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Broadcasting Decision CRTC 2004-25
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Ottawa, 21
January 2004 |
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CHUM Limited
Across Canada |
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Application 2002-0954-5
Public Hearing in the National Capital Region
26 May 2003 |
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Star!-TV (Star) – Licence renewal
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In this decision, the
Commission renews the broadcasting licence for the
specialty television service known as Star!-TV (Star), from 1 March 2004
to 31 August 2010. The details regarding the licensee’s specific
proposals for the new licence term, and the conditions of licence and
other obligations determined by the Commission are set out below. |
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The application
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1. |
The Commission
received an application by CHUM Limited (CHUM) for the renewal of the
broadcasting licence for the national, English-language specialty
television service known as Star!-TV (Star). |
2. |
The Commission’s
general analysis with respect to its consideration of this and other
applications heard at the 26 May 2003 Public Hearing for the licence
renewal of specialty television services is set out in Introduction
to Broadcasting Decisions CRTC 2004-6 to 2004-27 renewing the licences
of 22 specialty services, Broadcasting Public Notice CRTC 2004-2, 21
January 2004 (Public Notice 2004-2). |
3. |
The Commission
received three letters specifically in support of Star’s licence renewal
application. |
4. |
Other interveners raised
general concerns related to all of the specialty television licence
renewal applications considered as part of this public process. These
concerns are discussed in Public Notice
2004-2. |
5. |
On the basis of its review of
this licence renewal application and having considered the interveners’
comments, the Commission renews the broadcasting licence for
Star!-TV, from 1 March 2004 to 31 August 2010.1
The licence will be subject to the conditions specified therein and
to the conditions set out in the appendix to this decision. |
6. |
As part of its licence renewal
application, the licensee requested an amendment to its condition of
licence in order to add categories 7(c) Specials, mini-series or
made-for-TV feature films and 10 Game shows to the list of categories
from which it may draw programming. The licensee also proposed an
amendment to the condition of licence relating to its nature of service
to allow the exhibition of category 7(d) Theatrical feature films aired
on TV programming between 6 p.m. and 11 p.m. The proposed amendments are
discussed below. |
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Expenditures on, and exhibition of, Canadian programming
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7. |
In its application, CHUM
proposed that Star maintain the Canadian content exhibition requirements
set out in its original conditions of licence, which would see the
service increase its overall Canadian content level from 40% to 50% and
its evening level from 35% to 40% by the third year of the new term.
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8. |
CHUM presented a number of
arguments to support its proposal. First, it noted that Star is one of
the few specialty services licensed in 1996 that did not launch in 1997
as part of a broad tier. Second, it pointed out that, since its launch,
Star has not enjoyed widespread analog carriage and has instead relied
on a hybrid of analog and digital distribution. In its view, this
limited distribution has made it difficult for Star to attract
subscribers, which has led to low advertising revenues. Third, unlike
services that draw programming from other genres, Star does not have a
library of Canadian programming from which to choose. Finally, CHUM
argued that given that U.S.-based entertainment industry-related
programs are important drivers of the service, increasing Canadian
content levels on Star would result in a reduction in already low
advertising revenues, this reduction leading to reduced spending on
Canadian content. |
9. |
With respect to Star’s level of
Canadian programming expenditures, CHUM submitted that an increase was
not warranted at this time, given that Star only launched its service in
1999 and that its current 39% expenditure level is consistent with other
similar services. |
10. |
The Commission notes that the
service’s historical average profit before interest and tax (PBIT)
margin has been in the range of 20% to 24%. Taking this into account and
consistent with the approach described in Public Notice
2004-2, the
Commission has determined that an increase of three percentage points in
Star’s Canadian programming expenditure (CPE) level is appropriate.
