ARCHIVED - Decision CRTC 2001-458

Decision CRTC 2001-458

See also: 2001-458-1, 2001-458-2, 2001-458-3, 2001-458-4, 2001-458-5, 2001-458-6, 2001-458-7, 2001-458-8, 2001-458-9, 2001-458-10, 2001-458-11, 2001-458-12, 2001-458-13, 2001-458-14

Ottawa, 2 August 2001

Licence renewals for the television stations controlled by Global

The Commission renews the licences for the television stations controlled by Global for a seven year term. The licence renewal applications for these stations were considered at the 17 April 2001 public hearing held in the National Capital Region. A list of conditions of licence common to all stations controlled by Global is set out in Appendix 2 to this decision.

Introduction

In Public Notice CRTC 1999-97, the Commission set out its new Television Policy, arrived at after extensive consultation with the industry, the public, and other stakeholders. One of the basic tenets of the new policy was that the renewal of all the conventional television licences held or controlled by a group would be considered by the Commission at the same time. A group was defined as more than one conventional television station owned or controlled by the same person or entity.

In implementing this change, the Commission stated that it wished to consider the group's corporate strategy and the method of implementing the strategy on each of the group's individual stations, when renewing the licences of those stations. The Commission also stated that commitments made by a group would be applied to individual stations within the group as either conditions of licence or expectations.

This approach reduces the administrative and cost burden for both broadcasters and the Commission, and provides an opportunity to make a strategic assessment of the contribution of all aspects of a licensee's operations to the broadcasting system.

The public hearing held in April 2001, at which the licence renewals of all of the Global conventional television stations were heard, is the first time the Commission has simultaneously dealt with renewals of all of the television licences of one of the largest private multi-station ownership groups. Consistent with the approach set out in the Television Policy, the Commission has today published this decision as well as Decisions CRTC 2001-458-1 to 458-14, which renew the licences for all television stations controlled by Global across Canada for seven years. Conditions of each licence that are common to all Global stations are set out in Appendix 2 to this decision, while those that are unique to particular stations are set out in the individual decisions addressing particular stations.

The Commission recognizes that the licences of conventional broadcasting undertakings which are before it had varying expiry dates. In the Television Policy, the Commission stated its intention of generally considering for renewal all of the licences for conventional undertakings held by a multi-station group at the same time. In part, the Commission's purpose in establishing such a process was to reduce the administrative and regulatory burden on the licensees while increasing the efficiency of the licence renewal process. In light of these objectives, the Commission notes its appreciation of the actions of Global in bringing in some of their conventional licences early so that the new licence term for all of these conventional licensees will run from 1 September 2001 to 31 August 2008.

Global's structure

In the Television Policy, the Commission noted that the Canadian broadcasting industry had undergone ownership consolidation, which resulted in efficiencies and synergies that would provide increased investment in Canadian programming and the greater likelihood of the export of that programming. The Commission also stated its expectation that the consolidation of broadcasting, production and communications companies would continue, to the benefit of Canadian audiences, the broadcasting system and the public interest.

Broadcast holdings

CanWest Global Communications Corporation is a leading diversified Canadian media company with an international presence.

Through its subsidiaries Global Communications Limited, CanWest Television Inc. and Global Television Network Quebec (Limited Partnership), collectively known throughout this decision as "Global", it currently owns or controls a total of sixteen television stations across Canada, excluding CKVU-TV Vancouver and CFCF-TV Montréal, whose assets are currently held in trust pending approval of their sale. The Commission has received an application by CHUM Limited to purchase CKVU-TV and will consider it shortly. The Commission is currently considering an application by CTV to purchase CFCF-TV (see Public Notice CRTC 2001-77). Eleven of the sixteen stations broadcast Global's main programming schedule. Two stations, CHCH-TV Hamilton and CHEK-TV Victoria, were among those television stations formerly owned by WIC Western International Communications that were acquired by Global in 2000 (Decision CRTC 2000-221). These stations offer a program schedule that is different from that of other Global stations. Global also operates CHBC-TV Kelowna and CKRD-TV Red Deer, two stations affiliated to the CBC English-language television network. Finally, Global recently acquired CJNT-TV, a multilingual station in Montréal.

Global is also active in the specialty services industry. In 1997, it launched its first specialty service, known as Global Prime, a national service targeted to an audience over 50 years of age. Global also owns a 50% interest in ROBTv, a business news specialty channel, but those shares have been placed in trust following a direction by the Bureau of Competition. It is anticipated that an application to transfer control (directly or indirectly) of ROBTv to Bell Globemedia Publishing Inc. will be filed shortly. In late 2000, the Commission approved Global's applications for two new Category 1 and 27 new Category 2 digital specialty television services.

Program production

In 1998, Global acquired Fireworks Entertainment Inc., which has since become one of Canada's leading production and distribution companies. Global has moved to expand its existing library and to build strategic alliances with other producers and distributors around the world. Through its international entertainment division based in the United Kingdom, Global will distribute programs world-wide, offering Canadian producers access to additional audiences for their creative works.

Newspapers and new media

In August 2000, Global purchased from Hollinger Inc. 14 major daily Canadian newspapers, a 50% interest in The National Post, a national daily newspaper, and 126 daily and weekly newspapers in smaller Canadian communities. In addition, Global also acquired newspaper websites and Internet portals across Canada.

International interests

Global's interests outside of Canada include a U.S. distributor of full-length feature films, a U.S. company that develops websites for local television stations, and a specialized content provider, also in the U.S. Outside of North America, Global owns a national television network in Australia, two private commercial television operations and one radio network in New Zealand, and a national television network in Ireland.

Resulting synergies

In Canada, Global considers that owning stations across the country enables it, in some instances, to use the revenues from its more profitable stations to subsidize those that are less profitable. Thus all stations can fulfil their local programming commitments even if some are in a loss position. The licensee also noted that its stations benefit substantially through the sharing of programming, promotion services, national and international services, management services, payroll, accounting and personnel services.

Global considers that its links withThe National Post and local paperswill help it to free up journalistic resources to cover additional stories and to undertake more investigative reporting. For example, in some instances, a newspaper and a television station could pool resources to cover routine news stories such as news conferences so that more reporters would be available to cover additional stories. Issues and implications related to the cross-ownership of television stations and newspapers are explored later in this decision.

