. This rule applies also to Class 2 distribution undertakings that choose to distribute this service. Subscribers to a multi-point distribution system (MDS) in a Francophone market who choose to subscribe, in addition to the basic service, to three or more French-language specialty services, must also receive Télé des Arts on a mandatory basis. The revised distribution and linkage requirements are set out in Public Notice CRTC 2000-129 issued today entitled Distribution and linkage requirements for Class 1 and Class 2 licensees.

42.

With a broader pool of potential subscribers, the applicant confirmed that it would be able to satisfy more stringent requirements, particularly with respect to Canadian content and expenditures on Canadian programming, and to reduce the proposed wholesale rates.

43.

With respect to rates, the applicant proposed in its application a wholesale rate for distribution in Francophone markets calculated using a scale based on penetration. According to the scale, with 60% penetration, the monthly wholesale rate would be $0.80 per subscriber. However, the Commission notes that the higher penetration tier offered by the largest cable distribution undertakings in the Francophone market has a much higher penetration rate. In the case of Vidéotron in particular, average penetration on this tier would be over 70% and, in some sectors, close to 80%, according to statements by its representative at the hearing.

44.

In opting for distribution of Télé des Arts as part of an existing tier with the highest penetration, the Commission is contributing to the service’s viability and quality by guaranteeing it a sufficient subscriber base. In addition, this expanded distribution allows for the maintenance of a reasonable rate for subscribers.

45.

The Commission is of the opinion that the mandatory distribution it has authorized will provide an average annual penetration rate that is significantly higher than that forecast by the applicant. Taking into account the various benefits of this distribution mode, particularly with respect to revenue, marketing and promotion, the Commission has set, as a condition of licence, a monthly wholesale rate of $0.55 per subscriber which the licensee can charge to distribution undertakings in the Francophone market, with the exception of a maximum three-month free trial period.

46.

In setting this rate, the Commission took into account the applicant’s business plan and annual revenue forecasts. The Commission is confident that the applicant will have the resources required to offer a high-quality service, while meeting its commitments and the requirements set out in this decision. The Commission considers this service to be important to the cultural life of Francophones. It therefore requires distribution undertakings to contribute to its success by offering this service to their subscribers at an affordable cost.
Distribution in Anglophone markets

47.

The Commission authorizes the distribution of the Télé des Arts service in Anglophone markets via modified dual status, i.e., on a discretionary basis unless the distribution undertaking and the programming service operator agree to distribute it as part of the basic service.

48.

The Commission has provided for certain pricing incentives to encourage distributors to offer the Télé des Arts service in Anglophone markets. Some distribution undertakings may offer the service in analog mode in some of these markets. Given that the applicant did not forecast any revenues from Anglophone markets in its financial projections, and stated at the hearing that it could offer the service free of charge under those circumstances, the Commission has made this a condition of licence. With respect to digital distribution by cable and MDS undertakings, the applicant proposed a maximum wholesale incentive rate of $0.25 per subscriber per month, which the Commission has also established as a condition of licence.

49.

The Commission also wishes to ensure that analog distribution of the Télé des Arts service in Anglophone markets increases the total offering of French-language services in those markets. The Commission expects that the French-language services already offered in analog mode will not be displaced by the addition of Télé des Arts.

50.

Given that the primary mandate of the Télé des Arts service is to reflect not only Quebec culture but also the needs and circumstances of Francophone communities in other parts of Canada, the Commission considered other means of making this service available to the greatest possible number of Francophones outside Quebec. The Commission wishes to examine this issue within the context of its call for comments on the draft policy on increasing the availability of specialty services in the minority official language for cable subscribers in Canada and within the context of its consultation process on Francophone services outside Quebec (Public Notices CRTC 2000-38 and 2000-74).

51.

As explained in Public Notice CRTC 2000-74-2 dated today, the Commission is inviting comments on an additional question relating to the Télé des Arts service, as part of the aforementioned processes. That question addresses its preliminary opinion that Télé des Arts should be granted priority status on a digital basis by the cable distribution undertakings to which the policy applies in order to comply with the requirements that would arise from the policy that is finally adopted. Priority status would ensure that, should it be necessary, Télé des Arts will be part of the minimum offering of Francophone services in markets that would be targeted by the policy, but without increasing the minimum number required.
Distribution by DTH undertakings

52.

The Commission notes that pursuant to the Broadcasting Distribution Regulations, DTH distribution undertakings that broadcast nationally in digital mode are required to distribute all licensed Canadian specialty services, both French- and English-language. As well, DTH distribution undertakings must also include the Télé des Arts service in their package of discretionary services containing the greatest number of French-language services. The Commission requires Télé des Arts, by condition of licence, to offer its service to DTH distribution undertakings at a maximum wholesale rate of $0.55 per subscriber per month. Public Notice CRTC 2000-128, entitled Linkage requirements for direct-to-home (DTH) satellite distribution undertakings  and published today implements this new rule.
Authority

53.