Accordingly, the Commission is requiring the licensee, in each year of
the licence term, to expend 42% of the previous year’s gross revenues on
Canadian programming, beginning 1 September 2004. A condition of
licence to this effect is set out in the appendix to this decision. |
11. |
In light of the increase of its
spending on Canadian programming and consistent with the approach set
out in Public Notice 2004-2, the Commission is also imposing, by
condition of licence, the Canadian content exhibition levels as
proposed by the licensee. |
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Nature of service
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12. |
As noted above, CHUM requested
a number of amendments to the current conditions of licence describing
its nature of service, related to programs in category 7 Drama and
comedy. CHUM requested an amendment to add program category 7(c)
Specials, mini-series and made for TV feature films to the list of
categories from which it may draw programming. It also applied to delete
the condition of licence that prohibits Star from broadcasting category
7(d) Theatrical feature films aired on TV between 6 p.m. and 11 p.m. In
its place, CHUM proposed to limit category 7 programming to 5% of the
broadcast year and 5% of the evening broadcast period. The licensee also
proposed an amendment to add category 10 Game shows to the list of
categories from which it may draw programming. |
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Categories 7(c) and (d)
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13. |
In support of its request, the
licensee submitted that the addition of category 7(c) to the list of
categories from which it may draw programming would enable Star to
provide a more diverse and attractive service to the Canadian public.
CHUM proposed that, should its request to add category 7(c) be approved,
the existing condition of licence that stipulates that "programs drawn
from category 7(d) shall be limited to ‘Movies or feature documentaries
that are about the art and industry of show business featuring topics
such as biographies of significant personalities, or stories set in the
world of filmmaking, television and entertainment’" could apply to all
of category 7 programming. |
14. |
In addition, CHUM requested a
deletion of the condition of licence that prohibits Star from
broadcasting programming from category 7(d) between 6 p.m. and 11 p.m.,
a condition it called "unique" and "excessively restrictive." As an
alternative, CHUM proposed that Star be subject to a condition of
licence stipulating that "no more than 5% of the broadcast year and no
more than 5% of the evening broadcast period" shall be devoted to
programming drawn from category 7, including category 7(c) if it were
added to the list from which Star may draw programming. |
15. |
The Commission is satisfied
that the addition of category 7(c) would not represent a shift in Star’s
nature of the service since Star is currently permitted to broadcast
programming from category 7(d). The Commission further notes that the
approval of CHUM’s request would allow Star a broader range of
subcategories from which to draw programming, but that the total amount
of category 7 programming would remain limited to 5% of the broadcast
year, as set out in the current condition of licence. Accordingly, the
Commission approves the request by CHUM for an amendment
authorizing Star to draw programming from category 7(c). The Commission
also considers that it is appropriate to limit all programs drawn from
category 7 to programming that is about the art and industry of show
business. Conditions of licence with respect to the above are set
out in the appendix to this decision. |
16. |
With respect to CHUM’s request
to delete the current condition of licence that prohibits Star from
broadcasting category 7(d) programming between 6 p.m. and 11 p.m., the
Commission notes that this condition was originally put in place to keep
Star from competing with other services. However, the Commission
recognizes that the broadcasting environment has changed and that there
are now far more services permitted to broadcast drama programming
without a restriction similar to Star’s. Accordingly, the Commission
considers that this concern may no longer be relevant. |
17. |
In addition, the Commission
notes that Star was originally permitted to broadcast category 7(d)
programming during the day. Therefore, the Commission considers that
permitting a limited amount of category 7(c) and (d) programming would
not represent a significant shift to Star’s nature of service
definition. |
18. |
In light of the above, the
Commission considers it appropriate to delete the condition of licence
that prohibits Star from broadcasting programming from category 7(d)
between 6 p.m. and 11 p.m. and, instead, to impose a limit of 5% of the
broadcast year and 5% of the evening broadcast period on categories 7(c)
and (d) programming, taken as a whole. A condition of licence to
this effect is set out in the appendix to this decision. |
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Category 10
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19. |
With respect to adding
category 10 to the list of categories from which Star may draw
programming, the licensee stated that it would accept a condition of
licence limiting the amount of such programming to 5% of the broadcast
year. It also stated that it would only broadcast category 10
programming that focuses on the entertainment industry, which would
enhance the service as an "Entertainment Information Station." Finally,
the licensee indicated that Star has had to reject a number of proposals
from independent producers of game shows based on the entertainment
industry because the list of categories from which it may draw
programming does not include category 10. |
20. |
The Commission is satisfied
that the addition of game shows would be in keeping with Star’s nature
of service. The Commission notes that no interventions were received
expressing concern with this amendment. Accordingly, the Commission
approves the request by CHUM for an amendment authorizing Star to
broadcast game shows. A condition of licence is set out in the
appendix to this decision. |
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Canadian independent production
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21. |
As stated in Public Notice
2004-2, the Canadian Film and Television Production Association (CFTPA)
recommended in its intervention that Star, along with a number of other
services, be required to ensure that at least 75% of its original,
first-run Canadian programming is the product of independent producers.
