ARCHIVED - Decision CRTC 2000-772

Decision CRTC 2000-772

Ottawa, 21 December 2000

Rogers Broadcasting Limited
Toronto, Ottawa and London, Ontario
- 200003898

4 July 2000 Public Hearing
in Toronto

Licence renewal for ethnic television station CFMT-TV

The Commission renews, from 1 March 2001 to 31 August 2007, the licence for CFMT-TV Toronto and its rebroadcasting transmitters at Ottawa and London. The licence is subject to a number of conditions, most of which are carried over unchanged from the current licence term. The one modification of substance is a 5% increase, phased in over five years, in the required levels of Canadian content.

Specifically, the minimum amount of Canadian content to be aired during the broadcast day, and the amount to be broadcast between the hours of 6 p.m. and midnight, will increase by 1% per year. The current minimums of 50% and 40%, respectively, will thus increase to 51% and 41% in the 2001/2002 broadcast year, rising to 55% and 45% in the broadcast year beginning 1 September 2005.

The Commission notes that the minimum levels of Canadian content that are to be achieved in 2005/2006, while higher than those specified in the current licence, fall 5% below the minimum levels of 60% and 50% called for by the Commission's 1999 ethnic broadcasting policy and specified in the regulations. On balance, the Commission is satisfied that the new Canadian content levels are reasonable, taking into consideration the licensee's commitments, the economic circumstances of the market it serves and the availability of funds to support ethnic television production.

The terms and conditions of licence are set out in the appendix to this decision.

Background

CFMT-TV is licensed as an ethnic television station. As such, at least 60% of its schedule must be devoted to ethnic programming, and at least 50% of its schedule must consist of third-language programming. Under the Commission's 1999 ethnic broadcasting policy, third-language programming is programming in languages other than English, French or an Aboriginal language. An ethnic program is defined as one, in any language, "that is specifically directed to any culturally or racially distinct group other than one that is Aboriginal Canadian or from France or the British Isles."

In addition, by conditions of licence, CFMT-TV is required to broadcast, on a monthly basis, ethnic programs directed to not less than eighteen distinct ethnic groups monthly; and in not less than fifteen different languages.

The last licence renewal hearing for CFMT-TV was in 1991. Decision CRTC 92-141 issued following that hearing renewed the licence for a full seven-year term. More recently, in January 1999 and in August 2000, the Commission accorded CFMT-TV successive administrative licence renewals of one year and of six months, respectively. The first was to enable the Commission to consider the station's renewal following completion, later in 1999, of its ethnic broadcasting policy review. The second short-term renewal was to allow the Commission sufficient time to complete its deliberations concerning the present application. The Toronto hearing in July of this year was thus the Commission's first opportunity in almost a decade to consider the licensee's overall performance.

Within the first eleven months of the licence issued in 1992, the licensee had sought and received authority to establish new transmitters of CFMT-TV at London and Ottawa. The London and Ottawa transmitters increased CFMT-TV's potential audience by almost 35%, making the service available to approximately 70% of all Ontario residents, and enhancing the station's attractiveness as a vehicle for national and regional advertising. The licensee's revenue-earning potential was further increased as a consequence of a 1995 Commission decision authorizing CFMT-TV to broadcast infomercials during the broadcast day.

At the Toronto hearing, the Commission examined with the licensee the degree to which the various authorizations noted above may have contributed to CFMT-TV's improved financial health in recent years. The hearing was also an occasion for the Commission to assess the continuing appropriateness of the current conditions of licence, taking into account the licensee's resources, its capacity to contribute to the Canadian broadcasting system, and, in particular, the stipulation contained in the 1999 ethnic broadcasting policy that ethnic stations should broadcast "the same minimum Canadian content levels as non-ethnic private television stations (60% Canadian content overall, 50% during the evening broadcast period)".

The Commission's deliberations

Past performance

Over the course of the past licence term, the Commission has found CFMT-TV to have consistently met or exceeded the requirements of its licence terms and conditions. Interventions were filed with respect to the current renewal application expressing the views of hundreds of Ontario residents, and representing a comprehensive sampling of the many ethnocultural communities served by CFMT-TV. These comments were overwhelmingly complimentary of the licensee's past performance. The Commission notes the comments and concerns contained in the interventions on file, four in number, that were not in support of the applicant, and is satisfied by the licensee's responses.

