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Broadcasting Decision CRTC 2005-476
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Ottawa, 3 October 2005 |
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3095531 Nova Scotia Company
Toronto, Ontario |
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Application 2005-0071-1
Broadcasting Public Notice CRTC 2005-66
13 July 2005 |
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CKXT-TV Toronto and CKXT-DT Toronto – Licence amendments
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In this decision, the Commission
approves in part amendments to conditions of licence related to
required expenditures for independently-produced ethnic programs in
English. |
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Background
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1. |
In New television station for Toronto/Hamilton,
Broadcasting Decision CRTC 2002-81,
8 April 2002 (Decision 2002-81),
the Commission approved an application by Craig Broadcast Systems
Inc., on behalf of a corporation to be incorporated (Craig), for a
broadcasting licence to operate an English-language over-the-air television
station to serve Toronto, with an additional transmitter in Hamilton.
The conditions of licence for the new station included the following,
which reflected a commitment by Craig to establish a New Voices Fund
to support independently-produced ethnic programs in English: |
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4a) Over the licence term, the licensee shall expend at least
$6,650,000 in licence fees for independently-produced ethnic
programs in English, and at least $725,000 for script and concept
development for such programs. Administrative costs shall not be
included in these amounts. The programming funded by the amounts set
out in this condition shall not include any programming covered by
conditions of licence 3 and 4b). For purposes of this condition,
"expend" means actual cash outlay.
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2. |
In Transfer of effective control of
Toronto One to TVA Group Inc. and Sun Media Corporation, Broadcasting
Decision CRTC 2004-503, 19 November
2004 (Decision 2004-503), the
Commission approved applications by TVA Group Inc. (TVA) and Sun Media
Corporation (Sun Media),1
on behalf of Newco, a wholly-owned subsidiary corporation to
be incorporated by Craig, to transfer effective control of Newco to
TVA, and to add a condition of licence relating to editorial independence.
At the time of closing, all of the issued and outstanding shares of
Newco would be transferred to TVA (75%) and Sun Media (25%). Newco
would be the licensee of CKXT-TV Toronto and its transmitter CKXT-TV-1
Hamilton, and CKXT-DT Toronto and its transmitter CKXT-DT-1 Hamilton
(collectively, Toronto One). Newco has since become 3095531 Nova Scotia
Company (the licensee). |
3. |
In the application to transfer effective
control of Toronto One, TVA and Sun Media reported that, as of 31 August
2004, a large portion of the New Voices Fund remained to be expended
by the end of the current licence term, which expires on 31 August
2008. The applicants argued that expending the remaining money within
such a short time frame might have a negative impact on the quality
of the resulting programming. They further expressed concern about
whether the community involved in the production of ethnic programming
could reasonably accommodate such a volume of spending over a short
period of time. In light of these concerns, as a tangible benefit
of the transaction to transfer effective control of Toronto One, TVA
and Sun Media proposed to inject an additional $1 million into the
New Voices Fund while extending to seven years the period over which
the money in that fund would be expended. The Commission addressed
this proposal in paragraphs 37 and 38 of Decision 2004-503,
which read as follows: |
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The Commission accepts the additional $1 million for the New Voices
Fund as a tangible benefit of this transaction. The Commission requires
the applicants to file, within 60 days of the date of this decision,
an application to amend the condition of licence set out in Decision
2002-81 with respect to the
New Voices Fund so that the condition reflects the addition of this
$1 million dollars and the extension of the period within which
the money in the New Voices Fund will be expended.
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The Commission further expects the money in the New Voices Fund
to be expended in a timely manner, and that expenditures be equally
distributed over the seven year period, which translates into an
annual expenditure of approximately $1.1 million or 14% of the
augmented New Voices Fund.
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The application
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4. |
The licensee proposed to amend condition
of licence 4a) for CKXT-TV in order to reflect the Commission’s direction
set out in Decision 2004-503.
The amended condition of licence would read as follows: |
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From 1 September 2003 to 31 August 2008, the licensee shall
expend at least $4,000,000 in licence fees for
independently-produced ethnic programs in English, and at least
$500,000 for script and concept development for such programs.
Administrative costs shall not be included in these amounts. The
programming funded by the amounts set out in this condition shall
not include any programming covered by conditions of licence 3 and
4b). For purposes of this condition, "expend" means actual cash
outlay.