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22. |
In response, CHUM noted that
the "CFTPA’s proposal far exceeds the requirements relating to the
acquisition of programming from the independent production sector that
have been imposed by the Commission on digital specialty services and
conventional television broadcasters in recent years." CHUM reiterated
that much of the programming on Star consists of news-magazine type
programs presenting current affairs from the Canadian and international
entertainment industries. CHUM stated that if these types of programs
did not focus on the entertainment industry, they would be classified as
"current affairs" and, historically, broadcasters have not been required
to acquire "current affairs" programming from independent producers. |
23. |
Moreover, CHUM submitted that
imposing a requirement that Star acquire a minimum level of programming
from the independent production sector could prevent the service from
meeting its conditions of licence relating to Canadian programming. CHUM
noted that most of the funding available to independent producers is for
the production of drama, documentaries and variety programming and not
for programming about the entertainment industry. Furthermore,
programming about the entertainment industry might not be of interest to
many independent producers since it generally has a short shelf life.
For these reasons, acquiring more programming from Canadian independent
producers would be difficult, if not impossible. CHUM therefore
indicated that a condition of licence that requires Star to acquire a
minimum amount of programming from Canadian independent producers could
"impact the service’s ability to meet its conditions of licence relating
to Canadian programming" or "could result in the service having to
change its programming focus" so that it could acquire the necessary
amount of suitable programming from independent producers. |
24. |
The Commission agrees with
CHUM that much of the programming broadcast on Star is time-sensitive,
and that if it had a different focus, the programming would be deemed
"current affairs." The Commission also acknowledges that much of Star’s
programming is produced in-house. Any limit on acquiring programming
from related producers would include programming produced in-house and,
therefore, could prevent the service from meeting its conditions of
licence relating to Canadian programming. |
25. |
In light of the above, the
Commission determines that it would be inappropriate to impose a
requirement with respect to the amount of programming that Star must
acquire from Canadian independent producers. |
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Regional reflection and production
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26. |
In its application, CHUM stated
that, in addition to having correspondents from across the country, Star
sponsors, covers and reports from festivals and major events in most
Canadian provinces. Star also sends representatives across the country
to find new concepts for programming. |
27. |
The Commission expects the
licensee to ensure that the programming aired by Star reflects all of
Canada’s regions. The Commission also expects the licensee to provide
opportunities for producers working outside the major production centres
to supply programming for the service. |
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Cultural diversity
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28. |
As stated in Public Notice
2004-2, the Commission expects the licensee to endeavour, through its
programming and employment opportunities, to reflect Canada’s
ethno-cultural minorities and Aboriginal peoples. The Commission further
expects the licensee to ensure that the on-screen portrayal of such
groups is accurate, fair and non-stereotypical. |
29. |
The Commission notes the
initiatives that CHUM has taken in this regard. During the current
licence term, CHUM filed a corporate cultural diversity plan with the
Commission setting out specific commitments relating to corporate
accountability, reflection of diversity in programming, and community
involvement as they relate to the presence and portrayal of cultural
diversity. With specific reference to Star, the Commission expects the
licensee to continue to contribute to cultural diversity and to
implement the commitments set out in the CHUM corporate cultural
diversity plan. As discussed in Public Notice
2004-2, the Commission
further expects the licensee to incorporate persons with disabilities
into its cultural diversity corporate planning and to ensure that this
is reflected in its annual reports on cultural diversity, beginning with
the report to be filed in December 2004. |
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Employment equity and on-air presence
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30. |
Pursuant to section 5(4) of the
Broadcasting Act, the Commission does not regulate or supervise
matters concerning employment equity in relation to broadcasting
undertakings with more than 100 employees, as they are subject to the
Employment Equity Act. However, the Commission continues to regulate
matters such as on-air presence. |
