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Broadcasting Decision CRTC 2006-24
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Ottawa, 1
February 2006 |
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Canadian Broadcasting
Corporation
Across Canada |
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Application 2005-0849-2
Broadcasting Public Notice CRTC 2005-93
28 September 2005 |
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Country Canada – Licence amendments
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The Commission approves
the application by the Canadian Broadcasting Corporation (CBC) for
amendments to the licence for its national English-language Category 1
specialty service known as Country Canada. The licensee is currently
required by its nature of service condition of licence to devote no more
than 10% of all programming broadcast during the broadcast week to
subcategories 6(a) Professional sports and 6(b) Amateur sports. The
licence amendment herein approved permits the licensee to meet the 10%
limitation, as measured during the broadcast year. |
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The Commission approves
the further licence amendment requested by the CBC for removal of
the reference to Country Music Television from its nature of service
condition of licence. |
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Background
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1. |
The Commission originally authorized
the operation of the national Category 1 specialty programming undertaking
known as Country Canada (formerly known as Land and Sea) in Land
and Sea – a new specialty channel, Decision CRTC 2000-453,
14 December 2000 (Decision 2000-453).
The undertaking was to be operated by a company to be incorporated,
in which Corus Entertainment Inc. (Corus) would hold a 70% voting
interest, and the Canadian Broadcasting Corporation (CBC) would hold
the remaining 30%. At the time, Corus held a majority ownership interest
in the specialty service known as Country Music Television (CMT),
and it continues to hold an indirect 90% voting interest in the
licensee of that service. |
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2. |
In Decision 2000-453,
the Commission imposed the following restrictions, among others, as
part of the condition of licence prescribing the nature of service
that the undertaking was to offer: |
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- No more than 10% of all programming broadcast during each
broadcast week shall be devoted to subcategories 6a and 6b.1
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- No more than 10% of all programming broadcast during each
broadcast month shall also be broadcast on either the CBC or the
specialty service Country Music Television during the same broadcast
month.
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3. |
In Transfer of effective
control of 3899071 Canada Inc., Broadcasting Decision CRTC 2002-336,
24 October 2002, the Commission approved an application to transfer
effective control of the licensee of Country Canada through the transfer
of the 70% voting interest held by Corus to the CBC. Subsequently,
in Acquisition of assets, Broadcasting Decision CRTC 2003-172,
5 June 2003, the Commission approved an application by the CBC to
acquire the assets of the specialty service from its wholly-owned
subsidiary, and for a broadcasting licence to continue the operation
of Country Canada. |
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The application
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4. |
The Commission received an
application by the CBC to amend the licence for Country Canada.
Specifically, the CBC requested that the above requirement for a weekly
calculation of the amount of sports programming be replaced by language
that would permit the amount to be calculated over the broadcast year,
i.e.: |
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No more than 10% of all programming broadcast during each
broadcast year shall be drawn from subcategories 6(a) and 6(b).
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5. |
The CBC indicated that approval
of the proposed amendment would provide Country Canada with the
flexibility it requires to schedule event-based sports programs more
effectively, and to increase the attractiveness of its service to
subscribers. It noted that the amendment would not result in any
increase in the overall amount of sports programming that it is
permitted to broadcast within any broadcast year. |
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6. |
The CBC requested that its
nature of service condition of licence be further amended to remove the
reference to CMT. It noted that the reference to that Corus-owned
service had relevance at the time that the original nature of service
condition of licence decision was formulated, as Corus then held a 70%
ownership interest in Country Canada. The CBC stated that, because it
now wholly owns Country Canada’s licence, the reference to CMT in the
nature of service condition of licence is no longer relevant or
necessary. |
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Interventions
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7. |
The Commission received
opposing interventions from CTV Specialty Television Inc. (CTV) and
Rogers Media Inc. (Rogers). CTV owns The Sports Network Inc., the
licensee of the national specialty service known as The Sports Network,
while Rogers owns Rogers SportsNet Inc., the licensee of the national
specialty service known as SportsNet. |
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8. |
CTV submitted that Country
Canada was seeking to make sports a substantial, and potentially
dominant, component of the service’s program schedule. CTV argued that
approval of this application would allow Country Canada, at the CBC’s
sole discretion, to broadcast over 655 hours of sports programming
annually, and to schedule this programming at any time during the
broadcast year. In CTV’s view, the existing limitation on Country
Canada’s ability to broadcast sports programming (no more than 10% in
each broadcast week) ensures that the service does not become
competitive with sports specialty services, and that it offers a
balanced schedule of information, interaction and entertainment
programming. The removal of the weekly limit would, according to CTV,
enable the CBC to compete with sports specialty services. |
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9. |
CTV also argued that, because
the CBC has the ability to buy rights to properties and schedule them
within both the main CBC network service and the Country Canada service,
this application could not be viewed in isolation. CTV stated that it
had serious concerns that Country Canada could become a very strategic
additional "window" for the broadcast by the CBC of sports programming
that has historically been exhibited on services that have sports as
their primary programming mandate. According to CTV, approval of the
application would introduce a new competitor to the arena of sports
programming rights. |
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10. |
Rogers submitted that a change
to a measurement period of a full broadcast year would provide Country
Canada with a significant degree of flexibility to schedule sports
events and sports programming, especially tournaments or championships.
