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Broadcasting Notice of
Public Hearing CRTC 2006-1 |
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See also: 2006-1-1,
2006-1-2 |
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Ottawa, 13 January 2006 |
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Review of the Commercial
Radio Policy |
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The Commission will hold
a public hearing commencing on 15 May 2006 at 9:30 a.m.,
at the Conference Centre, Phase IV, 140 Promenade du Portage,
Gatineau, Quebec, to consider the matters addressed in this notice
as part of a review of its Commercial Radio Policy. |
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The Commission invites written
comments on the matters for consideration set out below. The deadline
for filing written comments is Wednesday, 15 March 2006. |
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Background |
1. |
On 30 April 1998, the Commission
issued Public Notice CRTC 1998-41,
Commercial Radio Policy 1998 (the 1998 Policy), which had three
major objectives: |
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(i) To ensure a strong, well-financed radio industry that is
better poised to achieve its objectives under the Broadcasting
Act (the Act) and meet the challenges of the 21st century.
(ii) To ensure pride of place for Canadian artists.
(iii) To ensure that a French-language presence in radio broadcasting
is maintained.
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2. |
In order to ensure the fulfillment
of these objectives, the 1998 Policy introduced a number of new regulatory
measures, including: |
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1. Increased opportunities for ownership consolidation by expanding
the number of stations operating in a single market that may be
controlled by a single person.
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2. More flexibility to encourage the entrance of new players through
revocation of the Radio Market Policy.1
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3. Greater availability of Canadian popular music selections by
increasing the regulatory minimum from 30% to 35%.
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4. Ensuring that Canadian music is played during high listening
periods by also requiring a minimum 35% between 6:00 a.m. and 6:00
p.m.
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5. For French-language broadcasters, increasing the regulatory
minimum for French-language vocal music from 55% to 65%.
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6. Ensuring that French-language vocal music is played during high
listening periods by requiring 55% between 6:00 a.m. and 6:00 p.m.
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7. Supporting cooperative initiatives between the radio and music
industries in order to promote Canadian music.
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8. Requiring, in ownership transfers, a minimum public benefit
representing 6% of the value of the transaction.
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3. |
The 1998 Policy stated that, |
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The Commission intends to review its approach to commercial radio
in five years, including its revised policy on common ownership,
and its policies designed to ensure exposure for Canadian artists
and a distinctive French-language presence.
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4. |
In 2003, the Commission was
in the process of launching a review of the 1998 Policy when it received
an application for a licence to operate a satellite radio undertaking.
The Commission decided that the radio policy review should be postponed
until the subscription radio licensing process was complete. That
process culminated in the licensing of three subscription radio undertakings
on 16 June 2005 (Broadcasting Decisions CRTC 2005-246,
247, and
248), and
the recent launch of two satellite subscription radio undertakings. |
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Introduction |
5. |
Although rapid technological
and societal changes have been constants for decades, never have these
changes seemed more dramatic than they do now. The seven years since
the 1998 Policy came into effect have seen the advent of new digital
technologies and methods of distribution that are having a profound
effect on the way in which people, particularly young people, obtain
and listen to music. This is presenting the radio industry with new
opportunities, but also new challenges: in addition to the satellite
radio services now available, file-sharing, podcasting, downloading,
and audio streaming, all facilitated through the increasing ubiquity
of the Internet, offer new and often more flexible alternatives to
the traditional practices of purchasing recorded music and listening
to radio broadcasting. |
6. |
These new distribution platforms,
which provide a wide variety of audio programming, predominately in
the English-language, present an added challenge for French-language
radio broadcasters, who are charged with the responsibility of supporting
the francophone recording industry in Canada, exposing francophones
to music that reflects their culture, and contributing to the development
of French-language expression. |
7. |
In the meantime, all broadcasters
must reflect and meet the needs of an increasingly diverse multicultural,
multilingual and multiracial society, particularly in larger metropolitan
centres, if they are to remain relevant and viable. Edmonton, Saskatoon,
Regina, Winnipeg and Ottawa are home to growing Aboriginal communities
and increasing ethnic and racial diversity. Ethnic and racial minorities,
taken together now account for at least one-third of the population
of Vancouver and Montréal, and these groups now compose more than
50% of the population of Toronto. |
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The objectives of this
review |
8. |
In addition to reviewing the
effectiveness of the measures implemented in the 1998 Policy, this
process has the objectives set out below. |
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To develop policies that assist in creating conditions for:
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A. A strong, well-financed commercial radio sector in both official
languages capable of contributing to the fulfillment of the policy
objectives set out in the Act.
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B. A commercial radio sector that makes effective contributions
to Canadian artists through airplay of Canadian music, French-language
vocal music, and contributions to Canadian talent development (CTD)
that are commensurate with the financial health of the sector.
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C. A commercial radio sector that provides listeners with a greater
diversity of musical genres, and airplay for a greater variety of
Canadian artists in both official languages.
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D. A commercial radio sector that reflects the multicultural and
multiracial nature of Canadian society and the special place of
Aboriginal peoples within society.
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E. A commercial radio sector that provides listeners with an appropriate
amount of regularly-scheduled, locally produced news and information.
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F. A commercial radio sector capable of making the transition to
digital transmission, and of exploiting new and emerging distribution
platforms in a manner that furthers the objectives of the Act.
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Overview |
9. |
This policy review provides
an important opportunity for all interested parties to express their
views as to what policy framework will be necessary for commercial
radio stations to maintain healthy, successful businesses in the face
of growing competition, while meeting the objectives of the Act. In
particular, the Commission wishes to discuss appropriate strategic
responses to broad challenges such as the following: |
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- What is the likely impact of other audio technologies, such
as satellite radio, Internet radio, podcasting, file sharing and
down-loading, on commercial radio and the music industry?
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- How can commercial radio attract younger audiences in light
of competing sources of popular music?
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- How can French-language broadcasters respond to the demands,
particularly of younger audiences, for a greater variety of music?
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- How will Canada’s changing demographics, particularly the
increasingly multi-ethnic and Aboriginal composition, affect the
audience and revenue base of commercial radio over the next 5
to 10 years?
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- What are the appropriate responses of commercial radio to
these changes in order to attract and retain its audience?
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- What factors will influence the availability of popular Canadian
music, in both English and French, over the next 5 to 10 years?
What is commercial radio’s role in ensuring a steady supply of
such music?
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- In a fragmented marketplace, what strategies will result
in an appropriate balance between the market and regulation in
order to ensure that commercial radio successfully contributes
to the objectives of the Act?
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10. |
Broadcasters, music producers,
and other interested parties are requested to place on the record
of this proceeding detailed financial information and other related
studies, tabulations, statistics, etc. concerning the economic models
they envisage as most effectively contributing to the fulfillment
of the objectives noted above, and consistent with the objectives
of the Act. |
11. |
In this review, the Commission
wishes to examine its existing policies and regulatory mechanisms
to determine how they can be most effectively implemented to contribute
to the objectives of the Act, as the radio industry continues to move
into an era of increased competition from alternative sources of programming.
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12. |
To provide a context for this
discussion, the following sections of this notice describe the mechanisms
currently used to achieve the policy objectives set out above, highlight
issues and concerns, and pose questions that may be addressed by interested
parties in the public process. The questions raised in this notice
are not intended to indicate that the Commission is predisposed to
a particular policy direction, only to assist interveners in preparing
their comments on the various issues. Nor are they meant to preclude
discussion of other relevant issues that interested parties may wish
to address. |
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Current regulatory
framework |
13. |
The current regulatory framework
for radio is based on principles derived from the Act. The
principles most relevant to this proceeding may be summarized as follows:
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- radio programming should be predominantly Canadian;
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- radio should provide listeners with varied and comprehensive
programming from a variety of sources including the CBC, commercial
stations and not-for-profit stations. The presence of different
editorial voices should be encouraged and listeners should have
a diversity of programming from which to choose;
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- programming should be of high standard and balanced on matters
of public concern;
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- radio should provide service that is relevant to local communities;
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- programming should reflect Canada's linguistic duality;
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- programming should reflect Canada's cultural diversity, including
the needs and interests of Aboriginal peoples; and
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- radio should be readily adaptable to technological change.
