ARCHIVED - Broadcasting Decision CRTC 2003-57

Broadcasting Decision CRTC 2003-57

Ottawa, 19 February 2003

World Television Network/Le Réseau Télémonde inc. (WTM)
Across Canada

Application 2000-2155-1
Public Hearing in the National Capital Region
9 May 2002

Reconsideration of Decision CRTC 2001-757 pursuant to Order-in-Council P.C. 2002-330

The Commission confirms Decision CRTC 2001-757 granting World Television Network/Le Réseau Télémonde inc. (WTM) a licence to carry on a new, national, Category 2 specialty television service for digital distribution only.

Background

Original licensing action

1.

In December 2001, the Commission announced the licensing of a new, national, specialty television service (see WTM is to be licensed as a new, national, Category 2 specialty television service for digital distribution; the applicant's request for guaranteed access to analog distribution on cable is denied, Decision CRTC 2001-757, 14 December 2001; Decision 2001-757). In its application, as filed in 2000 (the 2000 application), World Television Network/Le Réseau Télémonde inc. (WTM) had proposed a service that was to offer a variety of programming from Canada and around the world, and have as its target a mainstream audience of all Canadians.

2.

Programming was to include foreign news, public affairs, film and entertainment not made available to Canadians by existing licensed services. WTM had described the purpose of its programming as being to facilitate insight, understanding and integration by providing viewers with direct windows on the people of Canada and the world. Non-Canadian programs, collectively described by WTM as "world programming", were to be aired in their language of origin. The service was to be distributed as three separate feeds of the same programming, one with subtitles in French for reception across the country, and two with English-language subtitles - one for carriage in Eastern Canada and a time-shifted version to serve Western Canada.

3.

WTM's 2000 application, as considered by the Commission at a public hearing on 19 June 2001, had proposed a distribution model that would have virtually guaranteed carriage of the service, in a high penetration tier or package, on the analog offering of all but the smallest broadcasting distribution undertakings (BDUs). WTM based its request for such regulatory treatment on the premise that its service would be of exceptional importance to the achievement of the multicultural objectives identified in section 3(1)(d)(iii) of the Broadcasting Act.

4.

The Commission, however, was not convinced that the proposed service "would be of such exceptional importance as to warrant the carriage requested in the prevailing circumstances". Although the Commission thus denied the applicant's carriage request, it acknowledged that the proposed service would complement existing mainstream, multilingual and third-language services. Accordingly, the Commission stated that it would license WTM as a Category 2 specialty television service, the distribution of which would be subject to negotiations between the licensee and distributors, and the carriage of which would be as a discretionary service, available on a digital basis only.

5.

WTM's nature of service condition of licence stipulated, among other things, that WTM was to provide:

...a national service with both English- and French-language feeds. The service will be dedicated to providing news, public affairs, film and entertainment programming from Canada and around the world in the original language of production and will reflect Canadian and global cultural diversity. Through the exclusive use of subtitles in English and French, the service will be widely accessible to Canadian viewers.

6.

The Commission added that the licence would be subject to various other terms and conditions generally applicable to Category 2 specialty services, as set out in Introductory statement - Licensing of new digital pay and specialty services, Public Notice CRTC 2000-171-1, 6 March 2001. Consistent with the requirements established in that notice for other Category 2 specialty services, licence conditions concerning such matters as Canadian content, Canadian programming expenditures, and closed captioning were either not imposed on WTM or were generally far less onerous than the applicant's commitments.

The Order-in-Council

7.

On 13 March 2002, by Order-in-Council P.C. 2002-330 issued pursuant to section 28 of the Broadcasting Act (the Order-in-Council), the Governor in Council referred Decision 2001-757 back to the Commission for reconsideration and hearing. The Order-in-Council expressed the opinion of the Governor in Council that it was material to the reconsideration and hearing "that the Commission fully assess the appropriate options for the carriage by Broadcasting Distribution Undertakings of services that aspire to reflect and connect Canada's multicultural communities to broader audiences".

8.

By letter dated 20 March 2002, the Commission invited WTM to file any comment or amendment it might wish to make to its application. The applicant submitted amendments to the 2000 application on 8 April 2002. In Reconsideration of Decision CRTC 2001-757, Broadcasting Notice of Public Hearing CRTC 2002-5, 26 March 2002, interested parties were given until 26 April 2002 to file interventions. Some 76 parties did so. The public hearing was held in the National Capital Region on 9 May 2002 (the reconsideration hearing). On 24 May 2002, pursuant to the Commission's request made at the reconsideration hearing, the applicant filed certain supplementary material, including further amendments to its application. Fourteen interveners of record filed comments on this supplementary material.

9.

The record for this reconsideration proceeding thus consists of the 2000 application, the transcript of the 19 June 2001 Public Hearing at which it was considered, Decision 2001-757, the Order-in-Council, the amendments to the 2000 application and interventions filed thereto, the 9 May 2002 Public Hearing transcript, the above-noted supplementary material filed by WTM and the further amendments contained therein, and the comments regarding this supplementary material filed by interveners of record.

Principal elements of the application

Carriage options

Carriage requested by WTM in its 2000 application

10.

