ARCHIVED - Decision CRTC 2000-418

Decision CRTC 2000-418

See also: 2000-418-1

Ottawa, 27 October 2000

TQS inc.
Montréal, Rimouski and Québec, Quebec
- 200005381 - 200005399 - 200005414

27 June 2000 Public Hearing
Montréal

Renewal of the licences of the Quatre Saisons television network, of CFJP-TV Montréal and its transmitter CJPC-TV Rimouski, as well as of CFAP-TV Québec

 

The Commission renews the licences of the Quatre Saisons television network, of CFJP-TV Montréal and its transmitter CJPC-TV Rimouski, as well as of CFAP-TV Québec, from 1 September 2001 until 31 August 2008.

The Commission approves the application by the licensee to delete its present condition of licence related to Canadian independent production, and substitute therefor a condition under which the licensee must spend on such production at least $4 million each year and at least $40 million over seven years.

Further, the Commission approves the application for deletion of the condition of licence that precludes the chair of the board of directors, president or chief executive officer of Quebecor inc. from sitting on the board of directors of TQS. It imposes a new condition of licence related to representation of Quebecor inc. or Communications Quebecor inc.(CQI) on the licensee's board of directors. In addition, the Commission has reimposed the conditions of licence related to the maintenance of a watchdog committee to review any complaints, and adherence to a code of professional conduct.

Lastly, the Commission relieves the licensee of the requirement of the policy on closed captioning, but nevertheless encourages the licensee to achieve a 90% level of captioning before the expiry of its licence.

The appendix to this decision sets out the conditions applicable to the three licences and the list of commitments made by the licensee for the new licence term.

Issues raised during the hearing

During the public hearing, the Commission discussed a number of issues, including: the profitability of TQS; its use of independent production; representation of Communications Quebecor inc. (CQI) on the board of directors of TQS and the independence of TQS's news services from the other Quebecor companies; the licensee's contribution to priority programming and local reflection; Canadian content; closed captioning for the hearing-impaired; and depiction of violence on television. The Commission's decision is based on the record of the proceeding, which closed on 29 June 2000.

Profitability of TQS

Following the transfer of effective control of TQS to CQI in August 1997 (Decision CRTC 97-482), TQS developed a strategy to make the company profitable. This strategy had four components: a targeted programming approach; more aggressive sales policies; stricter cost control; and a re-launch of the station. As part of this strategy, all new initiatives were to focus on being bold, urban, aggressive and profitable.

The TQS strategy has produced results: the network expects that, by August 2001, it will achieve a positive profit before interest and taxes (PBIT). The licensee also noted at the hearing that staff morale, and the perceptions of the TQS network on the part of viewers, the business community and advertising agencies, had significantly improved. According to the licensee, stricter management of the network will enable TQS to tailor its programming to generate improved audience ratings and more stable advertising revenues. In this regard, it noted at the hearing that the total investment by Quebecor and its partners should be approximately $94 million in 2003.

Independent production

The licensee argued that in order to become profitable it must have access to a broader range of options in selecting its programming suppliers. TQS wishes to conceive and produce more programming itself in order to exercise greater control over program development, production costs and broadcasting rights. For this reason, it has recently established its own production company, Les Productions Point-Final inc.

The licensee has accordingly requested that the Commission delete the condition of licence related to independent production. This condition requires the licensee to allocate at least $8.6 million of its total annual programming expenditures to programming produced by Canadian independent producers, excluding undertakings directly or indirectly affiliated to shareholders of the licensee. Instead, the licensee offered its commitment to ensure that the program contribution of independent production sector [TRANSLATION] "will play a prominent role, within the economic and financial realities of the network". This issue was discussed at length during the hearing.

The licensee explained that any savings resulting from the flexibility it would gain from removal of this condition of licence would be reinvested to improve programming quality, thus generating the additional revenues anticipated in the financial projections.

The Commission notes that, despite its negative financial position, the licensee has implemented all the tangible benefits proposed at the time of the transfer of control of TQS to CQI, as approved in Decision 97-482. This is with the exception of an expenditure of $90 000, which it nonetheless undertook to complete before the expiry of its licence in August 2001. Most of the benefits proposed at the time of that transaction related to independent production.