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14. |
The Commission also makes its
licensing decisions with the goal of ensuring that the introduction
of additional radio stations will not unduly affect the ability of
existing commercial stations to meet their obligations under the Act,
the Radio Regulations, 1986 (the Regulations) and the commitments
made in their licence applications. |
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Objective A: A strong,
well-financed commercial radio sector in both official languages,
capable of contributing to the fulfillment of the policy objectives
set out in the Act. |
15. |
In the 1998 Policy, the Commission
determined that one of the ways to ensure a strong, well-financed
radio industry was by allowing station groups to cut high operating
costs. |
16. |
Accordingly, the Commission
revised its policy on common ownership in a given market by allowing
the following: |
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- in a market with less than eight commercial stations operating
in a given language, a person may be permitted to own or control
as many as three stations operating in that language, with a maximum
of two stations in any one frequency band; and
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- in a market having eight or more commercial radio stations in
a given language, a person may be permitted to own or control
as many as four radio stations (not more than two in the same
frequency band).
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Radio revenues |
17. |
All Canadian commercial AM
and FM radio stations combined experienced an average annual growth
in total revenues of 4.5% between the broadcasting years 2000 and
2004. English-language stations accounted for $998.5 million in total
revenue or 81.5% of total radio revenue in 2004. |
18. |
AM stations showed a continued
gradual decline in total revenues, dropping from $315.1 million
in 2000 to $302.4 million in 2004. However, total AM station revenues
have rebounded since 2002 after reaching a low point of just over
$297 million. |
19. |
This increase in total revenue
by AM stations between 2002 and 2004 is significant given that the
number of AM stations declined by 23, or 11%, during this two-year
period. Since 2002, total AM revenues have increased by 1.7% while
total expenses have declined by 5.1%. |
20. |
FM stations have seen revenues
increase from $710.5 million in 2000 to $922 million in 2004, an average
annual growth rate of 6.7%. The total number of FM stations grew by
102 or 39.7% between 2000 and 2004. Growth in the FM segment of the
radio industry between 2000 and 2004 more than offset the contraction
in the AM industry segment during this period. |
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Radio profits |
21. |
Profit before interest and
taxes (PBIT) for all Canadian AM and FM stations combined increased
from $167 million (16.3% of total revenues) in 2000 to $224 million
(18.3%) in 2004. |
22. |
PBIT grew at an average annual
rate of 8.8% for English-language stations, but declined by 1.3% for
French-language stations, between 2000 and 2004. PBIT margins for
English-language stations mirrored the growth seen overall in the
radio industry. However, the average PBIT margin for French-language
stations has gradually declined from 14.8% in 2000 to 11.9% in 2004.
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23. |
The PBIT of all Canadian AM
stations rose from a loss of $15 million in 2000 to $3.4 million
in 2004. |
24. |
FM stations remain the main
contributor to profit in the commercial radio sector. FM profits grew
at an average annual rate of 4.9%, from a total of just under $182
million (25.6%) in 2000 to $220.6 million (23.9%) in 2004. |
25. |
While significant ownership
consolidation has taken place since 1998, the commercial radio industry
still has a significant "independently owned" sector. Independent
owners can be defined as those other than the six largest ownership
groups – Astral Media, CHUM, Corus Entertainment, NewCap, Rogers Communications,
and Standard Broadcasting. |
26. |
Of the 438 English-language
commercial radio stations in Canada in 2004, 234 (53%) were owned
by independents. In the French-language market, 55 of a total of 92
originating stations, or 60%, were independently-owned. |
27. |
While a majority of stations
are owned by independents, in 2004 they represented only 30% of total
radio revenues in the English-language market, and 27% of total revenues
in the French-language market. |
28. |
Please note that more financial
information regarding the commercial radio sector is available in
the "Industries at a Glance" section of the Commission’s
website (www.crtc.gc.ca) through the "Financial Data" and
"Monitoring Reports" links. Note also that updated financial
data for 2005 is scheduled to be posted during the course of this
public process. |
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Questions for consideration |
29. |
In light of the overall health
of the commercial radio sector, there may be no need for major changes
to the current ownership rules, however, the Commission considers
that certain issues should be examined: |
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Profitability of French-language
radio |
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1. Why has the PBIT of French-language radio stations declined?
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2. What changes might improve the financial health of the French-language
radio sector?
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3. Is there a concern regarding the diversity of ownership in French-language
markets?
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Independent radio stations |
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1. Is it in the public interest to ensure a healthy independent
sector in radio – that is, radio stations operated by licensees
other than the six largest radio groups in Canada?
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2. Are there regulatory measures that could help maintain a strong
independent sector?
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Small market radio stations
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1. What particular challenges are faced by small market stations
– both those owned by independent operators, and larger station
groups?
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2. What regulatory measures could help small market broadcasters
fulfil their public service obligations?
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3. Are there circumstances in which the Commission could allow
the ownership of more than two stations on the same band in a particular
market?
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Local management agreements
(LMAs) |
30. |
In the 1998 Policy, the Commission
recognized that increased consolidation of ownership in a market involving
stations that are party to an LMA could raise questions as to whether
this would lead to market dominance by one broadcaster to the undue
detriment of others in a market, or effectively create a monopoly
in a market that would otherwise be competitive under the revised
common ownership policy. |
31. |
This led to the review of the
Commission’s policy on LMAs. Initially, the LMA policy was intended
to assist radio broadcasters in achieving cost savings and greater
marketing parity with other media during periods of financial difficulty.
Cost savings are normally realized under LMAs through the integration
of several operational components of one radio station, often involving
the technical, sales and promotion and general administrative activities,
with similar operational components of a radio station operated by
another licensee in the same market. |
32. |
In Local Management Agreements,
Public Notice CRTC 1999-176,
1 November 1999 (LMA Policy), the Commission announced its policy
determinations with respect to LMAs and the adoption of an amendment
to the Regulations to give effect to that policy. The amendment, which
is contained in section 11.1 of the Regulations, prohibits any licensee
from entering into, or operating its station pursuant to, an LMA unless
it first obtains Commission approval and a condition of licence authorizing
it to do so. Section 11.1 defines an LMA as follows: |
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"local management agreement" means an arrangement, contract,
understanding or agreement between two or more licensees or their
associates that relates, directly or indirectly, to any aspect of
the management, administration or operation of two or more stations
that broadcast in the same market.
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33. |
Such arrangements are evaluated
on a case-by-case basis, taking into account all relevant circumstances.
At the same time, the Commission had set out what it described as
"guiding principles" to assist radio broadcasters in evaluating
which alternative business model the Commission would generally consider
as being appropriate, and in what circumstances it might authorize
an LMA by condition of licence. The Commission reminded broadcasters
that an LMA cannot constitute a change in the effective control of
an undertaking. The Commission added that it would also continue to
expect the following: |
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- parties to an LMA must ensure that distinct and separate
programming and news services are maintained, and that their management
remains under the respective responsibility of each licensee.
This includes the program director and the news director, as well
as any other related staff assigned to programming and/or news
activities; and
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- all assets of the undertakings involved in an LMA must
remain in the ownership of each respective licensee.
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34. |
Furthermore, the Commission
indicated that it would be generally inclined to approve LMAs that
include unprofitable stations: |
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- in which the number of stations does not exceed the number
that may be commonly owned under the ownership policy; and
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- that are limited to a specific term and represent a temporary
alternative business model that will allow the broadcasters involved
to improve their performance.
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35. |
The Commission indicated that,
in exceptional circumstances, it may approve an LMA that includes
the participation of a number of stations that exceeds the limit allowed
under the common ownership policy. It emphasized, however, that licensees
would be required to demonstrate clearly that the participation of
radio stations in LMAs in excess of the threshold would be in the
public interest and that it does not create a situation of inequity
within the market. |
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Local sales agreements
(LSAs) |
36. |
In The Commission’s policy
on local management agreements (LMAs) – Determinations concerning
the appropriateness of various existing and proposed LMAs, including
local sales agreements, between licensees of radio stations serving
the same market, Broadcasting Public Notice CRTC 2005-10,
31 January 2005, the Commission determined that LSAs – combining the
sales functions of radio stations, including the invoicing and collection
of advertising revenues – fall within the definition of an LMA, as
contained in section 11.1 of the Regulations. As a result, licensees
of commercial radio stations serving the same market who wish to enter
into an LSA, or any other similar business arrangement, whether formal
or informal, must first apply for Commission approval to obtain conditions
of licence authorizing them to do so. |
37. |
As part of its determination,
the Commission raised its concern about the possible negative consequences
of LMAs, including LSAs, over time, such as the potential disadvantage
to which they subject competitors who are not party to them, the chilling
effect such agreements may have on the decisions of potential new
entrants, and the extent to which they may reduce, ultimately to the
detriment of the service provided to the public, the incentive for
some or all parties to an LMA to manage their stations efficiently,
compete effectively and improve their programming performance. |
38. |
Therefore, although the Commission
has made its decision regarding the application of the LMA Policy
to LSAs in February 2005, it wishes to review various aspects of the
LMA Policy, including the issues set out in the following questions.