The ethnic broadcasting policy announced in Public Notice CRTC 1999-117 emphasizes the importance of the role played by ethnic stations in serving local communities. The Commission notes the comments contained in many of the interventions underscoring the vital contribution made by CFMT-TV in supporting the activities of ethnocultural communities in the areas served by the licensee. Others noted the balance found in CFMT-TV's news coverage, across a range of languages, and including coverage of events in the Ottawa area.

Overall, the Commission considers that the licensee's efforts and initiatives to provide local reflection in its Canadian programming have been very effective. Much of this programming is the product of independent producers in the Toronto area. The Commission commends the licensee on such productions as the anti-racist program The Courage to Stand. It also notes CFMT-TV's plans for a cross-cultural talk show program in English. The Commission notes that, in its ethnic broadcasting policy, it stated that ethnic programming could include cross-cultural programming provided that it is specifically directed to any culturally or racially distinct group other than one that is Aboriginal Canadian or from France or the British Isles. The Commission encourages the licensee to pursue the development of this and other "bridge" programs devoted to linking different ethnocultural communities with each other and with other elements of Canadian society. The Commission also encourages the licensee to provide greater resources to the promotion of its ethnic programming.

New licence term; increased Canadian content requirements

CFMT-TV's financial performance has seen considerable improvement in recent years. At present, it is the only profitable, over-the-air ethnic television station in Canada. The licensee claimed that it was unable to quantify the financial impact attributable to the establishment of the transmitters of CFMT-TV at Ottawa and London. In response to questioning, however, the licensee acknowledged that these transmitters have clearly helped increase CFMT-TV's attractiveness among national advertisers. As for the coverage they afford CFMT-TV in Ontario, the licensee stated that the additional transmitters place the station ".on an even footing with Global and CITY and CTV and CHUM and OnTV". Although CFMT-TV raised the possibility that its current financial performance might later be revealed as an anomaly, the Commission notes that the licensee's projections are for continued financial health.

Accordingly, the Commission raised with the licensee at the hearing the possibility of increasing, by as much as 10%, the existing condition of licence requirements for the broadcasting of Canadian content and/or ethnic programming, whether over the broadcast day, during the evening broadcast period, or both.

At the hearing, the licensee stated that its improved financial performance is due largely to the strong audience ratings earned last year by three popular U.S syndicated comedy programs broadcast during the early evening hours before 8 p.m. The licensee suggested that the economics of the station's operation are "pretty simple". While it earns a modest profit on the ethnic programming acquired outside of Canada, its Canadian-produced ethnic programming, taken as a block, loses money. The licensee stated that the station pursues an economic strategy in which the comedies mentioned above, and the other U.S.-produced English-language programs acquired by CFMT-TV, serve as ".the engine that pulls the train. [They provide] the necessary financial resources to ensure that we have the highest quality, most competitive Canadian ethnic programming".

The losses routinely incurred by the station on its Canadian-produced programming are understandable. Although the language used in a program has little or no influence on the cost of its production, the audiences attracted to individual ethnic programs on CFMT-TV are often quite small. More specifically, while the populations of the various ethnocultural communities served by CFMT-TV, combined, constitute a significant number, the audience for an individual ethnic program targeted to a single group can often be too small to be measured by most advertisers, making it difficult for the station to sell advertising time.

The licensee indicated that increases in the required amount of Canadian content or of ethnic programming, especially by the 10% levels contemplated in the Commission's questioning at the hearing, could seriously jeopardize the continued effectiveness of its economic strategy. It indicated that such increases could not be accommodated without removal, at the very least, of the condition specifying the broadcast of a 75% level of ethnic programs between 8 p.m. and 10 p.m.