At the hearing, the licensee quantified its proposed commitment. It stated that it will spend on Canadian independent production at least $4 million each year and at least $40 million over the upcoming seven-year period. The Commission believes that it is essential to ensure that a preponderance of the licensee's programming expenditures continue to be directed to independent Canadian production. This has been one of the most fundamental and defining characteristics of the network since its inception in 1986. The licensee's commitment is thus the subject of a condition of licence set out in the appendix to this decision.

Specifically, in its new licence term, the licensee made a commitment to produce the children's program Le Petit Journal using an independent producer. This will consist of 52 original hour-long segments per year. Each segment will consist of two 30-minute programs broadcast each week, targeting adolescents between the ages of 12 and 17. The licensee also made a commitment to use an independent production company for an original 30-minute program each week targeting children between the ages of 2 and 11.

Participation of CQI in TQS

In approving the transfer of effective control of TQS to CQI in August 1997, the Commission imposed two conditions of licence aimed at ensuring diversity of media voices as well as a clear line of demarcation between the activities of CQI's dailies and weeklies on the one hand, and TQS's newsrooms on the other. The conditions stipulated that:

· the person acting as chair of the board of directors, president or chief executive officer of Quebecor not sit on the board of directors of the licensee; and

· the majority of the members of the licensee's board of directors be composed of persons who do not belong and have never belonged to the board of directors of Quebecor, CQI or any other corporation or undertaking directly or indirectly controlled by Quebecor or CQI.

The licensee stated at the hearing that, owing to the marked trend toward consistently greater convergence in the communications industry, [TRANSLATION] "a company that is an integral part of a media group like Quebecor must be able to rely on the presence on its board of directors of a representative of the custodian of that company's overall vision and strategies for growth." For this reason, in the context of its licence renewal, TQS has applied for replacement of the conditions noted above by a condition that would permit not more than sixty percent (60%) of the members of its board of directors to be persons who are now or have been a member of the board of directors of Quebecor, CQI, or any corporation or business undertaking controlled directly or indirectly by Quebecor or CQI.

The Commission is of the opinion that, given the increasing convergence, Quebecor must be able, on the same basis as its partners in Consortium Quebecor, to rely on the presence of the chairperson of the principal corporate shareholder on the licensee's board of directors. The Commission has therefore decided to permit not more than forty percent (40%) of the members of the licensee's board of directors to be persons who are now or have been a member of the board of directors of Quebecor, CQI, or any corporation or business undertaking controlled directly or indirectly by Quebecor or CQI. A condition of licence to this effect is set out in the appendix to this decision.

In view of the small size of the Quebec market, it is essential that the licensee preserve the existing level of diversity in editorial voices by maintaining the independence and separation of its newsrooms from the Quebecor companies. In this regard, the licensee has made a commitment to continue to adhere to the code of professional conduct and maintain a watchdog committee to review any complaints, as proposed at the time of transfer of control of TQS to CQI in 1997. Conditions of licence requiring adherence to these commitments are set out in the appendix to this decision.

Priority programming and local reflection

In Building on Success - A Policy Framework for Canadian Television, Public Notice CRTC 1999-97 (A Policy Framework), the Commission indicated that, at the time of licence renewal, it would discuss the commitments of TQS with respect to the broadcast of priority programming. Specifically, it proposed to discuss whether the licensee's programming plans give adequate emphasis to the priorities placed on certain categories of Canadian programs.

In this regard, the licensee made a commitment to broadcast at least five hours of priority programming per week during peak viewing hours (7 p.m. to 11 p.m.). It also indicated its intention to produce, in particular, a sequel to the series Lance et compte,as well as other programs comparable to it in style and in potential revenue earning capacity.

Consistent with its Policy Framework, the Commission no longer requires quantitative commitments relating the provision of news programming and local reflection. Nevertheless, it expects applicants to demonstrate in their applications how their local news and other local programming will meet the expectations and reflect the concerns of their local audiences.

In this case, the licensee made a commitment in its renewal application to reflect the local communities it serves by broadcasting at least 14.5 hours of local news per week on CFJP-TV Montréal, and at least 9.5 hours of local news per week on CFAP-TV Québec. The Commission also notes that TQS plans to make greater use of the Québec station and other network affiliates, in co-operation with the network, to provide regional news coverage throughout Quebec. Further, the licensee made a commitment to broadcast on CFJP-TV and CFAP-TV magazines and other programming that reflect the reality of the communities they serve.

