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Broadcasting Decision CRTC 2020-77

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Reference: 2019-303

Ottawa, 28 February 2020

CFPV-FM Radio Ltd.
Pemberton, British Columbia

Public record for this application: 2018-0694-4
 Public hearing in the National Capital Region
5 November 2019

CFPV-FM Pemberton – Non-renewal of licence

The Commission denies the application from CFPV-FM Radio Ltd. to renew the broadcasting licence for the English-language commercial radio station CFPV-FM Pemberton, British Columbia.
Given the severity and recurrence of the current instances of non-compliance; the station’s history and the licensee’s actions, which clearly demonstrate its poor understanding of its conditions of licence and regulatory obligations, or a lack of willingness to respect them; the licensee’s demonstrated inability to implement the necessary measures to ensure compliance; and its disregard for the Commission’s authority and for its responsibilities as a broadcaster, the Commission is not convinced that the imposition of conditions of licence, the imposition of a mandatory order, a suspension of the licence or a short-term licence would be effective measures. Consequently, the Commission finds that not renewing the licence is the only appropriate measure in the circumstances.

Application

  1. CFPV-FM Radio Ltd. (CFPV-FM Radio) filed an application to renew the broadcasting licence for the English-language commercial radio station CFPV-FM Pemberton, British Columbia, which expires 31 March 2020.Footnote 1
  2. CFPV-FM Radio is a corporation wholly owned and controlled by Matthew G. McBride. Mr. McBride owns and controls three other English-language commercial radio stations in British Columbia: CKPM-FM Port Moody, CIMM-FM Ucluelet and CHMZ-FM Tofino.

Background

  1. In Broadcasting Decision 2006-643, the Commission approved an application by the licensee for a broadcasting licence to operate CFPV-FM. In Broadcasting Decision 2013-700, the Commission renewed the broadcasting licence for CFPV-FM for a short-term period of four years due to the licensee’s non-compliance with section 9(2) of the Radio Regulations, 1986 (the Regulations) relating to the filing of annual returns, and with condition of licence 2 set out in the appendix to Broadcasting Decision 2006-643 relating to Canadian talent developmentFootnote 2 (CTD) contributions.
  2. In Broadcasting Decision 2017-354, the Commission renewed the broadcasting licence for CFPV-FM for a short-term period of two years due to the licensee’s non-compliance with sections 2.2(8), 2.2(9), 9(2) and 9(3)(b) of the Regulations relating to the broadcast of Canadian content, the filing of annual returns and the filing of music lists, as well as with condition of licence 2 set out in the appendix to Broadcasting Decision 2013-700 relating to rectifying a shortfall in additional CTD contributions.

Intervention

  1. The Commission received an intervention in opposition to the four licence renewal applications filed by Mr. McBride as part of the present proceeding.Footnote 3 At the hearing, the intervener stated that he was a former employee of the station and the he held a management position with CFPV-FM Radio. As such, he indicated that concerns regarding the licensee’s stations were often brought to his attention. The intervener submitted that the four stations owned and controlled by Mr. McBride have a “legacy of non-compliance” and stated that he has concerns regarding the licensee’s ability and commitment to operate the stations in a compliant manner in the future.
  2. At the hearing, the licensee indicated that the intervener never held a management position with the company and was hired to provide piecework for a very brief period of time.

Non-compliance

  1. In Broadcasting Notice of Consultation 2019-303, the Commission stated that the licensee was in apparent non-compliance with the following:
    • sections 8(1), 8(2) and 9(3)(a) of the Regulations, relating to the submission of a complete and accurate program log and an accurate self-assessment report;
    • condition of licence 2 set out in Broadcasting Decision 2017-354, which requires the licensee to direct $1,500 to Canadian content development (CCD) in each of the 2017-2018 and 2018-2019 broadcast years; and
    • condition of licence 3 set out in Broadcasting Decision 2017-354, which requires the broadcast of on-air announcements regarding its non-compliance.
  2. The Commission also expressed concerns regarding the local programming offered by the station as well as the licensee’s ability and commitment to operate the station in a compliant manner. For these reasons, the Commission called the licensee to appear at a public hearing.

