ARCHIVED - Broadcasting Decision CRTC 2002-323

Broadcasting Decision CRTC 2002-323

See also: 2002-323-1 and 2002-330-1

Ottawa, 21 October 2002

CHUM Limited
Toronto, Woodstock and Ottawa; London; Wingham; Wheatley and Windsor; Pembroke and Ottawa; and Barrie, Ontario; and Vancouver and Courtenay, British Columbia

Applications 2001-1321-7, 2001-1323-3, 2001-1324-1, 2001-1325-9, 2001-1326-7, 2001-1327-5, and 2001-1322-5
Public Hearing in the National Capital Region
6 May 2002

Licence renewal for seven CHUM Limited television stations

1.

In this decision, and in others that follow in sequence (Decisions CRTC 2002 324 to 2002-330), the Commission renews the broadcasting licences for the six television stations owned by CHUM Limited (CHUM) in Ontario, and for one of the two stations owned by this licensee in British Columbia. The licence for the other British Columbia station, CIVI-TV Victoria, expires in 2004; its renewal was not before the Commission as part of this licence renewal process.

2.

In this decision, the Commission addresses CHUM's role as a multi-station ownership group within the conventional television broadcasting industry, reviews CHUM's record in performance of that role, and assesses CHUM's plans and commitments for the upcoming licence term. The decision also announces the Commission's determinations regarding these plans and commitments, and sets out those conditions of licence and expectations that are directed to all of the television stations owned by CHUM whose licences are being renewed at this time. Licence conditions or expectations addressed to only one or two of the stations, as opposed to the entire group, are set out in the individual decisions related to the stations concerned.

3.

The licence renewals granted CHUM in respect of its Ontario stations (CITY-TV Toronto, CFPL-TV London, CKNX-TV Wingham, CHWI-TV Wheatley and its transmitter CHWI-TV-60 Windsor, CHRO-TV Pembroke and its transmitter CHRO TV-43 Ottawa and CKVR-TV Barrie and its transmitter CKVR-TV-1 Parry Sound) are for terms expiring 31 August 2009. In the case of CKVU-TV Vancouver and its transmitter CKVU-TV-1 Courtenay, the Commission has decided to renew the licence for a term expiring 31 August 2004, to coincide with the expiry of the current licence issued for CIVI-TV Victoria.

4.

The short term licence renewal accorded to CKVU-TV Vancouver reflects the Commission's view that the long-term plans and commitments for the Vancouver station presented by CHUM lacked the degree of detail and the clarity that would justify a full, seven-year licence renewal.Although the Commission recognizes thatCHUM only recently acquired ownership of this station (Transfer of control of CKVU-TV Vancouver, Decision CRTC 2001-647, 15 October 2001), it considers that the licensee should have been able to furnish the Commission with a far more complete outline than it did of its plans over the next seven years. The Commission also notes that the two-year licence term will enable the Commission to assess CHUM's long-term plans and commitments for CKVU-TV Vancouver concurrently with its examination of those for CIVI-TV Victoria. At that time, the Commission will wish to be satisfied that these commitments are commensurate with the privilege CHUM holds as licensee of two television stations operating in Canada's second-largest English-language television market.

CHUM's past performance

5.

The Commission is generally satisfied that CHUM has adhered to the conditions and expectations currently attached to the licences of the various conventional television stations it owns and operates. In most instances where the Commission's conditions of licence or expectations have specified minimum quantitative targets, the licensee has exceeded these. For example, in each of the last three years, CITY-TV Toronto has broadcast approximately 22 hours per week of local news, or some nine hours more than the amount expected of the licensee at the time of its last licence renewal. CHUM has also met or surpassed all of its financial and other commitments offered as benefits in the context of ownership transfers.

6.

As a broadcast group, CHUM is exceeded in both size and reach by CanWest Global and by CTV Television Inc. (CTV). Nevertheless, during the current licence term, CHUM has been responsible for the production, broadcast, and sale abroad, of a significant amount of Canadian programming. Through its program licensing arrangements, particularly those involving new Canadian films, CHUM has provided substantial support to the independent program production sector in this country. It has also served as an effective vehicle for the production and broadcast of programming reflecting cultural diversity, has established a strong record in sponsorship and partnership in a broad range of community activities, and has taken a leading role in the advancement of media literacy in Canada. The Commission commends CHUM on all of these accomplishments and encourages the licensee to maintain its course in these respects.

7.

The Commission received 23 interventions that related to the CHUM applications as a group, and all have been taken into account by the Commission in its deliberations. All but one of these interventions were in support of the renewals of CHUM's television licences. The lone opposing intervention relates to cultural diversity and is discussed below.

The Commission's 1999 Television Policy

8.

Reviewing the licence renewal applications of all or most of the television stations owned or controlled by a single broadcaster at the same time is an approach adopted by the Commission in its Television Policy (Building on success - a policy framework for Canadian television, Public Notice CRTC 1999-97, 11 June 1999) (the Television Policy). The process allows the Commission to review the overall performance of each ownership group, and examine the corporate strategy that the owner proposes to follow during the new licence term. A group licence renewal also enables the Commission to assess the programming plans of an ownership group against the background of the objectives of the Broadcasting Act (the Act) and of the Television Policy, and thereby to determine whether these plans adequately reflect the group's capabilities and responsibilities to contribute to the broadcasting system.

9.