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Questions for consideration |
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1. Are LMAs of any kind necessary or appropriate given the current
situation of the radio industry?
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2. Should LMAs continue to be accepted on the basis that they represent
a temporary alternative business model to allow the broadcasters
involved to improve their financial performance?
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3. Do LMAs between two licensees operating their respective radio
stations in adjacent markets raise concerns?
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4. Should the LMA definition be amended to include an arrangement
between licensees of radio stations and television stations in the
same market?
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5. Should the Commission take into consideration additional criteria
when considering an LMA, such as measures to ensure that distinct
and separate programming and news services are maintained, and that
management remains under the respective responsibility of each licensee;
the specific terms of the arrangement, and the performance of the
undertakings involved?
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6. In a market of less than four radio stations, is an LMA preferable
to market consolidation?
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7. Are LSAs preferable to LMAs?
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Objective B: A commercial
radio sector that makes effective contributions to Canadian artists
through airplay of Canadian music and French-language vocal music,
and contributions to CTD that are commensurate with the health of
the sector. |
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Canadian content regulations |
39. |
Section 2.2 of the Regulations
sets out the minimum levels of Canadian musical selections required
of radio stations. The regulations generally require that at least
35% of popular music selections (category 2) broadcast each week must
be Canadian selections, and at least 10% of traditional and special
interest music selections (category 3) broadcast each week must be
Canadian selections. |
40. |
The lower level of Canadian
content for category 3 selections has been established because of
the more limited availability of Canadian recordings for more specialized
types of music such as classical and jazz. |
41. |
Where 7% or more of the musical
selections broadcast during an ethnic programming period are Canadian
selections, this programming will not be considered in determining
whether or not a licensee is in compliance with the weekly 35% and
10% Canadian content requirements set out above. |
42. |
To qualify as a Canadian selection,
a musical selection must generally fulfil at least two of the following
conditions set out below. This is usually referred to as the MAPL
system. |
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- M (music) - the music is composed entirely by a Canadian.
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- A (artist) - the music is, or the lyrics are, performed principally
by a Canadian.
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- P (production) - the musical selection consists of a live performance
that is recorded wholly in Canada, or performed wholly in Canada
and broadcast live in Canada.
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- L (Lyrics) - The lyrics are entirely written by a Canadian.
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- The musical selection was performed live or recorded after September
1, 1991 and a Canadian who has collaborated with a non-Canadian
receives at least half of the credit as a composer and lyricist.
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43. |
There are also three special
cases where a musical selection may qualify as Canadian, even if it
does not satisfy at least two conditions of the MAPL system: an instrumental
performance of a musical composition written or composed entirely
by a Canadian; a performance of a musical composition that a Canadian
has composed for instruments only; and a musical selection that has
already qualified as a Canadian selection under previous regulations.
All are deemed to be Canadian selections. |
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The 1998 Policy |
44. |
In the 1998 Policy, the Commission
stated that it considered playing Canadian music to be a vital contribution
that radio makes toward fulfilling the cultural goals set out in the
Act. It also stated that the regulations requiring minimum levels
of Canadian music were important elements in bringing the Canadian
music industry to its current level of success. |
45. |
Moreover, the Commission was
convinced that an adequate supply of Canadian recordings was available
to support an increase in the required level of category 2 music on
radio stations. The Commission also noted that Canadian content requirements
do not generally involve large incremental direct expenses, since
radio stations do not have to pay for the production of the recordings.
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46. |
Based on those factors, and
the maturity of the Canadian radio industry, the Commission considered
that an immediate increase in the level of Canadian content from 30%
to 35% was both manageable and appropriate. The Commission stated
that such an increase would expand the exposure given to Canadian
artists and provide increased support to the Canadian music industry
as a whole. |
47. |
The Regulations were amended,
effective 3 January 1999, to require that at least 35% of category
2 musical selections broadcast by commercial AM and FM stations each
broadcast week be Canadian selections. |
48. |
The Commission also stated
that it was confident that the cooperative initiatives and efforts
of the broadcasting and music industries to promote and support Canadian
music would succeed in bringing about a level of Canadian content
that would reach 40% in five years. |
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Distribution of Canadian
category 2 selections |
49. |
To ensure that Canadian selections
were not relegated to times of low listenership, the Commission also
amended the Regulations to require that at least 35% of category 2
musical selections broadcast between 6:00 a.m. and 6:00 p.m., Monday
through Friday, be Canadian selections. The Commission considered
that this increased level, as well as the reduction of the daytime
measurement period from 13 to 12 hours, would increase exposure of
Canadian music during hours of higher listening, but still give licensees
flexibility in adjusting their programming. |
50. |
A review of the Commission’s
records indicates that there has been no increase in the incidence
of non-compliance by radio stations that must meet the higher Canadian
content requirements. As noted above, the fulfillment of these increased
Canadian content requirements has been achieved in concert with increases
in annual industry revenues and profits. |
51. |
It should also be noted that
since the release of the 1998 Policy, the Commission has licensed
some 20 new radio stations that play popular music where commitments
were made to broadcast levels of Canadian content that exceed the
standard 35% requirement. |
52. |
In spite of the success in
increasing the percentage of Canadian music that is broadcast by commercial
radio stations, there is a concern that this has not increased the
number of Canadian selections that are played – instead, the same
songs are simply being played more often. |
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State of the Canadian
music industry |
53. |
In its 2004 Economic Profile
of the Canadian Music Industry, which can be accessed at
http://www.pch.gc.ca/pc-ch/sujets-subjects/arts-culture/sonore-sound/music_industry/music_industry_e.pdf
, the Department of Canadian Heritage (Canadian Heritage) notes that
the shift in music format and consumer behaviour to the online realm
resulted in five years of declining music sales, both internationally
and in Canada. |
54. |
The Canadian Heritage study
indicates that between 1999 and 2003, the value of music sold dropped
28%, from $1.3 billion to $946.4 million. However, it also notes that
the last few years have been a period of incredible success for Canadian
artists, both at home and abroad. Based on the strength of releases
by musicians such as Céline Dion, Shania Twain, Avril Lavigne and
Nickelback, Canadian artists’ share of the top 200 best selling albums
in Canada increased from 15.1% in 2001 to 27.2% in 2003. |
55. |
During the same period, while
sales of albums by foreign artists in the top 200 continued to decline,
albums by Canadian artists – led by Shania Twain, Avril Lavigne, Sarah
McLachlan and Diana Krall – actually grew by 36.8% |
56. |
The report also notes that
2002 and 2003 were the first years in the history of the Society of
Composers, Authors and Music Publishers of Canada (SOCAN) that royalties
paid to Canadian artists from international sources have exceeded
royalties paid by SOCAN to foreign songwriters, composers and publishers. |
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Questions for consideration |
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1.The Commission’s approach to Canadian content on radio focuses
primarily on the percentage of Canadian musical selections that
are played. Would an increase in the minimum Canadian content
requirement for category 2 popular music to 40% result in a broadening
of the play lists for Canadian artists, or are there other more
effective ways of achieving this objective?
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2.Is the current definition of a "Canadian selection"
(the MAPL system) still appropriate? If not, what changes could
be made to the definition to make it more effective?
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3. Is the current approach of requiring that at least 35% of
category 2 musical selections broadcast between 6:00 a.m. and
6:00 p.m., Monday through Friday, be Canadian selections ensuring
the exposure of Canadian music during hours of higher listening?
Are there other measures that would be more effective in achieving
this objective?
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Special interest music |
57. |
In the 1998 policy, the Commission
concluded that given the limited number of commercial stations involved,
it would be best to deal with the issue of increasing Canadian content
levels for category 3 (special interest) music on a case-by-case basis.