Submission of program logs and self-assessment report

  1. Sections 8(1) and 8(2) of the Regulations set out requirements relating to keeping program logs. Section 9(3)(a) of the Regulations sets out the information to be included in a station’s self-assessment report.
  2. In a letter dated 18 May 2018, the Commission requested that the licensee file monitoring documentation regarding the programming broadcast by the station during the 6 to 12 May 2018 broadcast week.
  3. The program log filed with the Commission contained inconsistencies. Specifically, the dates indicated in the program log did not correspond to the dates of the week monitored. In addition, the audio files had the same inaccurate dates.   
  4. The self-assessment report submitted by the licensee also contained errors. Specifically, the number of musical selections indicated in the self-assessment report did not correspond to the number of music selections set out in the music list.
  5. In a letter to the Commission dated 23 November 2018, the licensee explained that the audio files must be manipulated in order to be transferred successfully to the Commission, and that the files often carry the dates of the last handling.
  6. At the public hearing, the licensee, upon reflection, considered that the apparent non-compliance regarding the program log could be explained by the probability that the Commission wished to obtain the pre-execution log rather than the post-execution log that it had submitted.Footnote 4
  7. The licensee also stated that the system used was not sophisticated enough for the type of manipulation that was required of it.
  8. In regard to the self-assessment report, the licensee submitted that the discrepancies between the report and the music list were due to a coding error, a printing error, and the fact that the first and last musical selections of the day may have been included by the licensee but not counted by the Commission. To ensure future compliance, the licensee indicated that it will explore methods for more accurately reviewing its documentation and developing more efficient tools and techniques to digitally compare output logs against its manual analysis. It added that it will remove the “human factor” from log evaluation and that it intends obtain a more efficient system once its licence is renewed.

Commission’s analysis and decision

  1. Adherence to the requirements relating to the submission of complete and accurate program logs and self-assessment reports are fundamental to the Commission’s ability to monitor a station’s performance and verify its compliance with the Regulations and its conditions of licence. Further, the submission of material containing inconsistencies affects the Commission’s ability to independently confirm a licensee’s adherence to its regulatory obligations. These filings also become important indicators as to whether the licensee has the willingness, ability and knowledge necessary to bring itself into compliance and maintain such compliance.
  2. In its request for radio monitoring materials, the Commission requested only the post-execution program log, which is what the licensee submitted. As such, the licensee’s explanation for the apparent non-compliance relating to the program log is inaccurate; it relates instead to inaccuracies regarding the dates of the program log and audio recordings.
  3. Further, the licensee’s non-compliance relating to the filing of an accurate self-assessment report can be explained by discrepancies between the self-assessment report and the music list at the time the licensee filed these documents with the Commission.  
  4. In regard to the licensee’s explanation that its operating system was not good and that it would upgrade the system once the station’s licence is renewed, the Commission considers that a well-functioning operating system is a fundamental requirement for any station operator. Accordingly, the Commission considers that the licensee should have invested in a new operating system after May 2018, which is when it noted that its current system did not work properly.   
  5. In light of the above, the Commission finds the licensee in non-compliance with sections 8(1), 8(2) and 9(3)(a) of the Regulations.

