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Broadcasting Decision CRTC 2006-296
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Ottawa, 17 July 2006
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Canadian Broadcasting Corporation
Across Canada
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Application 2006-0031-3
Broadcasting Public Notice CRTC 2006-32
16 March 2006
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Le Réseau de l'information - Licence amendment
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In this decision, the Commission approves an application to amend the broadcasting licence for the French-language specialty service known as Le Réseau de l'information, in order to replace the current condition of licence pertaining to the broadcast of advertising material with a condition of licence that authorizes the licensee to broadcast up to 12 minutes of advertising material in any clock hour.
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The application
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1.
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The Commission received an application by the Canadian Broadcasting Corporation (CBC) to amend the broadcasting licence for the national, French-language specialty programming undertaking known as Le Réseau de l'information (RDI).
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2.
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The CBC requested an amendment to its condition of licence pertaining to the broadcast of advertising material. Its current condition of licence no. 5, as set out in Licences for Newsworld and RDI renewed for a seven-year term, Decision CRTC 2000-3, 6 January 2000 (Decision 2000-3), reads as follows:
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5. (a) Subject to subsections (c) and (d), the licensee shall not distribute more than 8 minutes of advertising material during each clock hour.
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(b) The licensee shall not distribute any paid advertising material other than paid national advertising.
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(c) In addition to the maximum of 8 minutes of advertising material referred to in subsection (a), the licensee may broadcast, during each clock hour, a maximum of 30 seconds of additional advertising material that consists of unpaid public service announcements.
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(d) Where a long-form live program that is not regularly scheduled occupies time in two or more consecutive clock hours, the licensee may exceed the maximum number of minutes of advertising material set out in subsection (a) during any of those clock hours, up to a maximum of 10 minutes in any clock hour, provided that the average number of minutes of advertising material broadcast during the clock hours occupied by the program does not exceed 8 minutes during each clock hour.
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3.
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The CBC submitted that the vast majority of licensees of specialty programming undertakings currently enjoy a condition of licence that allows them to distribute 12 minutes of advertising material during each clock hour. The CBC pointed out that, in Licence amendment for Newsworld, Decision CRTC 98-28, 4 February 1998 (Decision 98-28), and in Le Canal Nouvelles - Licence amendment pertaining to the distribution of advertising material, Decision CRTC 99-193, 3 August 1999 (Decision 99-193), the Commission approved licence amendment applications that were similar to the present application. The CBC added that the proposed amendment would make RDI's condition of licence consistent with the condition of licence granted to Newsworld.
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Interventions
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4.
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The Commission received two interventions opposing the present application. Quebecor Média Inc. (QMI), which, among other things, is the licensee of the TVA network, and the Association québécoise des radios et télédiffuseurs (AQRT), an association made up of Astral, Cogeco Radio-Télévision, Corus, Pelmorex, Radio Nord Communications, Standard Broadcasting and TVA opposed the present application because of the CBC's refusal to increase its advertising minutes at the time of RDI's licence renewal. Instead, the CBC opted for a rate increase of $0.10. The CBC attributed its refusal to the growing supply of advertising minutes in a challenging French-language market and to the fact that an increase in the number of minutes of advertising air time would have adversely affected the quality of its programming. The AQRT submitted that the proposed amendment seemed inconsistent with the arguments that the CBC put forward at the time of RDI's licence renewal. The AQRT therefore suggested that the Commission defer its consideration of the present application until RDI's next licence renewal so that the Commission could assess the impact of an increase in the CBC's advertising inventory on the Quebec market and on RDI's financial performance.
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5.
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QMI expressed concern about the impact that the proposed amendment would have on the advertising revenues of private over-the-air television broadcasters. According to QMI, advertising revenues should be reserved for private television exclusively because public networks receive subsidies from government and subscription revenues in the case of specialty services. QMI argued that, in an era of audience fragmentation, the market shares of private over-the-air television broadcasters, on which advertising revenues are based, might in the near future no longer suffice to enable private over-the-air television to continue to play a role. In addition, QMI indicated that it had noted that the CBC offers advertising air time on RDI free-of-charge to its clients as part of bundled advertising offerings, which allows it to claim that it has sold RDI's entire advertising inventory and thereby justify the present application. QMI added that RDI's financial health is sound and therefore does not warrant an application for an increase in advertising minutes.
