Craig files amendment for pop channel; also asks for leave to appeal CRTC decision

Craig Broadcast Systems Inc. is seeking leave to appeal a CRTC decision that aims to put restrictions on its Category 2 digital TV pop channel, just in case a counter proposal that it has made to the commission doesn’t get approval. The moves stem from a complaint filed by CHUM Ltd., which argued that Craig’s pop channel, branded MTV2, was programmed in a manner that made it competitive with the Toronto-based broadcaster’s MuchMusic. The CRTC agreed, and asked Craig to apply for a licence amendment for MTV2 stating that pop videos would make up no fewer than 95% of the music video clips aired, and that the amendment include a definition of pop (CCR, Feb. 28/03). But Craig argues that the CRTC’s proposal is too restrictive, and has filed an alternative amendment that no fewer than 70% of music videos be pop. Comments on the licence amendment, made public July 25, are due by August 29 (Broadcasting Public Notice 2003-40). Craig has also set in motion legal action that could be used if the commission doesn’t approve its revised licence amendment. Craig has asked the Federal Court of Appeal to grant it leave to appeal Broadcasting Decision 2003-65, which ordered Craig to file the licence amendment for MTV2. The leave to appeal lists as respondents CHUM Ltd. and other interveners in the CRTC proceeding, including Friends of Canadian Broadcasting, Directors Guild of Canada, Canadian Film and Television Production Association, and others. In its April 16, 2003 request for leave to appeal, Craig questions the commission’s authority to impose such a condition of licence. Craig filed for and received an extension until July 31 to serve and file its memorandum of fact and law in conjunction with the leave to appeal. The company also notes in the court documents, "The applicants have made an application to the commission which may resolve the matters at issue in this proceeding, but the commission’s timetable for processing the application is unknown to the parties and, in any event, may not be completed by July 31, 2003." In a March 21, 2003 filing with the Federal Court of Appeal, Craig lays out its grounds for leave to appeal. The broadcaster argues that the CRTC exceeded its jurisdiction by making an application for the change of ownership structure of MTV Canada and MTV2 conditional on the latter filing the licence amendment and that the commission erred in issuing the decision. Craig also states that the CRTC breached rules of procedural fairness and natural justice by failing to provide it with adequate notice of the test it had to meet to obtain approval of the change of ownership. While the CRTC looked into CHUM’s complaint over competing genres of specialty channels, it also probed an ownership agreement between Craig and Viacom International Inc., a non-Canadian partner in MTV2 and Craig’s Category 1 digital youth channel MTV Canada and a supplier of programming (CCR, Feb. 15/02). Jennifer Strain, Craig’s VP of corporate and regulatory affairs, tells Canadian Communications Reports that the company’s revised licence amendment is an attempt to "be a good corporate citizen," and could possibly make the legal proceeding mute. She calls a condition of licence that restricts MTV2 to airing 95% pop videos far too limiting, with pop being defined as music video clips of a musical selection that is listed or has been listed within the preceding 12 months on the following trade publication charts: Billboard’s Top 40 Tracks and/or Canadian Music Network’s CHR Top 50 Spins, and/or CHR Top 50 Audience, as suggested by the CRTC. She notes that MTV2 would have difficulty in introducing new Canadian pop artists who haven’t yet made the charts, or even in playing the video of a new Brittney Spears song until it charted, even though Spears is obviously a pop artist. "Like a radio station, you need more of a library. Otherwise you’ll just keep running the same tracks, and that’s not good for viewing," she says. Craig’s revised licence amendment application, filed March 24, notes that under the CRTC’s prescribed condition, MTV2 would be restricted to a total library of less than 290 videos, with about 58 of them being Canadian. Peter Miller, CHUM’s VP of business and regulatory affairs, says the question is how much flexibility is needed. "I guess the issue is does it need to be 5% or 30%? How (many artists) are you going to break in? I think 30% is beyond breaking in," he tells CCR. In addition to reducing the amount of pop videos required to be aired to 70%, Craig’s revised licence amendment calls for Billboard’s Hot 100, rather than its Top 40 Tracks, to be used to define what constitutes pop. It also wants Canadian artists and songs to be exempt from any chart or time restrictions. Another change Craig is seeking is to be able to broadcast any songs that have appeared on the charts within the last 36 months, rather than a year. "A pop song does not cease to be a pop song 12 months after it appears on the charts. It may no longer be a ‘hot hit’ but MTV2 is not licensed as a hot hits format," reads Craig’s application. Craig notes in its application that Corus Entertainment Inc.’s Country Music Television (CMT) was granted 30% flexibility to broadcast music videos from categories other than country, and that its now defunct Category 2 digital music channel EdgeTV (CCR, June 20/03) was restricted to 95% of its videos being rock, but there was no restriction to particular charts or to time. "This is what we’ve applied for, and can live with," Strain states. "But it’s still going to be tough. No other digital specialty channels have such restrictions." But Miller points out that the CRTC has used charts in other decisions, such as in defining what constitutes a hit. "(The digital specialty channel universe) is all new territory because the commission did license all these genres and never did define them at the time of licensing. But they have on the radio side, in particular, referred to charts before," he notes. At the moment, MTV2, which according to CRTC figures generated just $251,448 in revenues and had 212,439 subscribers at Aug. 31, 2002, hardly seems a threat to CHUM’s more established MuchMusic. But Miller says, "The issue is the precedent, and these are services that are going to grow. The commission has a policy and that is that Category 2s aren’t suppose to be directly competitive (with Category 1s or existing analog specialty channels), and in furtherance of that policy, they approved niche music services, not general interest music services." The CRTC also gave Craig 90 days from the February 21 release of Broadcasting Decision 2003-65 to report on steps taken to ensure that MTV Canada was operating in compliance with the terms and conditions of its licence. Strain says that Craig has filed the report. She explains that Craig has cut down the number of videos on MTV Canada’s flagship show Select, as well as throughout the day, and has forged partnerships with educational institutions in Alberta to produce more educational programming.

Craig files amendment for pop channel; also asks for leave to appeal CRTC decision

Broadcast | July 31, 2003

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