Contributions to Canadian content development

  1. When the Commission first renewed the broadcasting licence for CFPV-FM in 2013, it determined that the licensee was in non-compliance with its condition of licence relating to over-and-above CCD contributions for the 2007-2008 through 2011-2012 broadcast years, and had incurred a shortfall of $9,183. At the time, the licensee explained that the Pemberton market was financially challenging and did not allow it to make the CCD contributions it had proposed when it was granted a licence, set out in Broadcasting Decision 2006-643. The Commission imposed a condition of licence requiring the licensee to pay the shortfall of $9,183 and provide proof of payment by no later than 17 March 2014.
  2. When the Commission last renewed the station’s licence in 2017, it determined that the licensee did not make any of the CCD contributions that were required by condition of licence. To make up for the shortfall, the licensee proposed an annual contribution of $1,500 for the duration of the licence term considered appropriate by the Commission. After examining CFPV-FM’s financial data, the Commission recognized the licensee’s low revenues since 2014 and its apparent inability to pay the shortfall. Consequently, it imposed a condition of licence requiring the licensee to direct $1,500 to CCD for the 2017-2018 and 2018-2019 broadcast years, as proposed by the licensee.
  3. According to Commission’s records, the licensee did not make any CCD contributions for the 2017-2018 and 2018-2019 broadcast years. It has therefore incurred a shortfall of $3,000.
  4. In reply to this apparent non-compliance, in a letter to the Commission dated 28 May 2019, the licensee indicated that the station was in a difficult financial situation. It added that it intends to establish a planned budget for allocating funds, clearly identify qualified recipients in advance, and prepare appropriate documentation for each contribution. In that same letter, the licensee confirmed that it would make the $1,500 payment to CCD for the 2018-2019 broadcast year by no later than 31 August 2019.
  5. Further, in a letter dated 12 June 2019, the licensee indicated that it would adhere to a condition of licence requiring payment of the $1,500 shortfall for the 2017-2018 broadcast year by no later than 30 days after the publication of the decision, should its licence be renewed.
  6. At the hearing, the licensee specified that it had intended to make the $1,500 CCD contribution for the 2018-2019 broadcast year but that it did not make the contribution as it was called to a public hearing. It added that the proposed sale of two of its stations, CIMM-FM and CHMZ-FM,Footnote 5 would allow it to expend the shortfall. The licensee therefore did not make any CCD contributions, whereas it had proposed an amount of $1,500 each broadcast year

Commission’s analysis and decision

  1. It is important that radio station licensees respect their CCD contribution obligations, given that CCD initiatives help to develop and advance the careers of emerging Canadian artists while increasing the supply of high-quality Canadian music in a variety of genres and the demand for Canadian music by listeners. Licensees that do not make CCD contributions can therefore cause harm to the Canadian broadcasting system.
  2. The Commission notes that the licensee itself proposed to expend $1,500 in each of the 2017-2018 and 2018-2019 broadcast years in order to rectify a portion of its $9,183 shortfall. At the time, the Commission had agreed to the licensee’s proposal in light of the station’s low revenues. However, the licensee has not made any CCD contributions in the current licence term and has not contacted the Commission for guidance on the best course of action to take in order to address this issue.
  3. In light of the above, the Commission finds the licensee in non-compliance with condition of licence 2 set out in the appendix to Broadcasting Decision 2017-354.
  4. The Commission is concerned by the fact that this is the third consecutive licence term in which the licensee has been found to be in severe non-compliance with its conditions of licence relating to over-and-above CCD contributions. The Commission considers that the licensee’s behaviour clearly demonstrates a lack of willingness to operate the station in a compliant manner and a lack of respect for the Commission’s authority.

Broadcast of on-air announcements

  1. Pursuant to condition of licence 3 set out in the appendix to Broadcasting Decision 2017-354, the licensee was required to broadcast, within 14 days starting 1 January 2018, the new licence term, an announcement stating that the station had been found in non-compliance and that it had put measures in place to ensure that the situation did not reoccur.
  2. The licensee was also required to provide to the Commission the audio recordings for the broadcast days during which the announcement was broadcast and to file a completed and signed attestation to that effect by no later than 14 days following the final broadcast of the announcement.
  3. On 21 December 2017, several days before the beginning of the new licence term, Commission staff communicated by email with the licensee to provide additional details regarding the filing of the required material. Subsequently, on 28 December 2017, Commission staff called the licensee, and the licensee confirmed that it understood the requirements set out in the condition of licence.
  4. In a letter dated 14 May 2019, the Commission informed the licensee that it appeared not to have not filed the audio recordings or the completed and signed Attestation as to the broadcast of the non-compliance announcement on CFPV-FM Pemberton, as required by the above-noted condition of licence. The Commission gave the licensee an opportunity to further explain the circumstances surrounding this non-compliance and to specify the measures that have been or will be put in place to ensure future compliance.
  5. In response to that Commission letter, the licensee indicated that it did comply with the condition of licence. It also submitted an audio recording of the announcement and the attestation document.
  6. At the hearing, the licensee repeated that it did in fact broadcast the announcement and believed it had filed the required documents with the Commission.

