Speech
Notes for an address
by Andrée Wylie
Vice-Chairperson, Broadcasting
Canadian Radio-television and
Telecommunications Commission
to the Atlantic Association of Broadcasters
Annual Conference
Summerside, Prince Edward Island
September 11, 1999
(CHECK AGAINST DELIVERY)
Introduction
It is indeed a pleasure to be back in the Maritimes to address the Atlantic Association
of Broadcasters. Thank you for inviting me for a second time to attend your annual
meeting. I am honored, since I can’t remember being particularly entertaining last
year.Moreover, I was probably very tense since, but a few weeks into my Vice-Chairmanship,
I had to respond to your questions on our then recently issued revised radio policy…
not exactly a Comedy Network subject at the time.
Today, I would like to review what we have accomplished of particular interest to you
since last year.
First, I will address how we have handled, and are handling, with your suggestions and
cooperation, the implementation of our revised radio policy.
Secondly, I will comment on our new media decision and the reasons underlying it.
Thirdly, I will talk to you about our recently issued revision of the television
policy.
However, now that I have been Vice-Chair – Broadcasting for a whole year, I feel a
little bolder and will claim some successes for the CRTC. In fact, I want to brag about
our ability to meet the following objectives in dealing with the three areas I have
already identified.
- Regulation only where necessary to meet our legislative mandate.
- Regulation, where deemed necessary, that is flexible and no more onerous than required
to reach our goals.
- Regulation that is implemented in a manner responsive to the industry’s legitimate
need for certainty, flexibility and timeliness, without jeopardizing the transparency and
procedural requirements that are important attributes for a regulatory agency.
The new environment
We all know that the broadcasting industry as a whole may look very different in the
near future. Technological developments, globalization, and business consolidation are
driving the pace of change, and redefining the role of broadcasters. We have seen the
introduction of new ways of broadcasting, such as digital radio. Direct-to-home and
multi-point distribution systems are offering consumers alternatives to cable.
Distributors, producers, and broadcasters are merging and consolidating. And while the
industry consolidates, audiences are fragmenting.
As broadcasters, you are aware of the trends and you must respond to the new business
environment or fail. As the regulator, the CRTC must also keep up with the pace of change
so that Canada is able to compete effectively in the evolving world of communications.
That’s why we have reviewed our major policies on radio and television, and made a
clear statement on new media. Our aim in conducting these reviews has been to look at our
policies to make sure that we only regulate where necessary to achieve the objectives of
the Broadcasting Act and, where we regulate, that we do it in the most flexible manner
possible.
To develop and implement our three-year strategic plan for 1997-2000, we held extensive
consultations on various subjects and tried to answer a number of key questions. For
example, when is it advisable to regulate new technology like the Internet? Can we
regulate some media and not regulate others? In a time of media concentration, what is the
best way to serve Canadians living in small markets and in the remotest regions of the
North? How can we guarantee that broadcast content will reflect and deal with the issues,
the concerns and the culture of citizens in all regions of Canada?
We have found some answers, but new questions and concerns continue to arise. To answer
them, the Commission is already developing its new action plan for 2000-2003, which we
will release next March. Our vision has not changed. We are now setting our priorities for
the next three years. And to do that, we still need your help.
We appreciate your help and make no mistake about it, we listen to your comments as
well as those of the other participants and consider them carefully when we develop our
policies. I can’t stress enough how important this is to our decision making.
Our greatest resource in the effort to make Canada a world leader in communications is
the ability, acumen, and imagination of our broadcasters, producers, and creative talent.
As for us, with technology changing, with relationships shifting, and with public
expectations evolving, we must move along a continuum from detailed regulation to broader
parameters wherever possible.
We must be much more focused on promoting the opportunity for Canadians to build on
their successes in the changing communications landscape. We know that Canadians can
thrive in the new more competitive environment.
And now for the bragging…
Radio policy
On April 30, last year, the CRTC issued its revised radio policy. It was intended to
place Canada’s radio industry in a stronger position to adapt and flourish in the
changing communications environment. It was intended at the same time to strengthen
radio’s acknowledged ability to help ensure a well-developed indigenous music
industry by requiring the increased airing of selections of Canadian music when more
Canadians are listening. The industry expressed concerns with the new radio policy, but
consider the encouraging signs of growth in the industry.