The 2000 application proposed that the feed of the service subtitled in the official language of the majority be distributed on a modified dual status basis by Class 1 and 2 cable BDUs for a monthly wholesale fee of $0.35 per subscriber. This carriage status would have required distribution of this feed on an analog channel, as a discretionary service, by all Class 1 cable BDUs, and by any Class 2 cable BDU choosing to carry the service. Alternatively, with the agreement of both the distributor and the service provider, modified dual status for WTM would have permitted the service to be distributed, not as a discretionary service, but as part of the basic service. The applicant had also requested that, when distributed as a discretionary service, WTM be carried either as part of the highest penetration discretionary tier or on a discretionary tier having at least 60% penetration.

11.

In the case of Class 3 cable BDUs (i.e. those generally with fewer than 2,000 subscribers), WTM had proposed that carriage be at the distributor's option. Multipoint distribution services (MDS) undertakings were to either include the service in a package having at least 60% penetration, or deliver it to all subscribers whose existing service package consisted of three or more services in the same language. WTM proposed that direct-to-home (DTH) BDUs distribute the service in the package of services having the greatest number of services in the language of the majority.

12.

With respect to the service containing subtitles in the official language of the minority, WTM's 2000 application proposed that this feed be carried as a digital discretionary service by Class 1 and Class 2 cable, and by DTH BDUs. Carriage by Class 3 cable BDUs and by MDS undertakings was to have been at the discretion of the distributor.

WTM's carriage request as amended

13.

At the May 2002 reconsideration hearing, WTM reiterated its request that Class 1 cable BDUs be required to distribute the service in the language of the majority on a modified dual status basis, again with the refinement that it be placed on the discretionary tier having the highest penetration. WTM proposed that the same distribution model apply in the case of Class 2 cable BDUs electing to distribute the service. Later during the hearing, however, WTM requested that the feed of its service in the language of the majority be granted dual status as a specialty service. Under this proposal, Class 1 cable BDUs (and Class 2 cable BDUs electing to carry the service) would be required to distribute the service on an analog channel of the basic service, to the extent of available channels.

14.

WTM's amended application retained the proposal set out in its 2000 application that the service in the language of the majority be distributed by the licensee of a Class 3 cable BDU as a discretionary service, at the BDU licensee's option. In the case of MDS undertakings, however, WTM revised its distribution model, and proposed that such undertakings also be permitted to distribute the service on a purely discretionary basis, at the distributor's option.

15.

With respect to carriage of the service in the language of the majority by DTH BDUs, WTM proposed in its amended application that the service be offered in the package of services having the highest penetration. At the reconsideration hearing, however, the applicant indicated that its business plan was now predicated on distribution of the service by DTH BDUs in packages having a penetration of more than 70% of all subscribers.

16.

WTM submitted revised business plans as part of the supplementary material filed on 24 May 2002. In its revised business plans with respect to its distribution by Class 1 cable BDUs in the language of the majority, WTM proposed a form of mandatory carriage as part of the basic service, akin to the status accorded by the Commission to TVA¹ and APTN². The applicant proposed to charge a monthly wholesale fee of $0.29 per subscriber when distributed on this basis. It stated that it would prefer this model to the modified dual status option described in its 2000 application. As for the distribution of WTM by Class 2 cable BDUs, the projections contained in the revised business plans were also predicated on the service being accorded mandatory carriage as part of the basic service, as opposed to optional distribution.

17.

According to WTM, carriage as part of the basic service would cause less disruption to the packaging of cable services, and would thus be "preferable to mandatory discretionary carriage [as a modified dual status service], not only for audience access, Canadian programming and viability of a national multicultural service but for cable BDUs as well".

18.

WTM maintained throughout the process that its service would only be economically feasible were it to receive analog carriage by Class 1 and Class 2 cable BDUs in the language of the majority. Although the applicant expressed a preference for the mandatory basic carriage model described in its supplementary filing, it did not request that the dual status option it had proposed earlier at the reconsideration hearing be removed from the Commission's consideration. WTM's supplementary filing did, however, clarify the applicant's wish to have the service distributed by DTH BDUs to all of their subscribers, as opposed to its placement in packages having any lesser penetration.

19.

The model for carriage of the service in the language of the minority proposed by the applicant in its amended application did not differ significantly from that originally proposed. For Class 1 and Class 2 cable BDUs, WTM sought mandatory distribution on a digital channel, or on an analog channel if available, while for DTH BDUs, the applicant proposed mandatory carriage, but with no packaging stipulations. Distribution by Class 3 cable BDUs and MDS undertakings was to be at the discretion of the distributor.

Programming

20.

In its 2000 application, WTM had committed to offer 40% Canadian content in programming in year 1, increasing by 5% a year to attain a minimum level of 60% in year 6 and for the remainder of the licence term. It further proposed to maintain a level of 50% Canadian content, as a minimum, during the evening broadcast period of 6:00 p.m. to midnight throughout the licence term. Approximately 70% of the Canadian content was to be produced in English and 30% in French.

21.

WTM's commitments to minimum levels of Canadian content in its amended application were essentially unchanged from those presented in its 2000 application. The applicant confirmed that it had no specific plans to include any Canadian third-language programming in its schedule, and that the proposed 70:30 ratio of English- to French-language programming remained unchanged.

22.

In its supplementary filing, WTM indicated its willingness to accept a condition of licence to provide a minimum of 50% Canadian content during the period between 7:00 p.m. and 11:00 p.m. WTM added that it would be willing to provide a minimum Canadian content level of 50% over the broadcast day, beginning in year 1, if accorded mandatory carriage as part of the basic service of Class 1 and Class 2 cable BDUs.