Commission’s analysis and decision

  1. According to Commission’s records, the licensee did not file, by the prescribed deadline, the required documents relating to its condition of licence, even though Commission staff had contacted the licensee twice to make sure that it understood the requirements. Although it claimed to have filed the requirement documents, the licensee did not provide the Commission with any proof of filing. In the Commission’s view, the failure to file the required documentation by the prescribed deadline demonstrates the licensee’s lack of understanding or willingness to comply with its conditions of licence.
  2. Moreover, the audio recording submitted by the licensee on 28 May 2019 was only 40 seconds long. However, condition of licence 3 specifies that the licensee was required to submit the audio recordings for the broadcast days during which the announcement was broadcast.
  3. At the hearing, the licensee stated that it thought the Commission only required the audio recording of the announcement, and not the audio recordings for the full broadcast day. However, condition of licence 3 clearly sets out the requirements relating to the on-air announcement, including the prescribed deadline and the required documents.
  4. When asked by the Commission if it had taken any measures to ensure full compliance with any future requirement to broadcast an on-air announcement, the licensee confirmed that it understood the requirements, but did not propose any measures to ensure future compliance in this regard.
  5. In light of the above, the Commission finds the licensee in non-compliance with condition of licence 3 set out in the appendix to Broadcasting Decision 2017-354.
  6. Given that condition of licence 3 was imposed in light of the serious and recurring nature of the licensee’s non-compliance during the preceding licence term, the Commission considers the licensee’s non-compliance to be very severe. The Commission also considers that the failure to respect any corrective measure imposed by the Commission demonstrates that the licensee does not take its broadcasting responsibilities seriously and does not respect the Commission’s authority.

Broadcast of local programming

  1. As noted above, the Commission monitored CFPV-FM’s programming for the 6 to 12 May 2018 broadcast week. In a letter dated 5 November 2018, the Commission raised concerns regarding the accuracy of the station’s spoken-word programming content. Specifically, the Commission noted that a number of weather and news bulletins were rebroadcast on different days of the week and, consequently, did not provide listeners with accurate information.
  2. In that same letter, the Commission asked the licensee to explain how the station’s local programming, in particular the weather and news bulletins, provided relevant and accurate information to the community served, given that some segments were repeated on different days during the week monitored.
  3. In its response letter dated 23 November 2018, the licensee admitted that broadcasting the same weather report on different days is not a typical operating procedure. It added that, although it is not a best practice, recording over an existing weather report without changing the label frequently occurs. CFPV-FM Radio indicated that although the labels on the pre-recorded reports were incorrect, the content was in fact correct.
  4. Moreover, in the same letter, the licensee submitted that the automation system in use at the time the Commission monitored the station’s programming was not a good quality system, and that it has been replaced with a more reliable system with a file structure that is easier for broadcasters to understand.
  5. To address the local programming issue, the licensee indicated that it would establish a policy and an approach to convey relevant information more effectively to the community. It proposed to file these documents with the Commission by no later than 31 December 2018.
  6. In a letter dated 14 May 2019, the Commission informed the licensee that it had not received the promised documentation, and asked it to provide the information. In reply to that request, the licensee filed a document with the Commission specifying that it had a double-checking policy and a single file policy.
  7. At the public hearing, Mr. McBride noted that he was the station’s sole employee, that the station was remotely operated from the suburbs of Vancouver, and that all the data and audio required to operate the station is transmitted over the Internet. To prepare programming that is relevant to the Pemberton community, the licensee indicated that it uses information from different Internet sources or by communicating with members of the community by telephone.
  8. The licensee committed to broadcast 12 hours of spoken-word programming per broadcast week, including five hours of newscasts, should the station’s licence be renewed.
  9. Finally, the licensee explained that the issues relating to the news and weather reports were caused by the station’s operating system, which occasionally selects the wrong audio file, and that it might have entered the wrong code in the audio files.
  10. At the public hearing, the licensee submitted that one way to resolve the issue would be to invest in an operating system that would allow for better control of the audio files. It explained, however, that it did not invest in such a system due to the uncertainty surrounding its licence renewal.

