ARCHIVED - Decision CRTC 2001-668

Decision CRTC 2001-668

Ottawa, 2 November 2001

Pelmorex Communications Inc.
Across Canada 2000-2339-1

19 June 2001 Public Hearing
National Capital Region

The Weather Network / Météomédia

The Commission renews the licence for the specialty television service "The Weather Network/Météomédia" for a full term. A proposal to increase the monthly wholesale rate is denied. The decision also addresses the issues of interactive programming and improved access for persons who are visually impaired.

1.

The Commission renews the broadcasting licence issued to Pelmorex Communications Inc. (Pelmorex) for the national English- and French-language specialty television service known as "The Weather Network/Météomédia" from 1 December 2001 to 31 August 2008, subject to the conditions set out in the appendix to this decision and in the licence to be issued.

2.

The Commission notes that The Weather Network/Météomédia has complied with all conditions of its licence during the current licence term.

3.

As part of its application, the licensee proposed to amend its condition of licence pertaining to the nature of service to specify the categories from which its programs may be drawn and to add explicit reference to an interactive component for digital subscribers. The licensee also proposed to provide separate Eastern and Western programming feeds for prime-time morning hours and to increase the monthly wholesale rate by $0.02 per subscriber. During the hearing, the Commission also discussed with the licensee a complaint regarding the service provided by The Weather Network to blind and visually impaired subscribers.

Nature of service

4.

The condition of licence pertaining to the nature of service to be provided by The Weather Network/Météomédia reads as follows:

The programming provided by the licensee shall be dedicated exclusively to video programming, text and graphics relating to meteorological, atmospheric and marine conditions for local, regional and national areas of Canada, and international areas as they may be of national interest to Canadians, as well as programming relating to the prevention and effects of these conditions.

5.

Category 1 - News
Category 2a) - Analysis and interpretation
Category 3 - Reporting and actualities
Category 5b) - Informal education/Recreation and leisure
Category 11 - General entertainment and human interest
Category 12 - Interstitials
Category 13 - Public service announcements
Category 14 - Infomercials, promotional and corporate videos

6.

In their interventions, CHUM Television and Global Television Network expressed their concerns that the addition of the above categories might expand the scope of programming that the licensee is currently authorized to offer. In response, Pelmorex stated that all its programming would be weather-related and that, in any case, it would be required to comply with the definition pertaining to the nature of its service.

7.

The Commission approves the proposed amendment, given that it further clarifies the type of programming that the licensee is authorized to broadcast, as set out in the definition of the nature of service that is the subject of condition of licence number 1 in the appendix.

Interactivity

8.

Pelmorex proposes to add interactivity to The Weather Network/Météomédia services starting in the first year of the new licence term, and to expand it as digital set-top box penetration increases and the functionality of digital technologies supports new features. Pelmorex wants to be able to provide weather-related information "on-demand", to enhance the service and permit it to be more competitive with new media sources of weather information. Pelmorex emphasized at the hearing that interactivity is essential to its ability to provide localised information to digital subscribers.

9.

In the initial stages, each program on the main service would be complemented with one or more pages of related content consisting of text, graphics and still image pictures, from which viewers would be able to cull customized information including detailed local information. As digital technology matures and additional high-speed capacity becomes available, the interactive service would be enhanced by multimedia content, including audio, full-motion video, graphics and text, all related to weather.

10.

Pelmorex asked the Commission to provide explicit authorization of its interactivity by adding the following to its nature of service condition of licence:

The service may include an interactive capability, enabled by the digital set-top boxes of broadcasting distribution undertakings carrying the service, whereby individual subscribers to the service will have access to additional programming content related to meteorological, atmospheric and marine conditions.

11.

In support of its requested licence amendment, Pelmorex stated that the ability of The Weather Network/ Météomédia to provide accurate and regularly updated information in all parts of the country is the very essence of the service for which it is licensed. The licensee added that the analog technology it has used successfully up to now is no longer sufficient for it to remain relevant and competitive in the new digital world. Pelmorex thus intends to take advantage of all the possibilities that digital technology offers in the coming years, especially interactivity, in order to make its service as relevant and timely as possible for its subscribers. Pelmorex believes that explicitly including the interactive component in the definition of its service will guarantee that interactivity is made available to subscribers.

12.

In its intervention, the Canadian Cable Television Association (CCTA) stated that although broadcasting distribution undertakings have invested considerable resources to convert to digital technology, the implementation of new, interactive television services still presents numerous technical and operational challenges. The CCTA also considered that a licence renewal is not the appropriate time to establish precedents pertaining to interactive television, especially since the Commission stated less than a month before the 19 June 2001 public hearing that it was premature to develop specific regulations pertaining to interactive services.

13.