One of the key elements of the Commission's Television Policy is the importance it places on providing each multi-station ownership group with the flexibility ".to differentiate itself and brand its programming and scheduling to attract maximum audience, all within an equitable and well-defined regulatory framework". The policy also distinguishes between larger and smaller station groups for the purpose of determining the appropriate contribution that each should make to attainment of the objectives of the Act. For example, while the larger multi-station groups have been required to broadcast eight hours per week of priority programming on their television stations, the policy provides for the imposition of less stringent requirements on stations within the smaller ownership groups. The Commission sees this approach as essential due to the fact that, while various station groups compete directly with each other in many markets, the size of any group in relation to another can vary widely.

CHUM's qualification as owner of a smaller multi-station group

10.

The Television Policy defines a larger multi-station group as one licensed to operate in several provinces and whose stations have a combined potential reach of more than 70% of the national audience in their language of operation. Groups meeting this definition include CTV and CanWest Global in the English-language conventional television market, and TVA Group Inc. (TVA) on the French-language side. The television stations belonging to each of these three larger ownership groups were the subject of group renewal proceedings in 2001. Smaller multi-station ownership groups include Craig Broadcasting Systems Inc. (Craig) and CHUM, whose group licence renewal applications were considered at the 10 April and 6 May 2002 hearings, respectively. TQS inc. is a third multi-station ownership group; the licences for its French-language television stations were last renewed two years ago.

11.

At the 6 May 2002 hearing, CHUM agreed with the Commission's calculations that place CHUM's national potential reach at approximately 67%, just below the threshold of 70% specified in the Commission's definition. Nor does CHUM meet the second criterion used to define a larger multi-station group in that it operates conventional television stations in only two, as opposed to several, provinces.

CHUM's programming strategy

12.

CHUM indicated at the hearing that it plans to continue to employ two distinct programming strategies within its group of conventional television stations, developing one schedule that is common to CITY-TV Toronto and CKVU-TV Vancouver, and another that is common to the remaining Ontario-based stations and CIVI-TV Victoria. CHUM noted at the hearing that it will also continue with programming strategies that provide synergies with CHUM's specialty programming undertakings:

We think it provides programming in the markets in a way that is not now being served. This is, of course, in the context of each of these groups of stations being intensely local and connected to their community in a truly local way.

13.

At the hearing, with respect to the format of its conventional stations, CHUM expressed the view that its decision to retain the movie-based formats of CITY-TV Toronto and CKVU-TV Vancouver "is sound and remains as valid as ever." According to CHUM, this approach allows its smaller-market stations "to concentrate on more action/adventure programming, some science fiction programming and to deal with their generally smaller markets in a way that is appropriate to those markets."

14.

Further, at the hearing CHUM indicated that it is eager to take up the challenge of putting strong Canadian programming up against the best programming from the U.S. in prime time, stating that "it is part and parcel of our philosophy, which is not to ghettoize Canadian programming and not to be overly reliant on U.S. simulcast."

Non-priority programming during peak viewing hours

15.

The Commission noted in its Television Policy that the smaller station groups generally offer programming schedules that differ from those of the larger groups. The Commission sought to encourage this distinctiveness by permitting the smaller groups to experiment with new genres of Canadian programming tailored to the needs of their audiences. Thus, while stipulating that the larger groups would generally be required to provide eight hours per week of priority programming on each of their stations, the Commission recognized that stations belonging to smaller ownership groups "can contribute to diversity of programming in the system through the exhibition of programming in categories other than those defined as priority".

16.

Consistent with this policy objective of diversity, CHUM has developed a variety of popular magazine-style and other, non-priority programs, and has established a niche for itself by giving many of these programs first play on its television stations during peak viewing hours. The Commission notes the role played by such programs as "Speaker's Corner" in providing community access. It also notes the contributions to media literacy and the opportunities for in-depth discussion of Canadian music, art, architecture and films made by other programs such as "MediaTelevision", "The NewMusic" and "MovieTelevision". The Commission encourages CHUM to continue to broadcast such programs during peak viewing hours.

Priority programming

Quantitative requirements

17.

Despite CHUM's position within the industry as owner of a smaller station group, it currently adheres to conditions of licence requiring that it provide eight hours of priority programming per week on each of its television stations except CITY-TV Toronto. In the case of CKVU-TV Vancouver, CHUM assumed responsibility for adhering to such a condition of licence when it purchased the station from CanWest Global. CHUM collectively brands its smaller Ontario television stations, those other than CITY-TV, as the "NewNet" stations. In the case of these NewNet stations, the licensee agreed to accept conditions of licence for the weekly broadcast of eight hours of priority programming in its successful application for a licence to carry on a new television station to serve Victoria.

18.

In its current renewal applications, CHUM agreed to accept a condition of licence under which CITY-TV would increase the amount from the present level of roughly four and one-half hours to six hours in each week of the first three years, increasing to seven hours per week in year four and for the remainder of the licence term.

19.

Interventions by the Directors Guild of Canada (the Directors Guild), the Canadian Film and Television Production Association (CFTPA) and the Writers Guild of Canada recommended that CITY-TV be obliged to increase the amount of priority programming it broadcasts. The views of these interveners varied as to the year of the new licence term by which CITY-TV should be required to implement the increase. All three, however, recommended a minimum weekly level of eight hours, largely on the basis of CHUM's group profitability, and in the interests of consistency with the requirements that have been imposed on other multi-station ownership groups.