23.

At the hearing of WTM's 2000 application, WTM had indicated that it was prepared to devote to Canadian programming annual expenditures representing 40% of the previous year's gross revenues. Some 18% of annual gross revenues was to have been allocated to programming acquired from independent producers, and approximately the same amount was to have been used for the production of in-house programming. Regional independent producers were to receive funding in accordance with the following formula: 15% to the Atlantic region, 25% to Quebec, 5% to Francophones outside Quebec, 30% to Ontario, and 25% to Western Canada. These commitments were predicated on the service receiving distribution on a modified dual status basis.

24.

During the reconsideration process, the applicant indicated that it would increase its Canadian programming expenditures to 45% of the previous year's gross revenues if the Commission were to accord the service mandatory distribution as part of the basic service.

25.

WTM proposed several changes with respect to the specific titles and subject matter of the Canadian programs that it would produce in-house or acquire from independent producers. However, the quantitative commitments to independent production offered by WTM in the context of its amended application remained unchanged from those set out in the 2000 application. These included an undertaking to commission a minimum of 13 regionally-based and independently-produced documentaries each year. This and other acquired programming, representing ten program titles in all, and expenditures of 18% of gross revenues over seven years, would account for approximately 12 hours 30 minutes of original programming per week.In-house productions would consist of three program titlesrepresenting an additional 9 hours 30 minutes per week of original Canadian programming and accounting for expenditures roughly equivalent to those proposed for acquired independent productions.

26.

With respect to the applicant's non-Canadian programming, paragraphs (f), (g) and (h) of WTM's nature of service condition of licence currently specify the following:

f) A maximum of 20% of the non-Canadian programming aired in each quarter of the broadcast year may be produced in any one language.

g) Programming produced in Great Britain or the U.S. may, in each case, account for a maximum of 5% of the non-Canadian programming aired in each quarter of the broadcast year.

h) A maximum of 10% of the non-Canadian programming aired in each three-month period commencing 1 September, 1 December, 1 March and 1 June of the broadcast year may originate in any single country other than Great Britain and the U.S.

27.

At the reconsideration hearing, in response to concerns raised in interventions by the licensees of various ethnic specialty services, WTM stated that it would accept the incorporation into its nature of service of a requirement that programming originate in a minimum of 15 languages and from a minimum of 20 countries each month. WTM also indicated that it would accept the addition of the following stipulation to its nature of service:

A maximum of 10% of the third-language programming exhibited in each broadcast month may be produced in any one language.

28.

Further, the applicant proposed that paragraphs (g) and (h) be replaced by the following:

A maximum of 10% of the non-Canadian programming aired in each three-month period commencing 1 September, 1 December, 1 March and 1 June of the broadcast year may originate in any single country.

29.

With respect to this last proposal, WTM argued that establishing the same maximum limit of 10% on the amount of programming that may originate from any single country, including the U.S. and Great Britain, would eliminate the appearance of discrimination against the acquisition of programming produced in those two countries. Although the condition of licence, as currently drafted, reflects the commitments made by the applicant at the June 2001 Public Hearing, WTM suggested that the language could conflict with the provisions of the North American Free Trade Agreement.

30.

The nature of service condition of licence set out in Decision 2001-757 inadvertently failed to specify that WTM was to operate as a specialty service. At the reconsideration hearing, WTM agreed with the Commission that the nature of service condition of licence should thus be further amended to include mention of the fact that it is to be a specialty service.

31.

WTM also confirmed that all Canadian and non-Canadian programming would be subtitled in at least one of the two official languages. Thus, a program produced in French or in a third language would be accompanied by subtitles in English on the English-language feed, while on the French-language feed, all English- and third-language programming would have subtitles in French. At the reconsideration hearing, the applicant expressed the view that subtitling is essentially the same as captioning. WTM added, however, that at least 90% of all English- and French-language programming exhibited on its English- and French-language feeds, respectively, would be captioned by the end of the licence term.

32.

With respect to described video programming, WTM stated that it would adhere to the same commitments for the provision of such programming as those made by CTV Television Inc., and noted in Licence renewals for the television stations controlled by CTV,Decision CRTC 2001-457, 2 August 2001.

33.

As for cultural diversity and employment equity,WTM stated that it would establish "conditions necessary to ensure the presentation of the multicultural perspective - participation reflective of the cultural diversity, and production that reflects the understandings and sensitivities within our cultural diversity". It added that it would "strive to provide accurate and unique productions that represent the dynamics within our multicultural society", and ensure that commissioned programs are "inclusive and make the fullest feasible use of the talent that exists within the completeness of our cultural diversity".

Views of interveners

34.

Most of the interventions filed with respect to WTM's amended application were in support; many of these expressed the view that WTM should be permitted to add diversity to the Canadian broadcasting landscape in an environment where its service is distributed broadly, so as to attract the widest possible audience. Specifically, supporting interveners saw WTM's proposed service as offering a unique opportunity to showcase Canada's diversity to all Canadians, and not just to specific groups. Several took the opportunity to present the Commission with their views concerning the multicultural nature of Canadian society. They stressed the importance they place on making access to multicultural programming readily available to all Canadians as a means to foster tolerance and understanding. In this regard, many believed that WTM would fill a gap in the existing broadcasting system. Typical of these comments was that of Rino Vultaggio of Vancouver, who argued that WTM could serve as a "national bridge that links Canadians in all corners of the country".