With respect to the last point, the CCTA referred to Public Notice CRTC 2001-57 dated 25 May 2001 entitled Principles for the launch of Category 1 and 2 digital services. The Commission stated in that public notice that the Digital Code Working Group, composed of the CCTA and the Canadian Association of Broadcasters (CAB), among others, was unable to come to a consensus with respect to the principles relating to the provision and distribution of interactive programming. The Commission added that:

As for interactive services, the Commission agrees with parties who submitted that it is too early to develop principles specific to this type of service. The Commission expects that there will be developments in this area in the short to medium term that will clarify the issues to be addressed. To this end, the Commission encourages both programmers and distributors to work together in such areas as the development of technical standards.

14.

The Commission notes that the licensee has made commendable efforts in recent years to implement new technology and approaches that have allowed it to provide locally relevant weather information in all regions of the country. The Commission notes the licensee's plans to gradually offer interactive services over its new licence term and recognizes that this new approach will be a valuable tool for continuing to improve The Weather Network/Météomédia's ability to offer timely and relevant localised content on demand. Nevertheless, the Commission believes that it is not appropriate to amend The Weather Network/Météomédia's nature of service at this time. Thus, the Commission denies the proposed amendment.

15.

The denial of Pelmorex's proposed amendment is due to the Commission's concern that it is premature given the embryonic state of the technology and the numerous uncertainties pertaining to digital distribution and the implementation of interactivity. Noting that distributors and programmers are beginning to offer interactive features, the Commission is launching a fact finding inquiry, as announced in Public Notice CRTC 2001-113 of today's date. In the meantime, given the importance of interactivity to Pelmorex's plans for offering localised content in digital, the Commission encourages Pelmorex and distributors to work together to implement interactive services and negotiate the terms and conditions for distributing those services in good faith. Given that their experiences could assist in the development of its future policies, the Commission requests that the licensee file a report within six months of the date of this decision and once a year thereafter on progress made in this area.

16.

The Commission notes that refusal to make The Weather Channel/Météomédia's interactive elements available to subscribers where the distributor is offering interactivity for other programming services, including programming services with which that distributor is affiliated, could be reviewed pursuant to the provisions pertaining to undue preference in the Broadcasting Distribution Regulations.

East/West feeds

17.

Pelmorex intends to provide separate Eastern and Western programming feeds during prime-time morning hours so that it may provide more focused and regionally relevant information to viewers across Canada.

18.

In its intervention, Bell ExpressVu stated that it does not support this aspect of Pelmorex's application if it means that DTH operators would have to carry both feeds. In its reply, Pelmorex stated that its proposal is not intended to impose a must carry rule for both feeds on DTH.

19.

The Commission notes Pelmorex's plans to provide separate Eastern and Western feeds, which will be made available to distributors for distribution at their discretion. The Commission would generally expect that distributors will broadcast the feed of most relevance to their suscribers.

Rate increase

20.

Pelmorex proposed to increase the monthly wholesale rate per subscriber by $0.02, from $0.23 to $0.25 as of 1 January 2002, when the service is distributed as part of the basic service. The licensee stated that the proposed increase is based primarily on economic need, and that it would not be able to implement separate Eastern and Western programming feeds during prime-time morning hours if its application for a rate increase were denied.

21.

Pelmorex stated that operating a bilingual service that broadcasts live weather reports 24 hours a day in French and English, and adapted to all regions of the country, requires numerous on-air and off-air staff and results in very high costs. It added that the service requires major and continuous investment to stay on the cutting edge of technology. Pelmorex also stated that its profit margin before interest and taxes (PBIT) fell from 29% to 15.5% between 1995 and 1999. According to its projections for the new licence term, even with the proposed increase, the average PBIT would still be lower than that of other dual-status specialty services.

22.

In their interventions, the CCTA, Bell ExpressVu and Look Communications Inc. questioned the merits of the proposed increase. Rogers Cable Inc. supported a rate increase of $0.02 applicable to the pass-through portion of the basic rate charged by Class 1 distribution undertakings.

23.

The Commission notes that The Weather Network/Météomédia reported a PBIT of 18% in 2000, compared with the average PBIT of 19% recorded by all English-language specialty services. That 18% PBIT also compares favourably with the average PBIT margins of the Canadian private conventional television industry and the radio industry, which were 14% and 16% respectively for the same year.

24.

In its review, the Commission also noted Pelmorex's successful efforts in recent years to maximize its advertising revenues. From 1995 to 2001, annual advertising revenues increased by 35% on average, including a 54% increase in 2000, and a forecast increase of 9% in 2001. Although advertising revenues represented 8% of the licensee's total revenues in 1995, they accounted for 23% of its total revenues in 2001.

25.

In view of the licensee's past financial performance and its revenue projections for the next licence term, the Commission denies the increase proposed by Pelmorex.

Service to blind and visually impaired subscribers

26.