Commission’s analysis and decision

  1. In its letter to the Commission dated 23 November 2018, the licensee clearly indicated that the system in use at the time of the station’s monitoring report was not a very good system and that it had been replaced by a more reliable system with a file structure that is easier for broadcasters to understand.
  2. At the public hearing, the licensee reiterated that the operating system in place was unreliable. However, it noted that it did not invest in a new system because of the uncertainty caused by the hearing. Therefore, the licensee contradicted its earlier November 2018 statement, which, in the Commission’s view, undermines the licensee’s credibility.
  3. CFPV-FM Radio operates its station via the Internet from the suburbs of Vancouver, approximately 150 kilometres from Pemberton. Although no regulatory requirement prevents a licensee from operate a station remotely, the Commission expects that stations operated in this way maintain a certain presence in the community they serve. In this regard, it appears that CPFV-FM Radio has no presence in the Pemberton community.
  4. According to the Commission’s definition of local programming, set out in paragraph 207 of Broadcasting Public Notice 2006-158, “[i]n their local programming, licensees must incorporate spoken word material of direct and particular relevance to the community served.” In addition, as set out in section 3(1)(g) of the Broadcasting Act (the Act), the programming originated by broadcasting undertakings should be of high standard, and as set out in section 3(1)(h), all persons who are licensed to carry on broadcasting undertakings have a responsibility for the programs they broadcast.
  5. The results of the monitoring evaluation in 2018 show that the station provided inaccurate weather and local traffic reports to the community. In the Commission’s view, these reports must allow the audience to access information that is useful, relevant, and available in a timely manner. It also considers that the programming segments broadcast did not meet this definition or the sought objectives. It also considers that the local news and weather reports can have an impact on public safety and that providing incorrect information could potentially endanger listeners.
  6. In the Commission’s view, the quantity and quality of local spoken-word programming broadcast by CFPV-FM reflect the licensee’s low level of investment in programming and production. In fact, the money invested by the licensee in programming and production was four times less that that invested by similar stations.
  7. Finally, the Commission notes that no members of the community filed interventions in support of CFPV-FM’s licence renewal application.  
  8. In light of the above, the Commission is not convinced that the licensee would provide quality local programming reflecting the needs and interests of the Pemberton community should the station’s broadcasting licence be renewed.