In Rogers’ view, this was precisely what the Commission sought to
preclude when it imposed a weekly limitation on sports programming on
Country Canada. |
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11. |
Rogers noted that the CBC
focused almost exclusively on the scheduling of sports programming in
its application without providing any explanation as to how and why the
sports programming on Country Canada would be consistent with its nature
of service. Further, Rogers stated that any change in sports programming
would be inconsistent with Country Canada’s mandate to provide
distinctive, rural-focused programming. |
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12. |
Rogers, like CTV, expressed
concern about the potential impact of the CBC’s application on the
rights market for sports programming. Although Rogers recognized that
approval of the application would not increase the amount of sports
programming on Country Canada, it maintained that this amendment would
have an impact on analog sports specialty services, as it would allow
Country Canada to focus on a number of live sports properties, and
operate as a quasi-sports service on behalf of the CBC. Rogers stated
that the CBC is currently a very competitive bidder for broadcast rights
to sports properties in Canada, such as NHL and CFL games, curling
bonspiels and the Olympics, and that private broadcasters do not have
the resources necessary to outbid the CBC for those rights. |
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Licensee’s replies
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13. |
In replying to the interveners,
the CBC submitted that their concern that the amendment would allow
Country Canada to transform itself into a sports specialty service was
without merit. The CBC noted that the 10% limit on sports programming
set by condition of licence ensures that, of Country Canada’s 6,570
total hours of annual programming, almost 6,000 hours is, and would
continue to be, allocated to programming other than sports. Thus, in the
CBC’s view, sports programming is not and could not become a dominant
part of Country Canada’s schedule. The CBC further submitted that no
evidence had been presented by the interveners to support their claim
that the additional flexibility to be afforded under the proposed
amendment would result in increased competition and costs for rights to
sports programming. It stated that such claims were illogical given the
limited amount of sports programming that Country Canada is permitted to
broadcast. |
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14. |
In responding to a written
question put to it by the Commission during the deficiency process, the
CBC stated that a limit on the amount of category 6a programming that
Country Canada may broadcast was neither necessary nor appropriate,
particularly in light of the ratio of amateur to professional sports
programming historically broadcast on Country Canada. According to the
CBC, over the period following the CBC’s acquisition of ownership and
control of Country Canada in 2002, amateur sports programming has
accounted for an average of 97% of total sports programming aired by the
service. Asked by the Commission whether a monthly 10% limit on the
amount of sports programming broadcast by the service would be
appropriate, the CBC responded that a monthly calculation would not
leave adequate room in the schedule to accommodate coverage of
overlapping sports events that may occur within the same month and, on
occasion, within the same week. The CBC specifically cited March 2006 as
an upcoming example, when the World Figure Skating Championships, the
Brier, the Commonwealth Games, the Scott Tournament of Hearts, the
Winter Paralympics and the Women’s Curling World Championship will all
take place. It noted that many of these events, the curling events in
particular, were very popular with subscribers residing in rural areas.
The CBC reiterated that the purpose of its application was to obtain for
Country Canada a measure of additional flexibility that would allow it
to better serve its viewers. It stressed that it was requesting no
change to Country Canada’s nature of service or in the quantum of
overall sports programming that Country Canada is permitted to
broadcast. |
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Commission’s analysis and determinations
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15. |
Country Canada’s current nature
of service condition of licence set out in Decision 2000-453
specifies that the licensee shall: |
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… provide a national English-language Category 1 specialty
television service for rural Canadian families, with a focus on
adults 25-54. The service will provide information, interaction
and entertainment from a rural perspective.