35.

There were other views put forward, including those expressed in the comments submitted by the Communications and Diversity Network (CDN) and the opposition expressed in the interventions filed by the Canadian Cable Television Association (CCTA), the Canadian Association of Broadcasters (CAB), the licensees of four existing Canadian ethnic specialty services and the Centre for Research-Action on Race Relations (CRARR).

36.

The CCTA fully supported the Commission's determination announced in Decision 2001-757 to grant WTM a Category 2 specialty television licence. In the CCTA's view, WTM's broad carriage proposals were inappropriate for reasons that include increasing and competing demands for analog channel capacity and the further demand soon to be placed on the capacity of BDUs to accommodate new technologies, such as high definition television and over-the-air digital broadcasting. In its oral presentation at the reconsideration proceeding, the CCTA also made reference to the role of the distribution industry in accommodating the new Category 1 services, various Category 2 services, and a number of French-language services in Anglophone markets. The CCTA and other opposing interveners argued that WTM's proposals conflict with the objectives of existing Commission broadcasting policy. Some argued that WTM's request for analog distribution by cable BDUs should not be granted without there first being a call for competing applications or a policy review.

37.

The CAB also strongly supported Decision 2001-757, and urged the Commission to confirm its decision to license WTM as a Category 2 specialty service. The CAB stated that, given the limited amount of analog capacity available on cable BDUs, the licensing of new analog specialty services would be contrary to the objective of increasing choice and diversity within the Canadian broadcasting system. It added that it considered WTM's application to be flawed from a programming point of view, and indicated that licensing WTM for distribution on anything other than a digital only basis would not represent the best use of scarce spectrum. Further, the CAB raised concerns with respect to fairness to all of the licensed digital services should WTM be permitted to "jump the queue and receive guaranteed analog carriage".

38.

The main concern expressed by the licensees of existing ethnic specialty services was that WTM would effectively operate as a multilingual ethnic service, but would possess a distinct advantage over their services were it granted distribution on an analog channel as part of the basic service of Class 1 and 2 cable BDUs. These licensees noted that, by contrast, they have access to distribution systems only in certain circumstances, and are licensed for distribution on a discretionary basis only. They argued that granting basic carriage to WTM would have negative financial implications for their services, including the following:

• WTM would offer undubbed programming of sufficient attractiveness to ethnic groups to make its programming directly competitive with ethnic specialty services;

• WTM's guaranteed subscriber revenue from mandatory carriage rights would allow WTM to set lower advertising rates in these limited ethnic markets and compete with ethnic specialty services for limited advertising dollars; and

• WTM's guaranteed subscriber revenue and consequent financial base would make it difficult for ethnic specialty services to compete with WTM for program rights.

39.

Fairchild Television Ltd. stated in its written intervention that "licensing WTM as a must carry basic service with minimal restrictions on third language programming and third language advertising represents the absolute worst case scenario in terms of impact on existing third language services". The intervener elaborated on this position at the hearing: "Our experience as an ethnic broadcaster serving the largest ethnic community in Canada tells us that a Chinese movie with English or French subtitles will have much greater appeal to a Chinese audience than a mainstream audience".

40.

In its intervention, CRARR questioned, among other things, what it considered to be the limited opportunity that would be provided by WTM for access by national organizations and by those representing minority cultures in Canada. In CRARR's view, such limited access would be exclusionary.

41.

The CDN commented on what it considered to be "WTM's heavy concentration on foreign programming". According to the intervener, this emphasis "would not show communities as they exist in Canada but how people live in other lands". It added that this was "not the principal aim of Canadian multiculturalism".

Commission's reconsideration and hearing of Decision 2001-757

46.

Moreover, in Licensing framework policy for new digital pay and specialty services, Public Notice CRTC 2000-6, 13 January 2000, the Commission emphasized the limited analog capacity available on distribution systems, the advantages of digital over analog distribution, and the importance of promoting the deployment of the new technology. It added:

Commission's analysis of WTM's proposed carriage option

47.

As proposed, WTM's service would consist of separate feeds of the identical video programming accompanied by an audio signal or subtitles in each of the two official languages. Under WTM's requested distribution model, all Class 1 cable BDUs, and Class 2 cable BDUs electing to carry the service, would be obliged to provide WTM's service with mandatory carriage on analog in the language of the majority, and mandatory carriage on digital (or on an analog channel if available) in the language of the minority. Since analog channel capacity is in scarce supply on most cable BDUs, approval of WTM's carriage proposal would have significant consequences for the majority of cable BDUs, for their subscribers, and for the licensees of a number of ethnic specialty services.

48.

As one consequence, most cable BDUs would be obliged either to remove or displace services now carried on analog channels, thereby creating service disruptions for subscribers. Other possible consequences include increases in rates for basic service and the diminished capacity of cable BDUs to accommodate high definition television signals and other new and emerging forms of over-the-air digital broadcasting, such as specialty audio, and interactive TV. In the case of DTH BDUs, the introduction of WTM to the package of basic services offered by these undertakings may also lead to some disruption of service and higher fees for their subscribers. At the reconsideration hearing, the CCTA noted that, "digital technology provides consumers with the long awaited ability to choose the content that interests them most and to effectively determine the price that they are prepared to pay for that content". It added that WTM, as an analog service with mandatory carriage either on basic or on a tier, would not constitute "efficient delivery of programming at affordable rates nor would it satisfy the objective of using the most effective technologies available at reasonable cost".