The Commission has taken all of the above into consideration in reaching its decision. The Commission has also taken into account the fact that the station's improved financial performance is an achievement that has come about despite the fact that CFMT-TV is essentially a stand-alone operation. Unlike most of its conventional television competitors in Ontario, the licensee has few, if any, opportunities to amortize programming costs across a range of exhibition outlets or to benefit from the other potential synergies that such additional outlets would provide. Given the nature and scheduling of much of the programming it acquires, CFMT-TV is also unable to take advantage, to the same extent that its conventional television competitors can, of the Broadcasting Distribution Regulations to request the simultaneous substitution of its programming on cable against the programming contained in out-of-market television signals. Nor can CFMT-TV, in current circumstances, look to any of the Canadian program production funds for assistance in producing third-language programming.

Based on all of the foregoing, the Commission, by majority vote, has decided to require a phased-in increase of 5% in the levels of Canadian content aired by CFMT-TV during the broadcast day and in the hours between 6 p.m. and midnight. The Commission is confident that the licensee can accommodate such an increase, and that it is a reasonable requirement. This determination is based on the licensee's other commitments, the circumstances of the market it serves, the availability of funds to support ethnic television production, and the licensee's financial projections for the new licence term. The Commission also notes that the increased requirements for Canadian content will not result in any decrease in the amount of ethnic programming aired by the station. By the same token, the Commission has determined that to impose greater requirements on the licensee, at this time, could potentially erode the continued effectiveness of the licensee's economic strategy, and the overall quality of the important service it provides to Ontario's diverse ethnic communities.

Related CRTC documents

. Decisions CRTC 99-29 and 2000-302 - Short-term administrative renewals

. Public Notice 1999-117 - Ethnic broadcasting policy

Secretary General

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

Dissenting opinion of Commissioner Andrew Cardozo

Expecting more

Should the Commission and the public be expecting more of CFMT-TV? And if so, what?

In my view more can certainly be expected; and the station should air more third-language programming in prime-time when most viewers watch television.

The other two Commissioners on this hearing agree that more can be expected and instead have required CFMT-TV to increase its Canadian content (Cancon) level over the next five years.

CFMT-TV has had time to solidify its financial position over the last fourteen years since Rogers took it over. In recent years, the Commission has allowed the service to grow in the Greater Toronto Area (GTA) and be re-broadcast in Ottawa and London, which has had a positive impact on its overall advertising revenues. The Commission has also allowed CFMT-TV to air infomercials as an additional revenue source.

We have been repeatedly told that viewers in Toronto want more third-language programming. As such, I believe CFMT-TV should provide more ethnic or third-language programming in prime time, i.e. weekday evenings. I would have required the station to replace a weekday evening hour of English programming each day, with an hour of ethnic programming, and make the reverse replacement during the day time.

CFMT-TV operates under a "60-40" formula, in which 60% of its programming is "ethnic" (for the most part in various third-languages), and 40% is "non-ethnic", i.e. English - understanding that it will be American programming. This is an economic model in which the 40% of American programming will have a wide appeal and therefore be a good revenue earner. While the 60% ethnic programming also earns revenue, the assumption has always been that because programs are targeted to specific cultural, racial or linguistic communities, the resulting revenues will not be as high.

Wrong "increased requirement"

I believe that the majority has chosen the wrong "increased requirement" for this station. CFMT-TV currently has to air 50% Canadian content during the broadcast day. Requiring more Cancon is an important principal that the Commission pursues. However, the particulars of this licence need to be considered. The 50% Cancon requirement is for the programming overall. If one looks at the English and ethnic components as separate services, we see that the Cancon level in the English service is 0% (it is 100% American). As a result the ethnic service has to run the entire station's Cancon quota which works out to 83% Cancon - far more than we expect of any other conventional or generalist service. With this decision, this level goes up to 92%. The small amount of foreign ethnic programming, is in fact very popular - "novellas" in Italian and Portuguese, which are popular especially among senior citizens in these communities. The approach of the majority jeopardizes these programs. It is even more incongruous to demand more Cancon when the Canadian Television Fund will not fund programming in non-official languages. It is worth noting that English and French stations generally have access to the Fund and yet have Cancon levels well below the 83% or 92% level.

These novellas are among the highest earning ethnic programs. The likely effect of the Commission's decision will be to reduce this programming, and as such, the Commission will be institutionalizing the non-profitability of ethnic programming. The very ethnic programs which make most money will be reduced!