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CBC's reply
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6.
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In response, the CBC argued that all other specialty services are currently authorized to distribute a maximum of 12 minutes of advertising during each clock hour. The CBC noted that the specialty services that applied for this authorization received it without having to wait for the renewal of their licences. In particular, the CBC noted that, in Decisions 98-28 and 99-193, the Commission authorized the publicly owned Newsworld and the privately owned Le Canal Nouvelles to each increase the amount of advertising from 8 minutes to a maximum of 12 minutes during each clock hour.
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The CBC noted that QMI and the AQRT did not oppose Astral Broadcasting Group Inc.'s application announced in Broadcasting Public Notice CRTC 2006-3, 2 March 2006, to eliminate the restriction on the broadcast of advertising material, in order to allow VRAK.TV to distribute a maximum of 12 minutes of national advertising material during each clock hour.
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The CBC also contended that QMI's argument that an increase from 8 minutes to 12 minutes of advertising would create pressure on the advertising market is groundless. In addition, the CBC pointed out that RDI does not receive any Parliamentary appropriations, that subscription and advertising revenues are its only sources of funding, and that RDI invests all of its revenues and surpluses in its programming and in the improvement of its programming. The CBC added that it does not sell advertising bundles in which RDI advertising time is included for free. It further submitted that RDI needs these financial resources to continually modernize its equipment, to provide live coverage of events, to ensure its presence in the regions, to produce programming for young people, and to pay down its debt.
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Commission's analysis and determination
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The Commission carefully examined the application, taking into account the comments made by the licensee and the interveners.
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10.
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The Commission is not convinced that approval of the present application to increase the number of advertising minutes that RDI is authorized to distribute from 8 minutes to a maximum of 12 minutes during each clock hour would disrupt the French-language television advertising market to the point of causing undue harm to the private over-the-air television undertakings currently operating in that market.
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The Commission notes that, in Decision 98-28, it authorized the specialty service Newsworld to broadcast 12 minutes of advertising without postponing its consideration of the application until the service's next licence renewal. The Commission considers that approval of the present application would enable RDI to enjoy the same treatment as is currently granted to Newsworld, LCN and most other specialty services with respect to the broadcast of advertising material.
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12.
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The Commission also notes that from the time RDI's licence was issued, RDI, like Newsworld, has been subject to a condition of licence requiring the licensee to maintain separate accounts from those of the CBC's television networks. The Commission points out that the purpose of this condition of licence is to ensure that RDI and Newsworld are not financially supported by the CBC's Parliamentary appropriations. The Commission emphasizes that this separate accounting rule is not intended to prevent RDI or Newsworld from sharing resources and programs with the main service. In fact, as noted in Decision 2000-3, the Commission considers that such resource sharing is clearly in the public interest. The Commission notes that RDI's licence is still subject to this condition of licence.
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13.
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In light of the above, the Commission approves the application by the Canadian Broadcasting Corporation to amend the broadcasting licence for its specialty programming undertaking Le Réseau de l'information, in order to replace the current condition of licence no. 5 pertaining to the distribution of advertising material with the followingcondition of licence:
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5. (a) Subject to subsections (c) and (d), the licensee shall not distribute more than 12 minutes of advertising material during each clock hour.
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(b) For the purposes of this condition, advertising material does not include promotion of a Canadian program to be broadcast by the licensee, notwithstanding that a sponsor be identified in the title of the program or be identified as a sponsor of that program, where the identification is limited to the name of the sponsor only and does not include a description or representation of the products or services or any attributes of the sponsor's products or services.
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(c) In addition to the maximum of 12 minutes of advertising material referred to in subsection (a), the licensee may broadcast, during each clock hour, a maximum of 30 seconds of additional advertising material that consists of unpaid public service announcements.
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(d) Where a long-form live program that is not regularly scheduled occupies time in two or more consecutive clock hours, the licensee may exceed the maximum number of minutes of advertising material set out in subsection (a) during any of those clock hours, up to a maximum of 14 minutes in any clock hour, provided that the average number of minutes of advertising material broadcast during the clock hours occupied by the program does not exceed 12 minutes during each clock hour.
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(e) The licensee shall not distribute any paid advertising material other than paid national advertising.
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Secretary General
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This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined in PDF format or in HTML at the following Internet site: www.crtc.gc.ca
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Date Modified: 2006-07-17