February 15, 2018 Filed via Intervention/Comment/Answer Form Mr. Claude Doucet Secretary General Canadian Radio-television and Telecommunications Commission Ottawa, Ontario K1A 0N2 Dear Mr. Doucet: RE: Blue Ant Television General Partnership’s Broadcasting Licence Renewal Application for A.Side (formerly AUX TV); Makeful TV (formerly BITE Television); travel + escape; Cottage Life (formerly Bold); BBC Earth (formerly radX); Love Nature (formerly Oasis HD); HIFI (formerly Treasure HD) (Application no. 2017-0841-3) and SN Channel General Partnership’s Broadcasting Licence Renewal Application for Smithsonian Channel (formerly eqhd) (Application no. 2017-0842-1) – Intervention from the Canadian Media Producers Association Introduction 1. The Canadian Media Producers Association (CMPA) is pleased to provide the following comments with respect to the broadcasting licence renewal applications for Blue Ant Television General Partnership’s discretionary services A.Side (formerly AUX TV); Makeful TV (formerly BITE Television); travel + escape; Cottage Life (formerly Bold); BBC Earth (formerly radX); Love Nature (formerly Oasis HD); HIFI (formerly Treasure HD) (Application no. 2017- 0841-3) and SN Channel General Partnership’s discretionary service Smithsonian Channel (formerly eqhd) (Application no. 2017-0842-1) (hereinafter collectively referred to as “Blue Ant Television” when referring to the Applicants and “Blue Ant Group” when referring to the group-based licence). In the event the Commission announces a public hearing with respect to the above-noted licence renewal applications, the CMPA requests to appear to further elaborate on this intervention. 2. The CMPA is the country’s leading member-based advocacy organization for independent producers. We represent hundreds of companies engaged in the development and distribution of English-language content made for television, cinema, and digital media channels. The CMPA works to promote the continued success of the Canadian production sector and to ensure a future for the diverse content made by Canadians for both domestic and international audiences. 3. The CMPA supports the renewal of the modified group-based licence for Blue Ant Television’s eight discretionary services, subject to the following comments. Executive Summary 4. The CMPA supports the renewal of the Blue Ant Group on the condition that the Commission impose conditions of licence (COLs) in accordance with the group’s historical levels for Canadian programming expenditures (CPE) and programs of national interest (PNI) expenditures, and requires appropriate independent production expenditures in the new licence term. Specifically, we request that the Commission impose a 30% CPE (either actual or effective for the designated group) because the Blue Ant Group exceeded this amount in the current licence term and it is the Commission’s policy to require a CPE of 30% of the previous year’s gross revenues for group-based licences. While we are unable to recommend a PNI level for the Blue Ant Group in the new licence term based on a lack of financial data in the licence renewal application, we suggest that the COL relating to PNI should be at least 13.5% of the previous year’s gross revenues. We also request that the Commission require that at least 60% of the expenditures related to PNI be made to an independent production company for the acquisition or commission of original, first-run programming. We respectfully submit that these proposals are in line with the group-based licensing framework as originally provided in Broadcasting Regulatory Policy CRTC 2010- 167, A group-based approach to the licensing of private television services (BRP 2010-167) and confirmed in the Broadcasting Regulatory Policy CRTC 2015-86, Let’s Talk TV, The way forward - Creating compelling and diverse Canadian programming (the “Create Policy”) and Broadcasting Regulatory Policy CRTC 2017-148, Renewal of licences for the television services of large English-language ownership groups – Introductory decision (BRP 2017- 148). 2 5. As well, the CMPA submits that a public hearing should be called to renew the Blue Ant Group in order to meet the public interest. With the exception of the current round of licence renewal proceedings, the Commission has called public hearings for all group-based licence applications and renewals. A public hearing allows for more meaningful input from the public on issues such as the proposed amendments to independent production COLs for the Blue Ant Group. 