Priority programming

In the Television Policy, the Commission redefined the concept of "under-represented programming" (drama, music and variety programs) to also include long-form documentaries, regionally-produced programs and entertainment magazine programs. At the same time, it renamed programming from under-represented categories as "priority programming." Also as part of the Television Policy, the Commission required major broadcasters to offer as a minimum in each broadcast year, an average of eight hours per week of priority programming during peak time, 7 p.m. to 11 p.m. In various decisions issued on 6 July 2000, the Commission imposed conditions of licence to this effect on all Global stations except CIFG-TV Prince George.

As part of the licence renewal process, the Commission wished to examine the programming strategies proposed by Global for peak time priority programming, and whether those strategies demonstrated an appropriate commitment to high quality Canadian programming.

In its application, Global stated that its peak time Canadian programming targets the 18-49 age group, and the priority programming for the current year is predominantly made up of series drama, supplemented by a mix of documentary series and movies of the week. Global stated further that it will continue to concentrate on dramatic series, but not eliminate the possibility of pursuing other forms of programming as well.

Global's stations in Hamilton (CHCH-TV) and Victoria (CHEK-TV) will provide separate and distinct Canadian programming designed to complement the main service by targeting a slightly older demographic of ages 25-54, as well as family audiences. This programming will be a mix of general viewing programs, including dramas, movies of the week, event television, talk shows and an entertainment magazine show. Approximately 60% of the proposed priority programming will be drama.

Global's current scheduling of priority programming is reasonably evenly distributed throughout the week, with Canadian shows on every evening except Friday. When questioned about its scheduling practices, Global stated that spreading its Canadian offerings across the week helps attract audiences since the shows benefit from the lead-in of more highly-rated programs. Global also noted that there were opportunities to gain audiences on high-viewing nights when foreign programs are repeated, providing opportunities for Canadian shows to attract more viewers.

The Commission notes that the first principle set out in the Television Policy is to "ensure quality Canadian programs at times when Canadians are watching." The Commission recognizes that developing a successful television programming schedule is a complex art, and that licensees must take many factors into account when creating one. However, it wishes to ensure that Canadian programs are available when large numbers of Canadians could be watching, both on a weekly and on a seasonal basis. It therefore intends to monitor both Global's scheduling practices for priority programs and the audience levels that such programs obtain over the upcoming licence term in order to ensure that the goals of the Television Policy are achieved.

Some interveners requested that the Commission reinstate expenditure requirements to ensure the production of high-quality Canadian programs and support for the independent production sector. Other groups called for the revision or elimination of the 125% credit for dramas attaining between 6 and 9 points while yet others recommended that the Commission require that at least 70% of all priority programming be drama. In addition, the Canadian Film and Television Production Association (CFTPA) suggested that, in order to ensure that Canadian priority programs are available year-round, and, to prevent the clustering of Canadian programs during low-viewing summer months, the Commission could require compliance in every six-month period.

A number of interveners including the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), The Writers Guild of Canada, and the Directors Guild of Canada, called for an increase in the hours per week of priority programming. These groups noted that further consolidation of the major broadcast groups took place following the publication of the Television Policy, and considered that Global now has the resources to do more than the minimum eight hours per week required by that policy.

The Commission is satisfied that the priority programming proposed by Global consists of a reasonable balance of programming genres, with an emphasis on drama. In the Commission's view, it is premature to make any substantive alterations to the Television Policy, a policy that has only been in place for a year. The Commission will be monitoring and evaluating all aspects of this policy over the next several years.

The Commission has decided, therefore, to reimpose on the licence of each station, a condition of licence that requires the licensee to broadcast in each week, as a minimum in each broadcast year, an average of 8 hours of Canadian programs in the priority program categories between the hours 7 p.m. and 11 p.m. The Commission will continue to monitor Global's performance with respect to the provision of priority programming, and expects that each station's schedule will ensure a reasonable distribution of priority programming both throughout the broadcast week and the broadcast year.

Local reflection

The Commission's Television Policy requires licensees to demonstrate how they will "meet the demands and reflect the particular concerns of their local audiences, whether through local news or other local programming."

As part of the renewal process, Global made a commitment to adhere to the same minimum levels of local programming on each of its stations as it had been recently obligated to provide in the context of its purchase of the WIC stations (Decision CRTC 2000-221). Levels vary from station to station, and commitments include a mix of news programming and other types of more specialized local programming. In the context of the proceeding, Global further set out measures to restore a strong local programming orientation to CHCH-TV Hamilton and CHEK-TV Victoria. Conditions of licence related to these initiatives are set out in the individual licence renewal decisions for CHCH-TV and CHEK-TV. Global explained its approach to local programming as follows:

Throughout the next licence term, we will continue to provide local audiences with programming that is timely and relevant to them through our news and information programming. At the same time, we remain committed to serving special community needs through other non-news programming, whether it is a regularly scheduled program in certain markets or in the form of special events coverage, issues-based documentaries or other forms of local reflection.

Global cited numerous examples of local programs other than newscasts that its stations produce and broadcast. For example, a program called The Leading Edge that deals with entrepreneurs in Atlantic Canada is broadcast in the Maritimes. CIII-TV airs Focus Ontario, a weekly program on provincial affairs. In Alberta, Global broadcasts Agri-business Report and Commodity Future which address matters of particular interest to the agricultural community around Lethbridge. As well, information of general community interest is aired during Global's regular news and information programs such as This Morning Live in Quebec, CH Morning Live in Hamilton and Okanagan Now in Kelowna.

Most of the stations currently broadcast more local programming than their commitment in this regard. Global opposed the imposition of its current levels of local programming as conditions of each licence. In support of this position, Global referred to the flexibility envisioned by the Television Policy, as well as the business realities of a constantly evolving broadcasting environment.

The Commission notes that there is some evidence that the local reflection role traditionally played by conventional television is being supplemented by other media, such as cable community channels as well as the Internet. In view of these developments and the licensee's practice of including material of general local interest in newscasts, the Commission accepts and notes Global's commitments for local programming on all Global stations, except for CIII-TV, as noted below. The Commission also notes, however, that some markets in Canada could be better served with local non-news programming in the information and entertainment categories (2,7,8 and 9). The Commission therefore encourages Global to broadcast regular local non-news programming in those categories, on all of its major stations.

