ARCHIVED - Decision CRTC 2000-77
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Decision CRTC 2000-77 |
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| Ottawa, 20 March 2000 | ||
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Regina Cablevision Co-operative Regina, Saskatchewan – 199905428 |
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Application processed by Public Notice CRTC 1999-171 Dated 21 October 1999 |
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| Summary | ||
| The Commission, by majority vote, approves the application by Regina Cablevision Co-operative (Cable Regina) for relief from the requirements of section 29 of the Broadcasting Distribution Regulations (the regulations). | ||
| The Commission considers that the not-for-profit nature of the undertaking and the potential negative effect that application of section 29 of the regulations could have on community programming in Regina, taken together, are enough to warrant an exception to the regulations. | ||
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Cable Regina will be able to direct $1.2 million annually to its community channel without any additional contributions to production funds until its annual revenues exceed $24 million. |
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| The requirements of section 29 | ||
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Section 29 of the regulations provides that Class 1 broadcasting distribution undertakings (BDUs) must contribute at least 5% of their gross revenues derived from broadcasting activities to Canadian programming, unless a condition of licence provides otherwise. BDUs may use a portion of this contribution to support local expression, such as the community channel, if they elect to provide such a service. The balance of the 5% contribution must be paid to funds that support the production of Canadian programming. The specific split between the amount of money that supports local expression and the amount of money to be directed to production funds varies according to the class of the undertaking and the number of subscribers. | |
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In this case, Cable Regina operates a Class 1 cable system with more than 20,000 but fewer than 60,000 subscribers. Pursuant to section 29 of the regulations, Cable Regina must, for the broadcast year ending 31 August 2000 and each broadcast year thereafter, contribute to funds that support the production of Canadian programming not less than the greater of: |
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Accordingly, if Cable Regina elects to operate a community channel, it may for the broadcast year ending 31 August 2000, and for each year thereafter, contribute to local expression up to 2% of gross revenues derived from broadcasting activities from the total 5% contribution it would otherwise be required to make to Canadian production funds. In such a case, it must contribute a minimum of 3% of such revenues to funds supporting the production of Canadian programming. | |
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In Public Notice CRTC 1997-150, which was issued with the revised regulations, the Commission stated that it would allow exceptions to section 29 of the regulations on a case-by-case basis related to the special circumstances of a licensee’s operations. The regulations provide that such exceptions may be granted by condition of licence. | |
| The applicant’s position | ||
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The applicant considered that it should be allowed to contribute the greater of $1.2 million per year or 2% of gross revenues from broadcasting activities to local expression on its community channel, rather than contribute in accordance with the funding formula set out in the regulations. It considered that this would allow Cable Regina to continue funding community programming at a level similar to that which it has provided in the past. | |
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In support of its application, Cable Regina noted that, unlike most cable systems, it is operated on a not-for-profit basis. As such, it strives to maintain low basic rates for its subscribers while still offering a high-quality community channel. | |
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The applicant indicated that the over-the-air television stations serving Regina have reduced their local programming. Cable Regina considers that its community channel is now the principal source of local programming in the city and thus provides an important service. | |
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The applicant considers, however, that the percentage of gross revenues that it is permitted to allocate to the community channel before making payments to production funds is too low, and would result in a significant reduction in resources available for community programming. Cable Regina is of the view that it would not be able to maintain adequate support for local expression and, at the same time, contribute the required sums to Canadian production funds. | |
| The Commission’s decision | ||
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Section 3(1)(e) of the Broadcasting Act (the Act) stipulates that "each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming." The regulations provide that all distributors should contribute a minimum of 5% of their gross annual revenues derived from broadcasting activities to achieve this fundamental objective, unless a condition of licence provides otherwise. | |
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In 1997, the Commission explored, during an extensive public process that resulted in the adoption of the regulations, the appropriate split between the amount of money that may be allocated to local expression and money that would be contributed to production funds to support Canadian programming. | |
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The Commission appreciates the important service that community channels provide, especially in areas where the amount or type of local television programming is limited. That is why section 29 of the regulations allows smaller cable systems to reduce their contributions to production funds if they operate community channels. |
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The Commission further notes comments in a number of interventions supporting the application that addressed the importance and excellence of Cable Regina’s community channel. Some 120 submissions were received from groups addressing health, sports, cultural and social issues. They were concerned that the community channel's coverage of local issues, as well as the help the channel provides to local groups with respect to promotion and fund raising , might be lost. | |
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The Commission, however, continues to believe that contributions by BDUs to independent production funds provide essential support for the production of Canadian programming. Such support is necessary if Canadian programming is to continue to have a strong presence in a more competitive broadcasting environment. The Commission considers that subscribers will benefit from higher quality Canadian programming on the services offered by BDUs as a result of these contributions. It therefore wants to ensure that production funds receive broad support from BDUs. | |
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On the other hand, the Commission recognizes that Cable Regina is different from most cable systems in that it is operated by a not-for-profit organization rather than on a for profit basis. As such, this system is highly oriented to the community it serves and also strives to keep its rates at a low level. The Commission is of the view that failure to grant the licensee's request could, in the circumstances of Cable Regina, have a significant negative effect on the amount and quality of community programming available. | |
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The Commission therefore considers that the not-for-profit nature of the undertaking, and the potential negative effect that application of section 29 of the regulations could have on community programming in Regina, taken together, are enough to warrant an exception to the regulations. Therefore, the Commission, by majority vote, approves the application and amends the licence for Cable Regina by adding the following condition of licence: | |
| It is a condition of licence that the licensee make a contribution to Canadian programming, for the broadcast year ending 31 August 2000, and in each broadcast year thereafter, of an amount not less than 5% of its gross revenues derived from broadcasting activities. This contribution may be reduced by the amount spent on local expression in the form of its community channel to a maximum of the greater of $1.2 million or 2% of gross revenues derived from broadcasting activities for the year in question. | ||
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This condition will allow Cable Regina to direct $1.2 million annually to local expression without any additional contributions to production funds until its annual revenues exceed $24 million. |
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Related CRTC document
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Secretary General |
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This decision is to be appended to the licence. It is available in alternative format upon request, and may also be viewed at the following Internet site: www.crtc.gc.ca
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