20.

In responding to these interventions at the hearing, CHUM noted that as a group, it has committed to 16 hours of unduplicated priority programming "on a revenue base that is roughly one-third that of the larger multi-station groups." It also noted that imposing a requirement to broadcast 8 hours per week of priority programming on CITY-TV might oblige it to reduce the amount of original, Canadian magazine format programming currently aired by CHUM during the evening.

21.

The Commission notes that, on all of CHUM's other stations, with the exception of CKVU-TV where CHUM inherited the priority programming commitments of the previous ownership group, the licensee has volunteered to provide the eight hours per week of priority programming required of stations owned by larger multi-station groups. This is despite the fact that the Television Policy provides flexibility to smaller multi-station groups in their provision of weekly hours of priority programming. The Commission considers that CHUM's proposed levels of priority programming for CITY-TV are acceptable. Conditions of licence reflecting CHUM's priority programming commitments are set out in the individual decisions for the stations concerned.

22.

CHUM indicated that, for the purpose of calculating the amounts of priority programming that are broadcast in fulfilment of these conditions of licence, it would claim the dramatic programming credit announced in 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 CRTC 1999-205, 23 December 1999. The Commission reminds the licensee that it is thus no longer entitled to claim the dramatic programming credit set out in the appendix to Recognition for Canadian Programs, Public Notice CRTC 1984-94, 15 April 1984, and appendices I and II to Certification for Canadian programs - a revised approach, Public Notice CRTC 2000-42, 17 March 2000.

23.

The Commission acknowledges the care that CHUM has taken in the past to schedule the priority programming aired on its various stations in a well-balanced manner across the broadcast week. It encourages CHUM to continue to provide such balance in its scheduling, and to ensure that such programs are broadcast when larger numbers of Canadian viewers are available.

24.

One of the several distinguishing aspects of CHUM's programming has been its emphasis on the broadcast of Canadian feature films and made-for-television movies, particularly on CITY-TV. The majority of these productions have also been identifiably Canadian by virtue of their themes, settings and the stories that they tell. It had been CHUM's commitment over the past licence term to broadcast on CITY-TV an annual minimum of 100 hours of Canadian feature films. In the 1996/97 broadcast year, and again in the 1997/98 broadcast year, CHUM failed to meet this commitment, broadcasting 68.5 hours of Canadian feature films in 1996/97 and only 54 hours in 1997/98. CHUM argued that the minimum annual level had been a voluntary commitment on its part, and that the annual level had been provided, as an average, over the licence term. Nevertheless, in the Commission's view, the applicant's commitment was that it would broadcast a minimum of 100 hours of Canadian feature films in each year.

25.

At the deficiency stage of the current application process, CHUM stated that it would accept a condition of licence requiring that it broadcast a minimum of 100 hours per year of Canadian features during peak viewing hours on both CITY-TV and CKVU-TV. CHUM indicated that its willingness to accept such a condition was on the basis of "Canadian feature" being defined to include all forms of Canadian long form features, including theatrical features, movies of the week and feature-length documentaries.

26.

The Commission has reviewed CHUM's proposal, and finds it to be generally acceptable. It considers it appropriate, however, to place a limit on the proportion of the 100 hours that may be devoted to feature-length documentaries. Without such a limit, the important support CHUM has extended to the Canadian film production industry over the years could become diluted. Moreover, imposing a limit on the amount of feature-length documentaries that CHUM may claim in meeting its condition of licence would be consistent with the objective of maintaining diversity, given the presence of documentaries in the programming schedules of the various other station groups. Accordingly, in the decisions renewing the licences for each of CITY-TV and CKVU-TV, the Commission has imposed a condition of licence requiring the broadcast of a minimum of 100 hours per broadcast year of Canadian long form features during peak viewing hours. Such features may include theatrical features, movies-of-the-week, and a maximum of ten hours of feature-length documentaries.

Maintaining distinctiveness

27.

In its intervention, the CFTPA recommended that the Commission ensure that the programming aired on CKVU-TV Vancouver is distinct from that broadcast by CIVI-TV Victoria. It added that such distinctiveness should also be maintained between the programming of CITY-TV Toronto and that of the NewNet stations, particularly of CKVR-TV Barrie. At the May hearing, CHUM stated that it would accept conditions of licence to this effect.

28.

In recent cases where the Commission has permitted a single licensee to own and operate two television stations in the same market, it has required the licensee, by condition of licence, to ensure that the priority programming on one station remains distinct from that broadcast on the other. In the case of the Vancouver and Victoria stations, CHUM had agreed to accept such a condition of licence in its application to acquire control of CKVU-TV. Accordingly, in today's decision renewing the licence for CKVU-TV, the Commission has required as a condition of licence that the priority programming broadcast on that station be distinct from the priority programming of CIVI-TV.

29.

The circumstances surrounding CITY-TV Toronto and CKVR-TV Barrie differ from those present in the case of CHUM's stations in Vancouver and Victoria. The two Ontario stations have operated alongside one another since 1995. Over the years, CHUM has consistently pursued a business plan whereby the two stations have been programmed distinctly from each other. The Commission expects the licensee to adhere to its commitment to continue to ensure that the priority programming on CKVR-TV and
on the other NewNet stations remains distinct from the programming on CITY-TV. In the circumstances, the Commission does not consider a condition of licence requiring adherence to this commitment to be necessary.