A key issue discussed at the public hearing was the accessibility of the service for blind and visually impaired subscribers. This arose as a result of a complaint by Chris and Marie Stark regarding their ability to fully access programming on The Weather Network. Mr. Stark also appeared at the public hearing to explain his concerns on the matter.

27.

The complainants asked the Commission to order The Weather Network to provide audio descriptive narration of textual material, such as temperatures and other weather conditions, so that such information would be equally accessible by visual or audio means. They also asserted that the service provides vital information when there are weather warnings or extreme weather conditions, which should be available to all Canadians. They also stated that because the service is distributed as part of the basic service, they are required to pay for a service they cannot access.

28.

In response, Pelmorex explained that providing an audio complement to its existing programming poses significant technical and financial challenges. Pelmorex simultaneously distributes over 1,200 streams of unique local information in a highly automated text- and graphic-based system that does not have the capacity for audio - adding this capacity would involve significant technological changes at considerable cost. Pelmorex described two possible approaches: either upgrading the PMX units (patented localisation technology) at the more than 1,200 head-ends, or delivering audio from Pelmorex's broadcast centres in Mississauga and Montréal.

29.

To provide an audio complement to the segments delivered by the PMX system, Pelmorex would have to replace each of the PMX units. Pelmorex also indicated that such technology does not yet exist and would have to be developed. Pelmorex estimates development and implementation costs for this option would be in the order of $6 million ($1 million in development and $4-5 million in implementation). In addition, Pelmorex noted that voice synthesis would accommodate only a portion of the content supplied via the PMX system since it would be incapable of rendering graphics (e.g. radar maps) into audio format.

30.

The second option would require the recording of an audio complement to all of the information delivered to the PMX units, representing some 300,000 individual pages of information each day. Pelmorex estimates that it would take 260 people per 8 hour shift to record a full audio complement to all of this information. Assuming an hourly cost of $25 to cover salaries, benefits, office space, overhead, etc., Pelmorex estimates these costs to be well over $55 million annually. The delivery of the audio would, in turn, require more than 1,200 audio data streams, and a significant amount of satellite bandwidth.

31.

Pelmorex also pointed out that each 'page' of information delivered to the PMX units presents a huge volume of information that would be impossible to read in the amount of time it is on-screen (30 to 90 seconds). Pelmorex pointed out that some screens are purely graphic (e.g. radar maps) which would be extremely difficult to render into audio, particularly within the 30-90 second timeframe. The Commission notes that based on Pelmorex's cost estimates, the technology upgrades alone would negate the service's 2000 PBIT ($5.95 million) and would represent almost 20% of the service's 2000 revenue ($32 million).

32.

After examining a range of possible solutions and consulting with various representatives of persons who are visually impaired, Pelmorex proposed an alternative solution which would use the secondary audio programming (SAP) channel to provide weather-related information in audio format. Specifically, the licensee plans to produce one national and five regional audio reports to be broadcast several times each hour and updated at least every six hours. At the hearing, Pelmorex confirmed that the audio reports will be updated at the same time as the main channel. Pelmorex stated that this solution is only a beginning, and that it intends to continue consultations with representatives of persons who are visually impaired, such as the National Broadcast Reading Service who commented on this alternative proposal in its intervention, in order to make improvements. The Commission expects the licensee to implement its planned regional audio weather service (via the SAP) and to continue to seek input from affected parties to improve upon that model.

33.

The Commission notes the concerns expressed by Mr. Stark regarding access to Pelmorex's main service and his desire to avoid "special" services that may ghettoise visually impaired audiences. While Pelmorex's regional audio reports will provide improved service to visually-impaired subscribers, the Commission also encourages Pelmorex to explore ways to provide a more integrated service, for example, by synchronizing the SAP feeds with the main service's audio feed, or incorporating elements of the main feed into the SAP feeds.

34.

At the hearing, Pelmorex stated that it was sensitive to the needs of people who are blind, and described its efforts to improve the accessibility of the existing services. For example, it requires its on-camera presenters to describe in detail the movements of weather patterns and the effects they will have on every region of the country. Further, Pelmorex asks on-camera presenters to mention all areas affected by weather warnings and advisories in their live briefings. Pelmorex stated at the hearing that it was committed to improving the oral description of what it presents on air, which it would do through on-going training of its on-air presenters.

35.

The Commission notes that Pelmorex currently provides some non-local information in a purely graphic form, (e.g. Travellers and International Forecasts). While the Commission recognizes that Pelmorex has adopted such an approach to maximise the volume of information it can provide in a short space of time, the Commission notes Pelmorex's commitment to make such segments more accessible, for example through the addition of an audio description in the main programming feed.

36.

Thus, the Commission also expects Pelmorex to continue to improve access to its main service, specifically by:

37.