- The industry’s 1998 total revenues increased by 8 %;
- AM radio achieved revenue growth of 2 % in 1998, after years of negative growth;
- FM radio in Canada has reported an impressive 11 % growth in total revenues in 1998;
- At recent public hearings, radio broadcasters and industry representatives have outlined
the strong continued revenue growth expected in 1999 and beyond.
Even more important is the improvement to the bottom line of broadcasters: radio profit
margins before interest and taxes increased to over 14 % in 1998 for the industry. In 1998
– for the first time in years – the profit margins for radio were higher than
for the TV industry.
Of course, meeting the 35 % Canadian content requirement remains a challenge. But we
know you can achieve it and that you will work at it, innovating and rethinking old ways
where necessary, hand in hand with the music industry.
The relaxation of multiple ownership restrictions in the new radio policy has led to
numerous applications for transfers, as well as for new radio undertakings, and for flips
from AM to FM in markets across Canada. The willingness of both existing broadcasters and
new entrants to apply for new radio undertakings is a testament to the renewed vigor and
interest in the radio industry.
Calls for radio applications: process streamlined
We have received approximately 67 applications since the revised radio policy was
issued of new radio licences, AM to FM conversions or transfers of ownership. 16 calls for
applications have been issued. 29 applications have been published on the agenda of 8
different public hearings. Of the 17 transfer applications received, involving some 33
markets, 15 have already been approved. 11 were dealt with without public appearance and 4
administratively. We are, like you, struggling with implementation issues:
- When do we issue a call for applications?
- How do we accelerate the application process, given our limited resources and the strain
on them during the transition period?
How much certainty can we provide the industry with respect to our likely procedure in
dealing with applications, as we develop a framework for dealing with the multiple
applications triggered by our new policy and the renewed vigor of the radio industry?
We looked at whether it is necessary to initiate a call for applications every time the
Commission receives a proposal. Not only did we establish criteria to determine when
applications would not generally result in a call, we published them to help applicants
understand when a call is likely to be issued.
In response to the feedback we received from you, we have also given applicants the
chance to argue against a call and the opportunity to withdraw their application if we
determined that a call is warranted.
Your suggestions have led to increased flexibility in dealing with applications
generated in large part by the relaxation of our multiple ownership rules in radio. Keep
sending them. We are listening and will respond where they improve flexibility and
timeliness without jeopardizing our responsibilities and without requiring changes to the Broadcasting
Act.
New media
The CRTC is one of the world’s first regulators to clarify its position on the
Internet. We felt that we had the responsibility to examine the effect of important new
technologies that touch on the two main industries we regulate: broadcasting and
telecommunications.
Clearly, Canadians had something to say on the subject, and the Commission was never
more popular than during its public hearing on new media. The interest taken in this
hearing showed how important it was for the Commission to promote dialogue and to
determine whether regulating the Internet, partially or totally, was part of its mandate
and whether it was necessary.
Essentially, the CRTC decided not to regulate the Internet. It choose to adopt an
approach of "non-interference" in the Internet, because it did not consider that
regulating the new media would make it possible to achieve the objectives of the Broadcasting
Act for the moment. We agreed that because of its creativity, entrepreneurship and
passion, the new media industry should be authorized to innovate and grow without
intervention or regulation.
Well, how did we come to this decision?
Since most of the material on the Internet is presently alphanumeric text, it cannot be
defined as broadcasting. Material which is significantly customizable, is also not
considered broadcasting. And although some audio and visual products and services carried
on the Internet are indeed broadcasting, we considered that, at the moment, they are not a
substitute for radio and television, but rather complements to these two mediums. We
therefore decided to exempt such services from licensing and regulation. We believe that
Canada’s new media environment will attract investment to the broadcasting and
telecommunications industries and their new media partners more easily if unfettered by
unnecessary regulatory intervention.