31. |
The Commission expects the
licensees of specialty television services to ensure that the on-air
presence of members of the four designated groups (women, Aboriginal
persons, persons with disabilities and members of visible minorities) is
reflective of Canadian society, and that members of these groups are
presented fairly and accurately. |
32. |
The Commission further expects
CHUM to take steps during the new licence term to address any gaps in
the on-air presence of members of the four designated groups on Star. |
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Service to persons who are deaf or hard of hearing
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33. |
The Commission is committed to
improving service to viewers who are deaf or hard of hearing, and has
consistently encouraged broadcasters to increase the amount of closed
captioned programming they broadcast. The Commission generally requires
all broadcasters to offer a minimum percentage of closed captioned
programs consistent with the nature of their services. Most
English-language services must close caption at least 90% of their
programming. |
34. |
In the present case, the
licensee made a commitment to close caption, by August 2006, 90% of all
programming broadcast on Star during each broadcast day. Star’s
current licence calls for close captioning in accordance with the policy
set out in Introductory statement – Licensing of new specialty and
pay television undertakings, Public Notice CRTC
1996-120, 4
September 1996 (Public Notice 1996-120), which requires licensees, by
the end of their licence terms, to caption 90% of their programming.
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35. |
In support of its commitment,
the licensee explained that it was of the view that meeting the 90%
requirement by the seventh year of Star’s operation was consistent with
Public Notice 1996-120. As previously noted, CHUM stated that, unlike
the other services licensed in 1996, Star has not enjoyed widespread
analog carriage and has instead relied on a hybrid of analog and digital
distribution. This limited distribution has made it difficult for Star
to attract advertisers. CHUM also pointed out that programming acquired
by other services is often already captioned, but that much of the
programming broadcast on Star is not, forcing Star to underwrite this
cost. Furthermore, CHUM indicated that the financial impact of close
captioning 90% of programming in each year of the new licence term would
cost approximately $1.5 million over the next three years and would
significantly reduce the service’s pre-tax profit in the first years of
the new licence term. |
36. |
The Commission has generally
extended some flexibility to those services with annual revenues under
$10 million. It notes, however, that Star has had annual revenues in
excess of $10 million since 2001-2002. Furthermore, in the Commission’s
view, the cost of offering closed captioning is part of the expense of
holding a broadcasting licence. |
37. |
In light of the above and
consistent with the Commission’s general approach for English-language
services, the Commission considers that it is appropriate to impose a
condition of licence requiring the licensee to close caption at
least 90% of all programming aired during the broadcast day, beginning
not later than 1 September 2004. The condition of licence is set out in
the appendix to this decision. |
38. |
The 90% obligation is based on
the recognition that requiring 100% captioning at all times by condition
of licence may not be reasonable. Thus, the obligation is designed to
provide some flexibility to cover unforeseen circumstances (such as late
delivery of captions, technical malfunctions, or the lack of
availability of captions for programs acquired outside North America),
or programming where captioning may not be feasible, such as
third-language programming. |
39. |
The Commission expects that,
during the new licence term, the licensee will continue to focus on
improving the quality, reliability and accuracy of its closed
captioning, and work with representatives of the deaf and hard of
hearing community to ensure that captioning continues to meet their
needs. |
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Service to persons who are blind or whose vision is impaired
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40. |
The Commission is committed to
improving the accessibility of television programming for persons with
visual impairments through the provision of audio description2
and video description (also known as described video).3
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41. |
In its application, the
licensee stated that it established guidelines for its services
governing the use of voice-overs to accompany on-screen text
information, which it will continue implementing throughout the new
licence term. With respect to the provision of described programming,
CHUM indicated that the current equipment being used for Star is only
capable of two channels of audio. It added, however, that new machines
will be installed to allow for the requisite additional channels and
that, once a significant number of broadcasting distribution