So that it can verify Pelmorex's achievements in these areas, the Commission requires Pelmorex to submit a report in two years, at the same time it files its annual report (30 November 2003), describing the measures implemented by the licensee to improve access to its service in the following areas:

38.

The Commission encourages the industry as a whole to work together to find ways of facilitating access by blind and visually impaired persons to broadcasting services and ensuring that those citizens are able to participate fully in Canadian society.

Cultural diversity

39.

The Commission expects this, and all other specialty and pay television licensees, to contribute to a broadcasting system that accurately reflects the presence in Canada of cultural and racial minorities and Aboriginal peoples. The Commission further expects licensees to ensure that their on-screen portrayal of all such groups is accurate, fair and free of stereotypes. These expectations are fully in keeping with section 3(1)(d)(iii) of the Broadcasting Act, which states that the Canadian broadcasting system should, "through its programming and the employment opportunities arising out of its operations, serve the needs and interests, and reflect the circumstances and aspirations, of Canadian men, women and children, including equal rights, the linguistic duality and multicultural and multiracial nature of Canadian society and the special place of aboriginal peoples within that society" (the Act's cultural diversity objective).

40.

The Commission notes that Pelmorex is sensitive to issues of reflection, both on-air and in its hiring practices. Although the nature of its programming does not necessary lend itself to the reflection of cultural diversity, Pelmorex has demonstrated that it works hard to ensure that its on-air personnel is broadly reflective of Canada's cultural diversity. The Commission commends Pelmorex for its efforts in this regard (for example, its outreach efforts to recruit Aboriginal employees) and encourages it to continue to pursue these activities.

41.

In Public Notice CRTC 2001-88, Representation of cultural diversity on television - Creation of an industry/community task force, the Commission called upon the Canadian Association of Broadcasters to develop an action plan for a joint industry/community task force. The role of this task force is to sponsor research, identify "best practices", and help define the issues and present practical solutions to ensure that the Canadian broadcasting system reflects all Canadians. In its notice, the Commission emphasized the importance of having the participation of all sectors of the broadcasting industry, including specialty services. The Commission therefore expects Pelmorex to contribute to the work of the task force.

42.

The Commission further expects the licensee to develop and implement a comprehensive corporate plan that explains how Pelmorex intends to continue to improve its representation of Canada's cultural diversity, and to file its plan with the Commission within three months of the date of this decision. The plan should include specific commitments to corporate accountability and to the reflection of diversity in programming, and should make provision for the gathering of feedback on the effectiveness of these commitments. The plan should also set goals for achieving the full, fair and consistent reflection of diversity in Canada.

43.

With respect to corporate accountability, the plan should address how Pelmorex will create an environment that supports the cultural diversity objectives outlined above, by:

44.

With respect to the reflection of diversity in programming, the plan should focus on how the licensee will ensure the presence and the fair, accurate and non-stereotypical portrayal of cultural minorities and Aboriginal peoples in the programming it produces or acquires. Specifically, the plan should include provisions for making certain that:

45.

As for feedback, the corporate plan should describe the specific mechanisms the licensee will put in place to ensure that it receives effective input from community groups concerning its performance in reflecting cultural diversity in programming.

On-air presence

46.

The Commission reminds the licensee that the expectations set out above with respect to cultural diversity are over and above the longstanding and more general expectations concerning employment equity. Specifically, the Commission expects the licensee to continue to ensure that the on-air presence of members of the four designated groups (women, Aboriginal persons, disabled persons and members of visible minorities) is reflective of Canadian society, and that members of these groups are presented fairly, accurately and in a manner free of stereotypes.

Closed captioning

47.

The Commission is committed to improving service to television viewers who are deaf or hearing impaired. Over the period since the Commission announced its policy on closed captioning in Public Notice CRTC 1995-48, it has consistently encouraged broadcasters to increase the amount of captioned programming they provide. The Commission now requires the licensees of conventional television, specialty and pay television undertakings to achieve a minimum level of captioned programming appropriate to the nature of the service that each provides. Generally, the specified minimum requirement is 90% of all programming.

48.

Pelmorex confirmed that its news programming as well as all pre-recorded elements will be captioned. However, Pelmorex indicated that it would be difficult to achieve a captioning level of 90% of all programming for a variety of reasons. Nevertheless, consistent with the policy approach described above, the Commission has decided to require the licensee, beginning 1 September 2006, to close caption 90% of all spoken-word programming during the broadcast day. A condition of licence to this effect is contained in the appendix to this decision.

49.

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 provide some flexibility 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.

50.

The Commission expects the licensee to focus on improving the quality, reliability and accuracy of closed captioning, and to work with representatives of the deaf and hard of hearing community to ensure that captioning continues to meet their needs.

Interventions

51.

The Commission has considered all other interventions submitted in regard to this application.

Related CRTC documents

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

Appendix to Decision CRTC 2001-668

Conditions of licence for The Weather Network/Météomédia