Regional news on CIII-TV

At the hearing, Global confirmed that CIII-TV, a station that serves an audience across Ontario, was broadcasting an average of 13 hours per week of regional news. This level is below the 17.5 hours per week of regional news to which the licensee committed for the current term of licence.

Global indicated that the shortfall resulted from a decision to replace its noon newscast, which had low ratings, first with a lifestyles magazine program and later with an hour-long interview program. Further, Global noted that it would also broadcast a national newscast from Vancouver each evening which would replace a portion of its evening regional newscast. For the upcoming licence term, Global proposed to broadcast 15.5 hours of regional news.

The Commission considers that 15.5 hours of regional news is an appropriate commitment for CIII-TV, given that it plans to supplement regional news coverage with a national newscast from Vancouver during the upcoming licence term. The Commission is concerned about CIII-TV's failure to fulfil its previous commitment and considers it essential for Global to fulfil the commitment for regional news it has made for the new licence term. The Commission therefore is imposing a condition of licence on CIII-TV that reflects its commitment to regional news.

Independent production

Section 3(1)(i)(v) of the Broadcasting Act (the Act) states that the programming provided by the Canadian broadcasting system should include a significant contribution from the Canadian independent production sector. The Commission considers that television broadcasters have an essential role to play in the development and continued health of the Canadian independent production industry.

Further, the Commission notes that Section 3(1)(i)(ii) of the Act specifies that programming should, among other things, be drawn from regional sources. The Commission considers, therefore, that broadcasters have a responsibility to encourage regional production and to support such production at a level that is commensurate with their presence in the community. In this section of this decision, the Commission deals with two issues related to independent production that were explored at the hearing. The first is the issue of access to Global's program schedule by producers who are not affiliated to the licensee. The second is the broadcast of independently-produced programming that reflects the regions that particular stations serve.

Access for unaffiliated production companies

In the Television Policy, the Commission indicated that, where a broadcasting licensee owns or has acquired a production company, either in whole or in part, it would expect the licensee to address the issues arising from vertical integration at the time of licence renewal. The Commission's concern in such situations is to ensure that production companies that are unaffiliated to the licensee have reasonable access to the licensee's programming schedule. Affiliated production companies are considered by the Commission to be those in which a licensee, and any company related to the licensee own, in aggregate a 30% or greater equity interest. Global has such ownership interests in a number of production companies, including Fireworks Entertainment, Apple Box Productions and CanWest Studios.

In its application, Global did not propose any safeguard respecting access for independent producers to its schedules, indicating that its policy was to provide the best programs regardless of who produced them. It noted that Fireworks Entertainment will produce two hours per week, or 25% of the priority programming that will be broadcast on Global system stations during the fall 2001 television season.

At the hearing, the Commission explored this issue further, asking the applicant to comment on the possible imposition of conditions of licence that would:

· ensure that a certain amount of Canadian priority programs broadcast by the licensee is produced by unaffiliated production companies;

· guarantee access, at some determined level, by unaffiliated producers to the time period between 6 a.m. and 7 p.m.

Global indicated that it was prepared to offer up to 50% of its hours of programming in the drama category to independent producers. However, it indicated that it was opposed to conditions of licence with respect to access to its schedule by independent producers.

Interveners who addressed the issue all focused on the level of access that independent producers should have to the licensee's prime time schedule. The CFTPA suggested that at least 75% of priority programming broadcast by the licensee should come from non-affiliated production companies. The Alberta Motion Pictures Industry Association (AMPIA) suggested a level of 95%, the Directors Guild of Canada proposed 90%, the Independent Film and Video Alliance proposed a level of 75%, and the Writers Guild of Canada recommended 90%.

No intervener made a specific recommendation with respect to the level of access by unaffiliated producers to the time period between 6 a.m. and 7 p.m. The CFTPA indicated that a flexible approach would be best for this time period. The Commission concurs that it is not necessary to impose any condition of licence or expectation with respect to the time period between 6 a.m. and 7 p.m.

The Commission also considers that, given the relatively low level of priority programming produced by affiliated production companies that is broadcast by Global currently, as well as the limited amount of such programming proposed for the Fall 2001 programming schedule, significant immediate concerns in this area do not arise. However, it is concerned that in the absence of any safeguard or expectation, the circumstances could change substantially over the licence term, especially if the licensee were to acquire other major production houses or to significantly increase the amount of programming produced by its existing affiliated companies. The amount of priority programming in relation to the total schedule is relatively small. However, the budgets for these programs are high, so programming decisions made by a major licensee in this area can have a huge impact on the Canadian independent production sector.

Therefore, the Commission expects the licensee to ensure that at least 75% of all Canadian priority programming broadcast by the licensee on average over the broadcast year is produced by independent production companies. For the purpose of this expectation, an independent production company is defined as a production company in which the licensee, and any company related to the licensee, owns or controls, directly or indirectly, in aggregate, less than 30% of the equity.

Regional independent production

The Commission is of the opinion that Global, as a national broadcaster, has a critical role to play in ensuring that all regions of the country are reflected in its programming. In the production of drama, variety and long-form documentary programs, Global relies on independent producers. The production industry is more mature in some parts of the country than in others. It is important that Global make a conscious effort to develop Canadian talent through the licensing and broadcast of programming from all parts of Canada.

The Commission considers that program development expenditures are the cornerstore of the development of creative talent for television producers. As such, those expenditures have been characterized as the research and development of the broadcast industry's drama and long-form documentary production activities. The Commission was therefore encouraged by Global's commitment for ongoing program development expenditures as well as its commitment made at the hearing, to obtain programs from independent producers across Canada.

Global's primary vehicle for regional production to be broadcast across Canada will be a new documentary series entitled Our Canada. Global describes the series as "a regionally-produced documentary series comprised of 36 hour-long documentaries per year, produced by independent producers located in the regions where Global has television stations". At the hearing, Global committed to continue this series throughout the new licence term. In addition, in Quebec, Global commissions a movie of the week each year for national broadcast on Global in English, and on the TVA network in French.