undertakings (BDUs) are able to make available any described video
programming, Star will be technically ready to launch described video
"within 90 days." |
42. |
In response to interventions
that recommended that Star be required to provide levels of described
video programming equivalent to those required of conventional
television stations, CHUM argued that, like news and music videos,
Star’s programming, which is talk-based and in the category of
"magazine," would not benefit from video description. |
43. |
The Commission expects that,
during the new licence term, the licensee will: |
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- provide audio description wherever appropriate;
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- acquire and broadcast the described versions of a program wherever
possible; and
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- take the necessary steps to ensure that its customer service
responds to the needs of viewers who have visual impairments.
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Programming delivered across time zones
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44. |
As discussed in Public Notice
2004-2, the Commission expects the licensee to demonstrate
responsibility in the scheduling of programming intended for adult
audiences, taking into account time zone differences between where the
program originates and where it is received. |
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Compliance with industry codes
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45. |
In accordance with its usual
practice for specialty television services, the Commission is imposing
conditions of licence requiring the licensee to adhere to
industry codes related to sex-role portrayal, advertising to children,
and the depiction of violence in television programming. |
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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 at the following Internet site:
http://www.crtc.gc.ca |
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Appendix to Broadcasting Decision CRTC 2004-25
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Conditions of licence
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1. (a) The licensee shall provide a national, English-language
specialty television service whose main purpose is to inform its
audience on all aspects of the entertainment industry.
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(b) The programming must be drawn exclusively from the following
categories, as set out in section 6 of Schedule I of the
Specialty Services Regulations, 1990, as amended from time to
time:
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1 News
2 (a) Analysis and interpretation
(b) Long-form documentary
3 Reporting and actualities
7 (c) Specials, mini-series or made-for-TV feature films
(d) Theatrical feature films aired on TV
8 (a) Music and dance other than music video programs or clips
(b) Music video clips
(c) Music video programs
9 Variety
10 Game shows
11 General entertainment and human interest
12 Interstitials
13 Public service announcements
14 Infomercials, promotional and corporate videos
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(c) In each broadcast year, the programming drawn from categories
7(c) and (d), taken as a whole, shall make up no more than 5% of the
broadcast day and no more than 5% of the evening broadcast period.
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(d) Programs drawn from categories 7(c) and (d) shall be limited
to programming that is about the art and industry of show business
featuring topics such as the biographies of significant
personalities, or stories set in the world of filmmaking, television
and entertainment.
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2. (a) In each of the first and second broadcast years of the new
licence term, the licensee shall devote to the exhibition of
Canadian programs not less than 40% of the broadcast day, and not
less than 35% of the evening broadcast period.
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(b) In the third broadcast year and in each subsequent broadcast
year of the new licence term, the licensee shall devote to the
exhibition of Canadian programs not less than 50% of the broadcast
day, and not less than 40% of the evening broadcast period.
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3. In accordance with the Commission's position on Canadian
programming expenditures as set out in New Flexibility With Regard
to Canadian Program Expenditures by Canadian Television Stations,
Public Notice CRTC 1992-28, 8 April 1992, in The Reporting of
Canadian Programming Expenditures, Public Notice CRTC
1993-93, 22 June 1993 and in Additional Clarification Regarding the
Reporting of Canadian Programming Expenditures, Public Notice CRTC
1993-174, 10 December 1993:
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(a) In the broadcast year ending 31 August 2004, the licensee
shall expend on the acquisition of and/or investment in Canadian
programs a minimum of 39% of the gross revenues derived from the
operation of this service during the previous broadcast year.
