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ARCHIVED - Decision CRTC 2000-87

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Decision CRTC 2000-87
Ottawa, 24 March 2000
5191987 B.C. Ltd.
Peterborough, Bancroft and Oshawa; Kingston, Brighton, Prescott and Smiths Falls, Ontario
5191989 B.C. Ltd.
Barrie, Cambridge, Collingwood, Guelph, Kingston, Oshawa and Peterborough, Ontario
5191991 B.C. Ltd.
Amqui, Causapscal, Drummondville, Montmagny, Rimouski, Sainte-Marguerite- Marie and St-Jean-sur-Richelieu, Quebec
5191992 B.C. Ltd.
Carleton, Sainte-Marguerite-Marie, Port-Daniel, Chandler, Percé, Gaspé, Rivière-au-Renard, L'Anse-à-Valleau, Cloridorme, Quebec; Kedgwick, Saint-Quentin and Tracadie, New Brunswick
21 February 2000 Public Hearing
in Vancouver
Acquisition of assets

1.

The Commission approvesthe applications by 5191987 B.C. Ltd., 5191989 B.C. Ltd., 5191991 B.C. Ltd. and 5191992 B.C. Ltd. requesting authority to acquire from Power Broadcasting Inc./Diffusion Power inc. (Power) and Télévision de la Baie des Chaleurs inc. ("la Baie") the assets of all radio (including the assets of a French-language radio network) and television programming undertakings located in Ontario, Quebec and New Brunswick and listed in Appendix 1 to this decision. They are also asking for broadcasting licences to continue the operation of these undertakings.

2.

Upon surrender of the current licences, the Commission will issue licences to:

· 5191987 B.C. Ltd. to carry on the television programming undertakings CHEX-TV Peterborough and its transmitter CHEX-TV-1 Bancroft, CHEX-TV-2 Oshawa, and CKWS-TV Kingston and its transmitters at Brighton, Prescott and Smiths Falls;

· 5191989 B.C. Ltd. to carry on the radio programming undertakings located in Ontario and listed in Appendix 1 to this decision;

· 5191991 B.C. Ltd. to carry on the radio programming undertakings and French-language radio network located in Quebec and listed in Appendix 1 to this decision; and

· 5191992 B.C. Ltd to carry on the television programming undertaking CHAU-TV Carleton including its eleven transmitters in Quebec and New Brunswick.

3.

The licences for the radio stations and network will expire on 31 August 2006. They will be subject to the conditions specified in Appendix 2 to this decision and in the licences to be issued.

4.

The licences for the television stations will expire on 31 August 2003, except for CHAU-TV and its transmitters which will expire on 31 August 2005 (the current expiry date). This term will allow the licensees time to prepare licence renewal applications that address the requirements of the new television policy set out in Public Notice CRTC 1999-97 entitled Building on success - A policy framework for Canadian television.

5.

The licences for the television stations will be subject to the conditions specified in the appropriate appendix to this decision and in the licences to be issued.

6.

The applicants are wholly-owned subsidiaries of Corus Entertainment Inc. (Corus), which also owns through its wholly subsidiary, Corus Radio Company, radio stations in Ontario and western Canada. Corus is controlled by Mr. JR Shaw through his direct holdings and a voting trust agreement. Mr. Shaw also controls Shaw Communications Inc., the parent company of the second largest cable operator in Canada, and licensee of a direct-to-home distribution undertaking.

7.

Mr. Paul Desmarais controls both Power and "la Baie" directly and indirectly through Power Corporation of Canada.

8.

The applicants, hereafter referred to as Corus, are purchasing the assets of three television and 11 radio stations in Ontario as well as seven radio stations, including one radio network, and one television station based in Quebec with bordering retransmitting stations in New Brunswick.

9.

Corus stated that consolidation of these broadcasting undertakings will strengthen the services they provide to their respective communities. It contended that the synergies available in a larger group will provide Corus' employees with more career opportunities and will enhance the ability of its broadcasting group to compete in an environment of consolidation of broadcasting undertakings and expanding media choices.

10.

The overall purchase price of this transaction is $107.5 million. Of the total purchase price, $50 million is allocated to the radio assets and $57.5 million to the television assets. In this particular case, the Commission accepts the purchase price as an appropriate value for the purposes of determining the value of the transaction and for the commitments with respect to tangible benefits. Based on the evidence filed
with the applications, the Commission has no concerns with respect to the availability and adequacy of the required financing.
Common ownership

11.

Except for Barrie, Power's Ontario radio stations are located in markets which Corus does not currently serve. Corus already owns one FM radio station in Barrie. As a result of this transaction, Corus will own two FM stations in that city. This application falls within the scope of the Commission's policy on the common ownership of radio stations established in Public Notice CRTC 1998-41 entitled Commercial Radio Policy, 1998. According to this policy, in markets with fewer than eight commercial stations operating in a given language, a licensee may own or control as many as three stations operating in that language, with a maximum of two stations on the AM or FM band.

12.