Global's development offices are now located in Toronto, Edmonton and Vancouver. There are no immediate plans to add offices in other cities. Global stated, however, that it has had success with local managers overseeing the development of projects that were broadcast nationally, and that it expects to use a similar approach with respect to the new documentary series. The Commission considers that these activities are very important.

The Commission notes that Global's proposed priority programming schedules appear to feature a reasonable amount of programming from independent producers, although the extent to which these programs will continue to be reflective of Canada's diverse regions is not clear. The Commission is aware in this regard, however, that Global has only recently become a truly national system, and may not have had sufficient time to fully establish the infrastructure to easily licence programming from all regions of Canada.

Some interveners proposed the imposition of specific annual quotas for regional programming, such as three out of each eight hours per week of priority programming. Others felt that the Commission could explore the possibility of commitments to regionally-produced programming averaged over the licence term. Global was opposed to any form of production quota on a regional basis, taking the position that program production is very cyclical in nature, and imposing regional quotas would prevent its ability to choose the best programming available at any given time.

In the Television Policy the Commission expressed the view that audiences have a strong desire for a better reflection of Canada's regions to the country as a whole, and set out a flexible, incentive-based approach to achieve that goal. Given that approach, the Commission considers that the imposition of specific regional production quotas would not be in keeping with the spirit of that policy. The Commission is, however, of the opinion that Global should be expected to engage in a level of production activity that is commensurate with its presence in its respective markets. The Commission therefore expects Global to commission its priority programming from all regions of Canada, throughout the course of the new licence term. It further considers that Global has a special obligation to ensure that its support for independent production in B.C. is commensurate with the extent of its television and other media interests in that province.

Reports on independent production

In order that the Commission may monitor the licensee's success in meeting these expectations, Global must submit annual reports, outlining all activities related to the licensing of independent production. The reports must include details on project budgets, the number of hours of independently-produced programming that is produced and broadcast, production locations and details regarding the location of the producer's home base. The reports will be made public so that producers and other interested parties can monitor progress in this area. The licensee will be expected to consult with Commission staff regarding further details with respect to the content and format of such reports.

Cultural diversity

Pursuant to section 5(3) of the Act, the Commission does not regulate or supervise matters concerning employment equity in relation to broadcasting undertakings with more than 100 employees, as they are subject to the Employment Equity Act. However, as indicated in Public Notices CRTC 1994-69 and 1995-98, the Commission continues to regulate matters such as on-screen presence.

With respect to cultural diversity, in the Television Policy the Commission stated that it

.will expect all conventional television licensees (at licensing or licence renewal), to make specific commitments to initiatives designed to ensure that they contribute to a system that more accurately reflects the presence of cultural and racial minorities and Aboriginal peoples in the communities they serve. Licensees are expected to ensure that the on-screen portrayal of all minority groups is accurate, fair and non-stereotypical.

Accordingly, the Commission explored with Global the measures that might be implemented to improve the portrayal and representation of Canada's cultural diversity. At the hearing, Global made a number of valuable commitments in this area. These included the development and provision to the Commission of a plan dealing with cultural diversity, submission of annual reports on progress made in achieving the goals set out in the plan, and participation in and financial support for an industry task force on cultural diversity. In light of these commitments, the Commission expects the licensee to implement the measures related to the reflection of cultural diversity that are set out and discussed below.

Plan: Portrayal and representation of cultural diversity

The Commission expects Global to submit, within three months of the date of this decision, a detailed planthat includes specific commitments relating to corporate accountability, reflection of diversity in programming, and community involvement as they relate to presence and portrayal of cultural diversity. The Commission considers that this plan should include goals whose purpose is to ensure that the diversity of Canadian society is reflected fairly and consistently in the programming that Global presents.

Corporate accountability

The Commission considers that the elements set out below will help ensure that the corporate culture of Global supports the reflection of cultural diversity in the programming that Global presents. In this section of its plan, the licensee should:

· Set goals toward creating a corporate culture that supports a programming service reflective of Canada's cultural diversity, including its Aboriginal reality.

· Identify a senior executive who will be accountable for diversity practices and ensuring that management becomes more reflective of Canada's multicultural reality.

· Set clear goals for station managers so that their stations reflect the diversity that exists in their communities.

· Ensure that all managers receive appropriate training.

· Ensure that regular opportunities are provided for staff assessment of progress made toward the reflection of diversity, as well as for identification of future challenges.

· Set out the licensee's plans for hiring and retention of visible minorities, as well as training in this area that it will provide to staff.

Reflection of diversity in programming

The licensee's plan should address the presence of people from diverse backgrounds both in programming that the licensee produces and in programming that the licensee acquires. As well, the plan should address the way that cultural minority groups including Aboriginal peoples are portrayed in programming. More specifically, with respect to news programming, the licensee should identify mechanisms to assess progress in the following areas:

· The use of people from minority groups as sources regardless of whether the issue being discussed is particularly related to a minority community.

· Ensuring that stories about ethnic communities do not appear solely within the context of coverage of cultural celebrations or reporting of negative stories.

· Ensuring that on-air personalities reflect the diversity of the community that the station serves.

· Ensuring that reporters and journalists from minority communities are not assigned exclusively to covering stories of principal concern to cultural groups.

The plan should also address how the portrayal and presence of cultural minorities will be incorporated into all stages of the production and acquisition of non-newsprogramming, including decisions about which programs will be broadcast. For instance, the plan should address how the licensee will ensure that:

· Those responsible for casting make a concerted effort to hire visible minority actors in leading and recurring roles.

· Those persons responsible for script development ensure that minorities are not portrayed in a stereotypical manner.

· Programming from independent producers reflects the presence and accurate portrayal of visible minorities.

Community involvement

The plan should set out mechanisms that the licensee will put in place to ensure that it receives effective input and feedback from its community with respect to the reflection of cultural diversity, including Aboriginal cultures, in its programming.

Annual reports

The licensee must file annual reports on progress made to achieve the goals with respect to the reflection of diversity that are set out in the plan. Such reports should be filed no later than 31 December of each year of the new licence term.