Subject to the requirements set out in this decision, the Commission will issue a licence expiring 31 August 2007. The licence will be subject to the conditions specified in this decision and in the licence to be issued.

54.

The licence will not be issued and will not take effect until the undertaking commences operations. The licensee must so advise the Commission in writing. If the undertaking cannot be put into operation within 12 months, the Commission may extend that deadline if the licensee so requests in writing before the expiry of the 12-month period or any extension granted.

55.

This authority will only be effective and the Commission will only issue the licence at such time as it receives documentation establishing that an eligible Canadian corporation has been incorporated in accordance with the application in all material respects and that this corporation may be issued a licence.
Other matters
Cultural diversity

56.

In Public Notice CRTC 1999-97 entitled Building on success - A policy framework for Canadian television, 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 diversity.
Employment equity

57.

In Public Notice CRTC 1992-59 dated 1 September 1992 and entitled Implementation of an employment equity policy, the Commission announced that the employment equity practices of broadcasters would be subject to examination by the Commission. In this regard, the Commission encourages the licensee to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources.
Service to the hearing impaired

58.

In the television policy, the Commission stated that the time has come to require French-language broadcasters to provide more closed captioning for the hearing impaired. In its application, the applicant proposed that 26% of its program schedule be closed captioned during the first year of operations, rising to 53% by the fifth year. The applicant stated that a working group was created last winter, which included representatives of the CBC, Télé-Québec and most of the specialty services. This working group operates jointly with the Regroupement québécois pour le sous-titrage to develop technologies that are more affordable for all French-language broadcasters. The Commission expects the licensee to broadcast, at the very least, the proposed closed captioning percentages.
Interventions

59.

The Commission acknowledges the numerous interventions submitted concerning these two applications and has considered all of them in reaching its decision.
Related documents
• Order in Council P.C. 1999-1454
• Public Notice CRTC 1999-146 – Call for comments concerning Order in Council P.C. 1999-1454
• Public Notice CRTC 1999-187 – Report on the establishment of a national French-language arts television service
• Public Notice CRTC 2000-18 – Call for applications for a licence to provide a French-language specialty arts service
• Public Notice CRTC 2000-38 – Increasing the availability of minority official language specialty services to cable subscribers across Canada – Call for comments on a proposed policy
• Public Notice CRTC 2000-38-1 – Suspension of process with respect too minority official language specialty services
• Order in Council P.C. 2000-511
• Public Notice CRTC 2000-74 – Call for comments concerning Order in Council P.C. 2000-511 and Public Notice CRTC 2000-38
•  Public Notice CRTC 2000-74-1 – Extension of deadline for the submission of comments with regard to Public Notice CRTC 2000-74
• Public Notice CRTC 2000-74-1 – Availability of French-language specialty services outside Québec - Additional question relating to Télé des Arts service
• Public Notice CRTC 2000-115 – Public consultations on French-language broadcasting services available to Francophones outside Quebec
• Public Notice CRTC 2000-128 – Linkage requirements for direct-to-home (DTH) satellite distribution undertakings
• Public Notice CRTC 2000-129   – Distribution and linkage requirements for Class 1 and Class 2 licensees
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: http://www.crtc.gc.ca

 Appendix to Decision CRTC 2000-386

1. a) The licensee shall provide a national French-language arts specialty television service that reflects the unique character of Quebec culture and the needs and circumstances of French-language communities in other parts of Canada.
b) At least 90% of the programming must be drawn exclusively from the following categories, as set out in section 6 of Schedule I of the Specialty Services Regulations, 1990:
1) News
2(a) Analysis and interpretation
2(b) Long-form documentary
5(b) Informal education
7(a) Ongoing dramatic series
7(c) Specials, mini-series and made-for-TV feature films
7(d) Theatrical feature films aired on TV
7(e) Animated television programs and films
7(f) Programs of comedy sketches, improvisation unscripted works and stand-up comedy
7(g) Other drama
8(a) Music and dance other than music video programs or clips
8(b) Music video clips
11) General entertainment and human interest
12) Interstitials
13) Public service announcements
c) The licensee shall not devote more than 20% of its hours of original programming between 4 p.m. and 1 a.m. to the broadcast of the program Quoi de neuf? or to any program of information or current events program on the arts;
d) The program Quoi de neuf? or any program consisting of information or current events in the arts community shall not be broadcast in peak time (between 7 p.m. and 11 p.m.);
e) Annual expenditures for the program Quoi de neuf? or any program consisting of information or current events in the arts community shall not exceed 25% of the annual budget for Canadian programming.
2. a) In each broadcast year, the licensee shall devote to the broadcast of Canadian programs not less than the following percentages of each broadcast day:

Year

Percentage

1 and 2
3 and 4
5
6 and 7 		47%
50%
52%
55%
b) In each broadcast year, the licensee shall devote to the broadcast of Canadian programs not less than the following percentages of the evening broadcast period:

