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ARCHIVED - Broadcasting Decision CRTC 2012-695

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Route reference: 2012-461

Ottawa, 20 December 2012

Newcap Inc.
 Ottawa and Sudbury, Ontario

Applications 2011-0158-4 and 2011-0162-5, received 28 January 2011

CILV-FM Ottawa and CIGM-FM Sudbury – Licence renewals

The Commission renews the broadcasting licences for the English-language commercial radio stations CILV-FM Ottawa and CIGM-FM Sudbury from 1 January 2013 to 31 August 2017. These short-term renewals will allow for an earlier review of the licensee’s compliance with its conditions of licence and with the Radio Regulations, 1986.

Introduction

1. The Commission received applications by Newcap Inc. (Newcap) to renew the broadcasting licences for the English-language commercial radio programming undertakings CILV-FM Ottawa and CIGM-FM Sudbury, which expire 31 December 2012.1 The Commission did not receive any interventions in connection with these applications.

Non-compliance

2. In Broadcasting Notice of Consultation 2012-461, the Commission indicated that the licensee may have failed to comply with the following:

3. Upon further review of the record, the Commission notes that, in regard to CILV-FM, the licensee may also have failed to comply with section 9(2) of the Regulations, which relates to the filing of annual returns, for the 2009-2010 broadcast year.

Commission’s analysis and determinations

4. After examining the applications in light of applicable regulations and policies, the Commission considers that the issues to be addressed in its determinations are the following:

Apparent non-compliance with section 15 of the Regulations for CILV-FM

5. As set out in Broadcasting Decision 2011-129, for CILV-FM, Newcap is required, by condition of licence, to make an annual contribution of $900,000 to the promotion and development of Canadian content. The Commission notes that for the 2009-2010 broadcast year, Newcap contributed $974,391 to CCD. However, further examination of supporting documentation showed that for the 2009-2010 broadcast year, Newcap included $20,059.63 in expenditures that are ineligible under the CCD plan. These expenditures are as follows:

6. In Broadcasting Decision 2011-129, the Commission noted that Newcap did not fulfill the annual spending requirements for its local band initiative in each of the 2005-2006 and 2006-2007 broadcast years, and that the total shortfall for those two broadcast years was $442,224. The Commission was of the view that the non-compliance was related to the way the condition of licence was structured and not the result of bad faith on the part of Newcap. The Commission expected the licensee to fulfill this CCD shortfall and stated that it would explore any issues of non-compliance at the time of licence renewal.

7. Newcap has demonstrated on the record of this proceeding that its payment schedule, as detailed in Broadcasting Decision 2011-129, will be met, and that the remaining shortfall of $249,107 for the 2005-2006 and 2006-2007 broadcast years will be expended by the end of the 2012-2013 broadcast year. An expectation to that effect is set out in Appendix 1 to this decision.

8. The Commission notes that the above-noted total of $20,059.63, although ineligible as a CCD contribution, exceeds the amount that Newcap was required to expend on CCD, an amount expended in a manner that was in compliance with its condition of licence. Accordingly, the Commission finds that, in regard to CILV-FM, Newcap is in compliance with its condition of licence relating to annual contributions to the promotion and development of Canadian content.

Apparent non-compliance with section 9(2) of the Regulations for CILV-FM

9. Pursuant to section 9(2) of the Regulations, licensees are required to file, by no later than 30 November of each year, their annual returns for the broadcast year ending the previous 31 August. Failure to file these returns, as well as all supporting documentation for contributions to CCD by the required date, may result in a situation of non-compliance. In regard to CILV-FM, the Commission notes that this station’s annual return for the 2009-2010 broadcast year did not include all of the supporting documentation for its contributions to CCD, as required by the Regulations.

10. The licensee explained that the missing documentation was due to an oversight and committed to make every effort to ensure that all supporting documents will be filed with the annual returns.