Vertical integration

30.

Section 3(1)(i)(v) of the Act states that the programming provided by the Canadian broadcasting system should "include a significant contribution from the Canadian independent production sector". In the group renewal decisions issued in respect of the television stations owned by CTV and CanWest Global (Licence renewals for the television stations controlled by CTV and Licence renewals for the television stations controlled by Global, Decisions CRTC 2001-457 and 458, 2 August 2001), the Commission stated the expectation that these licensees ensure that at least 75% of all priority programming broadcast on average over the broadcast year is produced by independent production companies. The Commission defined an independent production company as one 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.

31.

The Commission's reason for expressing this expectation was to ensure that production companies unaffiliated with the licensee have reasonable access to the licensees' programming schedules.

32.

In their interventions, the CFTPA and the Directors Guild both recommended that the Commission express the same expectation of CHUM as it did of CTV and CanWest Global. The Director's Guild emphasized that Canadian broadcasters serve as the principal market for independent producers, and "are the key to accessing funding support and tax credits." In its view, clear programming commitments are essential for the stability of the Canadian production industry.

33.

CHUM did not consider that the Commission should state that it has any expectation of CHUM in regard to the broadcast of productions obtained from independent production companies. CHUM confirmed at the hearing that the production company with which it is currently affiliated is winding up its business and would soon no longer be a part of the corporate group. CHUM estimated that any programming remaining on order from that company ".should all be delivered in the next nine months or so".

34.

CHUM suggested that it considers itself disadvantaged by the current definition of an independent production company. The licensee also noted that, unlike the larger station groups, CHUM produces a portion of its non-news programming in house. The licensee stated that, in Vancouver, it is assembling an in-house production team dedicated to multicultural and aboriginal programming. It suggested that some of the programming that emerges from this initiative ".may well qualify as priority programming, and we cannot see ourselves accepting a condition that could have the effect of discouraging us from running this programming that is most unique to us".

35.

The Commission notes that the vast majority of CHUM's in-house, non-news programs does not qualify as priority programming and would thus not be subject to the expectation proposed by the interveners. CHUM suggested that some projects it currently has in development for in-house production might qualify as priority programming. The proposed expectation, however, would allow the licensee to produce in-house, or obtain from sources other than non-affiliated independent producers, as much as 25% of its requirements for priority programming. An examination of CITY-TV's Fall 2001 programming schedule indicates that the station's priority programming already meets the proposed expectation, in that approximately 79% of it was acquired from non-affiliated independent producers. A similar examination of the licensee's sample block schedules for the NewNet stations indicates that all of their priority programming would satisfy the expectation regarding the broadcast of programming obtained from independent production companies.

36.

The Commission is of the view that it continues to be important to secure an envelope for Canadian independent production. The Commission further considers that the 75% level is an appropriate threshold for CHUM, and is satisfied that such an approach will not prevent CHUM from continuing to produce substantial amounts of its unique programming in house.

37.

Taking the above considerations into account, and given that the CHUM stations all have conditions of licence relating to priority programming, the Commission considers that the licensee should be subject to the same expectation that applies to the larger station groups regarding the broadcast of Canadian independent production. Accordingly, the Commission expects CHUM 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.

38.

The Commission notes CHUM's confirmation at the hearing that it has entered into discussions with the CFTPA aimed at developing a terms of trade agreement with that organization. The Commission considers that such agreements between broadcasters and the CFTPA are to the benefit of all elements of the Canadian broadcasting system.

Regional production and reflection

39.

In its Television Policy, the Commission recognized the need for the Canadian broadcasting system "to better reflect, in its peak time programming, the different regions of the country". In the group renewal decisions for CTV and CanWest Global, the Commission stated that it expected these broadcasters to commission their priority programming from all regions of Canada, and to report on their independent production activities on an annual basis.

40.

In its applications, CHUM noted that it has supported independent productions in all regions of Canada, and that its objective is to obtain the best product regardless of the region in which it is produced. At the hearing, the CFTPA praised CHUM's contributions to the Canadian independent production community, including its financial support, exhibition commitments and funding of script and concept development. It added:

Intensely local, with a strong focus on news, movies and music, CHUM's conventional television stations provide a distinct alternative to the offerings of the other station groups. CHUM has created a vibrant, streetfront style that is accessible and participatory. Its television stations are widely recognized for their efforts to promote various communities of interest and for presenting a true reflection of cultural diversity.

41.

In light of CHUM's significant presence in Ontario and in British Columbia, the Commission considers it reasonable that the licensee commission priority programming predominantly from independent producers in those two provinces. At the same time, the Commission encourages CHUM to continue its practice of commissioning priority programming from all regions of Canada.

42.

Further, the Commission expects CHUM to provide regional reflection, not only in its priority programming, but in all of its programming.

43.

The CFTPA suggested that CHUM should file annual reports on its independent production activities. It noted that this would be consistent with the Commission's expectations of CTV and CanWest Global, and would "ensure a transparent record of the relationship between broadcasters and producers." Addressing this matter in a 22 May 2002 letter to the Commission, CHUM expressed reservations about the increased administrative burden this might entail, but agreed to provide such information for all of its stations. It did so on the assumption that the details required by the Commission would be similar in nature to the information it is currently required to file regarding its independent production activity associated with benefits offered at the time it purchased CKVU-TV Vancouver.

44.