Participation in an industry and community task force

In Public Notice CRTC 2001-88 issued today, the Commission calls for a proposal and action plan for an industry and community task force to address matters related to the reflection of Canada's cultural diversity in broadcasting. The task force will identify best practices for broadcasters so that reflection of cultural diversity is achieved, sponsor research that will serve as a baseline for measuring progress, and help define issues and present practical solutions. The Commission expects Global to participate in the work of this task force and to support the work of the task force financially.

Service to the hearing impaired

In the past, closed captioning requirements for private English-language conventional television stations have differed depending on revenues. At the hearing, the Commission explored with the licensee the possibility of requiring all of its stations, regardless of revenues, to meet requirements for closed captioning by September 2001, and to caption all news programming, not just local news. The Commission notes that, at the hearing, the licensee indicated that it had been successful in selling sponsorships for its closed captioning. Global indicated that it would accept requirements related to closed captioning applied to all of its stations regardless of their revenues, effective in September 2001. It also agreed that captioning requirements should apply to all news programming that is broadcast.

After discussion at the hearing, and in light of commitments made by the applicant, the Commission has decided that it is reasonable to require all of the Global stations, regardless of revenues, to caption 90% of all programming that they broadcast, including all news (category 1) programming, beginning 1 September 2001. The Commission is imposing these requirements as a condition of licence for each of the Global stations being renewed today, except stations affiliated to the CBC. The imposition of a condition of licence emphasizes the importance that the Commission places on commitments with respect to closed captioning and does not reflect any concerns with Global's performance in meeting previous requirements. The Commission reminds the licensee that closed captioning obligations include live feeds.

In the case of CBC-affiliated stations, the Commission recognizes that, other than local programming, most of the schedule of these stations is provided by the CBC. The Commission notes that Decision CRTC 2000-1 requires the CBC to ensure that at least 90% of the programming distributed nationally is closed captioned in each year of the licence term. Consistent with the approach adopted for the CBC, the Commission therefore expects CBC-affiliated stations owned by Global to provide captioning of at least 90% of all programming, including 100% of all news.

The Commission notes that the 90% obligation is based on the recognition that requiring 100% captioning at all times may not be reasonable or appropriate. Thus, the obligation is designed to cover unforeseen circumstances (such as late delivery of captions, technical malfunctions, or the lack of availability of captions for programs acquired outside North America), or programming where captioning may not be feasible, such as third language programming.

The Commission further expects Global to focus on improving the quality, reliability and accuracy of captioning on each of its stations, and to work with representatives of the deaf and hard of hearing community to ensure that the captioning Global provides continues to meet their needs at a consistent high quality level.

Service to the visually impaired

"Audio description" and "video description" or "described video" are methods of improving the service that television broadcasters provide to the visually impaired. Audio description involves the provision of basic voice-overs of textual or graphic information displayed on the screen. A broadcaster providing audio description will, for example, not simply display sports scores on the screen, but also read them aloud so that the visually impaired can receive the information.

Video description, or described video as it is also known, consists of narrative descriptions of a program's key visual elements so that the people who are visually impaired are able to form a mental picture of what is occurring on the screen. These descriptions can be provided on the Secondary Audio Programming (SAP) channel. Not all broadcasters are currently equipped to deliver an SAP signal. Thus, the introduction of described video via the SAP channel requires significant capital expenditures to upgrade a licensee's transmission facilities.

Audio description

Global confirmed that its policy is to reinforce a program's textual and graphic elements, such as the presentation of regular weather forecasts, sports scores, addresses, and telephone numbers, with an oral description. The Commission notes this commitment, and expects Global to ensure that it provides audio description where appropriate. It further expects the licensee to take the necessary steps to ensure that its service responds to the needs of visually impaired audiences.

Described video

At the hearing, Global made a significant commitment to roll out descriptive video programming. Global originally proposed a seven-year plan for upgrading the technical facilities of all of its stations so that they could transmit described video. Roll out would begin in the largest markets, and other markets would be upgraded over the licence term. The licensee indicated, however, that the seven-year roll out plan was a minimum commitment and that it would make its best effort to complete the process within the first two years of the licence term.

Global also committed to a ramp up of the amount of described programming. As they are upgraded, stations will provide two hours a week of described Canadian priority programming within the first two years of the licence term. This minimum level will increase to three hours per week in the third year, and to four hours per week in year five. At least 50% of the described video programming aired each week will be original, with the remainder consisting of program repeats. The Commission commends Global on this significant commitment.

The National Broadcast Reading Service (NBRS) recommended that obligations with respect to described video relate to all categories of priority programming. The Commission notes, however, that some types of programming lend themselves more readily to video description. These types of programming are drama, long-form documentaries and children's programming. The Commission considers that requirements related to described video should apply, first and foremost, to these types of programs aired during peak viewing periods.

In light of the above, the Commission is imposing a condition of licence on each Global station relating to the provision of described video. The condition requires Global's largest stations (in Ontario, Vancouver and Quebec) to broadcast, between 7:00 p.m. and 11 p.m., an average of two hours per week of described video programming during the first two years of the licence term. All of Global's stations are required to provide three hours per week in year three, and four hours per week in year five. This programming must be Canadian and be from categories 2 (b) and 7. A minimum of 50% of the hours must be original broadcasts. The licensee may, however, count toward fulfilment of this condition a maximum of one hour per week of described video programming that is directed to children and broadcast at an appropriate children's viewing time.

The Commission further expects Global, wherever possible, to acquire and exhibit described versions of the Canadian and non-Canadian programming that its stations broadcast. It notes that some American programs already include descriptions in order to fulfil requirements in this area that are in effect in the United States. Finally, the Commission commends the licensee for making concrete proposals with respect to the broadcast of programming that includes described video. The Commission considers that the presence of such programming in the Canadian broadcasting system is an important contribution.

Children's programming

As part of this proceeding, the Commission explored with Global its plans for the broadcast of children's programming during the new licence term. The sample schedule for Global's national system indicates that four hours per week of children's programming will be broadcast, although as part of this proceeding, Global also stated:

We are proposing that, going forward, there would be no fixed commitment to children's and youth programming in our programming plans.

In the Television Policy, the Commission stated that the Canadian broadcasting system as a whole offered children's programming on a regular basis, and that a wide variety of both Canadian and foreign children's programs of high quality were available to audiences. In recognition of this availability, the Commission decided to maintain its policy of not requiring conventional television licensees to broadcast minimum quantities of programming directed to children and youth.