49.

The Commission considers that granting mandatory analog carriage for WTM could also produce potential negative consequences for emerging Category 2 specialty services. The current state of digital distribution technology is such that BDUs are able to convert, or "harvest", the bandwidth occupied by one analog channel for use in distributing up to ten digital television signals. Many distributors have already harvested analog channels for this purpose, and have done so with the encouragement of the Commission. Indeed, a principal objective of the Commission's licensing framework has been to promote the roll out of addressable digital technology. Obliging cable BDUs to devote an analog channel to the carriage of WTM could thus hinder the ability of Category 2 specialty services to gain digital carriage.

50.

The Commission has also introduced requirements that distributors having digital capacity carry all Category 1 specialty services and increase the number of services they distribute in the official language of the minority. In the circumstances, the Commission believes that approval of WTM's request for analog carriage would run counter to the objectives of the Commission's policy, and would contradict the Commission's longstanding encouragement of the cable industry's conversion to digital technology and to a more market-driven licensing model. This would effectively change the rules under which cable BDUs operate at the very time they are implementing technical changes and making expenditures on the basis of these known rules.

51.

In their interventions against WTM's application, the licensees of a number of ethnic specialty services claimed that approval of WTM's request for mandatory carriage would give the applicant an unfair competitive advantage over their services. In particular, they argued that the guaranteed subscriber revenues that such carriage would generate for WTM would allow it to compete directly with them for program rights and audiences. They stated that this revenue stream would allow WTM the further economic advantage of charging lower advertising rates than they do, and would thereby enable WTM to better compete with them for ethnic advertising dollars.

52.

The Commission notes that, contingent on approval of its proposed distribution model, WTM was willing to accept a condition of licence specifying a 10% maximum on the amount of third-language programming that may be exhibited in a broadcast month in any one language. In the Commission's view, such a condition of licence, coupled with the existing condition limiting the amount of non-Canadian programming WTM may broadcast that originates in any single country, would have restricted WTM's ability to target programming to any particular ethnic group in a quantity sufficient to attract subscribers away from existing ethnic services. Nevertheless, the Commission agrees with these interveners that the subscriber revenues generated by mandatory distribution would represent a potential economic advantage for WTM over services that broadcast third-language programming, particularly with respect to the acquisition of program rights and the setting of advertising rates.

53.

All or most of the above concerns associated with the distribution model proposed by WTM were also touched upon by the Commission in Decision 2001-757. In that decision, the Commission stated:

The onus was thus clearly on WTM to convince the Commission that the proposed service would be of such exceptional importance to the achievement of the multicultural objectives of the Broadcasting Act as to warrant distribution of the service on an analog channel. In the current distribution environment, it would be extremely difficult for a proposed service to lay a convincing claim to being of such exceptional importance in relation to the Act's multicultural objectives, unless it is one devoted to programming focused on the needs and interests, the circumstances and aspirations, primarily and predominantly, of Canadians.

54.

In the Commission's view, it remained WTM's responsibility in this reconsideration process to demonstrate convincingly that its proposed service would be of such exceptional importance as to justify the distribution model it has proposed and the significant negative consequences that such carriage would bring about.

Commission's analysis of WTM's programming service

Role of non-Canadian programming

55.

If the service were authorized for mandatory distribution by Class 1 and 2 cable BDUs as part of the basic service, as much as 50% of the programming on WTM would be non-Canadian, at least in the first year. Under the dual status model, 60% of the programming would be non-Canadian in the first year. For example, WTM proposed to broadcast non-Canadian films from 9:00 p.m. to 11:00 p.m., seven days a week. WTM described this program, entitled World Cinema, as the anchor of its non-Canadian programming. In the Commission's view, the applicant's "world programming" clearly remains the essence of its proposed service.

56.

The Commission recognizes that exposure to the experiences and stories of people living in other countries can broaden one's own world view and can thereby increase, in an indirect manner, the understanding of the cultural background of one's neighbour. The Commission, however, does not consider that the proposed non-Canadian programming would be capable of telling the stories or of reflecting the experiences arising from Canada's multicultural environment, or would otherwise serve to elevate WTM's service to the level of one having exceptional importance.

WTM's French-language feed

57.

WTM claimed that its proposal to distribute its English-language and French-language feeds on a national basis would make it "the only Canadian television service to offer the same service in both official languages". The applicant emphasized in this regard that it perceived the two feeds of its proposed service as essentially being one and the same: "Now, we are saying that both services are identical, except for maybe some time shifts, depending on how it goes, but they are identical".

58.

The applicant stated that it expects that approximately 1/3 of all Canadian programming would be in the French language by the third year of the licence term. It added that "service in the French language will by then also attract 1/3 of budget, and 1/3 of antenna time". WTM indicated that Canadian programming in French would be supplemented by a minimum of six hours per week of non-Canadian French-language programming. The applicant, however, did not specify whether its commitment to produce or acquire 1/3 of its Canadian programming in French would apply to each Canadian program title or only to certain episodes. Instead, it indicated that decisions concerning which programs and which stories would be produced in French would be reached on a case-by-case basis, according to story "fit" or story appropriateness.

59.

From the Commission's perspective, the applicant's proposed level of 1/3 Canadian production in French is a very small amount for a service that describes itself as a French-language service and seeks mandatory, nation-wide distribution. The Commission further notes that, according to the applicant's plans, WTM's French-language Canadian programming would not achieve the proposed level of 1/3 of its total Canadian programming until year three.