Accordingly, the Commission expects CHUM to submit annual reports outlining its activities relating to the licensing of independent production. The reports should 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 the licensee's performance in this area. The Commission expects the licensee to consult with Commission staff regarding the content and format of such reports.

Script and concept development

45.

The Commission considers that script and concept development expenditures are essential for developing creative talent in television production. They have been characterized as the broadcast industry's research and development funding in respect of its drama and long form documentary production activities. The Commission therefore expects CHUM to adhere to its commitment, on behalf of those stations whose renewal applications were considered at the May hearing, to expend a minimum of $1.83 million on script and concept development over the course of the coming licence term. This amount excludes the licensee's existing obligations for the funding of script and concept development associated with ownership transaction benefits.

Local programming

CITY-TV Toronto and the NewNet stations

46.

At the time CHUM filed its renewal applications, the Commission was deliberating on a number of other applications then before it, requesting licences for authority to carry on new television programming undertakings in south-central Ontario. In the renewal applications for its Ontario stations, CHUM filed two sets of commitments for the provision of weekly levels of local programming during the new licence term. One set of commitments proposed levels of local programming that were predicated on a subsequent Commission decision to license no new station in the Toronto area. In the case of each station, the proposed level either equalled or exceeded the number of hours of local programming expected of CHUM at the time of the station's last licence renewal. For most of the Ontario stations, the applicant's second set of commitments specified significantly lower minimum weekly amounts of local programming. CHUM indicated in its applications that the lower levels were in anticipation of what it termed the "worst case scenario", namely that resulting from a Commission decision to license two new stations in Toronto.

47.

The Commission notes that CHUM's commitment with respect to local programming on CKNX-TV Wingham and CHWI-TV Wheatley changed over the course of the proceeding. In a letter dated 18 January 2002 clarifying its original application, CHUM indicated that, if no new television station were licensed in the Greater Toronto Area (GTA), its commitment would be to a minimum of 1.5 hours per week of separate local programming for CKNX-TV and 7 hours per week of separate local programming for CHWI-TV. The same letter specified that under the "worst case scenario", neither CKNX-TV nor CHWI-TV would have any local programming separate from that of CFPL-TV London.

48.

An intervention was submitted by the Mayor of Windsor, Michael Hurst, expressing concern about the possible elimination of CHUM's local service in Windsor, and by association, in Wingham. In a further letter dated 16 April 2002, CHUM cited Mr. Hurst's intervention in revising its commitments for CKNX-TV and CHWI-TV. CHUM's final commitments were to maintain a minimum of 1.5 hours per week of separate local programming for CKNX-TV and 7 hours per week of separate local programming for CHWI-TV. However, these "worst case scenario" commitments were for two years as opposed to the seven-year commitments made with respect to CHUM's other stations.

49.

In response to questioning at the hearing, CHUM indicated that its reluctance to commit to providing levels of local programming any greater than those proposed under its worst case scenario was due to a number of factors. Among other things, CHUM suggested that introduction of two new television services would have an impact that would not be fully absorbed by the Toronto market for at least seven years. It claimed further that the new stations would reduce, by between 5% and 10%, the amount that CHUM was able to charge for advertising time, and would increase the costs it incurs in acquiring broadcast rights to foreign programs. In the meantime, notwithstanding generally improving economic forecasts, CHUM advised that its projections for its own operations were for "largely flat conventional growth". It noted in this regard that, traditionally, its stations had not performed as well as those of CTV and CanWest Global.

50.

CHUM maintained in its applications that it was the "localness" of its stations that distinguished CHUM from other multi-station groups. It argued, however, that this localness could not be measured solely by the amount of local programming offered, but hinged as well on the quality of the local reflection provided. CHUM claimed that the quality of local programming would be sacrificed if it were required to maintain or increase the amount.

51.

The hearing of CHUM's renewal applications followed by less than a month the Commission's approval of applications by two licensees to carry on new television stations in south-central Ontario. One application was by Craig Broadcast Systems Inc., on behalf of a corporation to be incorporated, for a licence to provide a new, English-language conventional television service in Toronto and Hamilton (New television station for Toronto/Hamilton, Broadcasting Decision CRTC 2002-81, 8 April 2002). The other was by Rogers Broadcasting Limited for a new Toronto multilingual ethnic television station (see New multilingual ethnic television station to serve Toronto, Broadcasting Decision CRTC 2002-82 of the same date). These decisions were accompanied by Introductory statement to decisions approving two new television stations to serve Toronto/Hamilton, Broadcasting Public Notice CRTC 2002-17. In this notice, the Commission concluded that the Toronto/Hamilton television market would be capable of sustaining the entry of a new general interest television station and a new ethnic television station without unduly impairing the ability of the existing stations in the market to meet their programming obligations.

52.

The Commission remains of the view that the Toronto market is of a size that should allow it to absorb the competitive impact of the two new television stations without undue difficulty. This impact will be borne not only by CHUM's stations in the Toronto area, but will be spread across these and all other television stations that serve or reach into this market. The Commission notes that the ethnic service licensed to Rogers will devote 70% of its schedule to serving 22 ethnic groups and thus will have a lesser impact on the market than would an English-language conventional station.

53.