In evaluating applications that would result in common ownership, the Commission requires applicants to address the issue of diversity of voices. Corus noted that Barrie is located approximately 90 kilometres north of Toronto and has access to a variety of media from Toronto and from Simcoe county. It added that some 20 radio stations reach the Barrie market. The Commission is satisfied that approval of this application will not significantly limit the choice and diversity of news voices in the Barrie market.

13.

Currently, Corus does not own any conventional television station in Ontario or any broadcasting undertaking in Quebec.
Benefits

14.

Corus proposed tangible benefits with a total value of $8.75 million to be implemented over seven years. It confirmed that these benefits are over and above any existing commitments or conditions of licence for each station and the network.
Radio stations and network

15.

Consistent with the requirements of the benefits test outlined in Public Notice CRTC 1998-41, the benefits offered with respect to the radio sector represent the required minimum direct financial contribution to Canadian talent development of $3 million, or 6% of the $50 million value of the transaction for the radio undertakings.

16.

Specifically, Corus will contribute $1,500,000 (3%) to the Music Marketing and Promotion Fund which is to be created. This contribution must be directed to the Canadian Association of Broadcasters which will hold all contributions in trust pending the creation of the fund.

17.

Corus will direct $720,000 to FACTOR and $280,000 to MusicAction. Corus has prorated the proportion between FACTOR and MusicAction based on the percentage of the value of the transaction allocated for each of the Ontario and Quebec group of stations.

18.

Corus will contribute $500,000 (1%) to local initiatives in the form of grants to musical and cultural organizations located in the regions served by the stations that are the subject of this transaction. It will direct the funds to eligible third parties directly involved in the development of Canadian musical and other artistic talent in accordance with Public Notice CRTC 1995-196.
Television undertakings

19.

Consistent with the requirements of the benefits policy outlined in Public Notice 1999-97, Corus will spend $5.75 million in tangible benefits in the television sector over seven years, or 10% of the $57.5 million value of the transaction for the television stations.

20.

Specifically, Corus will contribute $1,000,000 to the Canadian Film Centre towards the establishment of a new digital animated film production studio. This studio will offer advanced training in state-of-the-art animation software for film and new media to students from various institutions in the regions served by the stations.

21.

Corus will also direct $4.25 million to finance special family programs in drama, music and variety (categories 7, 8 and 9) to be exhibited on the CBC's national television networks with second windows available to Country Music Television and YTV. The Commission requires Corus to submit a report, within 60 days of the date of this decision, identifying the name of the existing fund or funds to which it will remit its contributions.

22.

In addition, Corus will contribute $500,000 to Canadian Women in Communications to fund seminars on executive training in the television field.

23.

Corus made a commitment to direct "whenever possible … some of the initiatives to French-language programming." The Commission expects Corus to contribute an equitable portion of the television benefits to the Francophone market commensurate with the value of the transaction allocated for the acquisition of the Quebec television stations.
Employment equity

24.

The Commission notes that Corus is subject to the Employment Equity Act that came into effect on 24 October 1996 (1996 EEA), and therefore files reports concerning employment equity with Human Resources Development Canada. As a result of a consequential amendment to the Broadcasting Act, the Commission no longer has the authority to apply its employment equity policy to any undertaking that is subject to the 1996 EEA.
Interventions

25.

The Canadian Film and Television Production Association filed an intervention supporting these applications on condition that Corus change the nature of its proposed fund for special family drama, music and variety programs. The Association argued that it is not appropriate for the fund to finance programming that is produced by the CBC or Corus, rather than by independent producers. It also maintained that the monies directed to this fund should be incremental to Corus' existing spending requirements for programming.

26.

Corus responded that its licensees have always exceeded their minimum requirements to exhibit original, first-run Canadian programming acquired from independent producers. It also attached a letter from the CBC confirming that at least 50% of programming in the drama, music and variety categories broadcast on its television networks will be independently produced. Corus also confirmed that all monies allocated to the proposed fund will exceed its Canadian programming expenditure requirements. The Commission is satisfied with Corus' response.

27.

The Commission acknowledges the 48 interventions submitted in support of these applications as well as the four letters of comment.
Secretary General
This decision is to be appended to each licence. It is available in alternative format upon request, and may also be viewed at the following Internet site: www.crtc.gc.ca
 

Appendix 1 to Decision CRTC 2000-87 

 
Ontario
 
Television stations

Station and locality

Application No.

CHEX-TV Peterborough and its transmitter at (CHEX-TV-1)

199913033
CHEX-TV-2 Oshawa

199913041
CKWS-TV Kingston and its transmitters at

199913059

Radio stations

Station and locality

Application No.

CIQB-FM Barrie

199912811
CIZN-FM Cambridge

199912986
CKCB-FM Collingwood

199912936
CJOY Guelph

199912944
CIMJ-FM Guelph

199912952

CFFX Kingston

199912960

CFMK-FM Kingston

199912978

CKDO Oshawa

199912994

CKGE-FM Oshawa

199913002

CKRU Peterborough

199913017

CKWF-FM Peterborough

199913025

Quebec and New Brunswick

Station and locality

Application No.