60.

In addition, the Commission notes that the applicant intends to add French-language subtitles to the programming contained in its French-language feed that is not produced in that language. This would represent more than 60% of all programming contained in that feed. The Commission has long recognized the importance of ensuring that Francophone viewers are served by Francophone broadcasting services, as distinct, for example, from subtitled versions of English-language television services. While the Commission considers that there are several circumstances in which subtitled programming has a role to play, the quantity of subtitling proposed by WTM casts serious doubt on whether the French-language feed would qualify as an adequate service.

61.

Based on all the above, the Commission is unable to conclude that the subtitled feed of the service, having a level of only 1/3 Canadian content produced in the French-language as of the third year, would be of such exceptional importance to achieving the multicultural objectives of the Broadcasting Act to warrant the carriage requested.

Canadian content and Canadian programming expenditures

62.

In Decision 2001-757, the Commission found that WTM's quantitative commitments to Canadian content undercut the applicant's argument regarding the exceptional importance of the proposed service and its claim to analog distribution. Specifically, the Commission stated that the reliance of the service on foreign programming, at least in the early years of operation, would have been a significant limitation on the capacity of the service to reflect Canada's multicultural reality.

63.

WTM's commitments to the exhibition of Canadian content, as presented at the reconsideration hearing, were predicated on the service being distributed by cable BDUs on a dual status basis and did not change from those presented in the 2000 application. In its supplementary filing, however, WTM did state that it would adhere to a 50% Canadian content level in programming beginning in the first year if it were granted mandatory cable carriage as part of the basic service.

64.

WTM's supplementary filing contained a further commitment to set Canadian program expenditures at a minimum of 45% of the previous year's gross revenues if it were permitted carriage on cable as part of the basic service, as compared to the level of 40% it had proposed if carried on a dual status basis. It stated, however, that this additional spending would not be used to purchase or produce new programs, but would be allocated among certain of its proposed programs. It thus appears to be the applicant's intention to meet its proposed increased Canadian content exhibition commitment of 50% in the first year by increasing the number of repeat broadcasts.

65.

In Decision 2001-757, the Commission examined the applicant's descriptions of many of its proposed Canadian programs, and found that very few of these programs would serve to reflect Canada's multicultural realities. Moreover, the Commission considered that WTM's plans for the scheduling of these programs further weakened the applicant's arguments regarding the exceptional importance of the service. Among other things, the Commission noted that no Canadian programs had been scheduled during the three peak viewing hours of 8:00 p.m. to 11:00 p.m.

66.

The Canadian programs described in WTM's amended application, in particular, the descriptions of the acquired Canadian programs in the proposed schedule, are evidence of a program strategy that would be directed more clearly to the reflection of Canadian multiculturalism than had been the case in WTM's 2000 application. Moreover, WTM's amended schedule provides for the broadcast solely of Canadian content between the hours of 6:00 p.m. and 9:00 p.m. This change represents a further improvement over the 2000 application. In the Commission's view, however, the applicant's scheduling plans for only one hour of Canadian content during the three peak viewing hours of 8:00 p.m. to 11:00 p.m. remains as a weakness in WTM's argument that its service would be of such exceptional importance to the achievement of the multicultural objectives of the Broadcasting Act as to warrant mandatory carriage on an analog channel of the basic service of cable BDUs.

67.

As stated above, the Commission considers that many of the independent productions WTM has proposed in its amended application would be better reflective of Canadian multiculturalism than those described in its 2000 application. The remaining Canadian content would consist of in-house productions focused on news and public affairs programming dealing with events happening outside of Canada. The Commission is concerned, however, by an apparent disproportion between the expenditures that the applicant has proposed in respect of its in-house production and those that would be allocated to acquired independent production.

68.

For example, although the number of hours of acquired Canadian programming in WTM's weekly schedule would be almost a third more than the number of hours of in-house production, WTM's proposed expenditures on independent production were only modestly greater than those forecast for its in-house production. As described by the applicant, WTM's proposed in-house programs would consist largely of in-studio discussion and analysis by WTM hosts of stories and events occurring outside of Canada. WTM did not plan to produce any original news programming itself. The type of in-house television production proposed by the applicant would thus be inexpensive when compared to the production costs of the type of programming that WTM proposes to acquire. In the Commission's view, the applicant's proposed expenditures on acquired programming relative to those for its in-house production call into question the overall quality of the former, its appeal to viewers and, ultimately, its success in meeting the objectives of the Broadcasting Act or those specified in the Order-in-Council.

Multicultural participation and representation

69.

In assessing WTM's potential to achieve the multicultural objectives of the Broadcasting Act, the Commission examined the extent to which its programming would encourage broad participation by, and provide representation of, the diverse elements that comprise Canada's multicultural society. In this regard, the Commission considers that WTM's commitments to regional production are reasonable, but is concerned by the absence of clear procedures or initiatives for ensuring the full participation of diverse communities or including productions from producers representing minority groups. For example, while WTM proposed to make use of an ombudsman and of focus groups to ensure that the diversity of Canadian communities is reflected in its Canadian programming, it offered few details regarding how these two mechanisms would actually function.

70.