Further, the Commission does not consider that the impact of the new stations on CHUM will be as great as the licensee predicts. CHUM is a strong, experienced and capable broadcaster. It has privileged access, through two television signals in each case, to the two largest English-language television markets in Canada. In addition to its regional system of conventional television stations in Ontario, and its more recently-obtained stations in British Columbia, CHUM owns or has interests in numerous, broadly-distributed specialty television services. Although some of these are emerging Category 2 digital services, others have been in operation as analog services for some time and are profitable. CHUM also owns 28 radio stations across Canada that, as a group, is also profitable. CHUM's access to these multiple exhibition platforms, and its ability to rebroadcast programming and exploit other potential synergies associated with this access, contributes substantially to CHUM's success and its ability to withstand competition.

54.

The Commission notes that the higher local programming commitments specified in the first of CHUM's two sets of commitments are significantly lower than the levels of local programming currently being broadcast on CHUM's Ontario stations, except for CFPL-TV London, where the first commitment and the station's current level of local programming are the same.

55.

At the hearing, CHUM cited its "track record of exceeding conditions of licence and commitments in the past" as the Commission's best assurance that it would continue to do so in the future. The licensee also emphasized that its proposed local commitments going forward are absolute minimums, and that it has committed to continue to exceed those levels if market conditions allow. CHUM made it clear that it would not reduce its current levels of local programming except under the most extreme financial pressure. As Mr. Znaimer said, ".that is the last thing that any of us want to do and all of us have said so."

56.

The Commission acknowledges that, over the years, CHUM has consistently met or performed beyond its responsibilities and commitments to the Commission, to the audiences and communities served by its stations, and to the Canadian broadcasting system as a whole. It is this track record that enables the Commission to accept as likely that CHUM will strive to provide the levels of local programming that it currently provides on its Ontario stations. At the same time, given the matters discussed above and CHUM's role as owner of this group of six large and small Ontario television outlets, the Commission considers it appropriate that CHUM provide, at a minimum, the level of local programming on each of the stations that the applicant specified in its first set of commitments.

57.

Accordingly, the Commission expects the licensee to provide, at a minimum, and throughout the licence term, the amounts of local programming specified in the first of its two sets of commitments. This expectation extends to the local programming of CKNX-TV Wingham and CHWI-TV Wheatley for the entire licence term, and not just for the first two years as proposed by CHUM. The Commission has stated this expectation in the renewal decisions for each of CHUM's Ontario television stations.

58.

In its applications, CHUM not only proposed to reduce the amount of local programming aired on its NewNet stations, but requested the flexibility to reduce the amounts further by replacing at least some of the local programming with "regional" programming in the case of certain of these stations, namely CHRO-TV Pembroke, CFPL-TV London and CKVR-TV Barrie. The Commission considers that, in the case of these three stations, the expectation regarding local programming will be met if no more than one hour per week of local programming is replaced by regional programming, provided that the regional programming is drawn from a category other than news.

59.

In deciding upon its expectation regarding local programming, particularly with respect to the Pembroke, London, Wingham and Wheatley stations, the Commission has taken into account the commitments to local programming and the retention of a "primarily-local focus" that had been offered by CHUM in the context of its applications for authority to acquire ownership of these NewNet stations five years ago (See Approval of applications by Baton Broadcasting Incorporated and certain of its subsidiaries, CHUM Limited, and CTV Television Network Ltd. for authority to transfer either the assets, or share equity representing effective control, of the CTV Television network, and of various English-language television and other programming undertakings across Canada, Decision CRTC 97-527, 28 August 1997). CHUM acknowledged at the May 2002 hearing that, in the case of the NewNet stations, the first target of any reduction it would make in local program production would likely be the local non-news programming now aired in the morning. In the Commission's view, with a decrease in local programming and, more specifically, with the sacrifice of the non-news component of such programming, the local reflection offered by the affected stations would shift almost entirely to local news. This is a strategy that would appear to mirror that now employed by the larger multi-station groups, and would thus reduce diversity.

CKVU-TV Vancouver

60.

CHUM's renewal application for its Vancouver station includes commitments for local programming that coincide with those it offered at the time CHUM acquired ownership of the station from CanWest Global in October 2001. These commitments are to provide 15 hours 30 minutes per week of original news and a further 12 hours per week of original non-news programming. As CHUM acknowledged at the May hearing, the Commission's practice in the case of those few licensees who own two television stations operating in the same language and in the same market is to require, by condition of licence, the provision of appropriate levels of local programming. Accordingly, in CKVU-TV's renewal decision, the Commission has attached a condition of licence requiring provision of the levels of local programming noted above.

61.

At the time of the concurrent renewal proceedings of CKVU-TV Vancouver and CIVI-TV Victoria in 2004, the Commission will wish to be satisfied that CHUM's commitments to local programming on CKVU-TV, among its other commitments, remains commensurate with the privilege CHUM enjoys as licensee of two television stations operating in Canada's second-largest English-language television market.

Cultural diversity

62.

The Commission's Television Policy stated the following:

The Commission 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.

63.

Within months of that announcement, CHUM had published its Cultural Diversity Best Practices statement, articulating the company's corporate approach to diversity. CHUM has also drafted a cultural diversity corporate plan, which it filed with the Commission just prior to the May hearing. Such initiatives illustrate the importance that the licensee attaches to reflecting the cultural diversity present in the communities it serves. CHUM's overall performance in this area, and the corporate philosophy that has informed and motivated that performance, have established CHUM as an industry leader. The Commission commends CHUM for its leadership, and encourages the licensee in its efforts to extend and strengthen, throughout its organization, the positive consequences of its corporate approach to the reflection of cultural diversity.