Interventions from the CFTPA and the Writers Guild of Canada both requested that the Commission require Global to broadcast a minimum of three hours per week of children's programming. The CFTPA also recommended that broadcasters be given an incentive to invest in new programs by restoring the 150% credit for first-run Canadian children's programming.

The Commission considers that imposing minimum levels of children's programming would not be in keeping with the spirit of the Television Policy. At the same time, it notes that 25% of Canadian homes receive television over the air, and therefore do not have access to the children's programming available from specialty and pay television services and the Commission is concerned that they too have access to a reasonable diversity of program genres.

Global is a national conventional broadcaster with significant viewership across the country, and its stations have priority status for cable carriage under the Broadcasting Distribution Regulations. The Commission considers that, given these factors, it is reasonable that Global be expected to provide programming that meets the needs of all age groups, including children.

At the hearing, Global acknowledged its responsibility to serve the needs of all audience members, and stated that:

.it is a legitimate concern and we do have, I think, a responsibility, as conventional broadcasters. And that's why we have left some hours in the schedules.

The Commission therefore, expects Global to continue to provide children's programming, and notes its commitment to maintain programming for children in its schedule.

Advertising issues

Request for flexibility

As part of its various applications for renewal of the Global television stations, the licensee requested that all stations be permitted to average over each week the current hourly maximum of 12 minutes of advertising as an exception to section 11(1) of the Television Broadcasting Regulations, 1987. Global stated that such flexibility would allow it to place more advertising during periods of heaviest viewing, and thus generate greater advertising revenue. It was anticipated that advertising during the peak 7:00 p.m. to 11:00 p.m. viewing period might approach 14 minutes per hour, while it would average less than 12 minutes per hour during daytime periods.

In support of its request, Global referred to the recent economic down turn, and indicated that the flexibility would be exercised only at Global stations in major markets. It estimated that the increased flexibility would result in the placement of additional commercials in foreign programs. While Global foresaw the additional advertising coming mostly from national advertisers, it noted that if "ad prices are adjusted accordingly, this may permit some local ad dollars as well." Global further stated that it would be prepared to make a commitment to guarantee at least one minute of Canadian content promotion, on average, over the week, per clock hour.

Global also stated its belief that no additional revenue realized from this proposal would come at the expense of other conventional broadcasters, because, if this request were approved, other broadcasters would also apply for the same flexibility. Global suggested that an increase in commercial inventory on conventional television stations would make those stations more price competitive with specialty television, making it possible to draw revenues away from those competitors.

An intervention in opposition to the flexibility request was submitted by the Association of Canadian Advertisers (ACA). At the hearing, the ACA cited a number of reasons for its opposition to the proposal, including:

· it could result in excessively cluttered prime time shows, leading to further commercial avoidance by viewers, and the dilution of the television product, and

· the fact that its research indicates that 80% of broadcast hours in Canada already run an average of over 14 minutes of non-program material, and that between 50% and 69% of Canadians regularly practice some form of TV commercial avoidance.

The ACA added that one reason that specialty television services are so successful in attracting advertising dollars is that during prime time only 66% of programs play more than 12 minutes of non-program material per hour, making the programs less cluttered, and therefore more attractive to viewers. The ACA also expressed the view that, in most markets, "Canada needs new conventional stations with fewer commercials.not more commercials on the conventional stations that we have."

Consistent with the Television Policy, the concerns expressed by both the public and the advertising industry concerning commercial clutter, and based on the fact that Global did not present a compelling rationale for the approval of this request, the Commission has determined that any amendment to the restriction on advertising minutes is unwarranted at this time. The Commission therefore denies Global's request for flexibility to average commercial content on a weekly basis.

Request for local advertising on CKMI-TV Quebec City

Also as part of this proceeding, Global requested to be relieved of a condition of CKMI-TV's licence that prohibits the broadcast of local advertising. Global indicated that its original commitment not to broadcast local advertising was a way of easing the impact on other stations in the market. In recognition of CKMI-TV's stated intention to be a station based on service to the Quebec region, in Decision CRTC 97-85, the Commission imposed the commitment to not broadcast local advertising as a condition of licence.

The licensee now believes that it would be appropriate to put all of the English-language television stations available in Montréal on the same footing. In support of its request, Global stated that if it is permitted to broadcast local advertising on CKMI-TV, there would be no danger that the service would move away from its regional mandate to become a more Montréal-oriented service. It stated that, as part of CKMI-TV's regional mandate, a considerable part of its current programming is already directed towards Montréal audiences.

Global stated that it is "constantly approached by advertisers that are looking for new opportunities to increase their market share and increase their market," and that it recently monitored the origin of commercials on U.S. border television stations. Over a two-week period, it noted the broadcast of commercials for 16 local Montréal advertisers on those stations. Global stated that, if this amendment is approved, they would expect to be able to repatriate significant advertising revenues from U.S. border stations, as well as from print and radio media, and local television stations CFCF-TV and CBMT.

Global stated that, while the approval of its request would allow CKMI-TV to reach profitability sooner, it is "comfortable with the current position" and "comfortable with the past performance."

An intervention in opposition to Global's request was submitted by CF Television Inc., licensee of CFCF-TV Montréal. The intervention expressed concern that the local advertising market in Montréal could not sustain the addition of another commercial station.

The Commission notes that, while the licensee raised concerns regarding the loss of local advertising revenue to U.S. border stations, it acknowledged that some of the local revenue would come at the expense of other local radio and television stations, and offered no indication of the magnitude of the potential impact. The Commission is concerned that the television advertising market in Quebec is already strained, and that the proposed change could have an adverse impact on other local broadcasters. It also notes the importance of CKMI-TV's regional mandate.

The Commission concludes that the potential negative consequences for the local advertising market outweigh any potential benefit. Accordingly, the Commission denies the application by Global to be relieved of the prohibition on the broadcast of local advertising on CKMI-TV.

Virtual advertising

Virtual advertising is a technique whereby commercial messages are broadcast with no interruption to program content. This can be achieved through the digital superimposition of advertising graphics or the creation of "virtual" billboards carrying messages that do not exist in reality, and can be seen only by the television audience. The Commission discussed issues related to virtual advertising as a result of interventions that raised concerns about this practice.

