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Broadcasting - Commission Letter addressed to Debra McLaughlin (South Fraser Broadcasting)

Ottawa, 18 November 2020

BY EMAIL

Debra McLaughlin
Consultant
South Fraser Broadcasting
101-15385 56 Ave
Surrey, BC V3S 0X9
debmclaughlin@mail.com

Re: Application 2019-0815-4 – Licence Renewal – CISF-FM Surrey, BC

Dear Debra McLaughlin, 

This is in reference to the above-noted application by South Fraser Broadcasting Inc. to renew the broadcasting licence. In order to pursue the analysis of this application, please respond to the questions set out in this letter. The information requested herein should be received by the Commission no later than 23 November 2020.

Instances of Apparent Non-Compliance

Please note that in evaluating instances of apparent non-compliance, the Commission considers factors such as the quantity, recurrence and seriousness of non-compliance. The Commission will impose measures according to the nature of the non-compliance, and also consider the circumstances, the arguments provided by the licensee, as well as the actions taken to rectify the situationFootnote1.

Please note that upon receipt of your response to the questions set out in this letter regarding instances of apparent non-compliance, no further letter requesting additional information will be sent unless exceptional circumstances justify to do so.  At this point, your file will be considered complete and a public proceeding will follow based on the information received.Footnote2

Consequently, it is the licensee’s responsibility to provide a response that includes complete and accurate information, including any necessary supporting evidence, as this is your opportunity to comment in writing on the preliminary findings concerning CISF-FM’s instances of apparent non-compliance described below. 

Please repeat each question in your response.

It is important to note that in the absence of a response on your part by the specified deadline, the licensee will be in a situation of apparent non-compliance with section 9(4) of the Radio Regulations, 1986 (the Regulations) which requires licensees to respond to Commission requests for information relating to adherence to their regulatory obligations. 

A copy of this letter and all related correspondence will be added to the public record of the proceeding.

The Commission requires that your response or other documents be submitted electronically by using the secured service “My CRTC Account” (Partner Log In or GCKey) and filling the “Broadcasting Cover Page” or the “Broadcasting Online Form and Cover Page” located on this web page. Also on this web page you will find information on the submission of applications to the Commission “Filing Broadcasting and Canadian Program Certification documents with the CRTC: Privacy and Security”.

Should you need further information concerning this application, please do not hesitate to contact me by e-mail at veronique.larose@crtc.gc.ca.

Sincerely,
Véronique Larose
Senior Radio Analyst
CRTC - Radio Policy & Application

In your response letter dated 13 October 2020, you have indicated that the station start date was 1 May 2016.

However, as indicated in our previous letter dated 6 October 2020, the annual returns submitted for the 2016-2017 broadcast year indicated that the station start date was 14 May 2017.

In Appendix 2 of Broadcasting Decision CRTC 2014-412, in which the Commission approved an application from South Fraser Broadcasting Inc. for a broadcasting licence to operate a new FM radio station to serve Surrey, BC, the following paragraph was indicated regarding the issuance of the licence:

Pursuant to section 22(1) of the Broadcasting Act, no licence may be issued until the Department of Industry notifies the Commission that its technical requirements have been met and that a broadcasting certificate will be issued.

According to the Commission records, the broadcasting certificate issued by the Minister of Industry was effective as of 14 March 2017.

Following this, the Commission issued a licence to South Fraser Broadcasting Inc. in accordance with the provisions of the Broadcasting Act and indicated an effective date of 27 March 2017.

Therefore, in accordance with your previous response letter dated 13 October 2020 it seems that South Fraser Broadcasting Inc. may have commenced operations without a broadcasting certificate from 1 May 2016 until 14 May 2017 resulting in apparent breach of section 22(1) of the Broadcasting Act.

In light of the above noted information, please answer the following questions:

  1. Was the station broadcasting without a broadcasting licence from 1 May 2016 until 14 May 2017?
  2. If not, please confirm the start date of the station.

If the station start date was in 2017, please answer the following questions:

Shortfalls in Over-and-Above Canadian content development (CCD) contributions, as required by condition of licence

  1. As noted in Broadcasting Decision CRTC 2014-412, the licensee of CISF-FM is subject to the following condition of licence:

In addition to the required basic annual contribution to Canadian content development (CCD), set out in section 15 of the Radio Regulations, 1986, as amended from time to time, the licensee shall, upon commencement of operations, make an annual contribution of $100,000 ($700,000 over seven consecutive broadcast years) to the promotion and development of Canadian content.

According to the station’s annual return for 2016-2017, the station began operations in May 2017, however the station contributed $0 in CCD contributions during the 2016-2017 broadcast year.

As set out in Broadcasting Information Bulletin CRTC 2009-251, the Commission requires a licensee, in its first year of operation, to make a pro-rated payment, related to its over-and-above CCD contribution requirements in an amount representing the number of months the station was in operation during the broadcast year. Based on the May 2017 commencement of operations, the licensee’s required minimum over and above CCD contribution for that broadcast year represented 4/12 of the total required amount for that year [i.e. ($100,000) x (4 ÷ 12) = $33,333].