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58. |
At licence renewal time, FM
stations operating in the specialty format, as well as AM stations
that offer high levels of category 3 music, are expected to propose
an increase in the current level of Canadian music they play. |
59. |
Since 2001, the Commission
has licensed a classical music station with a minimum Category 3 Canadian
content requirement of 15%, and four jazz radio stations with a minimum
Category 3 Canadian content level of 35%. |
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Questions for consideration |
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1. Should the Commission continue with its current approach of
determining appropriate levels of Category 3 Canadian content requirements
on a case-by-case basis, or should such requirements be reflected
in the Regulations?
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2. If these requirements should be incorporated into the Regulations,
what would be an appropriate minimum level of Canadian content for
Category 3 music?
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3. The Commission has noted increases in the availability of classical
music selections which qualify as Canadian selections. Should the
Commission consider an increase in the minimum requirement for this
genre of Category 3 music? If so, what would be an appropriate minimum
level?
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French-language vocal
music |
60. |
Currently, in order to ensure
that French-language radio stations reflect the needs and interests
of their audiences, at least 65% of the vocal popular (category 2)
music selections broadcast each week must be in the French-language. |
61. |
The Commission’s 65% requirement
was based on two related goals. On one hand, it wished to support
a francophone recording industry in Canada and to allow francophones
to have access to music reflecting their culture. On the other hand,
the Commission has always considered it to be the responsibility of
French-language broadcasters to continue their efforts to support
French-language expression. |
62. |
The Commission also requires
that a minimum of 55% of the vocal category 2 musical selections broadcast
between 6:00 a.m. and 6:00 p.m., Monday through Friday, be in the
French language. |
63. |
During the 1998 policy review,
it came to light that some stations were shortening French-language
selections on a systematic basis. This practice allowed the stations
to fulfil requirements for French-language vocal music by playing
a large number of shortened selections in periods of lower listening.
In the 1998 Policy, the Commission stated that shortening selections
to meet content requirements was inconsistent with the objectives
of the Act and the Regulations. Accordingly, the Regulations were
amended to require that category 2 Canadian selections and category
2 French-language selections be played in their entirety for the purpose
of meeting Canadian content and French-language vocal music requirements. |
64. |
In Regulations Amending
the Radio Regulations, 1986 – Commercial Radio Programming,
Public Notice CRTC 1998-132,
17 December 1998, which announced the adoption of those amendments
to the regulations, the Commission made an exception for montages,
compilations containing excerpts from several musical selections,
noting that montages can allow audiences to discover new artists or
to sample selections that would not otherwise be broadcast. |
|
Questions for consideration |
|
1. Are the French-language vocal requirements appropriate mechanisms
to ensure diversity of French-language music and artists in the
French market?
|
|
2. If not, what other mechanisms and/or measures would ensure diversity
of French-language music and artists in the French market?
|
|
3. Would a reduction in the French-language vocal music requirements
assist in providing diversity of music in the French market?
|
|
4. Is the rule requiring that musical selections be played in their
entirety achieving its purpose?
|
|
5. Should a new definition of montage be considered to reflect
the specificities of the French-language market?
|
|
6. Are broadcasters using the montage to effectively reduce the
amount of French-language vocal music being played?
|
|
Canadian talent development |
65. |
The Commission has long held
the view that the Canadian broadcasting system has an important role
to play in the development of Canadian artists, primarily through
airplay. It has also pointed to the importance of CTD as a way to
ensure that an adequate supply of Canadian material is available to
offer Canadian listeners a diversity of high quality Canadian content.
While broadcasters are not solely responsible for seeking out and
developing Canadian creative talent, it is clearly in their interest
to take an active role in this process to ensure that there is a sufficiently
large pool of Canadian recorded music as well as other types of Canadian
creative material available for broadcast. |
66. |
To achieve these goals, the
Commission has expected Canadian broadcasters to encourage and promote
the development of new Canadian talent, especially through financial
contributions. |
67. |
Radio licensees make commitments
to contribute to CTD in three contexts: |
|
- when applying for a new radio licence through the competitive
process;
- in the context of benefits related to transfers of control
or ownership of radio stations; and,
- through commitments made at licence renewal.
|
|
CTD commitments made
when applying for a new radio licence |
68. |
The Commission has no set policy
governing the amount parties applying for a new radio licence should
be required to contribute to CTD over their first license term. Nor
are there guidelines that dictate what types of contributions are
eligible expenditures. CTD commitments proposed are at the discretion
of the applicant and are often for initiatives that are connected
to the genre of music the applicant is proposing for its station.
The Commission generally uses benchmarks and guidelines established
in the past to determine what should be considered as an eligible
CTD contribution, for example, third parties associated with the development
of Canadian talent. |
69. |
Most parties applying for new
radio licences generally propose CTD commitments in order to gain
an advantage over other applicants. Given that the radio licensing
process is a competitive one, some of the larger broadcasters could
be seen to have an advantage over smaller broadcasters or new entrants,
who do not have the same financial resources at their disposal and
usually cannot make CTD commitments of the same proportion and value. |
|
Questions for consideration |
|
1. Should the Commission establish guidelines related to the quantity
and/or nature of CTD commitments made in applications for new radio
licences?
|
|
2. Should the Commission place a cap on the amount of CTD contributions
that applicants are expected to make when applying for a new radio
licence?
|
|
3. Is it appropriate to require that CTD contributions from new
radio licensees benefit the market/region that the undertaking will
serve?
|
|
4. What types of initiatives continue to be the most effective
in meeting the Commission’s objectives for the development of Canadian
talent? Are there existing eligible CTD initiatives that are no
longer effective, or need to be revised in order to increase their
effectiveness?
|
|
5. Should initiatives that are not directly involved in the development
of Canadian musical or artistic talent, but do contribute to the
broadcasting system as a whole, be eligible to receive CTD contributions?
|
|
CTD commitments made
in transfers of control or ownership |
70. |
In the 1998 Policy, the Commission
modified its policy for benefits proposed in transfers of ownership
or control. Until 1998, the Commission assessed the benefits proposed
in each such application on a case-by case basis. Although there were
no set guidelines or benchmarks concerning what would constitute an
acceptable level of tangible benefits in such transactions, these
generally represented approximately 10% of the value of a transaction. |
71. |
The Commission determined that
in the absence of a competitive process to consider applications involving
the transfer of ownership and control of radio broadcasting undertakings
(which, by definition, make use of frequencies that are scarce public
resources), the benefits test would continue to be an appropriate
mechanism for ensuring that the public interest is served in the case
of transfers of ownership and control. |
72. |
However, in response to calls
for a reduction in the level of tangible benefits associated with
ownership transactions, the Commission modified its benefits policy
for radio transactions. As noted in the 1998 Policy, in the case of
applications for transfers of ownership and control of radio undertakings,
the Commission expects applicants to make commitments to implement
clear and unequivocal benefits representing a minimum direct financial
contribution to CTD of 6% of the value of the transaction. |
73. |
Financial contributions derived
from such ownership transactions are to be distributed as follows: |
|
- 3% to be allocated to a new Canadian music marketing and promotion
fund (now the Radio Starmaker Fund and the Fonds RadioStar);
|
|
- 2% to be allocated, at the discretion of the purchaser, to FACTOR
or MusicAction; and
|
|
- 1% to be allocated, at the discretion of the purchaser, to either
of the above initiatives, to other CTD initiatives, or to other
eligible third parties directly involved in the development of
Canadian musical and other artistic talent.
|
74. |
These contributions to Canadian
talent are to remain separate and apart from CTD commitments derived
from previous ownership transactions, CTD commitments made at licence
renewal, or commitments made when applying for the undertaking’s original
licence (if within its first license term). |
75. |
The Commission granted its
approval for the new marketing and promotion funds, the Radio Starmaker
Fund and the Fonds RadioStar in 2000. From the date of the revised
Commercial Radio Policy until the end of the 2003/2004 broadcast year,
more than $46 million has gone to these two organizations to
help advance the careers of Canadian recording artists. |
|
Questions for consideration |
|
1. Is 6% of the value of the transaction still the appropriate
amount that should be required of broadcasters applying for a transfer
of ownership or control?
|
|
2. In the event that there are fewer ownership transactions in
the future, what other sources of revenue could be used to fund
the Radio Starmaker Fund and Fonds RadioStar?
|
|
3. If the Commission wishes to encourage support for local talent
development in ownership transactions:
|
|
a. Should structures already established by the industry, i.e.,
MusicAction/ Factor and Fonds RadioStar/Starmaker Fund, play a role
in meeting this objective? If so, how can that be done while respecting
each fund’s national mandate?