11. The Commission acknowledges Newcap’s commitment to file complete annual returns in the future. Nevertheless, the Commission finds that CILV-FM is in non-compliance with section 9(2) of the Regulations for the 2009-2010 broadcast year.

Apparent non-compliance with CIGM-FM’s condition of licence relating to CCD contributions

12. In Broadcasting Decision 2008-326, the Commission imposed the following condition of licence on CIGM-FM:

In addition to the required basic annual Canadian content development (CCD) contribution set out in section 15 of the Radio Regulations, 1986, as amended from time to time, the licensee shall, upon commencement of operations, contribute $280,000 over seven consecutive broadcast years to the promotion and development of Canadian content according to the following schedule: years 1 through 7: $40,000 annually.

Of this amount, the licensee shall allocate no less than 20% per broadcast year to FACTOR or MUSICACTION. The remaining amounts of this additional CCD contribution shall be allocated to parties and initiatives fulfilling the definition of eligible initiatives set out in paragraph 108 of Commercial Radio Policy 2006, Broadcasting Public Notice CRTC 2006-158, 15 December 2006.

13. Upon examination of its records and taking into consideration the licensee’s obligations under section 15 of the Regulations and the above-noted condition of licence, the Commission finds that the licensee has a shortfall of $499 in its required CCD contribution for the 2009-2010 broadcast year.

14. In Broadcasting Decision 2008-326, the Commission approved applications by Newcap and Rogers Broadcasting Limited (Rogers) for authority to exchange the assets of CIGM Sudbury and CFDR Dartmouth.2 Newcap stated that the calculation of CIGM-FM’s CCD contribution for the 2009-2010 broadcast year was based on the revenue generated by the station during the 2008-2009 broadcast year, only after it was controlled by Newcap, and did not include any revenue generated while it was controlled by Rogers. It claimed that this resulted in a miscalculation of CIGM-FM’s total CCD amount due for the 2009-2010 broadcast year.

15. The Commission is of the view that the above-noted miscalculation was made in good faith. Nevertheless, it reminds Newcap that a licensee, in acquiring a radio station, inherits all of the station’s obligations from the previous owner, and must include the station’s total revenue from the previous broadcast year in its calculation of CCD payments for the subsequent year, whether this revenue was generated by itself or by the previous owner.

16. Accordingly, the Commission finds that CIGM-FM is in non-compliance with its condition of licence relating to CCD payments for the 2009-2010 broadcast year. Consequently, the Commission directs the licensee to make a contribution of $499 to an eligible CCD initiative, as defined in paragraph 108 of Broadcasting Public Notice 2006-158, and to provide the Commission with appropriate proof that this contribution was made, by no later than 7 May 2013. A condition of licence to that effect is set out in Appendix 2 to this decision.

Conclusion

17. In Broadcasting Information Bulletin 2011-347, the Commission announced a revised approach to dealing with radio stations found in non-compliance. The Commission noted in particular that each instance of non-compliance will be evaluated in light of factors such as the quantity, recurrence and seriousness of the non-compliance. The Commission also noted that it will consider the circumstances leading to the non-compliance in question, the licensee’s arguments, and the measures taken to rectify the situation.

18. In accordance with its revised practice regarding radio non-compliance, the Commission considers that short-term renewal periods for both CILV-FM and CIGM-FM would be appropriate. Accordingly, the Commission renews the broadcasting licences for the English-language commercial radio programming undertakings CILV-FM Ottawa and CIGM-FM Sudbury from 1 January 2013 to 31 August 2017. These short-term renewals will allow for an earlier review of the licensee’s compliance with its conditions of licence as well as with the Regulations.

19. The term and conditions of licence for CILV-FM are set out in the Appendix 1 to this decision. The term and conditions of licence for CIGM-FM are set out in Appendix 2.

Employment equity

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

Reminder

21.  As noted above, in Broadcasting Decision 2008-326, the Commission approved applications by Newcap and Rogers for authority to exchange the assets of CIGM and CFDR. The Commission reminds the licensee that, as noted in that decision, the tangible benefits resulting from that exchange of assets must be paid over a period of seven broadcast years, a period that ends 31 August 2015.