Global stated at the hearing that the use of virtual advertising involves a partnership between the owner of the technology, the owner of the program rights, and the broadcaster, each of whom shares in the profits. Such non-traditional advertising is not sold by time but by the event, and to date, it has generated approximately $1 million in revenues.

Most of the successful experiments with virtual advertising have been with sporting events, because the audiences are large enough to balance the cost of the technology. Global noted that the technology needs to be further developed, and indicated that it has had limited success with virtual advertising, although it is anticipated that more of it will be done in the future.

Other non-traditional advertising

Other forms of non-traditional advertising include "product placement" and "pull-throughs." Product placement refers to the practice of advertisers paying to have their logos displayed, or their products used by television program characters. While Global has experimented with product placement, it finds that the financial returns are minimal, and the practice is awkward for program producers. It is difficult to guarantee how long a given product will be visible during a program, and the value of such exposure is therefore difficult to establish.

"Pull-throughs" is the industry term for digital images superimposed on the screen. The practice is quite common in some areas of the world, but Global indicated that it has received complaints from viewers about the disruptive nature of this type of advertising. Global has found, however, that when pull-throughs are combined with information such as weather updates, for example, the viewer acceptance is much higher.

The Commission considers that the use of non-traditional advertising, including virtual advertising, is in its infancy. Revenues are relatively low at this time, and the cost of the technology restricts its use to events that draw very large audiences. The Commission will monitor the development of all non-traditional forms of advertising, and continue to assess its impact on the public and industry as a whole. If required, further discussion of non-traditional advertising could take place as part of a broader review of advertising policy at some future date.

Compliance with industry codes

In accordance with its usual practice, the Commission is imposing conditions of licence on each of the Global stations requiring that they adhere to the industry codes related to violence in television programming, gender portrayal, and advertising to children. Application of the codes related to gender portrayal and violence will be suspended so long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC).

Cross-media ownership

In Notice of Public Hearing CRTC 2001-3, the Commission indicated that it would examine questions related to cross-media ownership in its consideration of applications to renew the television licences held by Global.

The Commission's concerns

Global is part of a corporate family with significant cross-media holdings, as described earlier in this decision. At the hearing, issues related to the diversity of voices at the national and local level were raised by the Commission and by interveners.

Global, as of Fall 2000, through its broadcasting assets, has a potential reach of 97.6% of the English-language population of Canada.

In Fall 2000, Global's conventional and specialty assets accounted for 14.5% of the total hours tuned in the Canadian English-language television market. Global's market share makes it one of the two largest Canadian broadcasters in the English-language market.

Global owns an extensive array of local daily and weekly newspapers across the country. In addition, Global owns a 50% interest in The National Post newspaper, one of Canada's two daily national newspapers.

The Commission notes that Global's level of cross-media ownership is particularly high in Vancouver/Victoria where it operates two television stations and three daily newspapers. In Calgary and Ottawa, Global owns one of the two major daily newspapers and a television station. In each of Regina and Saskatoon, Global owns the only major daily newspaper and a television station.

The Commission is concerned that cross ownership of television stations and newspapers, such as is the case with Global, could potentially lead to the complete integration of the owner's television and newspaper news operations. This integration could eventually result in a reduction of the diversity of the information presented to the public and of the diversity of distinct editorial voices available in the markets served. For example, under a fully integrated structure, the same editor could decide what matters would be investigated and what stories would be covered by a commonly owned television station and newspaper. Under such an integrated structure, the television station and the newspaper may no longer compete and might present a single editorial position and approach to the selection of stories considered relevant to the viewers and readers.

Concerns of interveners

Interveners expressed a number of views regarding cross-media ownership and its potential effects on Global's journalistic practices.

The Communication, Energy and Paper Workers Union of Canada (CEP) objected to a scenario under which a single journalist would cover the same story for both newspapers and television stations. It referred to the code developed by Quebecor Média Inc. (Quebecor) and imposed by the Commission as a condition of licence in Decision 2001-384. This code is substantially the same as the one that has been in place at Quebecor since 1997. The code essentially ensures that the newsgathering activities of Quebecor's newspapers and television stations are completely separate. CEP considered that the Commission should impose the Quebecor Code on Global. The Newspaper Guild of Canada also emphasized the importance of maintaining separate newsrooms rather than the approach suggested by Global. It considered that the Commission should ensure that newsrooms work separately from and independent of owners' interests. It further was of the view that any cross-media safeguards should be imposed as a condition of licence.

The Friends of Canadian Broadcasting (Friends) considered that, in addition to separate news management, separate newsgathering facilities must be maintained to ensure that a diversity of voices is available to Canadians. Friends suggested that the applicant undertake to ensure that its television newsrooms would gather information independently from the newsrooms of newspapers in which it has a financial interest.

Three university professors generally considered that separation of news management functions was sufficient and that the Commission should not impose on Global structural separation newsgathering activities. They considered that in certain cases, such as in the gathering of routine news stories, some co-ordination of newsgathering efforts between newspapers and television stations would be appropriate and could lead to an increase in the quality of news and information made available. They also generally considered that imposition of the Quebecor Code, or a similar code, in the markets concerned could unnecessarily limit the development of innovative journalistic techniques that make use of new media such as the Internet.

The Commission's jurisdiction

The Commission's concerns about cross-media ownership arise from sections 3(1)(d)(i), 3(1)(d)(ii) and 3(1)(i)(iv) of the Act. Section 3(1)(d)(i) states that the Canadian broadcasting system should:

serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada.

Section 3(1)(d)(ii) states that the programming provided by the Canadian broadcasting system should:

encourage the development of Canadian expression by providing a wide range of programming that reflects Canadian attitudes, opinions, ideas, values and artistic creativity, by displaying Canadian talent in entertainment programming and by offering information and analysis concerning Canada and other countries from a Canadian point of view.

Section 3(1)(i)(iv) of the Act states that the programming provided by the Canadian broadcasting system should:

provide a reasonable opportunity for the public to be exposed to the expression of differing views on matters of public concern.

In light of the policy objectives set out in the Act, the Commission considers that it has a responsibility to ensure that a sufficient diversity of broadcasting news and information voices remains as convergence continues to take place between broadcasters and related industries.