|
|
b. What other mechanisms could contribute to the effective development
of Canadian talent on a local level?
|
|
CTD commitments made
at licence renewal |
76. |
As part of their licence renewal
applications, all licensees of private commercial radio stations are
asked to make an annual financial commitment to CTD. The Commission
has considered that such contributions are important to help ensure
that there is a sufficiently large pool of Canadian music and other
Canadian creative material available for broadcast. |
77. |
In April 1995, the Commission
reviewed its CTD policy. At that time, annual direct cost contributions
by private radio broadcasters at licence renewal to CTD projects totalled
approximately $7 million. Approximately $1.8 million of the $7 million
offered as commitments in license renewal applications consisted of
payments to third parties, such as FACTOR and MusicAction, as well
as national and provincial musical organizations, cultural organizations,
performing arts groups, schools and scholarship recipients. |
78. |
The balance of commitments
($5.2 million) was related to initiatives carried out by stations
at a local level, which showcased and promoted local and regional
artists. These local initiatives included sponsorship of talent contests,
production of programming featuring live performances, local production
of recordings or videos and the sponsorship of concerts. |
79. |
The Commission determined that
a more streamlined approach to CTD was necessary. In addition, the
Canadian radio industry as a whole was experiencing financial difficulties
and was requesting a reduction in financial contributions to CTD initiatives. |
80. |
In response to the Commission’s
request for a new license renewal CTD proposal, the Canadian Association
of Broadcasters (CAB) presented its "CAB Plan" which set
out a distribution schedule for Canadian talent funds based on a market-by-market
approach in which a common fee schedule would be set for stations
in similar markets. Under the plan, licensees would send their contributions
directly to eligible third parties – FACTOR, MusicAction, national
and provincial music organizations, performing arts groups, schools
and scholarship recipients – and annual CTD payments by individual
stations would be as follows: |
|
Major Markets
|
$27,000 |
|
Large Markets
|
$ 8,000 |
|
Medium to Large Markets
|
$ 5,000 |
|
Medium Markets
|
$ 3,000 |
|
Small Market
|
$ 400 |
81. |
The Commission accepted the
CAB’s proposal and announced the new CTD policy in Contributions
by radio stations to Canadian talent development – A new approach,
Public Notice CRTC 1995-196,
17 November 1995. In the Notice, the Commission stated: |
|
In light of concerns expressed by recording industry representatives
that the proposed annual contribution of $1.8 million by the radio
industry could become a maximum rather than a minimum, the Commission
will review this base level in five years to determine whether it
remains adequate. With respect to local Canadian talent initiatives,
the Commission notes comments by broadcasters that many radio stations
will continue to undertake these projects on their own initiative.
|
82. |
The vast majority of radio
licensees adopted the CAB Plan and submitted applications to have
their conditions of licence amended so as to be relieved of their
existing CTD commitments and have, instead, requirements for contributing
to CTD under the CAB Plan. |
83. |
There are still, however, a
small number (although this number has increased over the past few
years) of radio licensees who have chosen not to adopt the CAB Plan
and who continue to direct their license renewal CTD financial contributions
to local initiatives. |
|
Questions for consideration |
|
1. Is the CAB Plan still an appropriate approach to CTD for radio
broadcasters renewing their licences?
|
|
2. Should CTD contribution levels be tied to revenues instead of
tied to market size?
|
|
3. Is the $1.8 million annual base contribution level still appropriate?
|
|
4. Are there different approaches to CTD initiatives that would
make financial contributions to CTD more effective?
|
|
5. Given that FACTOR and MusicAction get substantial funding from
government sources, should they still get broadcaster contributions?
|
|
6. Should the Commission consider a different approach in French-language
markets to ensure appropriate, diversified and equitable contributions
to Francophone CTD?
|
|
Objective C: A commercial
radio sector that provides listeners with a greater diversity of
musical genres and airplay for a greater variety of Canadian artists
in both official languages. |
|
New music and emerging
artists |
84. |
In the 1998 Policy, the Commission
agreed with the broadcasting industry that it would be very difficult
to develop across-the-board requirements for the broadcast of recordings
by new Canadian artists that could be fairly applied to all formats.
It also agreed that a bonus system would eliminate some of these difficulties,
but shared the concerns of the music industry that this could decrease
the overall level of Canadian music that stations play. |
85. |
The Commission considered that
the promotion and development of new Canadian artists was an area
that would benefit greatly from increased co-operation between the
music and broadcasting industries. It noted that the various commitments
by the CAB to promote Canadian music, and benefits contributions resulting
from transfers of ownership and control, would provide additional
support for new talent. |
86. |
The Commission considered that
it would be appropriate to allow these initiatives to develop, and
to evaluate their success before deciding if any new regulatory initiatives
related to new music by emerging Canadian artists were necessary. |
87. |
In the subscription radio licensing
process, a number of Canadian musicians and a representative of independent
Canadian musicians submitted that there are scores of highly talented
and emerging Canadian who are underserved by conventional radio stations,
and were therefore supporting the licensing of subscription radio
services in Canada. In response to these concerns, the Commission
imposed a condition of licence requiring the satellite subscription
radio undertakings to devote at least 25% of the Canadian musical
selections they broadcast to songs by emerging Canadian artists. |
88. |
In 1997, the Commission conducted
a study of the use and scheduling of various types of musical selections
by commercial radio stations operating in category 2 (popular) music
formats in Toronto, Calgary, Montréal, and Quebec City. In that study,
the Commission reviewed the stations’ play-lists to determine, among
other things, the percentage of musical selections that were recordings
by new Canadian artists. For the purposes of this study, a recording
by a new Canadian artist was defined as a) a recording released within
2 years of the date that the programming was broadcast; and b) the
artist had no entries in the Commission’s database of Canadian music
earlier than 2 years before the programming was broadcast. |
89. |
The 1997 study indicated that
new Canadian artists received 5.0% of the airplay on English-language
stations in Toronto, Calgary and Montréal, and accounted for 7% of
the music played on French-language stations in Montréal and Quebec
City. |
90. |
In April 2005, the Commission
conducted a similar study of English- and French-language popular
music stations in these four cities, using the same definition of
a new Canadian artist, to gauge the exposure that emerging artists
now receive on commercial radio stations. |
91. |
The 2005 study indicates that
new Canadian artists received 6.7% of the airplay on English-language
stations in Toronto, Calgary and Montréal, and accounted for 16.4%
of the music played on French-language stations in Montréal and Quebec
City. |
92. |
A copy of the 2005 study will
soon be available on the Commission’s website at www.crtc.gc.ca. Hard
copies of both the 1997 and 2005 studies are available on request,
and will be placed on the public record of this proceeding. |
|
Questions for consideration
|
|
1. How successful have initiatives resulting from cooperation between
the music and broadcasting industries, such as Radio Starmaker Fund
and Fonds RadioStar, been in promoting the airplay of new music
and emerging artists?
|
|
2. What should be considered an appropriate level of airplay of
new Canadian music and emerging Canadian artists by commercial radio
stations?
|
|
3. Should such levels be required by way of regulation, or is there
an incentive-based approach that could effectively promote the airplay
of new music by emerging Canadian artists?
|
|
4. What would be the most appropriate definitions of new Canadian
music and an emerging Canadian artist?
|
|
5. Are there changes that could be made to the current definition
of a "Canadian selection" (the MAPL system) to make it
more effective in promoting airplay by new and emerging Canadian
artists?
|
|
6. Are there other models or approaches that could be adopted that
would encourage the broadcast of new Canadian music and emerging
Canadian artists?
|
|
Diversity of musical
formats |
93. |
In the 1998 Policy review process,
a number of broadcasters stated that an increase in the number of
stations a person is permitted to own in a market would lead to an
increase in the diversity of formats offered. The Commission agreed
that one of the benefits of consolidation could be some increase in
the diversity of formats offered in some individual markets. However,
it did not consider that the extent of any such increase overall would
be as great as that forecast by the broadcasting industry. |
94. |
The Commission accepted the
argument that one owner with several stations in a market will likely
offer different formats on each of these stations, but it was not
convinced that this owner would maintain formats that differ from
those employed by stations that are owned by other broadcasters in
that market. |
95. |
Within the commercial sector,
the Commission has increasingly relied on competition and market forces
to encourage programming diversity. The licensing of additional radio
stations has increased the choice of services available to listeners,
however concern has been expressed that the range of programming provided
by commercial radio stations is still relatively limited, because
these stations tend to concentrate on providing programming to only
those age brackets and social demographic groups that are most attractive
to advertisers. |
|
Questions for consideration
|
|
1. In an environment with increasing alternative sources of audio
programming, are policies and regulations designed to encourage
diversity of music radio formats necessary? If so, what specific
mechanisms would be appropriate?
|
|
2. Are there ways in which the various funding agencies – FACTOR,
MusicAction, Starmaker Fund and Fonds RadioStar – or other funding
mechanisms could help facilitate music format diversity?
|
|
Objective D: A commercial
radio sector that reflects the multicultural and multiracial nature
of Canadian society and the special place of Aboriginal peoples
within society. |
96. |
Since the late 1990s, the Commission
has made cultural diversity one of its key priorities. When the Commission
refers to cultural diversity, it is referring to the inclusion of
groups that have been traditionally under-represented in broadcasting:
ethnocultural minorities, Aboriginal peoples, as well as persons with
disabilities. Such under-representation includes these groups’ presence
and portrayal on the air and their participation in the industry.