TV policy
The CRTC must also ensure that Canada has the best possible environment for the
continued success of its television industry. As you are all well aware, last June, the
CRTC announced a new policy for Canadian television. And like the other policies I have
bragged about, this policy too, reflects the Commission’s desire to remove
unnecessary regulation and provide greater flexibility to build on successes. We intend to
rely on the strength of the major private television networks to rejuvenate Canada’s
programming industry and increase the visibility of our homegrown talent.
The new policy recognizes the ownership changes that have taken place in Canada and
allows greater flexibility in meeting licensing and regulatory requirements.
The Commission has divided Canadian broadcasters into two main categories:
- Groups that reach over 70% of the audience in one of the two official languages and that
broadcast in several Canadian provinces, such as CTV, Global, WIC, and TVA; and
- Groups or broadcasters that reach less than 70% of the audience and have a more limited
broadcast area, including CHUM, Craig and TQS.
First, in recognition of the concentration of a number of stations under common
ownership, we have made a commitment to group licensing. It will allow for proposals for
the group, as well as for individual stations, to be put forward at the same time.
Secondly, we have abandoned the use of expenditures as a mechanism to measure Canadian
content performance. Our decision was informed by the growing complexity of such a measure
in the changing landscape, the burden it imposes on broadcasters and the Commission, as
well as the lower level of flexibility it permits.
The definition of prime time "priority" programming has been broadened to
include documentaries of 30 minutes or more, as well as regional programs — other
than news and sports — and programs that promote Canadian talent. Promotional
programming has proved successful in Quebec to encourage a "star system", which
has, in turn, built interest and support for domestic productions. We must strive to
duplicate this success for English television.
The CRTC will require major networks — CTV, Global, WIC, and TVA — to
broadcast 8 hours per week of priority programming during prime time. However, we have
broadened the time frame of what is considered prime time, in response to requests by
broadcasters. Also, in our continuing effort to ensure that we regulate only when
necessary, local newscasts will no longer be required by regulation.
Of course, we will be closely monitoring how broadcasters respond.
The CRTC has also established a new incentive for broadcasters to air Canadian drama
during prime time. Since drama is the most expensive genre to produce, a 150% credit will
apply to dramas that meet 100% of the Canadian content criteria. A 125% credit will apply
to those that meet 60% of those criteria.
We will continue to ensure that the level of Canadian content is maintained. That is
required by the Broadcasting Act. But we also know that broadcasters know their
audiences, and they have the possibility of building and broadcasting their own
images.Through greater flexibility, the quality of Canadian programming should attract a
larger number of viewers and satisfy a greater variety of tastes.
In my view, this represents increased opportunities here in the Maritimes, for both
broadcasters to remain competitive globally and for producers to build on their past
successes in creating programs that all Canadians may want to watch.
With these changes, the broadcast industry is in an excellent position to work with us,
hand in hand with the creative community, and ensure that the public is being well served.
The new TV policy acknowledges the important role that broadcasters play in meeting the
goals set by the CRTC. We have every confidence that broadcasters will respect the intent
of the new policy and will take very seriously their obligation to meet its requirements.
Conclusion
Et Voilà! These are some of the broad strokes of our recent activities that I feel we
can be proud of. As the regulator, I think that it’s fair to say that we have
responded at least to some of your concerns.
We’ve made changes to our procedures, streamlined and deregulated where possible
to allow you the flexibility to compete in a faster and ever-changing market place.
To do this, we have relied on your input. No doubt, as the industry continues to grow
and evolve, the CRTC and Canadian broadcasters will face many other challenges together.
Your contribution is valued.
We need your help. And when you have alternatives to regulation that still allow us to
meet our obligations to the broadcast industry, to society, and to individual Canadians,
we want to hear them. So please, keep talking to us.
And of course, I look forward to joining you next year.
Thank you.
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Contact: Denis Carmel, Ottawa, Ontario K1A 0N2
Tel.: (819) 997-9403, TDD: (819) 994-0423, Fax: (819) 997-4245
e-mail: denis.carmel@crtc.gc.ca
Toll-free # 1-877-249-CRTC (2782)
This document is available in alternative format upon request.
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