Given these concerns, the Commission discussed with the applicant possible safeguards that might be put in place to ensure editorial independence between the applicant's interests in the broadcast and print media at both the national and local levels.

Global's position

The Statement of Principles And Practices submitted by Global at the hearing set out the following seven points:

· Global adheres to the Broadcasting Act in its entirety and specifically in this context to sub-section 3(1)(i)(iv) of the Broadcasting Act;.

· Global will maintain its own news management structure for Global television operations which is separate and distinct from that of Global newspaper holdings. Journalistic content and presentation decisions for Global will be made by Global television news management;

· Global news managers will not sit on editorial boards of any newspapers owned or controlled by Global;

· Global will establish an internal mechanism to deal with complaints arising from any of the principles and practices included herein, and will report back to the Commission on an annual basis;

· Global will maintain its membership with the Canadian Broadcast Standards Council (CBSC) and will continue to adhere to each of the Codes under its purview, including the CAB Code of Ethics, and will continue to adhere to the Radio and Television News Directors Association (RTNDA) Code of Ethics;

· This statement shall be communicated to employees; and

· Through Public Service Announcements, our audiences shall be made aware of how to contact us and the existing complaint mechanisms through the CBSC and Press Councils.

Global was of the view that collaboration between its newspapers and television stations, if wisely implemented, could be of benefit to the public by increasing the quality and variety of news coverage. It considered that newspaper and television journalists could collaborate to examine stories from different angles and present them in different ways on different media. This could lead to more in-depth and compelling coverage. Global further pointed out the various cost savings that could result from synergies between television and newspapers. For example, Global considered that it would be possible to have one person, rather than two, cover routine news stories, such as news conferences, for both television and newspapers. This would leave more reporters free to cover other stories, thereby increasing the number of stories that might be presented to the public. It also considered that its television stations and newspapers could effectively cross-promote each other's journalistic activities.

Although Global was willing to make commitments to the above measures, which generally deal with news management issues, it objected to the introduction of measures that would enforce structural separation between the newsrooms and newsgathering activities of its television stations and newspapers. As indicated earlier, the licensee considered that the news coverage provided by its television stations would be enhanced if they had access to the information gathered by newspaper reporters. Global considered that separation of newsgathering functions was not necessary to ensure that Canadians have access to a diversity of news voices. Global, therefore, objected to the imposition of the Quebecor Code on its own operations.

Global also indicated that the CBSC, of which Global is a member, was considering the launch of a review of its codes so that they would take into account concerns arising from cross-media issues. Global, for its part, would launch a public service announcement campaign to make the public aware of the CBSC's codes as well as those of press councils, and to publicize the internal complaints mechanism. It also indicated that it would be willing to initiate "right of reply" programming so that those with different points of view from those expressed by Global would be able to make them known.

The Commission's conclusions

The Commission considers that Global's position in newspapers and television raises concerns related to cross-media ownership in the markets that it serves, and that safeguards are required.

Specifically, the Commission considers that Global must, as a minimum, maintain news management for its television stations that is separate from news management of the newspapers affiliated to Global. The Commission has therefore set out, in Appendix 1 to this document, a Statement of Principles and Practices that it is imposing on Global as a condition of licence. The Commission will monitor developments with respect to news and information programming over the upcoming licence term to determine if other action is necessary.

In essence, the Statement of Principles and Practices requires the licensee to maintain separate and independent news management and presentation structures for Global television operations that are distinct from those of any Global affiliated newspaper. It thus requires separation of news management functions, but not newsgathering activities. Therefore, cross promotion and some cooperation between Global's television stations and newspapers affiliated to Global in newsgathering would be permissible.

Further, the Commission is requiring Global, by condition of licence, to establish a Monitoring Committee as set out in Appendix "A" to the Statement of Principles and Practices. The licensee must establish an impartial, neutral committee to receive and handle all complaints concerning Global's compliance with the Statement of Principles and Practices. The Committee will, among other things, provide an annual report to the Commission that will also be available to the public. The Commission further notes Global's commitment to spend $1 million a year in announcements to publicize the Statement of Principles and Practices, including the existence and responsibilities of the Monitoring Committee.

The Commission further expects the licensee to respect the Statement of Principles and Practices in the operations of its other broadcasting services that provide news and information.

The Commission will be prepared, however, to consider suspending application of the conditions of licence respecting cross-media issues if the licensee is able to enter into an agreement with the CBSC resulting in an industry-wide code approved by the Commission and while Global is a member in good standing of the CBSC. The CBSC code of conduct must include an appropriate monitoring mechanism to be administered by the CBSC. Any application by the licensee to suspend these conditions of licence should include confirmation that the licensee supports the CBSC code of conduct, including the monitoring mechanism, and that the licensee is a member in good standing of the CBSC.

The Commission further expects Global to implement right of reply programming, as proposed.

Interventions

The Commission wishes to thank all those who participated in the process leading to this decision, either through their written interventions or through presentations at the public hearing.

Related CRTC documents

. Decisions 2001-458-1 to 2001-458-14: Licence renewal decisions for individual Global stations

. Decision 2001-457: Licence renewal of CTV television stations

. Decision 2001-459: Cable carriage of CIVT-TV Vancouver

. Public Notice 2001-88: Representation of cultural diversity on television -Creation of an industry/community task force

. Decisions 2001-384 and 2001-385: Transfer of effective control of TVA to Quebecor Média inc. and TVA renewal

. Decision 2000-221: Acquisition by CanWest Global Communications Corp., through its wholly-owned subsidiary CW Shareholdings Inc., of the ownership interests held previously by WIC Western International Communications Ltd., in various conventional television stations and in certain other broadcast holdings

. Public Notice 2000-94 and Decisions 2000-229 to 2000-250: Implementation of TV policy - New conditions of licence

. Public Notice 1999-205: Definitions for new types of priority programs; revisions to the definitions of television content categories; definitions of Canadian dramatic programs that will qualify for time credits towards priority programming requirements.

. Public Notice 1999-97: Building on success - A policy framework for Canadian television

. Public Notices 1992-59, 1994-69 and 1995-98 - documents related to employment equity

Secretary General