Original Voices and Intercom Community Magazines were two of three programs identified by the Commission in Decision 2001-757 as appearing to have the reflection of Canadian multiculturalism as their predominant themes. In the 2000 application, WTM had described the first program as offering "First Nation perspectives from First Nation producers", and the second as providing diverse Canadian communities with a "national platform to deal with the specific issues, ideas from their community". The concern expressed by the Commission in Decision 2001-757 was that most of the original and repeat broadcasts of these programs were scheduled to air either before 9:00 a.m. or after 11:00 p.m.

71.

In its amended application, WTM removed Original Voices as a specific program title. It indicated, however, that the theme initially proposed was one that would appear in other programs. Intercom Community Magazines remains as one of the applicant's proposed programs, although its place in the schedule continues to be at an hour when audiences would be small (Saturday and Sunday at 8:00 a.m.). Moreover, the Commission originally understood that this program was one that would provide access to diverse communities. WTM's description of the program at the reconsideration hearing, however, was that it would serve more as a forum or platform for national associations than for individual community groups, and would thus provide a diminished opportunity for diverse voices to find expression on air.

72.

In its supplementary filing, WTM indicated that it would consider the acquisition of Canadian productions in languages other than French and English "if they are directed to mainstream audiences". Otherwise, the applicant made clear that it had no specific plans for Canadian third-language productions in its schedule. In the Commission's view, the absence of any third-language Canadian production in WTM's proposed program schedule is, at the very least, inconsistent with the fact that the bulk of its non-Canadian programming will be in third languages. By limiting the opportunities that independent producers of third-language programming have to tell their stories, WTM's approach appears to overlook both the opportunity and the importance of enabling Canadians of diverse ethnocultural backgrounds to share their experiences with other Canadians in their language of comfort.

Reflecting and connecting Canada's multicultural communities to broader audiences

73.

The Order-in Council directed the Commission to fully assess the appropriate options to ensure carriage by BDUs of services "that aspire to reflect and connect Canada's multicultural communities to broader audiences".Reflection of Canada's multicultural diversity is provided by the broadcasting system through broadcasting services, the programming of which is primarily by and for ethnic and Aboriginal Canadians, as well as through the actions of all broadcasters, including the licensees of conventional, general interest services, in meeting their responsibilities under the Broadcasting Act and Commission policy to present such reflection in their programming.

Role of ethnic and Aboriginal services

74.

In Decision 2001-757, the Commission noted that ethnic programming is available on ethnic television stations in each of Toronto and Montréal, and on 14 ethnic radio stations across Canada. Ethnic communities are also served by the subsidiary multiplex communications operations (SCMO) of a number of FM stations, and by the programming of numerous community and campus radio stations. In addition, the Commission has licensed five ethnic analog specialty services, as well as 42 ethnic Category 2 specialty services for digital distribution. Some third-language programming is also offered by conventional radio and television services.

75.

Decision 2001-757 also noted the role played by APTN, a general interest, satellite-to-cable programming undertaking, in presenting a wide range of Aboriginal programming to Canadians. This Aboriginal programming is in addition to that provided by several stations operating under the Commission's Native Radio Policy, mostly in communities in northern Canada. It is soon to be complemented by the services of radio stations in Toronto, Ottawa, Calgary and Vancouver that will operate as components of the Aboriginal Voices Radio Network.

76.

In February of last year, the Commission approved an application by Multivan Broadcast Corporation to operate a new multilingual ethnic television station to serve Vancouver. Further, in April 2002, the Commission licensed Rogers Broadcasting Limited to carry on a second ethnic television station in Toronto to complement the service provided by its existing ethnic station CFMT-TV. At a Toronto public hearing in September of 2002, the Commission also heard a large number of applications to provide new AM, FM and digital radio services that would reflect the diverse languages and cultures of the population of the Greater Toronto Area.

Role of Canada's general interest services

77.

The Commission continues to work closely with all of the licensees that make up the television broadcasting industry, including those that provide general interest services, to ensure that their responsibilities under the Broadcasting Act and the Commission's policies are met. In addition to encouraging the production of specific multicultural programs, the Commission has been increasing its expectations of all broadcasters toprovide programming that serves to reflect and connect Canada's multicultural communities to broader audiences. Specifically, the Commission has established, as an element of its Television Policy³, that each broadcast corporate group should prepare a comprehensive corporate plan in respect of their conventional, specialty and pay television undertakings, on the approach that the group will take to deal with all matters touching on cultural diversity on screen. In particular, the plans are to include details of the initiatives that each group will pursue to ensure that it contributes to a system that more accurately reflects the presence of cultural, ethnic and racial minorities and Aboriginal peoples in each of the communities it serves, and in each
of the areas of corporate accountability, programming, and community input and feedback. To date, the Commission has requested eleven corporate groups, including CTV Television Inc., Global Television Network Inc. and TVA Group Inc. to file such plans.

78.

In addition, in Representation of cultural diversity on television - Creation of an industry/community task force, Public Notice CRTC 2001-88, 2 August 2001, the Commission called upon the CAB to co-ordinate the creation of a task force consisting of representatives of the broadcasting industry and community groups. The Cultural Diversity Task Force, established in 2002, is responsible for examining, and finding ways to improve, the representation of Canada's cultural diversity on television.

79.