CFEL-FM Montmagny

199913067
CFVM Amqui and its transmitter at

199913075
CFZZ-FM St-Jean-sur-Richelieu

199913083
CJDM-FM Drummondville

199913091
*CFLP Rimouski

199913116
CIKI-FM Rimouski and its transmitter at

199913109
French-language radio network consisting of stations:

199917126

CFLP Rimouski 

CFVM Amqui

CHNC New Carlisle 

CHGM Gaspé

CHRM Matane

CKCN Sept-Îles

*In Notice of Public Hearing CRTC 1999-7, the Commission announced an application by Power to establish a new FM station at Rimouski, which would replace the existing CFLP Rimouski. The decision is still pending.

Television stations

Station and locality

Application No.

CHAU-TV Carleton and its 11 transmitters in Quebec and New Brunswick

199913124
Appendix 2 to Decision CRTC 2000-87

Conditions of licence for the radio stations listed in Appendix 1 to Decision CRTC 2000-87

As indicated in Public Notice CRTC 1999-137, the conditions of licence that apply to all commercial radio stations appear only on the licence form. The conditions set out below are in addition to the standard conditions of licence shown on the licence itself.

CFFZ-FM St. Richelieu

The licensee must make an annual payment of $400 to MusicAction.

CIKI-FM Rimouski

The licensee shall not solicit local advertising in the Baie-Comeau market and the surrounding areas served by local stations.

CJOY Guelph, CFFX Kingston and CKRU Peterborough

The licensee shall, as an exception to the percentage of Canadian musical selections set out in sections 2.2(8) and 2.2(9) of the Radio Regulations, 1986, in any broadcast week where at least 90% of musical selections from content category 2 that it broadcasts are selections released before 1 January 1981

in that broadcast week, devote 30% or more of its musical selections from content category 2 to Canadian selections broadcast in their entirety; and

between 6 a.m. and 6 p.m., in the period beginning on Monday of that week and ending on Friday of the same broadcast week, devote 30% or more of its musical selections from content category 2 to Canadian selections broadcast in their entirety.

For purposes of this condition, the terms "broadcast week", "content category" and "musical selection" shall have the meaning set out in section 2 of the Radio Regulations, 1986.

The Commission reminds the licensee that it must specify, on music lists provided to the Commission, the year of release for all musical selections broadcast.

Related CRTC documents

• Public Notice CRTC 1999-137 – New licence form for commercial radio stations

• Decision CRTC 99-49 – Flexibility to broadcast a lower level of Canadian popular music for "oldies" radio stations

• Decision CRTC 98-390 – Licence renewal for CFZZ-FM

• Decision CRTC 96-468 - Licence renewal for CIKI-FM and its transmitter

Appendix 3 to Decision CRTC 2000-87

Conditions of licence for CHEX-TV Peterborough and its transmitter CHEX-TV-1 Bancroft

1. The licensee shall operate this undertaking as an affiliate of the English-language television network operated by the Canadian Broadcasting Corporation.

2. 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. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC).

3. 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. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC.

4. The licensee must 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.

Related CRTC document

• Decision CRTC 95-109 – Licence renewal for CHEX-TV Peterborough and its transmitter

Appendix 4 to Decision CRTC 2000-87

Conditions of licence for CHEX-TV-2 Oshawa

1. The licensee shall not affiliate or disaffiliate with any network operator without first having obtained the written approval of the Commission.

2. The licensee may broadcast a maximum of 6.5% of the commercial availabilities on the Oshawa undertaking separately from those broadcast on CHEX-TV Peterborough, for each hour of original, station-produced programming it broadcasts exclusively on its Oshawa undertaking each week.

3. 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. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council.

4. 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. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC.

5. The licensee must 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.

Related CRTC document

• Decision CRTC 93-633 – New television programming undertaking

Appendix 5 to Decision CRTC 2000-87

Conditions of licence for CKWS-TV Kingston and its transmitters at Brighton, Prescott and Smiths Falls

1. The licensee shall operate each broadcasting undertaking as an affiliate of the English-language television network operated by the Canadian Broadcasting Corporation.

2. 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. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC).

3. 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. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC.

4. 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.

Related CRTC documents

• Decision CRTC 2000-36 - Six- month renewal

• Decision CRTC 99-121 – Addition of a transmitter at Smiths Falls to broadcast the programs of CKWS-TV Kingston

• Decision CRTC 95-104 - Licence renewal for CKWS-TV Kingston, CKWS-TV-1 Brighton and CKWS-TV-2 Prescott

Appendix 6 to Decision CRTC 2000-87

Conditions of licence for CHAU-TV Carleton and its transmitters at Sainte-Marguerite-Marie, Port-Daniel, Chandler, Percé, Gaspé, Rivière-au Renard, L'Anse-à-Valleau, Cloridorme, Quebec; Kedgwick, Saint-Quentin and Tracadie, New Brunswick

1. 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. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC).

2.. 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. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC.

3. 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.

Related CRTC document

• Decision CRTC 98-117 – Licence renewal for CHAU-TV and its transmitters

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