It expects broadcasters to share the responsibility for assisting
in the development of a broadcasting system that reflects Canada’s
ethnocultural minorities, Aboriginal peoples as well as persons with
disabilities. |
97. |
This is in accordance with
section 3(d)(iii) of the Act, which states that the broadcasting
system should "through its programming and the employment opportunities
arising out of its operations, serve the needs and interests, and
reflect the circumstances and aspirations, of Canadian men, women
and children, including equal rights, the linguistic duality and multicultural
and multiracial nature of Canadian society and the special place of
aboriginal peoples within that society." |
98. |
In response to this goal, the
1998 Policy encourages broadcasters to "reflect the cultural
diversity of Canada in their programming and employment practices,
especially with respect to news, music and the promotion of Canadian
artists." |
99. |
In the case of television,
the Commission’s strategy to date has been two-fold: (a) requiring
all broadcast groups to file corporate plans at licence renewal as
well as annual progress reports, and (b) the creation of an industry/community
Task Force for Cultural Diversity on Television to undertake research
and develop best practices and industry initiatives. This strategy
has recently come to include persons with disabilities as well (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 (paragraphs 51-53). While there may be some parallels
that can be drawn from the experience of implementing this strategy
for television thus far, the Commission considers it essential that
the industry and public have an opportunity to share their views on
the unique challenges of making radio more reflective of Canada’s
cultural diversity. |
|
Questions for consideration |
|
1. What can the Commission do to increase the inclusion of groups
such as multicultural groups, Aboriginals and persons with disabilities
in the commercial radio sector?
|
|
2. What are the challenges of making radio more reflective of Canada’s
cultural diversity?
|
|
3. Are different goals and strategies required for different genres/station
formats?
|
|
4. Which areas of programming do stations have the most control
over in terms of being able to influence reflection of cultural
diversity?
|
|
5. Given the particular characteristics of radio, what are the
most appropriate ways to apply cultural diversity principles to
this medium?
|
|
6. Are there differences between the English and French language
markets that should be taken into account?
|
|
7. Are there CTD initiatives that could be implemented to further
cultural diversity objectives?
|
|
Objective E: A commercial
radio sector that provides listeners with an appropriate amount
of regularly-scheduled, locally-produced news and information. |
100. |
The Commission’s local programming
policy for radio was set out in Policies for local programming
on commercial radio stations and advertising on campus stations,
Public Notice CRTC 1993-38,
19 April 1993. Under this policy, licensees of commercial FM
stations in markets served by more than one private commercial radio
station are required to devote at least one-third of the broadcast
week to local programming if they wish to solicit or accept local
advertising. This requirement is imposed as a condition of licence.
|
101. |
Local programming is defined
as: |
|
Programming that originates with the station or is produced separately
and exclusively for the station. It does not include programming
received from another station and rebroadcast simultaneously or
at a later time; nor does it include network or syndicated programming
that is five minutes or longer unless it is produced either by the
station or in the local community by arrangement with the station.
|
|
In their local programming, licensees must include spoken word
material of direct and particular relevance to the community served,
such as local news, weather and sports, and the promotion of local
events and activities.
|
102. |
It is noted that no minimum
quantities of local information are specified in the policy. |
103. |
A more flexible approach for
AM stations was chosen by the Commission to allow syndicated or network
programming formats to develop. Such formats provide a complete music
or spoken-word service for stations, while providing opportunities
in each hour for the insertion of local information. These services
have allowed some financially-troubled AM stations to stay on the
air. The Commission was concerned that imposing an overall local programming
requirement on AM stations could have a negative impact on stations
that are in financial difficulty. |
104. |
Although the one-third guideline
does not apply to AM stations, the policy makes provision for AM stations
to indicate, at the time of licence renewal, the amount of local programming
they propose to broadcast and to indicate how they will provide information
of direct and particular relevance to the communities they serve. |
105. |
In the 1998 Policy, the Commission
decided to maintain the one-third local programming requirement with
respect to FM stations in competitive markets, and its case-by-case
approach for AM stations. The standard renewal form requires AM stations
to make commitments to a minimum level of local programming, and to
describe how they will provide sufficient service to their local communities.
|
106. |
The Commission noted the concerns
raised by several parties about the impact that consolidation of ownership
could have on news programming. It emphasized the important role that
radio plays in the dissemination of local news and information, and
expressed the view that local news coverage had declined in Quebec
as a consequence of the consolidation of ownership that had occurred
in that province in the period prior to the 1998 policy review. These
interveners were concerned that this trend could continue if ownership
requirements were loosened further. The Commission concluded, however,
that setting across-the-board requirements for levels of news and
spoken word would not take into account the particular needs of different
communities or the differing resources of licensees. |
107. |
Therefore, it decided to use
a case-by-case approach in assessing programming commitments. Applicants
seeking to acquire ownership or control of more than one AM and one
FM station in a given language and market are required to outline
how their proposed programming will benefit the community and further
the objectives of the Act. The Commission retains the option of requiring
adherence, by condition of licence, to particular commitments made
by applicants. |
108. |
In Canadian Heritage’s second
response to the 2003 Report of the Standing Committee on Canadian
Heritage, the government stated that in the current broadcasting system,
a "pressing issue is maintaining the diversity of voices at the
local and regional level in a changing communications environment"
(Reinforcing Our Cultural Sovereignty – Setting Priorities for
the Canadian Broadcasting System), and announced its intention
to issue a direction under section 7 of the Act in this regard. |
|
Questions for consideration |
|
1. Is local radio programming meeting the needs of communities?
Is enough local news and information being provided to listeners?
|
|
2. Is the Commission’s current local programming policy, including
the one-third requirement for FM stations in competitive markets,
the most effective means of ensuring that private radio stations
provide meaningful local service? If not, what alternative methods
would be more effective?
|
|
3. Are there circumstances in which commercial FM stations should
make more specific commitments to local programming than the one-third
level set out in the local programming policy?
|
|
4. Should the Commission impose a minimum level of local news/information
for commercial FM radio stations? If so, what would be the appropriate
amount?
|
|
5. Should the Commission consider minimum local programming requirements
for AM stations? If so, what would be the appropriate amount?
|
|
Objective F: A commercial
radio sector capable of making the transition to digital transmission,
and of exploiting new and emerging distribution platforms in a manner
that furthers the objectives of the Act. |
|
Transition to digital
transmission |
109. |
On 29 October 1995, the Commission
issued A Policy to Govern the Introduction of Digital Radio,
Public Notice CRTC 1995-184
(Transitional Digital Radio Policy). Because digital radio in Canada
was in the early experimental stage, the Commission set out a two-stage
approach for digital radio: this short term and long term approach
involved establishing a process for licensing digital radio services
on a transitional basis and then, later, undertaking a public process
to consider all aspects of digital radio broadcasting in the longer
term. |
110. |
The development of a long term
digital radio policy has not yet taken place largely because the adoption
of the new digital radio technology by consumers and the switch-over
by the radio industry to digital has taken longer than was expected.
In fact, it is now effectively stalled. |
111. |
The Commission stated in the
Transitional Digital Radio Policy that it considered digital radio
to be a replacement technology for existing AM and FM radio services.