As indicated above, the Commission's purpose in calling for the submission of corporate plans on cultural diversity and for the creation of the Cultural Diversity Task Force is to foster an increase in the amount of programming that is provided by mainstream broadcasters and that is reflective of Canada's multicultural reality. The ultimate goal is to ensure that this programming, together with the variety of Aboriginal and ethnic programming offered by broadcasters such as APTN and the licensees of ethnic specialty services, provides for the full, fair and accurate portrayal of Canada's multicultural values and the diversity of its multicultural communities, and that this programming is made as broadly accessible to Canadian viewers as possible.

80.

By directing all broadcasters to share in the task of achieving this goal, the Commission seeks to avoid the alternative whereby Canada's ethnic, racial and cultural voices could be relegated to just a very few broadcasting outlets.

WTM and its aspirations to reflect and connect Canada's multicultural communities

81.

The Commission believes that WTM has genuine aspirations to offer a service that reflects and connects Canada's multicultural communities to broader audiences. However, the Commission does not consider that the applicant's proposed service would fully succeed in meeting these aspirations.

82.

As suggested by the name the applicant has chosen for its company and its service, World Television Network/Le Réseau Télémonde inc. proposes to place a heavy emphasis on non-Canadian programming, which it describes as "world programming". The anchor for this world programming would be World Cinema, consisting of non-Canadian films airing seven evenings each week from 9:00 p.m. to 11:00 p.m. The Commission does not consider that this programming, by its very nature, is capable of reflecting Canada's multicultural reality. Moreover, the Commission shares the views of several interveners that much of WTM's programming would be destined to reach not broader audiences, but small, niche audiences of Canadians.

83.

The Commission considers that if the service, in and of itself, is to succeed as a showcase for Canada's cultural diversity, if it is to be judged as being of exceptional importance and worthy of mandatory carriage, and if it is to fulfil the objectives of the Order-in-Council, then Canadian programming reflective of Canadian multicultural communities, including programs obtained from independent multicultural producers, must have a far more substantial presence in the schedule, especially during peak viewing hours.

Commission's determination

84.

All television services, including those offering programming that reflects Canada's multicultural communities, are, in each case, carried by BDUs on terms or in accordance with options determined by the Commission as appropriate, taking into account a variety of factors, including the specific nature of the service. In the case of WTM, the Commission examined and discussed these options at length with the applicant.

85.

Having completed its reconsideration of Decision 2001-757, the Commission does not find that approval of the applicant's proposed distribution model is an appropriate option in the prevailing circumstances. More specifically, the Commission is not persuaded that the service proposed by WTM would be of such exceptional importance to the achievement of the objectives of the Broadcasting Act as to warrant its mandated distribution on an analog channel by Class 1 and 2 cable BDUs. Nor does the Commission find that the service would reflect and connect Canada's multicultural communities to broader audiences in a manner or to the extent that would justify mandatory analog carriage.

86.

At the same time, the Commission considers that elements of WTM's proposed Canadian programming could complement the multicultural and ethnic programming provided by existing mainstream and third-language services. The Commission also believes that this element of WTM's programming, coupled with the applicant's proposed non-Canadian feature films and other programming, would attract many viewers when made available as part of a Category 2 specialty television service available on a discretionary, digital basis.

87.

Accordingly, the Commission confirms Decision 2001-757 without change, other than for certain minor amendments to WTM's conditions of licence as a Category 2 specialty service. These amendments are set out in the following section of this decision.

88.

The Commission remains committed to the objective of ensuring that the Canadian broadcasting system embraces as broad and diverse a range of services as possible, especially those that serve to reflect and connect the many diverse elements that exist within our Canadian society.

Proposed amendments to WTM's conditions of licence

Confirmation of WTM as a "specialty" service

89.

As agreed to by WTM, the Commission amends paragraph (a) of WTM's nature of service condition of licence to read as follows:

a) The licensee will provide a national specialty service with both English- and French-language feeds. The service will be dedicated to providing news, public affairs, film and entertainment programming from Canada and around the world in the original language of production and will reflect Canadian and global cultural diversity. Through the extensive use of subtitles in English and French, the service will be widely accessible to Canadian viewers.

Non-Canadian programming

90.

Paragraphs (g) and (h) of WTM's nature of service condition of licence specify the maximum levels of non-Canadian programming exhibited by the service that, in any quarter, may be produced in Great Britain and the United States (5% in each case), or that may originate from any single country other than Great Britain and the United States (10%). The applicant proposed to replace paragraphs (g) and (h) with one that would apply the same maximum limit of 10% on the amount of programming exhibited in any quarter that may originate from any single country.

91.

The Commission considers that the proposed amendment, while somewhat less onerous than the existing requirement, would not have a significant impact on the proposed service or on the system in general. Accordingly, the Commission amends WTM's nature of service condition of licence by deleting paragraphs (g) and (h), and replacing them with the following:

(g) A maximum of 10% of the non-Canadian programming aired in each three-month period commencing 1 September, 1 December, 1 March and 1 June of the broadcast year may originate in any single country.

Other matters

92.

All or most other aspects of WTM's amended application proposed changes that were predicated on the service receiving approval for mandatory distribution by cable BDUs, and would have represented more onerous obligations than would normally be applied to a Category 2 specialty service. Accordingly, and consistent with the approach taken in Decision 2001-757, the Commission has left all other terms and conditions of WTM's licence unaltered.

Secretary General

² Order respecting the distribution of the Aboriginal Peoples Television Network, Public Notice CRTC 1999-70, 21 April 1999

³ Building on success - a policy framework for Canadian television, Public Notice CRTC 1999-97, 11 June 1999.