It would therefore appear, that the licensee is in apparent non-compliance with the above-noted CCD condition of licence for the 2016-2017 broadcast year.

In light of the information above:

  1. Please explain the circumstances of this apparent non‐compliance.
  2. Please specify what measures have been or will be put in place to full future compliance with the licensee’s regulatory obligations for its over-and-above CCD contributions during the new licence term.
  3. Please specify the date by which the shortfall will be expended and supporting documents will be filed. You are reminded that the licensee will need to provide the Commission with the necessary proofs of paymentFootnote3 and eligibilityFootnote4 once the shortfall has been expended.
  4. Please comment on the possibility of a short-term renewal for CISF-FM, in accordance with Broadcasting Information Bulletin CRTC 2014-608, should the licensee be found in non-compliance with the above-noted condition of licence relating to CCD.
  5. Please comment on the possible imposition of a condition of licence relating to the shortfall(s).
  6. Please comment on whether additional CCD contributions would be an appropriate measure to address this apparent non-compliance and to compensate for the harm caused to the Canadian broadcasting system.
  7. In the event the Commission determines that additional CCD contributions would be appropriate, please comment on the possibility of the Commission requiring the licensee to pay, for the first broadcast year of the next licence term, additional annual CCD contributions equal to the potential shortfall, up to $33,333, to be allocated in the manner set out in section 15(5)(a) and (b) of the Regulations (i.e., min. 45% to FACTOR or Musicaction, min. 15% to the Community Radio Fund of Canada and max. 40% to discretionary initiatives), in order to compensate for the harm caused to the broadcasting system for the year the contribution was not fulfilled.

Over-and-Above condition of licence to carry forward into the next licence term

  1. As noted in Broadcasting Decision CRTC 2014-412, the licensee of CISF-FM is subject to the following condition of licence:

    In addition to the required basic annual contribution to Canadian content development (CCD), set out in section 15 of the Radio Regulations, 1986, as amended from time to time, the licensee shall, upon commencement of operations, make an annual contribution of $100,000 ($700,000 over seven consecutive broadcast years) to the promotion and development of Canadian content.

    Of this amount, the licensee shall allocate no less than 20% per broadcast year to FACTOR. 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.

    Given that the station will have operated through its first 4 consecutive broadcast years upon the expiration of the current licence on 31 August 2020, the licensee would be required to contribute the remaining contributions for Years 5 to 7 through the next licence term. 

    As set out in Broadcasting Information Bulletin CRTC 2009-251, the Commission generally requires a licensee, in its first year of operation, to make a pro-rated payment, related to its over-and-above CCD contribution requirements in an amount representing the number of months the station was in operation during the broadcast year. 

    Given that CISF-FM operated for a 4 month period in broadcast year 2016-2017, the licensee’s required minimum contribution for that broadcast year represents 4/12 of the total required amount for that year [i.e. ($100,000) x (4 ÷ 12) = $33,333].  The licensee will therefore be required to contribute an amount representing the remaining 8 months of its first incomplete year of operation (i.e. $66,666) in the 2022-2023 broadcast year, representing the seventh full broadcast year.

    In light of the above:

    1. Please confirm your understanding that the licensee would be required to make an annual contribution to CCD of $100,000 in the 2020-2021 broadcast year ending 31 August 2021, in order to fulfil the above-noted condition of licence requiring over-and-above CCD contributions of $700,000.
    2. Please confirm your understanding that the licensee would be required to make an annual contribution to CCD of $100,000 in the 2021-2022 broadcast year ending 31 August 2022, in order to fulfil the above-noted condition of licence requiring over-and-above CCD contributions of $700,000.
    3. Please confirm your understanding that the licensee would also be required to make an annual contribution to CCD of $166,666 in the 2022-2023 broadcast year ending 31 August 2023, in order to fulfil the remaining (8 months) above-noted condition of licence requiring over-and-above CCD contributions of $700,000 based on the partial 2016-2017 broadcast year operation.
    4. Please comment on the possible imposition of a condition of licence relating to items a) to c) above, as conditions of licence.
  2. As previously indicated, Broadcasting Decision CRTC 2014-412 stated the following regarding the issuance of the licence:

    Furthermore, the Commission will only issue a licence for this undertaking once the applicant has informed the Commission in writing that it is prepared to commence operations. The undertaking must be operational at the earliest possible date and in any event no later than 24 months from the date of this decision, unless a request for an extension of time is approved by the Commission before 6 August 2016. In order to ensure that such a request is processed in a timely manner, it should be submitted at least 60 days before this date.

    It would therefore appear that the licensee is in non-compliance for having launched its station beyond the two year authority granted in Decision 2014-412 without an extension of time having been granted by the Commission.

    In light of the above:

    1. Please explain the circumstances of this apparent non‐compliance.
    2. Please comment on the possibility of a short-term renewal for CISF-FM, in accordance with Broadcasting Information Bulletin CRTC 2014-608, should the licensee be found in non-compliance with the above.
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