My calculations suggest that, a half-hour of prime time ethnic programming per day would cost CFMT-TV about the same as the 5% Cancon required by this decision. I believe that the one hour of prime time is a reasonable request given the station's mandate, its current state and future financial projections.

I would have been more inclined to support the increase in Cancon if it would mean that the English-language component would air Canadian programs as well.

Promotion and branding

That said, there is much that CFMT-TV could be doing differently to make it more profitable - so that in turn it could offer more ethnic programming when most people watch television. CFMT-TV and the Commission have always been working under the assumption that the ethnic programming component has not been a profit generator. The licensee did not present convincing evidence that it has done all it can to maximize the profit in this area. Billboard and other advertising has invariably been of The Simpsons or Frasier rather than Studio Aperto or Chinese Newsline. There does not appear to be a focus on branding its multilingual/multicultural image. Rather, its advertising strategy seems almost shy about its ethnic content. Advertising and branding of a station to the public is inevitably promotion to advertisers.

CFMT-TV is planning a new English language talk show, which if targeted for specific communities can be counted in the 60% of ethnic programming. Surprisingly, at the hearing there were no real plans for how this show would take shape. If one looks at talk shows on CBC Newsworld and TVO for example, one sees good examples of shows that can be cutting-edge, topical, popular, entertaining.and revenue generating. But this approach was not evident at the hearing.

Similarly, as indicated at the hearing, I was struck by the fact that CFMT-TV makes no effort to buy American programming that reflects racial and cultural diversity, which albeit American, would be more closely related to the central mandate of the station. Such programming would also assist in branding a clearer image of what this station is - for viewers and advertisers alike.

Synergies for the public

As the Commission considers increasing the requirements for this station, I would argue that CFMT-TV is not a "stand-alone station" in the strict sense of the term since it is part of a multi-media corporation and is linked to television, cable, community cable television, radio, internet and print media. It is also worth noting that CFMT-TV provides Rogers Communications Inc. (Rogers) with many benefits. It provides the corporation, with an all-important foray into conventional television broadcasting. Further, as Rogers rolls out its Internet strategy, CFMT-TV provides it with a unique multilingual asset, which will be useful to its expansion in an increasingly multilingual Canada, not to mention its international competitive position. The last couple of years have seen a world-wide increase in the non-English participation in the Internet.

Owning CFMT-TV also gives Rogers a multilingual image in the Greater Toronto Area which is becoming increasingly multicultural and multilingual, even while the upper echelons of Rogers do not reflect this diversity.

While broadcasters often trumpet the benefits of synergies and there are undoubtedly synergies in management in Rogers Media Inc., there are regretfully no synergies evident whereby the multicultural ethic would influence the decision making of Rogers Cable Inc. and in turn benefit the public in the area served by CFMT-TV. Besides Telelatino (Italian and Spanish), ethnic specialty services in the GTA get no enlightened treatment. Fairchild (Chinese), Asian Television Network (South Asian) and Odyssey (Greek) are carried as digital stand alone services by Rogers. This means that a subscriber who wants one of these services has to first pay for a digital set top box and then pay an exorbitant amount for the particular service. (In fact Fairchild is only on an analogue tier in the area which Rogers recently purchased from Shaw Cable - in the north east end of the GTA - which had it on a tier.) As such the many ethnic minority subscribers to these specialty services help Rogers Cable Inc. in a big way, i.e. helping the cable company in its drive for the holy grail - digital roll out.

In Ottawa, Rogers does not offer Telelatino at all, despite pleas from the Italian speaking community there; and Black Entertainment Television the only service that provides a constant positive image of Black people, was recently transferred to the more expensive digital tier to make for way for the business channel.

I most certainly recognize the professional standards that Rogers has brought to multilingual television and I applaud their various programming initiatives in social policy areas related to their mandate. I also recognize the work they do to train new volunteers and employees in matters relating to programming in various languages. However, I am not satisfied, given the range of factors mentioned here, that CFMT-TV is doing enough, and I would have preferred that the station air one additional hour per week day of ethnic programming.

For the reasons set out here, I respectfully dissent from my colleagues in the majority.