It noted, however, that digital radio has the potential to increase
diversity of programming services available to the public. For this
reason, the Commission decided that existing radio services would
have priority access, but not exclusive access, to the digital band. |
112. |
Since licensing Canada’s first
digital radio stations in 1998, the Commission has granted transitional
digital radio licences to existing AM and FM licensees in Toronto,
Windsor, Montréal, Vancouver, Victoria and Ottawa. In addition, a
digital radio licence was granted to a new entrant in Toronto. Currently,
there are 76 radio stations licensed to provide digital radio broadcasting
(DAB) service in Canada, including 42 English and 9 French-language
commercial stations, 18 CBC stations, and 7 ethnic stations. Of these,
approximately 50 are operational. Unlike the countries where the introduction
of DAB has been a success, Canadian DAB radio stations are primarily
rebroadcasting the programming of existing analog radio stations. |
113. |
In spite of the availability
of DAB signals, very few people are listening to these services due
to the limited take-up of DAB receivers in Canada. This has been due,
in large part, to the limited availability and cost of the DAB receivers
that have entered the Canadian market. |
114. |
Although many other countries,
notably in Europe, have also adopted the Eureka 147 standard for digital
radio broadcasting, a number of differences mean that all of the receivers
sold in Canada must be adapted to the Canadian market. The decision
by the United States to adopt a different technology, In Band On Channel
(IBOC), for the conversion of American radio stations from analog
to digital, has also prevented economies of scale to allow for the
sale of DAB receivers at prices comparable to those of AM and FM radios
in Canada. It has been suggested that it is not realistic for Canada
to establish a different digital radio broadcast platform than the
US. |
115. |
It has also been argued that
the slow roll-out of DAB may be due to the lack of distinctive programming
on the digital band: better quality sound through digital radio may
not be enough to drive the roll-out and widespread take-up of DAB
receivers. New and innovative programming may be needed, particularly
programming for ethnic audiences, who would have a strong incentive
to purchase DAB receivers. |
116. |
Any major changes to Canada’s
Transitional Digital Radio Policy will have to be closely coordinated
with the Department of Industry and all participants in the radio
sector. Nevertheless, the Commission considers that this is an appropriate
time to seek the views of the commercial radio sector and other interested
parties, such as the CBC, with respect to the necessary conditions
and regulatory approach to ensure a successful transition from analog
to digital transmission and reception. |
|
Questions for consideration |
|
1. How can radio best make the transition from analog to digital,
and how can the Commission assist this through policy and regulatory
actions? Should a distinction be made between the AM and FM bands?
|
|
2. Should the Transitional Digital Radio Policy be modified so
that DAB is no longer deemed to be a replacement technology? If
so, what should be the status of existing replacement DAB stations
which are now in operation?
|
|
3. Should the Transitional Digital Radio Policy be modified to
facilitate the use of DAB by new entrants? If so, how would adequate
DAB spectrum be obtained in markets such as Toronto, where available
frequencies are scarce?
|
|
4. Should the Commission permit the use of IBOC as a digital platform
for radio? If so, what regulatory measures and criteria should be
adopted?
|
|
5. Should the Commission consider other standards, such as DRM,
DMB or DVB-H, for digital broadcasting in Canada?
|
|
6. In the event that no other plans are identified, what other
use could be made of the DAB spectrum?
|
|
7. How can digital radio policies help provide better services
to Canada’s diverse cultural and ethnic communities?
|
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New and emerging distribution platforms
|
117. |
As noted in the Overview, the
advent of new digital technologies and distribution platforms is having
a profound effect on the way in which people are and will be able
to listen to music and other audio programming. In addition to the
Canadian satellite radio services that are now available, there are
several Internet-based methods of delivering audio content – file-sharing,
podcasting, downloading, and audio streaming – which offer listeners
a multitude of programming choices on a variety of devices, and the
ability to tailor those choices according to their personal tastes
and preferences. |
118. |
And while access to these Internet-based
services was initially limited to fixed locations, the rapid development
of cellphone distribution and other wireless systems such as Wi-Fi
and WiMAX will increasingly allow for their reception on a mobile
basis. The ability of Internet-based services to be received in cars,
where a significant amount of listening to conventional radio stations
takes place, will provide another competitive challenge for conventional
broadcasters. |
119. |
A number of conventional radio
broadcasters have established a presence on the Internet as a means
of extending their brand and providing value added services to their
listeners. However, there is no doubt that the new audio programming
alternatives pose an unprecedented challenge for the conventional
radio sector that will require astute business decisions and a judicious
regulatory approach. |
|
Questions for consideration |
|
1. How can conventional radio licensees utilize new technologies
and incorporate new platforms into their strategies in a manner
that furthers the objectives of the Act?
|
|
2. Should regulations of these activities be done through licensing
or by exemption order? What criteria should be used to determine
the dividing line between the two, particularly in a dynamic environment?
|
|
3. Should incentives be created to encourage the showcasing of
Canadian programming on these platforms? If so, to what extent
should any such incentives be linked to the holding of a broadcasting
licence?
|
|
Other Issues |
|
Streamlining the licensing
process |
|
Calls for applications |
120. |
On 8 July 1999, the Commission
released The Issuance of calls for radio applications, Public
Notice CRTC 1999-111
in order to clarify the types of applications that would normally
generate calls for applications. |
121. |
The policy conveys the Commission’s
intention to assess each application for either a new licence or an
AM to FM conversion on the merits of the individual application. |
122. |
The policy frames this approach
within the broader Commission objective of encouraging competition
and choice, with calls for applications issued where it is determined
that a call is warranted. |
123. |
The policy also lists the type
of applications which generally do not result in a call for
applications. These include: |
|
i) low power and other proposals with very little or no commercial
potential;
ii) proposals to provide the first commercial service in a market;
iii) proposals by the sole commercial operator in a market to improve
service to the market, either through an AM to FM conversion or
a new station;
iv) proposals to provide the first commercial service in the other
official language in a market, or to convert the only station in
the other official language from AM to FM; and
v) proposals to convert stations from AM to FM, in markets with
2 or fewer commercial operators.
|
124. |
As was anticipated, the increased
flexibility for multiple station ownership in a market provided by
the 1998 Policy resulted in an increase in applications for new radio
stations. The Commission issued 34 calls for radio applications between
July 1999 and May 2005. |
125. |
The large number of calls for
radio applications issued since July of 1999, and specifically the
competitive processes resulting from these calls, has contributed
significantly to delays in the consideration of licence applications.
|
126. |
As part of this review, the
Commission wishes to provide interested parties with an opportunity
to discuss potential modifications to its policy for issuing calls
and other elements of its consideration of applications for radio
licences in support of its goals related to streamlining the processing
of applications. |
|
Questions for consideration |
|
1. What modifications to the Commission’s policy for issuing calls
for radio licence applications could streamline the licensing process,
while maintaining the objective of encouraging competition and choice?
|
|
2. Are there other ways in which the licensing process could be
streamlined to expedite the consideration of applications for new
radio licences?
|
|
Streamlined approach
to radio licence renewals |
127. |
The Commission outlined its
streamlined radio renewal process in Broadcasting Circular CRTC 2002-448
dated 7 June 2002. |
128. |
The circular sets out
the process which allows licensees whose performance in the past licence
term raises no concern to file short licence renewal applications.
The purpose is to reduce the administrative burden faced by the Commission
and by licensees, since each year the Commission considers between
125 and 150 radio licence renewals. |
|
Questions for consideration |
|
1. Has the streamlined approach to radio licence renewals achieved
the goal of reducing administrative burden without compromising
basic regulatory requirements?
|
|
2. Are there modifications that should be made to ensure that interested
parties have sufficient opportunity to participate in the renewal
process of radio licences?
|
|
Low-power radio stations |
129. |
Low-power FM radio services
are those with a maximum Effective Radiated Power of 50 watts and
a maximum transmitting antenna height of 60 meters. As defined in
Parts III and IV of Industry Canada’s Broadcasting Procedures and
Rules, low-power radio frequencies are not protected against interference
from regular high-power (over 50 watts) radio stations. |
130. |
This means that, in case of
a frequency conflict between a low-power and an existing or newly
approved regular high-power station, the low-power service would either
have to change frequency or cease operation. |
131. |
Many low-power radio services
are exempt from licensing. These exempt services consist of non-mainstream
radio services such as those providing tourist and traffic information
in parks and historical trails; services providing local weather information
and information concerning local road and marine conditions, ferry
schedules, traffic advisories; as well as limited duration special
event facilitating programming. |
132. |
Over the past several years,
however, the Commission has received an increasing number of applications
for low-power commercial radio stations proposing to offer mainstream
programming. |
133. |
Policy framework for community-based
media, Broadcasting Public Notice CRTC 2002-61,
10 October 2002 (Public Notice
2002-61) sets out the Commission’s general policy governing low-power
radio. It sets out the following as the objectives of the licensing
policy for low-power radio broadcasting: |
|
The Commission considers that low-power radio undertakings make
a contribution to the goals set out in the Broadcasting Act and
may attract new entrants into the Canadian broadcasting system.