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16. |
The Commission emphasized elsewhere
in Decision 2000-453 the role
that the service would play in providing "rural Canadians with
distinctive programming focused on the rural experience" through
its offering, consisting primarily of "information programming,
including news and information, public forums, and documentaries."
The Commission authorized the licensee to provide a broad range of
programming, including programming from all of the drama and comedy
subcategories, variety programming, general entertainment and human
interest programming, together with a limited amount of sports programming,
on the basis that none of these various categories of programming
were inconsistent with its mandate as a general, albeit rural-based,
programming service. |
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17. |
As noted by both the applicant
and the interveners, approval of the CBC’s request for permission to
calculate, on an annual basis, the amount of its schedule that is
devoted to sports programming would not result in any increase in the
overall amount of sports programming beyond the current limit of 10%.
With respect to the concern of the two interveners that approval of the
application would increase the CBC’s clout as a bidder in the sports
programming rights market, and that this, in turn, would increase the
costs of obtaining such rights, the fact is that Country Canada’s sports
programming consists almost exclusively of amateur sports coverage.
Because of this, and given that the service has a relatively small
subscriber base, the Commission considers it unlikely that approval of
the proposed amendment would see Country Canada emerge as a significant
new window for professional or other high-end sports programming.
Rather, the increased flexibility might serve to raise the profile of
amateur sports of interest to rural subscribers. |
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18. |
Approval would, however, allow
Country Canada to schedule a far greater amount of sports programming
within a condensed period than would be permitted if measurement were to
remain a weekly calculation, or even become a monthly calculation. In
one scenario noted by the interveners, the requested amendment could
result in a schedule devoted almost entirely to sports coverage in a
given week or month. This, they claimed, would fundamentally alter
Country Canada’s nature of service. |
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19. |
In examining this question, the
Commission has considered the licensee’s argument that even a monthly
measurement period would leave insufficient room in the schedule for it
to provide adequate coverage of overlapping sporting events,
particularly those that appeal strongly to rural audiences. In the
Commission’s view, granting Country Canada the flexibility of an annual
measurement period would help the licensee to increase the
attractiveness of its service among subscribers, and thereby improve its
economic prospects. The Commission notes in this regard that the service
experienced a financial loss in 2004 (before interest and taxes). |
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20. |
Further, the Commission
considers that any incentive the CBC might have to devote entire weeks
or a full month to sports programming would be weakened by the fact that
this would substantially reduce or eliminate the amount of sports
programming that the service could broadcast during the remainder of the
broadcast year. In the Commission’s view, by scheduling its programming
in such a wholly unbalanced manner, the CBC would run the risk of
alienating viewers whose motivation for subscribing to Country Canada
has been the varied and balanced rural-based programming that it offers.
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21. |
For these reasons, the
Commission is satisfied that the increased flexibility requested by the
licensee with respect to the scheduling of its sports programming should
be granted. The Commission, accordingly, approves the application
by the Canadian Broadcasting Corporation for an amendment to its nature
of service condition of licence by replacing the current restriction on
the amount of sports programming with the following: |
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No more than 10% of all programming broadcast during each
broadcast year shall be drawn from subcategories 6a and 6b.
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22. |
The Commission notes that, in
its application, the CBC stated that approval of its request would
enable Country Canada to schedule live distribution of Canadian amateur
sports events at times that are convenient and attractive to its
viewers. The Commission thus expects the licensee to use the additional
scheduling flexibility to further this purpose. |
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23. |
Given that Corus, the majority
shareholder in CMT, no longer holds any ownership interest in Country
Canada, the Commission approves the further request for an
amendment to the restriction contained in the nature of service
condition of licence for Country Canada regarding the broadcast of
programming on both Country Canada and other services. Specifically, the
Commission removes the reference contained in that condition of licence
to CMT, so that the restriction now reads as follows: |
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- No more than 10% of all programming broadcast during each
broadcast month shall also be broadcast on the CBC during the same
broadcast month.
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Secretary General |
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This decision is to be appended to the
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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Footnote:
Subcategory
6(a) consists of professional sports programming, while subcategory 6(b)
consists of amateur sports. |