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(b) In the broadcast year beginning 1 September 2004, and in each
subsequent broadcast year of the licence term, the licensee shall
expend on the acquisition of and/or investment in Canadian programs
a minimum of 42% of the gross revenues derived from the operation of
this service during the previous broadcast year.
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(c) In each broadcast year of the licence term, excluding the
final year, the licensee may expend an amount on Canadian programs
that is up to five percent (5%) less than the minimum required
expenditure for that year calculated in accordance with this
condition; in such case, the licensee shall expend in the next
broadcast year of the licence term, in addition to the minimum
required expenditure for that year, the full amount of the previous
year’s under-expenditure.
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(d) In each broadcast year of the licence term, where the
licensee expends an amount on Canadian programs that is greater than
the minimum required expenditure for that year calculated in
accordance with this condition, the licensee may deduct:
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(i) from the minimum required expenditure for the following
year of the licence term, an amount not exceeding the amount of
the previous year’s over-expenditure; and
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(ii) from the minimum required expenditure for any subsequent
broadcast year of the licence term, an amount not exceeding the
difference between the over-expenditure and any amount deducted
under (i) above.
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(e) Notwithstanding paragraphs (c) and (d) above, during the
licence term, the licensee shall expend on Canadian programs, at a
minimum, the total of the minimum required expenditures calculated
in accordance with this condition of licence.
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4. (a) Subject to subsection (b), the licensee shall not
distribute more than twelve (12) minutes of advertising material
during each clock hour.
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(b) Where a program occupies time in two or more consecutive
clock hours, the licensee may exceed the maximum number of minutes
of advertising material allowed in those clock hours if the average
number of minutes of advertising material in the clock hours
occupied by the program does not exceed the maximum number of
minutes that would otherwise be allowed per clock hour.
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(c) The licensee shall not distribute any paid advertising
material other than national paid advertising.
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5. The licensee shall charge each exhibitor of this service a
maximum wholesale rate of $0.05 per subscriber per month, where the
service is carried as part of the basic service.
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6. The licensee shall provide closed captioning for not less than
90% of all programs aired during the broadcast day, beginning not
later than 1 September 2004.
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7. The licensee shall adhere to the guidelines on gender portrayal
set out in the Canadian Association of Broadcasters’ (CAB) Sex-role
portrayal code for television and radio programming, as amended
from time to time and approved by the Commission. The
application of the foregoing condition of licence will be suspended as
long as the licensee remains a member in good standing of the Canadian
Broadcast Standards Council (CBSC).
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8. The licensee shall adhere to the provisions of the CAB’s
Broadcast code for advertising to children, as amended from time
to time and approved by the Commission.
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9. The licensee shall adhere to the guidelines on the depiction of
violence in television programming set out in the CAB’s Voluntary
code regarding violence in television programming, as amended from
time to time and approved by the Commission. The application of
the foregoing condition of licence will be suspended as long as the
licensee remains a member in good standing of the CBSC.
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For the purpose of these conditions, the
terms "broadcast day," "broadcast year," "evening broadcast period" and
"clock hour" shall have the same meanings as those set out in the
Television Broadcasting Regulations, 1987; "paid national
advertising" shall mean advertising material as defined in the
Specialty Services Regulations, 1990 and that is purchased at a
national rate and receives national distribution on the service. |
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Footnotes:
In Administrative
renewals, Broadcasting Decision CRTC
2003-290, 21 July 2003, the
Commission granted a six-month administrative renewal for Star!-TV, from
1 September 2003 to 29 February 2004.
Audio description
involves the provision of basic voice-overs of textual or graphic
information displayed on the screen. A broadcaster providing audio
description will, for example, not simply display sports scores on the
screen, but also read them aloud so that people who are visually
impaired can receive the information.
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Date Modified: 2004-01-21 |