Regulatory measures

  1. The Commission’s approach to non-compliance by radio stations is set out in Broadcasting Information Bulletin 2014-608. Under that approach, each instance of non-compliance is evaluated in its context and in light of factors such as the quantity, recurrence and seriousness of the non-compliance. The circumstances leading to the non-compliance, the arguments provided by the licensee and the actions taken to rectify the situation are also considered.
  2. In Broadcasting Decision 2017-354, the Commission warned the licensee that should it once again breach its regulatory requirements, the Commission would consider recourse to additional measures, including the imposition of a mandatory order, or the suspension, non-renewal or revocation of the station’s broadcasting licence under sections 9 and 24 of the Act. Despite this warning, the licensee acknowledged that it has once again breached the regulatory requirements, for the third consecutive licence term.
  3. The Commission considers that the responses provided by the licensee during the current licence term and during the present licence renewal process raise concerns over its credibility, its commitment to its regulatory obligations, and its willingness to bring the station into compliance in the future. The Commission is not convinced that the licensee would assume its responsibilities as a broadcaster and respect the Commission’s authority should the station’s licence be renewed.
  4. It is incumbent upon licensees to know their regulatory obligations to ensure their stations’ compliance. The licensee’s responses to the instances of apparent non-compliance have not convinced the Commission that it has the requisite knowledge to ensure compliance. For example, in regard to the condition of licence requiring the broadcast of on-air announcements, the licensee stated that it misunderstood the condition of licence, although the condition of licence clearly sets out the prescribed deadline and the required documentation, and despite the fact that the licensee confirmed, in 2017, that it understood the requirements. The requirement to broadcast of on-air announcements was imposed in order to rectify the licensee’s past non-compliance. The Commission considers that the failure to respect an important measure that it had imposed clearly demonstrates that the licensee does not fully understand its conditions of licence or is not determined to comply with them, and that it does not respect the Commission’s authority.
  5. On different occasions, the licensee cited the station’s lack of funds as an explanation of its apparent non-compliance. While the Commission acknowledges that a licensee’s financial capacity can have an impact on the operation of a station, licensees must comply at all times with the requirements set out in the Act, the Regulations, and their conditions of licence. In the present case, the licensee is in non-compliance not only with conditions of licence requiring the payment of CCD contributions, but also with requirements that do not require substantive funds, such as the broadcast of on-air announcements.
  6. Further, this is the third consecutive licence term during which the licensee is in non‑compliance with the requirements relating to CCD contributions. The Commission is therefore not convinced of the licensee’s willingness to comply with any future regulatory obligation relating to CCD.
  7. In response to various Commission letters, the licensee failed to provide, in the Commission’s view, any convincing measures that would ensure its compliance in the future. In the letter dated 23 November 2018, the licensee stated that it replaced the operating system with a more reliable one, but contradicted this statement at the hearing. The Commission considers that the licensee’s contradictory statements in regard to the installation of a new operating system undermine its credibility. At the public hearing, it stated that it was relying on the renewal of CFPV-FM’s licence and the sale of its stations in Tofino and Ucluelet to ensure the Pemberton station’s compliance. It also admitted that it did not take concrete measures because of the uncertainty surrounding CFPV-FM’s licence renewal and the fact that it was called to a public hearing. Accordingly, the Commission considers that the licensee lacks credibility, and it is not convinced that the licensee will fulfil its commitments.
  8. Given that holding a broadcasting licence is a privilege, broadcasters are required to adhere at all times to a number of regulations and conditions of licence in order to operate a radio station. The Commission considers that being called to a public hearing does not justify a failure to respect these regulations and conditions. In fact, a hearing is an additional opportunity for a licensee to explain the measures taken to ensure compliance and to provide reasons why its licence should be renewed. Under the same circumstances, a responsible licensee would have understood the seriousness of the situation and the Commission’s warnings, and would have taken all the necessary steps to correct the situation as quickly as possible. In the present case, the Commission considers that CFPV-FM Radio failed to provide compelling measures to rectify the station’s non-compliance and did not seize the opportunity of the public hearing to explain why its licence should be renewed.
  9. In addition to the instances of non-compliance, the Commission considers that, during the station’s compliance evaluation in 2018, the licensee did not provide high-quality spoken-word content to the Pemberton community, as required by section 3(1)(g) of the Act.

Conclusion

  1. Since the launch of the station in 2008, the Commission has found the licensee in non-compliance in each licence term. The licensee’s history reveals several instances of non-compliance over three consecutive licence terms, often in regard to the same regulatory requirements, which demonstrates that the licensee is not taking the requirements seriously.
  2. Despite several warnings from the Commission, the licensee continued to be in non-compliance, and its behaviour even grew worse. The current non-compliance is not an isolated incident. Consequently, the Commission is not convinced that a change in the licensee’s behaviour in regard to its regulatory obligations will occur.
  3. The Commission has considered all of the regulatory measures available to it to ensure that the licensee adheres to its obligations, including the imposition of conditions of licence, the issuance of mandatory orders, the granting of a short-term licence renewal, and the suspension of CFPV-FM’s broadcasting licence.
  4. Given the severity and recurrence of the current instances of non-compliance; the station’s history and the licensee’s actions, which clearly demonstrate its poor understanding of its conditions of licence and regulatory obligations, or a lack of willingness to respect them; the licensee’s demonstrated inability to implement the necessary measures to ensure compliance; and its disregard for the Commission’s authority and for its responsibilities as a broadcaster, the Commission is not convinced that the imposition of conditions of licence, the imposition of a mandatory order, the suspension of the licence or a short-term licence renewal would be effective measures for ensuring compliance. Consequently, the Commission finds that not renewing the licence is the only appropriate measure in the circumstances.
  5. In light of all of the above, the Commission denies the application by CFPV-FM Radio Ltd. to renew the broadcasting licence for the English-language commercial radio programming undertaking CFPV-FM Pemberton, British Columbia. Accordingly, the licence will expire on 31 March 2020.

Secretary General

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