Canadian content

Film

Although film will continue to form part of the program schedule during the next licence term, TQS does not plan to continue to offer theme evenings devoted to specific film genres. The licensee made a commitment, however, to gradually increase the portion of its schedule reserved for Canadian films on TQS by 0.5% in each year of the new licence term. This will increase the portion of the schedule set aside for such films from the current 7% level to 10.5% in the final year. The licensee also stated that it would acquire Quebec and Canadian film industry "blockbuster" movies.

Youth programming

With respect to Canadian programming for youth, the licensee reiterated its commitment to produce the program Le Petit Journal and one original program of 30 minutes per week for children aged between 2 and 11 years.

Development of Canadian programs

In its renewal application, the licensee made a commitment to maintain its annual contribution of $120,000 for development of Canadian programs during the new licence term.

Social issues

Closed captioning for the hearing-impaired

Under the Commission's Policy Framework, the requirements applied to French-language broadcasters with respect to the closed captioning of programming should be the same as those that apply to English-language broadcasters. The Commission's policy on closed captioning is set out in Public Notice CRTC 1995-48. Under the policy, French-language stations with revenues of more than $10 million per year must, like English-language stations who earn in excess of this benchmark, caption all local news programming, including live segments.

The policy also requires that licensees provide closed captions for at least 90% of all programming during the broadcast day by the end of their licence terms, in most cases, in 2002. While TQS has slightly exceeded its commitments for the term now ending, the licensee applied to be relieved of this requirement. It argued that English-language broadcasters have a marked advantage, since most of the programming they acquire from the United States is already captioned. This is not necessarily the case for non-Canadian French-language programming.

TQS also noted its financial contribution to the development of new closed captioning technology. It made a commitment to gradually increase the percentage of closed captioned programming from 30% during the first year of its new licence term to 75% in the seventh year. This commitment is qualified by the assumption that the technology that would make attainment of these increases financially viable will have been developed by the third year. The licensee noted that the programming it will acquire from independent producers and the Point-Final production company, as well as its own newscasts, is all closed captioned. The licensee also made a commitment to close caption Le Petit Journal programs as of 1 September 2000.

Le Regroupement québécois pour le sous-titrage inc. intervened at the hearing to request that the Commission oblige the licensee to comply with the requirements of the new Policy Framework on closed captioning. Based on the arguments put forward by the licensee, however, the Commission is satisfied that an exemption from these requirements is warranted in the current circumstances. The Commission therefore relieves the licensee of the requirements of the closed captioning policy. Nonetheless, the Commission strongly encourages it to achieve a 90% level of captioning before expiry of the new licence term.

Depiction of violence on television

In view of complaints received concerning the depiction of violence on TQS, the Commission wished to discuss with the licensee its performance in that regard. During the hearing, the licensee explained that it respects the violence classification system of the Régie du cinéma and the guidelines set out in the Canadian Association of Broadcasters Code. It also noted its financial contribution to the study of violence conducted by the Centre d'études sur les médias, to be released this fall. The licensee added that it has taken steps to ensure compliance with the standards by previewing all films and making cuts if necessary or scheduling their broadcast during late evening hours.

The licensee has also extended to include all network stations its internal policy prohibiting the broadcast during children's programs of promotional messages of other programs that contain or may contain scenes of violence, such as films, Le Grand Journal and Scènes de crime. TQS notes that, with the implementation of these measures, no complaints were received in 1999. A condition of licence relating to depiction of violence on television is set out in the appendix to this decision.

The Commission, in reaching its decision, has considered all of the interventions filed relating to renewal of these licences.

Related CRTC documents

. Public Notice 1999-97 - Building on success - A Policy Framework for Canadian Television

. Decision 97-482 - Transfer of effective control of TQS inc. and renewal of the licences of CFJP-TV Montréal, CFAP-TV Québec and CJPC-TV Rimouski and of the TQS network

. Public Notice 1995-48 - Introduction to decisions renewing the licences of privately-owned English-language television stations

Secretary General

This decision is to be appended to each licence. It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca