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Broadcasting Decision CRTC 2005-248
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Ottawa, 16 June
2005 |
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CHUM Limited, on behalf of a
corporation or a partnership to be established
Across Canada |
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Application 2004-0133-1
Public Hearing in the National Capital Region
1 November 2004 |
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Terrestrial subscription radio undertaking
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The Commission approves
an application by CHUM Limited on behalf of a corporation or a
partnership to be established (CHUM/Astral), for a broadcasting licence
to operate a terrestrial subscription radio undertaking. The undertaking
will provide 50 radio programming channels, all produced in Canada. A
minimum of 20% of the channels will be in the French language. |
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The applicant indicated that
transmission facilities for the service would initially be built in
Montréal, Québec; Toronto, Ottawa and Hamilton, Ontario; and Vancouver,
British Columbia, and that facilities would be erected in additional
communities as the licence term progressed. |
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The CHUM/Astral application
was one of three applications for subscription radio undertakings
considered at the 1 November 2004 public hearing. The Commission’s
general approach to these applications is set out in Introduction
to Broadcasting Decisions CRTC 2005-246 to 2005-248: Licensing of
new satellite and terrestrial subscription radio undertakings,
Broadcasting Public Notice CRTC 2005-61,
of today’s date. |
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The application
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1. |
The Commission received an
application by CHUM Limited, on behalf of a corporation or a partnership
to be established (CHUM/Astral), for a broadcasting licence to operate a
terrestrial subscription radio undertaking. Pursuant to the terms of a
Memorandum of Understanding (MOU) entered into with Astral Media Radio
inc. (Astral) filed on 15 September 2004, CHUM will hold an 80.1%
interest in CHUM/Astral and the remaining 19.9% will be held by Astral.
Under the terms of the MOU, Astral has the right to increase its
position in CHUM/Astral to 50%.1
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2. |
The undertaking would initially
provide 50 radio channels, all produced in Canada, which would be
available to subscribers at a monthly rate of $9.95. Ten (20%) of the
channels would be in the French language. The applicant stated that all
of the channels would be Canadian-produced and would generally fulfil
requirements for Canadian musical selections and French-language vocal
musical selections comparable to those that apply to conventional radio
stations. The applicant further proposed to increase the number of
channels offered from 50 to 100 in the fourth year of operation. |
3. |
The applicant stated that the
channels offered by the undertaking would be delivered using
over-the-air transmitters, most of which would broadcast in the L-Band,
which is the spectrum currently used for digital audio broadcasting
(DAB). However, some of the channels would be transmitted in the 5 MHz
of spectrum that is adjacent to the L-Band, which is currently allocated
to certain non-broadcasting services. Subscribers would access the
service using specially-designed receivers that would be available for a
subsidized price of less than $100. CHUM/Astral envisaged a $50.00
receiver subsidy in the launch phase of the service, falling to $25.00
when the volume of receiver sales begins to rise. At the hearing, a
British company, Radioscape, stated that, in its view, an affordable
receiver with a conditional access capability could be brought to the
Canadian market within six to twelve months. The receivers would also be
capable of receiving free over-the-air DAB service. The applicant stated
that it would work closely with local broadcasters to help advance the
launch of conventional over-the-air DAB services where they do not exist
so that the launch of such services could coincide with the launch of
the CHUM/Astral service. |
4. |
CHUM/Astral indicated that,
during the first phase of the roll-out of the service, transmission
facilities for single frequency networks would be built in five cities:
Montréal (Quebec), Ottawa, Toronto and Hamilton (Ontario) and Vancouver
(British Columbia). As the licence term progressed, additional
transmission facilities would be constructed to serve other areas,
including St. John’s (Newfoundland and Labrador), Charlottetown (Prince
Edward Island), Halifax (Nova Scotia), Saint John (New Brunswick),
Gatineau, Québec, Sherbrooke and Trois-Rivières (Quebec), Kingston,
Kitchener and Guelph, London, Windsor, Oshawa, Barrie and St. Catharines/Niagara
(Ontario), Winnipeg (Manitoba), Saskatoon and Regina (Saskatchewan),
Calgary and Edmonton, later expanded to include Red Deer and communities
between Calgary and Edmonton (Alberta), and Victoria and the Fraser
Valley (British Columbia). The applicant indicated that if the
Commission were to issue a licence to CHUM/Astral and one of the
applicants for a satellite subscription radio undertaking under
equitable terms and conditions, it would establish enough transmitters
so that the programming provided by the undertaking would be available
to 60% of the Canadian population by the end of the licence term. The
number of transmitters would be increased so that 75% of the population
would be reached by the end of the first licence term if the Commission
were to decide to licence CHUM/Astral as the sole provider of
subscription radio service. This additional 15% would be accomplished by
adding transmitters in some 50 smaller communities across Canada. In
addition, the applicant stated that it would try to accelerate the
implementation of service in certain Quebec communities, including
Québec, Sherbrooke, Trois-Rivières, and Gatineau. |
5. |
The CHUM/Astral application
was one of three applications for subscription radio undertakings
considered at the 1 November 2004 public hearing. The Commission’s
general approach to these applications including a licensing framework
for satellite subscription radio undertakings, is set out in Introduction
to Broadcasting Decisions CRTC 2005-246 to 2005-248: Licensing of
new satellite and terrestrial subscription radio undertakings,
Broadcasting Public Notice CRTC 2005-61,
of today’s date (Public Notice 2005–61). |
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Interventions
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6. |
The Commission received more
than 60 interventions supporting and commenting on this application.
Interventions addressing policy issues associated with the licensing
of subscription radio undertakings are discussed in Public Notice
2005-61, and
interventions raising issues particular to the CHUM/Astral application
are discussed in the relevant sections of this decision. |
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The Commission’s analysis and determinations
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Number of Canadian-produced channels
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7. |
CHUM/Astral proposed to launch
the undertaking with 50 channels, all of which would be
Canadian-produced. Ten of the channels would be French-language
channels, and the undertaking would also offer five other channels, one
each for the Aboriginal, Chinese, German, Italian, and South Asian
communities. The undertaking would provide several radio channels in a
variety of music formats, including hit oriented, adult contemporary and
oldies, urban, rock, alternative rock, country, classical, jazz and
blues, dance, as well as channels featuring independent music, new
music, ambient music and sounds, children’s music and comedy. The
applicant further indicated that no more than 10% of the programming
broadcast on any of the English- or French-language channels would
consist of programming that was originally broadcast on over-the-air
radio stations. A condition of licence to this effect is set out
in the appendix to this decision. |
8. |
The applicant indicated,
however, that more of the programming on channels in languages other
than English or French could come from existing radio licensees. The
applicant considered that this would allow listeners that reside outside
the markets that these stations now serve to have access to their
programming. |
9. |
The applicant further indicated
that it would rebroadcast the audio portion of some specialty television
services. The Commission expects the licensee to make only limited use
of this programming, and will examine whether specific measures limiting
the rebroadcast audio material from specialty television services are
appropriate at the time that it considers an application to renew the
licence for this undertaking. The Commission reminds the applicant that
network licences would be required in those cases where programming from
a programming undertaking owned by another licensee was rebroadcast
simultaneously on one or more of the channels offered by the CHUM/Astral
undertaking. |
10. |
CHUM/Astral further proposed to
increase the number of channels offered in year four of operations. The
applicant indicated that, if the CHUM/Astral application were the sole
application for a subscription radio undertaking that was approved, all
of the additional channels would be Canadian-produced. The applicant
indicated that the actual composition of the additional channels would
depend, to some extent, on whether or not the Commission licensed one or
more satellite subscription radio undertakings and the regulatory
framework under which subscription radio services would operate.
CHUM/Astral was of the view, however, that approximately 30 of the
additional channels could consist of spoken word programming such as a
wilderness channel, a lifestyle channel and a book channel. |
11. |
Given the uncertainty
surrounding the content of the 50 additional channels, and in light of
the Commission’s decision to approve not only the CHUM/Astral
application but also the two applications for satellite subscription
radio undertakings, the Commission considers that it is appropriate to
authorize CHUM/Astral to offer 50 channels at the outset under the terms
and conditions set out in this decision. The Commission will be prepared
to consider an application to expand the number of channels offered once
CHUM/Astral is able to provide more complete plans concerning the
content of the additional channels and whether or not they will be
Canadian-produced. |
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Canadian content
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12. |
As indicated earlier, the
applicant made a commitment that all 50 channels would be Canadian
produced. A condition of licence to this effect is set out in the
appendix to this decision. |
13. |
The applicant further indicated
that each channel would fulfil weekly requirements for levels of
Canadian music comparable to those that apply to conventional radio
stations. Under the terms of the Radio Regulations, 1986 (the
Regulations), radio licensees, subject to conditions of licence, must
devote, during each broadcast week, at least 35% of musical selections
from content category 2 (Popular Music), at least 10% of musical
selections from content category 3 (Special Interest Music) and at least
7% of musical selections played during ethnic programming periods to
Canadian musical selections. The Commission further allows "oldies"
stations, by condition of licence, to devote 30% of musical selections
from content category 2 to Canadian selections, in light of the more
limited availability of Canadian music appropriate to the format.
Conditions of licence setting out these requirements are set out in
the appendix to this decision. |
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French-language channels
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14. |
The applicant proposed that 10
channels, or 20% of the 50 channels offered, would be French-language
channels. |
15. |
The French-language channels
would include channels featuring hit-oriented music (Palmarès, Musique
Plus-Radio, Radio Émergence), adult contemporary and oldies (Doux
Frissons, Les immortels, Pop 60), Rock (Québec Rock) classical (Classique)
Comedy (Franco-Fun) and children’s programming (La zone des petits).
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16. |
The applicant proposed that all
of the French-language music-oriented channels, with the exception of
Palmarès and Radio Émergence, would devote at least 65% of the category
2 vocal musical selections broadcast each week to French-language
selections, in accordance with the minimum levels set out in the
Regulations. Specifically, the applicant proposed that all music
broadcast on Québec Rock would consist of French-language selections and
all programming on Franco-Fun would be in French. For Palmarès and Radio
Émergence, the applicant proposed to broadcast a 50% level of
French-language vocal music selections. The applicant noted that
Palmarès would program current hit songs in various musical niches and
genres that are not well-served by conventional radio, and Radio
Émergence would be devoted to the presentation of new music. The
applicant considered that the availability of French-language music
appropriate for these channels was insufficient for them to broadcast a
65% level of French-language vocal music and still provide channels that
would be attractive to younger listeners. At the hearing, the applicant
indicated that it would accept a condition of licence requiring that at
least 65% of the category 2 vocal musical selections broadcast on all of
its French-language channels, considered together, be French-language
selections. A condition of licence to this effect is set out in
the appendix to this decision. |
17. |
At the hearing, the Association
québécoise de l’industrie du disque du spectacle et de la vidéo (ADISQ)
submitted that 10 French-language channels, or 20% of the total channels
offered, was insufficient and would not be enough to ensure that the
CHUM/Astral undertaking provided a sufficient diversity of
French-language musical content. ADISQ noted that the proposed 20% level
of French-language channels was below the 25% level required of pay
audio services. |
18. |
The Commission notes that the
applicant originally proposed to distribute five French-language
channels, but later increased the number of French-language channels to
10. The Commission considers that it is reasonable for the undertaking
to offer 10 French-language channels at the outset. Earlier in the
decision, the Commission indicated that it would be prepared to consider
an application by CHUM/Astral to increase the number of channels that it
offers when CHUM/Astral is able to provide more complete plans
concerning the content of the additional channels. The Commission
considers that it would be appropriate to review the percentage of
French-language channels offered at that time. A condition of licence
with respect to the percentage of French-language channels that must be
offered is set out in the Appendix to this decision. |
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New Canadian music
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19. |
CHUM/Astral proposed that a
minimum of 50% of the musical selections on albums by English-Canadian
artists that have been released and marketed in the previous six months
would receive airplay on its English-language channels, and a minimum of
50% of the musical selections on albums by French-Canadian artists that
have been released and marketed in the previous six months would receive
airplay on its French-language channels. |
20. |
The Commission considers that
this initiative will increase the variety of Canadian music available in
the Canadian broadcasting system and expects the applicant to fulfil its
commitments in this regard. |
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Canadian talent development
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21. |
CHUM/Astral made a commitment
to devote 2% of annual revenues from the new subscription radio service
to Canadian talent development (CTD). Based on the applicant’s
projections, this percentage commitment would translate to a total of
$8.3 million to CTD over a seven-year licence term. 75% of the money
would be allocated to initiatives supporting Canadian English-language
talent, and 25% would go to initiatives supporting Canadian
French-language talent. |
22. |
The money would be divided
equally among three types of initiatives, with one-third going to Fund
to Assist Canadian Talent on Record (FACTOR) or MusicAction and
one-third going to the Starmaker Fund or Fonds RadioStar. Most of the
remaining third would go to other qualifying third-party initiatives
designed for CTD, however, the applicant proposed that 10% of this
amount would be used to finance recordings by artists of alternative
versions of their existing recordings in different musical styles as a
means to expand the artists’ appeal. |
23. |
At the hearing, the Commission
discussed with the applicant why it had proposed to devote 2% of annual
revenues to CTD, given that the two applicants for satellite radio
undertakings had proposed higher percentages. In reply, CHUM/Astral
noted that its proposal, which was entirely reliant on the construction
of terrestrial facilities, required greater capital expenditures than
the proposed satellite undertakings. CHUM/Astral further noted that its
channels would have much higher overall Canadian content levels than the
satellite undertakings and would therefore make a greater contribution
to Canadian artists in the form of providing airplay for their
recordings. As well, the applicant noted that it would program 50 and,
ultimately, 100 Canadian channels, versus the 5 Canadian channels
originally proposed by the satellite applicants, so its programming
expenses would be much higher. |
24. |
The Commission considers that
CHUM/Astral’s proposal for CTD is acceptable and has included a
condition of licence in the appendix to this decision requiring it
to fulfil its commitments. The condition of licence further requires the
licensee to file annual reports on the fulfilment of its CTD commitments
by setting out the initiatives that have been financed and the amount of
money spent on each initiative, as well as the total amounts devoted to
French-language and English-language talent. |
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Local programming
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25. |
CHUM/Astral indicated that,
although it would draw some of its programming from existing radio
stations, none of the programming that was broadcast on the proposed
undertaking would consist of local surveillance information or other
programming designed specifically for a particular geographic community
or locality. A condition of licence to this effect is set out in
the appendix to this decision. |
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Commercial messages
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26. |
The applicant indicated that no
commercial messages would be broadcast by the proposed undertaking. A
condition of licence to this effect is set out in the appendix to
this decision. |
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Responsibility for programming
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27. |
The applicant indicated that it
would be responsible for all programming broadcast on the undertaking,
and stated that, if licensed, it would become a member of the Canadian
Broadcast Standards Council (CBSC). |
28. |
The Commission has included, in
the appendix to this decision, a condition of licence that
requires the applicant to adhere to sections 3, 6, 8(1) to 8(6), 9, 10,
10.1 and 11 of the Regulations. |
29. |
The Commission is further
imposing a condition of licence requiring adherence to the
Sex-Role Portrayal Code for Television and Radio Programming, as
amended from time to time and approved by the Commission. In accordance
with the Commission’s practice, this condition will be suspended as long
as the licensee is a member in good standing of the CBSC. |
30. |
In the event that CHUM/Astral
should decide to broadcast open line programming, the Commission expects
it to adhere to the Commission’s Policy regarding open-line
programming, Public Notice CRTC 1988-213, 23 December 1988. |
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Employment equity
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31. |
The Commission considers that it is
appropriate for CHUM/Astral to include its employment equity initiatives
related to the proposed undertaking with the employment equity plan in
place for CHUM, its majority shareholder. Because CHUM and Astral are
subject to the Employment Equity Act and file reports concerning
employment equity with the Department of Human Resources and
Skills Development, its employment equity practices are not examined by
the Commission. |
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Cultural diversity
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32. |
At the hearing, the applicant
indicated that it was exploring potential programming projects with
Aboriginal Voices Radio (AVR), including the rebroadcast of AVR’s
programming as part of the proposed undertaking’s Aboriginal channel.
The applicant also noted that it would distribute channels targeting the
Chinese, German, South Asian and Italian communities. The Commission
encourages the applicant to implement cultural diversity initiatives.