Such services are particularly well-suited to provide local community-based
programming. Low-power radio undertakings should not replicate
the programming offered by existing services. The Commission expects
applicants for low-power radio services to show how their programming
proposals will fulfil the following objectives:
|
|
- The contribution of an additional, diverse voice to the markets
served.
|
|
- The presentation of programming that complements that
of existing licensees in the market.
|
|
- The fulfilment of demonstrated community needs.
|
134. |
In addition, this Notice identifies
the four types of low-power radio undertakings that exist, comments
on when the Commission may issue a call for competing low-power applications,
identifies the markets where low-power frequencies are scarce and
sets out a priority system for assessing competing applications for
low-power frequencies. |
135. |
Public Notice
2002-61 also states that adherence to the Regulations and industry
codes, by low power licensees, is generally required. It also discourages
the ownership of multiple low-power radio undertakings and cross-ownership
between low-power radio and low-power television stations. The Notice
also states that low-power radio licensees should contribute appropriately
to Canadian talent development, even if they do so simply by providing
an outlet for artists who do not receive airplay on other stations.
|
136. |
Over the past several years,
due to the increasing number of applications for low-power commercial
radio stations, the Commission has heard concerns from broadcasters
regarding applications that have been received for low-power radio
licences. |
137. |
For example, a number of small
market broadcasters have voiced concerns that some applicants seem
to be using applications for low-power radio as a "back-door
entry" into the mainstream commercial radio sector. Others have
expressed concern about the lighter-handed approach the Commission
has taken with low-power radio applicants, in terms of the information
and documentation that must be provided with these applications. |
138. |
The Commission has taken steps
to address some of the concerns related to low- power radio, but considers
that the review of the 1998 Policy provides a context in which to
further examine its policy for the low-power radio services that it
licenses. The Commission does not wish to include in this proceeding
a discussion of the low-power radio services that are of a non-mainstream
nature and are currently exempt from licensing. The Commission, therefore,
calls for comments on the following questions and issues: |
|
Questions for consideration |
|
1. Should the Commission treat applications for originating conventional
low-power radio stations (private commercial broadcasters including
ethnic) differently than such applications for high-power radio
stations? If so, what differences should apply?
|
|
2. Given that low-power radio stations are particularly well-suited
to provide local community-based programming, should the Commission
impose minimum local programming requirements on these services?
If so, what is the appropriate amount?
|
|
3. Are there circumstances under which low-power radio licensees
should be allowed to apply for power increases which would accord
them protected status?
|
|
Infomercials |
139. |
Amendment to the Television
Broadcasting Regulations, 1987 to permit, by condition of licence,
the airing of "infomercials" during the broadcast day,
Public Notice CRTC 1994-139,
7 November 1994, outlines the Commission’s position with regard to
infomercials on television. An infomercial is defined as a program
that lasts more that 12 minutes and combines entertainment or
information with the sale or promotion of goods or services into a
virtually indistinguishable whole. |
140. |
For the purposes of private
television stations, networks (excluding the CBC) and specialty television
services, an infomercial is not counted as part of the 12 minute per
clock hour of advertising material and does not count as Canadian
programming in the calculation of fulfilling Canadian content requirements.
Infomercials must be clearly identified with a prominent written and
oral announcement that the programming constitutes paid commercial
programming. |
141. |
The Commission’s 1999 Television
Policy reiterated the infomercial policy. |
142. |
While the Commission has a
published policy with respect to the broadcasting of infomercials
on television, no such written policy exists for radio. |
|
Question for consideration |
|
1. Is a policy regarding the use of infomercials on radio required?
|
|
Public proceeding |
143. |
The Commission will hold an
oral public hearing to consider the matters addressed in this notice
commencing at 9:30 a.m. on Monday, 15 May 2006. The
Public Hearing will take place at The Conference Centre, Phase IV,
140 Promenade du Portage, Gatineau, Quebec. |
144. |
The Commission invites written
comments on the matters for consideration set out above. The deadline
for filing written comments is Wednesday, 15 March 2006.
|
145. |
Following the oral public hearing,
interested parties may have an opportunity to file brief final written
comments. |
146. |
The Commission will only accept
submissions that it receives on or before the prescribed date noted
above. |
147. |
Parties wishing to appear at
the public hearing must state their request on the first page of their
written submissions. Parties requesting appearance must provide clear
reasons, on the first page of their submissions, as to why the written
submission is not sufficient and why an appearance is necessary. The
Commission will subsequently inform parties whether their request
to appear has been granted. While submissions will not otherwise be
acknowledged, they will be considered by the Commission and will form
part of the public record of the proceeding, provided the procedures
set out herein have been followed. |
|
Procedures for filing
comments |
148. |
Interested parties can file
their comments to the Secretary General of the Commission: |
|
- by using the
Broadcasting
Intervention/Comments Form
|
|
OR
|
|
- by mail to
CRTC, Ottawa, Ontario K1A 0N2
|
|
OR
|
|
|
149. |
Parties filing submissions
that are over five pages in length are asked to include a short executive
summary. |
150. |
Please number each paragraph
of your submission. In addition, please enter the line ***End of document***
following the last paragraph. This will help the Commission verify
that the document has not been damaged during transmission. |
|
Important notice |
151. |
Note that all information that
you provide as part of this public process, except information granted
confidentiality, whether sent by postal mail, facsimile, e-mail or
through the Commission’s web site at www.crtc.gc.ca, becomes part
of a publicly accessible file and will be posted on the Commission’s
web site. This information includes your personal information, such
as your full name, e-mail address, postal/street address, telephone
and facsimile number(s), and any other personal information you provide.
|
152. |
Documents received electronically
or otherwise will be put on the Commission’s web site in their entirety
exactly as you send them, including any personal information contained
therein, in the official language and format in which they are received.
Documents not received electronically will be available in PDF format.
|
153. |
The personal information you
provide will be used and may be disclosed for the purpose for which
the information was obtained or compiled by the Commission, or for
a use consistent with that purpose. |
154. |
To ensure effective use of
time at the public hearing, the Commission may use a written question
process, prior to the commencement of the oral hearing, to obtain
additional information from those who have filed written submissions.
The questions and answers will form part of the public record and
may be consulted by other interested parties. Interested parties are
therefore encouraged and expected to monitor the content of the public
examination files. |
|
Examination of public
comments and related documents at the following Commission offices
during normal business hours |
|
Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage, Room 206
Gatineau, Quebec K1A 0N2
Tel: (819) 997-2429 - TDD: 994-0423
Fax: (819) 994-0218 |
|
Metropolitan Place
99 Wyse Road
Suite 1410
Dartmouth, Nova Scotia B3A 4S5
Tel: (902) 426-7997 - TDD: 426-6997
Fax: (902) 426-2721 |
|
205 Viger Avenue West
Suite 504
Montréal, Quebec H2Z 1G2
Tel: (514) 283-6607 |
|
55 St. Clair Avenue East
Suite 624
Toronto, Ontario M4T 1M2
Tel: (416) 952-9096 |
|
Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba R3B 2B3
Tel: (204) 983-6306 - TDD: 983-8274
Fax: (204) 983-6317 |
|
Cornwall Professional Building
2125 - 11th Avenue
Room 103
Regina, Saskatchewan S4P 3X3
Tel: (306) 780-3422 |
|
10405 Jasper Avenue
Suite 520
Edmonton, Alberta T5J 3N4
Tel: (780) 495-3224 |
|
530-580 Hornby Street
Vancouver, British Columbia V6C 3B6
Tel: (604) 666-2111 - TDD: 666-0778
Fax: (604) 666-8322 |
|
Secretary General |
|
This document 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
|
|
1.The
Radio Market Policy was a test to determine if a market could sustain
the entry of a new radio station, based on the profitability of the
existing stations in that market. |