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5. |
The licensee proposed that the Commission
impose an additional condition of licence effective at the time of
licence renewal that would cover the amounts allocated to the New Voices
Fund that would remain to be expended after 31 August 2008. |
6. |
The licensee further noted that condition
of licence 1 for CKXT-DT, the transitional digital television
undertaking associated with CKXT-TV Toronto, currently reads as follows: |
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In addition to the conditions set out below, the licence is subject
to the terms and conditions applicable to the analog television
station CKXT-TV Toronto, as set out in New television station
for Toronto/Hamilton, Broadcasting Decision CRTC 2002-81,
8 April 2002.2
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7. |
The licensee submitted that, if the
Commission were to approve its proposed amendment to condition of
licence 4 a) for CKXT-TV, condition of licence number 1 for CKXT-DT
should be amended to read as follows: |
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In addition to the conditions set out below, the licence is subject
to the terms and conditions applicable to the analog television
station CKXT-TV Toronto, as set out in New television station
for Toronto/Hamilton, Broadcasting Decision CRTC 2002-81,
8 April 2002, or as later amended.
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Interventions
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8. |
The Commission did not receive any
interventions in connection with this application. |
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The Commission’s analysis and determination
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9. |
The Commission’s determination set out in
Decision 2004-503 to extend the
time period over which the money in the New Voices Fund would be expended
was a special case based on concerns about program quality and whether
the community involved in the production of ethnic programming could
reasonably accommodate a very high volume of spending over such a
short period of time. |
10. |
In its application, the licensee stated
that, during the time that Craig owned Toronto One, it had expended a
total of $525,809 of its original $7,375,000 commitment to the New
Voices Fund. Therefore, when the licensee assumed control of Toronto One
on 2 December 2004, its total outstanding obligation to the New Voices
Fund was $6,849,1913
from Craig’s original commitment plus $1 million resulting from its own
commitment made as a tangible benefit when acquiring the station, for a
total of $7,849,191. |
11. |
While the current application, as filed,
would ensure that all of the money that the licensee has committed
to the New Voices Fund would be spent over seven years, as provided
in Decision 2004-503, the Commission
is concerned about the timeframe proposed by the licensee for expenditures
that would be made during the current licence term. As proposed, the
licensee would be obligated to expend at least $4,000,000 in licence
fees for independently-produced ethnic programs in English, and at
least $500,000 for script and concept development for such programs
between 1 September 2003 and 31 August 2008, for a total of $4,500,000.
The Commission notes, however, that the licensee did not take ownership
of Toronto One until 2 December 2004 and is therefore of the view
that the timeframe for expenditures related to the New Voices Fund
for the first term of licence should be adjusted so that it extends
from 2 December 2004 to 31 August 2008, which is the expiry date
of the current licence. Under this revised timeframe, which would
cover approximately four broadcast years beginning with the 2004-2005
broadcast year, the licensee’s expenditures would exceed the annual
target of $1.1 million identified in Decision 2004-503. |
12. |
Although the licensee proposed a further
condition of licence to address expenditures related to the New Voices
Fund for the subsequent licence term, which would begin on 1 September
2008, it is the Commission’s practice to refrain from imposing conditions
of licence that would apply specifically to a subsequent licence term.
However, in accordance with the licensee’s commitments, the Commission
expects the licensee, at the time of licence renewal, to accept a
condition of licence that would ensure that the $3,349,191 that will
remain to be expended from the New Voices fund at the end of the current
licence term is expended between 1 September 2008 and 31 August
2011. This will ensure that the licensee’s obligation to the New Voices
Fund is discharged over a period of seven years, pursuant to Decision
2004-503. |
13. |
In light of all of the above, the
Commission approves in part the licensee’s proposal to amend
condition of licence 4a) for CKXT-TV. The revised condition of licence,
which reflects a starting date of 2 December 2004 rather than 1
September 2003, as proposed by the licensee, reads as follows: |
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From 2 December 2004 to 31 August 2008, the licensee shall expend
at least $4,000,000 in licence fees for independently-produced
ethnic programs in English, and at least $500,000 for script and
concept development for such programs. Administrative costs shall
not be included in these amounts. The programming funded by the
amounts set out in this condition shall not include any programming
covered by conditions of licence 3 and 4b). For purposes of this
condition, "expend" means actual cash outlay.
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14. |
The Commission further approves the
licensee’s proposal to amend condition of licence 1 for CKXT-DT,
Toronto. The revised condition of licence reads as follows: |
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In addition to the conditions set out below, the licence is subject
to the terms and conditions applicable to the analog television
station CKXT-TV Toronto, as set out in New television station
for Toronto/Hamilton, Broadcasting Decision CRTC 2002-81,
8 April 2002, or as later amended.
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Secretary General |
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This decision is to be appended to each
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: http://www.crtc.gc.ca
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Footnotes:
TVA
Group Inc. and Sun Media Corporation are both controlled by Quebecor
Media Inc.
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Date Modified: 2005-10-03 |