64.

In the licensee's draft corporate plan, CHUM has set out specific plans to ensure corporate responsibility through public consultation. It also proposes such other mechanisms as having each of its television station managers conduct annual cultural diversity audits and report the results to CHUM's President. CHUM, citing the fact that two-thirds of those who make up Canada's visible minority communities are under 34 years of age, has made plans to focus greater energy and resources on serving the needs of visible minority youth.

65.

CHUM has also committed to file annual reports with the Commission, detailing the actions it has taken and the progress it has achieved towards attaining this and the plan's other objectives, with respect to corporate accountability, reflection of diversity in programming and community involvement. The Commission expects CHUM to adhere to this commitment. The Commission reminds CHUM that these reports should be filed each year no later than 31 December.

66.

The Commission notes CHUM's commitment to participate in, and contribute financially to, the industry/community task force on cultural diversity. It also notes the licensee's commitment, offered as one of the benefits of its application to acquire ownership of CKVU-TV Vancouver, to assist in funding the development of a cultural diversity databank of experts.

67.

The Commission understands that CHUM has asked community groups and other interested parties for comment on its draft cultural diversity corporate plan, and that it intends to submit to the Commission any revision to the plan that may result from this consultation. The Commission expects the licensee to submit the revised plan for approval within three months of the date of this decision. The Commission will review the plan at that time, and subsequently inform CHUM of its determinations with respect to the plan's acceptability.

68.

An opposing intervention was received from the Tamil Coordinating Committee, which raised a concern about negative stereotyping of the Tamil community on CHUM's radio station CFRA Ottawa, and in particular, on the Lowell Green Show. The intervener stated that this called into question CHUM's corporate treatment of diversity issues. The Commission notes the licensee's commitment at the hearing to follow up on the matters raised by the intervener. The Commission also considers that the initiatives undertaken and proposed with respect to CHUM's cultural diversity corporate plan will provide opportunities for community input regarding negative stereotyping, and that these initiatives signal CHUM's intention to be responsive to such issues on a corporate basis.

Employment equity

69.

Because this licensee is subject to the Employment Equity Act and files reports with Human Resources Development Canada, its employment equity practices are not examined by the Commission.

Ethnic and aboriginal programming

70.

The Commission notes CHUM's commitments to continue to broadcast ethnic programming on CITY-TV Toronto, CKVU-TV Vancouver, CKVR-TV Barrie and CHRO-TV Pembroke. CHUM's specific commitments in this area are noted in the individual renewal decisions for the stations concerned.

71.

At the hearing, the Commission questioned CHUM on its plans to develop and produce aboriginal programming and, in particular, on its program exchange activities with Aboriginal Peoples Television Network (APTN). The licensee stated that the exchange of programming between CHRO-TV Pembroke and APTN has been ongoing for several years. One such exchange highlighted by CHUM involves the local program Aboriginal Voices, which airs first on the Pembroke station, and subsequently on the APTN network. CHUM added that its relationship with APTN ".is exceptional, in part because it happened naturally and in part because [CHUM is] making it a priority". The Commission notes CHUM's plans to continue this relationship with APTN and develop and produce additional aboriginal programming in other markets in which it operates.

Service to the visually impaired

72.

"Audio description" and "described video " are methods of improving the service that television broadcasters provide to persons who are visually impaired. Audio description involves the provision of basic voice-overs of textual or graphic information displayed on the screen. For example, a broadcaster providing audio description will not simply display sports scores on the screen, but will also read them aloud to ensure that those who have a visual impairment receive the information.

73.

Described video, or video description as it is also known, consists of narrative descriptions of a program's key visual elements that enable persons who are visually impaired to form a mental picture of what is occurring on the screen. Described video particularly lends itself to drama programming, although long-form documentaries and children's programs also lend themselves to video description. Video description can be provided on the Secondary Audio Programming (SAP) channel. Not all broadcasters are currently equipped to deliver SAP signals. Thus, the introduction of described video via the SAP channel requires significant capital expenditures to upgrade a licensee's transmission facilities.

74.

With respect to audio description, CHUM 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, together with an oral description. The Commission expects CHUM to continue to provide audio description where appropriate. It further expects the licensee to take the necessary steps to ensure that the services provided by its various television stations respond to the needs of visually impaired audiences.

75.

With respect to described video programming, CHUM indicated that its commitments are the same as those required by the Commission of CTV and CanWest Global in conditions of licence set out in last year's group renewal decisions. Accordingly, CHUM proposed to air a minimum of two hours per week of described video programming on each of its two larger stations, CITY-TV Toronto and CKVU-TV Vancouver, during the first two years of the new licence term. During the third and fourth years, three hours per week of such programming would be broadcast on these two stations, as well as on the five NewNet stations. In the final three years of the licence term, the weekly amount would be increased to four hours on all seven stations. CHUM also confirmed that, consistent with the requirements imposed on the two larger multi-station groups, all of the described video programming would be Canadian, and a minimum of 50% of the described video programming broadcast each week would be original programming.

76.

In the case of CTV and CanWest Global, the Commission's conditions of licence stipulated that all of the described video programming should be aired between the hours of 7:00 p.m. and 11:00 p.m., and should be drawn from Category 2b - Long-form documentary or Category 7 - Drama and comedy. The Commission added, however, that the licensees could count toward fulfilment of this requirement a maximum of one hour per week of described video programming that is directed to children and is broadcast at an appropriate viewing time for children.