Secretary General

Related documents

*This decision and the appropriate appendix are to be appended to each licence.

Appendix 1 to Broadcasting Decision CRTC 2012-695

Term, conditions of licence and expectation for the English-language commercial FM radio programming undertaking CILV-FM Ottawa, Ontario

Term

The licence will expire 31 August 2017.

Conditions of licence

1. The licensee shall adhere to the conditions of licence set out in Conditions of licence for commercial AM and FM radio stations, Broadcasting Regulatory Policy CRTC 2009-62, 11 February 2009.

2. The licensee shall, as an exception to the percentage of Canadian musical selections set out in sections 2.2(8) and 2.2(9) of the Radio Regulations, 1986 (the Regulations), in any broadcast week:

(a) devote, in that broadcast week, a minimum of 40% of its musical selections from content category 2 (Popular Music) to Canadian selections broadcast in their entirety; and

(b) devote, between 6:00 a.m. and 6:00 p.m., in the period from Monday to Friday of the same broadcast week, a minimum of 40% of its musical selections from content category 2 (Popular Music) to Canadian selections broadcast in their entirety.

For the purposes of this condition, the terms “broadcast week,” “Canadian selection,” “content category” and “musical selection” shall have the same meaning as that set out in the Regulations.

Expectation

In addition to the basic annual contribution to Canadian content development (CCD) set out in section 15 of the Radio Regulations, 1986, and in order to fulfill its condition of licence relating to CCD contributions as set out in CILV-FM Ottawa – Licence amendment, Broadcasting Decision CRTC 2011-129, 25 February 2011, the Commission expects the licensee to make a direct expenditure of at least $249,107 to CCD by the end of the 2012-2013 broadcast year.

Appendix 2 to Broadcasting Decision CRTC 2012-695

Term and conditions of licence for the English-language commercial FM radio programming undertaking CIGM-FM Sudbury, Ontario

Term

The licence will expire 31 August 2017.

Conditions of licence

1. The licensee shall adhere to the conditions of licence set out in Conditions of licence for commercial AM and FM radio stations, Broadcasting Regulatory Policy CRTC 2009-62, 11 February 2009.

2. In addition to the basic annual contribution to Canadian content development (CCD) set out in section 15 of the Radio Regulations, 1986, the licensee shall, by no later than 7 May 2013, make a contribution of $499 to CCD. The licensee shall allocate this amount to a party or initiative fulfilling the definition of an eligible initiative set out in paragraph 108 of Commercial Radio Policy 2006, Broadcasting Public Notice CRTC 2006-158, 15 December 2006. The licensee shall also file acceptable proof of payment with the Commission by no later than 7 May 2013.

3. In order to fulfill its condition of licence requiring it to contribute $300,000 over seven broadcast years to Canadian content development (CCD), as set out in Exchange of radio assets between Newcap Inc. and Rogers Broadcasting Limited and conversion of CIGM Sudbury and CFDR Dartmouth to the FM band, Broadcasting Decision CRTC 2008-326, 24 November 2008, the licensee shall, in addition to the required basic annual CCD contribution set out in section 15 of the Radio Regulations, 1986, make an annual contribution, until the end of the 2015-2016 broadcast year, of at least $42,857 to an initiative fulfilling the definition of an eligible initiative set out in paragraph 108 of Commercial Radio Policy 2006, Broadcasting Public Notice CRTC 2006-158, 15 December 2006.

Footnotes

[1] The original licence expiry date for these stations was 31 August 2011. The broadcasting licences were administratively renewed from 1 September 2011 to 31 December 2012 as a result of Broadcasting Decisions 2011-556, 2012-164 and 2012-456.

[2] In Broadcasting Decision 2008-326, the Commission also approved an application by Newcap to convert CIGM to the FM band.

Date modified: