ARCHIVED -  Letter

Ottawa, 22 April 2013

By E-mail: ashadaniere@hifihdtv.ca

Ms. Asha Daniere
Blue Ant Media Partnership
Blue Ant Television Ltd.

Dear Ms. Daniere:

Subject: Bold (Application no. 2012-1537-7)
Travel + Escape (Application no. 2012-1198-7)
AUX (Application no. 2012-1196-1)
Bite (Application no. 2012-1197-9)
eqhd (Application no. 2012-1199-5)
HIFI (Application no. 2012-1200-3)
Oasis HD (Application no. 2012-1201-8)
radX (Application no. 2012-1202-6)

In order to clarify the proposed group-approach explained in the above-referenced applications, please provide responses to the following questions:

Canadian Programming Expenditures

1. You indicate in your supplementary brief that “The effective CPE flowing from AUX’s and BITE’s incrementality requirement would terminate with the benefits package with which they are associated in 2018. The effective lump-sum CPE flowing from the HiFi acquisition would terminate with that benefits package in 2019. However, the group-based approach would remain in place, governing at least those services with a CPE requirement, T+E and Bold.”

Please indicate how the flexibility that you propose (where T+E and Bold would be permitted to count towards their CPE requirement the CPE of any of your affiliated Category A or Category B services) would, once the tangible benefits period related to your services ends, affect the aggregate Canadian Programming Expenditures of your proposed group of services. For example, would it have the effect of reducing the aggregate CPE of those services? Please provide your calculations.

2. Should the Commission decide that it would be appropriate to consider an aggregate group CPE requirement based on the average aggregate CPE of all services within your proposed designated group over the past three broadcast years (as outlined in Broadcasting Regulatory Policy 2010-167), please indicate whether you would accept such a group-based CPE requirement? If not, please provide a detailed rationale and submit your suggested group CPE requirement (that would be calculated as a percentage of previous year’s revenues) with detailed calculations and assumptions.
For your reference, Commission staff notes that the CPE level of your proposed group’s could amount to as much as 35% of previous year’s revenues (based on the three-year average of the CPE currently required of your Category A services and on the three year average historical CPE of your Category B services).

3. In Broadcasting Regulatory Policy 2010-167, the Commission indicated that:
“49. The Commission has also determined that Category B specialty services controlled by a designated group and with more than one million subscribers will be subject to a CPE requirement. This requirement will be determined at the licence renewal of these services, using as a base the actual spending by the services over the previous three years.”
Please indicate whether you would accept a condition of licence to impose a CPE requirement for each your Category B specialty services, with over one million subscribers, based on the actual spending of these services over the previous three years. If not, please elaborate on your rationale.

4. As part of your proposed group renewal, you propose to include your Category B services as part of your designated group, some of which may have less than one million subscribers.

Given that the criterion for Category B services to be included in a group based licensing renewal is to have over a million subscribers, please elaborate on why these services should be included in a group based renewal.

5. Should the Commission consider it appropriate to include these Category B services with less than one million subscribers in your group of services, please indicate whether you would accept a CPE requirement for these Category B services based on the actual spending of these services over the previous three years. If not, please elaborate on your rationale. If applicable, provide a suggested individual CPE requirement for these Category B services should they be included as part of your proposed group renewal.

6. In your supplementary brief, you ask that “...the Commission consider seriously the request by a number of independent Category A programming services to reset their CPEs at 35 percent of their previous year’s revenues. We would suggest that under no circumstances, however, should T+E’s and Bold’s CPE requirements be continued at a level higher than the vertically-integrated group’s average English-language Category A CPE level of 38.9 percent”.

Please clarify the CPE requirements that you are proposing for Travel+Escape and Bold, with a detailed rationale and supporting calculations.

Programs of National Interest (PNI)

7. In the group-based policy, the Commission determined that it would be appropriate to impose a minimum, aggregate level of spending on PNI, which would be based on approximate levels of spending on PNI by the designated groups over the past three broadcast years.

a) In your supplementary brief, you propose a PNI requirement for Travel + Escape and Bold. However, the Commission’s approach to PNI requirements considers the PNI expenditures of all services within a designated group. Please elaborate why you propose a PNI requirement for only Travel+Escape and Bold.

b) Please indicate whether you would accept a condition of licence imposing a PNI requirement based on the average aggregate PNI spending of all services within your proposed designated group over the past three broadcast years. Please indicate whether you would accept such a group-based PNI requirement? Please submit a suggested group PNI requirement (calculated as a percentage of previous year revenues) with detailed calculations.

Independent Production Requirements

8. In Broadcasting Regulatory Policy 2010-167, which outlines the group-based approach to the licensing of private television services, the Commission noted that:

“95. The Commission's view, therefore, is that designated groups should be subject to a condition of licence requiring that at least 75% of the spending requirement for programs of national interest be allocated to independently-produced programs. The appropriateness of the percentage will be discussed at the next licence renewals. This obligation will be monitored through the annual reports that broadcasters will be required to file with the Commission. Further, specialty services that currently have individual requirements relating to independent production will retain those requirements.”
As you are asking to be renewed as a designated group, please indicate whether you would accept a condition of licence requiring that at least 75% of the spending requirement for programs of national interest be allocated to independently-produced programs. If not, please elaborate in detail on your rationale.

9. In your supplementary brief, you request that Blue Ant “...be able to air the programming that it creates in-house as independent programming on its own services, and that such programming qualify as independent programming with respect to the fulfilment of Blue Ant’s regulatory obligations in this respect.”
a) Please elaborate why it would be appropriate for the programming created and aired by your services to be designated as “independent” for the purposes of your regulatory obligations and how this would fulfill the policy on the creation of independent productions.
b) Comment on the potential impact on the operation of your services, if any, should the Commission deny this request.
c) In addition to the independent production requirements that the Commission has set out in its group based licensing policy, your services are also already subject to independent production requirements as part of their individual conditions of licence and/or certain tangible benefits packages.
Describe, in detail with supporting calculations, the overall potential impact on independent producers should the Commission approve your request to qualify programming produced in-house by Blue Ant as “independent”.

Please provide your response by no later than 26 April 2013, by using the secured service “My CRTC Account” (Partner Log In or GCKey). Also, please send me a copy of your response at the following e-mail: caroline.poirier@crtc.gc.ca.

We also request that you repeat each question in your response.

Please note also that all information that you provide, except information for which confidentiality has been requested and is granted, becomes part of a publicly accessible file and will be posted on the Commission’s web site and made available for public examination.

Should you need further information concerning this request for information, please do not hesitate to contact me by e-mail, by telephone at 819-994-2700 or by fax at: 819-994-0218.

Best regards,

Original signed by

Caroline Poirier
Senior Analyst
English and Third-language Programming

cc. Mr. Bram Abramson, McCarthy Tétrault LLP

Date modified:

2013-04-22