6. Finally, the CMPA is also taking the opportunity provided by the licence renewal process to request that the Commission review its standard definition for “independent production company” as well as emphasize the importance of transparent reporting by broadcasters. Blue Ant Group’s CPE and PNI levels should be based on historical expenditures 7. The CMPA submits that the Commission should impose COLs relating to CPE and PNI for the eight services in the Blue Ant Group based on their historical levels in accordance with BRP 2010-167 and the Create Policy.1 At Blue Ant Television’s last licence renewal,2 the Commission granted approval for a modified group-based licence for the Blue Ant Group and refrained from imposing group CPE or group PNI requirements in recognition of its status as an independent broadcaster. The Commission acknowledged that a modified approach to the group-based licensing framework was appropriate because Blue Ant Television does not own and operate conventional television stations and not all of its discretionary services have more than one million subscribers as required in BRP 2010-167. Instead, the Commission maintained the individual CPE levels for each of the eight discretionary services due to their distinct licence categories,3 and imposed a standard, incremental PNI expenditure level on all services within the group. Blue Ant Television is proposing to maintain this approach of individual CPE and PNI COLs for its discretionary services, with no group CPE or group PNI, in the new licence term. 8. While Blue Ant Television is requesting no group CPE in the new licence term, it is asking that the Commission provide a “weighted average of the current CPE requirements for the various services within the Blue Ant Group, based on the manner in which revenues skew 1 Create Policy, para. 217. 2 BD 2013-465. 3 Category A services Cottage Life and T+E were given a higher CPE level of 40% while the rest of Blue Ant Television’s Category B services maintained lower CPE levels of 10% or 15%. 3 across these discretionary services.”4 It is not clear from its licence renewal application exactly how Blue Ant Television reached a CPE level of 21% for each of its services, but the enclosed report from Boon Dog Professional Services (the “Boon Dog Report”) demonstrates that a CPE level of 21% across all services roughly approximates the total CPE required in the 2015-16, 2014-15, and 2013-14 broadcast years.5 We request that the Commission ask Blue Ant Television to clarify its approach in calculating CPE levels for the public record in this proceeding. Without the ability to determine if Blue Ant Television’s assertion that the figure of 21% will ensure that status quo levels of CPE will be maintained by the Blue Ant Group in the new licence term, it is not possible for the CMPA or any other intervener to provide truly informed feedback on this proposal. However, we wish to note that a “weighted average” calculation of required spending is not the approach contemplated by BRP 2010-167 and the Create Policy. We also note that by asking for a standard CPE of 21% across its eight discretionary services, Blue Ant Television is, in fact, asking for an effective group CPE of 21%. 9. The Commission has long held that designated groups must meet a group CPE of 30%.6 The CMPA notes that the Commission determined in BRP 2017-148 that “a standard 30% CPE level for each group and every service within the groups is appropriate” to ensure the appropriate contribution to the creation of Canadian programming by the group.7 This standard level was adopted to avoid situations where fluctuations in the revenues of individual services and any changes to the group’s composition would impact the CPE requirements of group-based licences. Moreover, the Commission determined that a more standardized approach to CPE is warranted following the Create Policy because discretionary services no longer benefit from genre protection and mandatory carriage,8 including the Category A and B services which currently make up the Blue Ant Group. 10. In reviewing the actual historical spend of the Blue Ant Group over the last three publicly- available broadcast years, as opposed to Blue Ant Television’s calculation of its required spending, this group has actually met an average CPE of 30.9% of the previous year’s gross revenues. The CMPA applauds Blue Ant Television’s commitment to Canadian programming 4 Blue Ant Television licence renewal application, Supplementary Brief, para. 55. 5 The Boon Dog Report is enclosed as Appendix A. Please refer to pages 3 – 5 of the Boon Dog Report for these calculations regarding the proposed CPE of 21% across all the services in the Blue Ant Group. 6 BRP 2010-167, para. 50, and BRP 2017-148, para. 30. 7 BRP 2017-148, para. 30. 8 Ibid. para. 28. 4 and for this over-performance on its COLs relating to CPE in the current licence term. The Commission determined in BD 2013-465 that it would not be appropriate to hold an independent broadcaster to the same standards as a large ownership group in the group- based licence framework,9 but in this case, the Blue Ant Group has proven it is able to meet the standard commitment of a 30% CPE. The CMPA submits that the Commission should impose a group CPE of 30% based on historical expenditures and the group-based licensing framework.