Year

Percentage

1 and 2
3 and 4
5 and 6
7 		45%
50%
55%
60%
3. a) For the purpose of this condition, "expend on Canadian programs" shall have the same meaning as that set out in Public Notices CRTC 1993-93 and 1993-174, dated 22 June and 10 December 1993, respectively.
b) In the broadcast year following the first year of operation, the licensee shall expend on Canadian programs not less than $5,800,000.
c) In each subsequent broadcast year, the licensee shall expend on Canadian programs not less than 46% of the previous broadcast year’s gross revenues derived from the operation of the service.
d) In the broadcast year following its first year of operation, and in each subsequent broadcast year, excluding the final year, the licensee may expend an amount on Canadian programs that is up to five percent (5%) less than the minimum required expenditure for that year set out in, or calculated in accordance with, this condition; in such case, the licensee shall expend in the next broadcast year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underspending.
e) In the broadcast year following the first year of operation, and in each subsequent broadcast year, where the licensee expends an amount on Canadian programs that is greater than the minimum required expenditure for that year set out in or calculated in accordance with this condition, the licensee may deduct:
i) from the minimum required expenditure for the next broadcast year of the licence term, an amount not exceeding the amount of the previous broadcast year's overspending; and
ii) from the minimum required expenditure for any subsequent broadcast year of the licence term, an amount not exceeding the difference between the overexpenditure and any amount deducted under paragraph i) above.
iii) Notwithstanding the above, during the licence term, the licensee shall expend on Canadian programs, at a minimum, the total of the minimum required expenditures set out in or calculated in accordance with the licensee's conditions of licence.
4. a) All (100%) of Télé des Arts profits shall be allocated to independent production, at least 25% of which shall be allocated to productions outside Montréal and at least 25% of which shall be allocated to productions outside Quebec.
b) Over the first four years of the operation of the service, at least 15% of the annual budgets for original Canadian production shall be expended on programs produced outside Quebec. That percentage shall increase to 20% beginning in the fifth year of operation. Of those amounts, an annual guaranteed amount of $200,000 shall be allocated to the production of original independent Canadian programs outside Quebec.
c) The licensee shall submit, no later than 31 December of each year, a report itemizing expenditures on original Canadian programming, including amounts allocated to independent production i) in Montréal, ii) in regions outside Montréal, and iii) outside Quebec, as well as total expenditures for original production outside Quebec.
5. The licensee shall not allocate more than 25% of its annual expenditures for the acquisition of broadcast rights for original first-run Canadian programming to programming produced by L'Équipe Spectra and its subsidiaries.
6. a) The licensee shall not broadcast more than 12 minutes of advertising material during each clock hour.
b) Where a program occupies time in two or more consecutive clock hours, the licensee may exceed the maximum number of minutes of advertising material allowed in those clock hours if the average number of minutes of advertising material in the clock hours occupied by the program does not exceed the maximum number of minutes that would otherwise be allowed per clock hour.
c) The licensee shall not distribute commercial messages during any program that has as its target audience children up to 5 years of age.
d) The licensee shall not distribute any paid advertising material other than national paid advertising.
e) 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.
7. a) The licensee shall charge each cable and MDS distribution undertaking distributing this service in Francophone markets a monthly wholesale rate of $0.55 per subscriber, excluding a maximum three-month free trial period.
b) The licensee shall charge each DTH distribution undertaking distributing this service a monthly wholesale rate of $0.55 per subscriber, excluding the maximum three-month free trial period.
c) The licensee shall charge each cable and MDS distribution undertaking distributing this service a maximum monthly wholesale rate of $0.25 per subscriber, where the service is distributed in Anglophone markets in digital mode.
d) The licensee shall not charge any fee to cable distribution undertakings that distribute Télé des Arts in Anglophone markets in analog mode.
8. The licensee shall adhere to the guidelines on gender portrayal set out in 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.
9. The licensee shall adhere to the provisions of the CAB's Broadcast code for advertising to children, as amended from time to time and approved by the Commission.
10. 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:
"original Canadian program" is defined as a Canadian program that, when first broadcast by the licensee, had not previously been broadcast by any other Canadian broadcasting undertaking.
"broadcast day" means a period of up to 24 consecutive hours, as selected by the licensee.
"broadcast week" means the total number of hours devoted by the licensee to broadcasting during seven consecutive broadcast days beginning on Sunday.
"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.
"first year of operation" shall mean the first broadcast year in which Télé des Arts is in operation for a period exceeding 90 days, excluding any free trial period.
"clock hour" means a period of 60 minutes beginning on each hour and ending immediately prior to the next hour.
"evening broadcast period" means the total time devoted to the broadcast of programs between six o’clock in the afternoon and midnight during the broadcast day.
"national paid advertising" means advertising material that is purchased at a national rate and receives national distribution on the service.
All time periods shall be reckoned according to the eastern time zone.
Note:
The definitions of "Anglophone market" and "Francophone market" are those set out as in section 18 (4) of the Broadcasting Distribution Regulations.
 
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