77.

In its applications, CHUM requested flexibility with respect to the categories of programming that it would accompany with described video:

While we understand [the Commission's] focus on drama, we also see the importance of description on for example our magazine shows, so to fulfil some of our requirements we would be looking for a mix of both drama and other prime-time programming such as our magazine shows.

78.

CHUM also expressed the view that, in the case of its smaller stations, encouragement by the Commission regarding the introduction of described video programming would be more appropriate than having requirements imposed as conditions of licence. It added, however, that it would accept conditions of licence if the Commission were to consider them as being necessary.

79.

The Commission has considered CHUM's arguments on these two matters. Given the importance the Commission places on improving the service provided by television broadcasters to persons who are visually impaired, and consistent with the approach it has taken on this issue in other television renewal decisions, the Commission has decided to impose conditions of licence regarding the provision of described video programming. At the same time, the Commission considers that CHUM should be permitted to apply a certain limited amount of described video, non-priority peak time programming towards meeting these conditions of licence. In the Commission's view this would be consistent with the flexibility extended to smaller multi-station groups under the Television Policy to provide programming that is distinct from that offered by larger groups.

80.

Accordingly, it is a condition of licence, with respect to CITY-TV Toronto and CKVU-TV Vancouver, that the licensee broadcast, between 7:00 p.m. and 11:00 p.m., an average of two hours per week of described video programming during each of the first two years of the licence term. It is a condition of licence with respect to these, and each of the other CHUM television stations whose licences are herein renewed, that the licensee broadcast, between 7:00 p.m. and 11:00 p.m., an average of three hours per week of described video programming during the third and fourth year of the new licence term, and an average of four hours per week of such programming for the remainder of the licence term. As part of these conditions, all of the described video programming must be Canadian, and a minimum of 50% of the required hours must be original broadcasts. The Commission further expects at least 75% of the described video programming to be priority programming. The licensee may count toward fulfilment of these conditions a maximum of one hour per week of described video programming that is directed to children and is broadcast at a viewing time appropriate for children.

81.

The Commission notes the growing amount of described video programming that is available for acquisition, particularly from U.S. sources. It expects CHUM to acquire and broadcast the described versions of programs wherever possible.

Service to the hearing impaired

82.

In the past, closed captioning requirements for private English-language conventional television stations have differed depending on revenues. Consistent with its recent practice, the Commission explored with the licensee as part of this process the possibility that each of the CHUM stations would be subject to the same requirements for closed captioning of programming.

83.

CHUM has indicated its willingness to accept conditions of licence requiring the provision of closed captions in respect of all news programming, and of 90% of all other programming aired during the broadcast day, throughout the new licence term, on all of its stations except CKNX-TV Wingham and CHWI-TV Wheatley. According to CHUM, these two smaller stations currently provide captions for the vast majority of the programming they broadcast, including local news. The licensee expressed concern, however, about the costs required to ensure that captions are provided for the 3% to 5% of local news that is not captioned at present. According to CHUM, these costs could have a negative impact on its ability to continue to provide extensive local programming.

84.

The Commission has considered the licensee's arguments, and notes that the annual advertising revenues and network payments of the Wingham and Wheatley stations are less than $10 million in each case. The Commission finds it reasonable that their requirements for closed captioning be lower than those of the other CHUM stations.

85.

Accordingly, by condition of licence, in respect of each of CHUM's television stations other than those serving Wingham and Wheatley, the licensee is required to caption 90% of all programming aired during the broadcast day, including all category 1 programming (news), beginning 1 December 2002.

86.

In the case of each of CKNX-TV Wingham and CHWI-TV Wheatley, it is a condition of licence that the licensee caption 90% of all programming aired during the broadcast day, beginning 1 September 2004. The Commission notes the licensee's statements that it has, in fact, achieved captioning levels in the range of 95% to 97% for local news programming on these stations. The Commission expects CHUM, at a minimum, to continue to achieve these levels of captioned news programming on both stations. The Commission further advises CHUM that, at the time of the next licence renewals, it intends to examine the appropriateness of increasing the captioning requirements to include all news programming. Accordingly, the Commission expects CHUM, by that time, to be captioning 100% of all news programming on these two stations.

87.

The above obligations take into account the fact that requiring captioning for all programming at all times may not be reasonable or appropriate. The obligations thus allow for unforeseen circumstances, such as the late delivery of captions, technical malfunctions, and the possibility that, for programs acquired from sources outside of North America, captions may not be available. The obligations also allow for the broadcast of programs for which captioning may not be feasible, such as third-language programming.

88.

These requirements are consistent with the approach taken by the Commission in the case of other television licensees, and reflect the importance that it places on commitments made with respect to closed captioning. The Commission reminds CHUM that its obligations with respect to the provision of closed captions include live feeds.

89.

Further, the Commission expects CHUM to focus on improving the quality, reliability and accuracy of the captioning it provides, and to work with representatives of the deaf and hard of hearing community to ensure that its captioning continues to meet the needs of that community at a consistently high level of quality.

Secretary General

Appendix to Broadcasting Decision CRTC 2002-323

Conditions of licence applicable to all CHUM television stations

The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) Sex-role portrayal code for television and radio programming, as amended from time to time and approved by the Commission. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council.