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Conclusion
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33. |
The Commission approves
the application by CHUM Limited on behalf of a corporation or a
partnership to be established. It will issue a broadcasting licence
expiring 31 August 2011 to operate a terrestrial subscription radio
undertaking subject to the conditions set out in the appendix to
this decision. |
34. |
The CHUM/Astral undertaking is
authorized to operate single frequency networks to serve the areas of
St. John’s (Newfoundland and Labrador), Charlottetown (Prince Edward
Island), Halifax (Nova Scotia), Saint John (New Brunswick), Gatineau,
Montréal, Québec, Sherbrooke, Trois-Rivières (Quebec), Barrie, Oshawa,
Hamilton, Kingston, Kitchener/Guelph, London, Ottawa, St. Catharines/Niagara,
Toronto, Windsor (Ontario), Winnipeg (Manitoba), Regina, Saskatoon
(Saskatchewan), Calgary, Edmonton, Red Deer (Alberta), Vancouver, the
Fraser Valley, Victoria (British Columbia), as described in, and
according to the technical parameters set out in the approved
application. |
35. |
The Commission reminds the applicant that,
pursuant to section 22(1) of the Broadcasting Act, no licence may
be issued until the Department of Industry (the Department) notifies the
Commission that its technical requirements have been met, and that a
broadcasting certificate will be issued. The technical requirements are
set out in Annex 2 of the Department’s letter to the Commission and
copied to the applicant entitled Issuance of technical broadcasting
certificates for applications authorized to provide subscription radio
services, 21 September 2004. CHUM/Astral must also provide the
Commission with a copy of all technical submissions, including coverage
maps, that it sends to the Department. |
36. |
The licence for this undertaking will be
issued once |
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- the Commission receives confirmation of the CHUM/Astral ownership
structure, i.e. whether it involves incorporation of a new corporation
or establishment of a partnership of the new licensee comprised of
CHUM (80.1%) and Astral (19.9%). If the new licensee is a duly
incorporated corporation, the licence will be issued to this
corporation. If the new licensee is a partnership, the licence will be
issued to the partners;
- the Commission receives all documentation supporting the
licensee’s ownership structure (where applicable, Certificate of
Incorporation, Articles of Incorporation, By-laws, Unanimous
Shareholders Agreement, Partnership Agreement, composition of the
Board of Directors, etc.);
- CHUM/Astral demonstrates that the licensee is a qualified
corporation pursuant to the Direction to the CRTC (Ineligibility of
Non-Canadians); and
- the applicant has informed the Commission in writing that it is
prepared to commence operations.
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37. |
The Commission notes that the applicant
proposed to begin operating the undertaking in a limited number of
centres and expand the number of communities that it serves as the first
licence term progresses. The undertaking must commence operations at the
earliest possible date and in any event no later than 24 months from the
date of this decision, unless a request for an extension of time is
approved by the Commission before 16 June 2007. In order to ensure that
such a request is processed in a timely manner, it should be submitted
at least 60 days before this date. |
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Secretary General |
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This decision is to be appended to the
licence. It is available in alternative format upon request, and may
also be examined in PDF format or in HTML at the following Internet
site: http://www.crtc.gc.ca
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Appendix to Broadcasting Decision CRTC 2005-248
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Conditions of licence for the terrestrial subscription radio
undertaking operated by CHUM Limited and Astral Media Radio Inc.
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1. The licensee shall distribute 50 audio channels, all of which
must be produced in Canada.
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2. A minimum of 20% of the audio channels offered at any time must
be French-language channels.
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3. A maximum of 10% of the programming distributed each week on a
French-language or English-language channel may consist of programming
that was originally broadcast on licensed A.M. or F.M. stations.
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4. (1) For the purposes of this condition, "ethnic programming
period" means that portion of a broadcast week during which a
licensee broadcasts ethnic programs.
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(2) For the purposes of this condition, "Canadian selection"
means a musical selection
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(a) that meets at least two of the following conditions,
namely,
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(i) the music is or lyrics are performed principally by a
Canadian,
(ii) the music is composed entirely by a Canadian,
(iii) the lyrics are written entirely by a Canadian,
(iv) the musical selection consists of a live performance
that is
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(A) recorded wholly in Canada, or
(B) performed wholly in and broadcast live in Canada, and
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(v) 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 fifty per cent of the credit as
composer and lyricist according to the records of a recognized
performing rights society;
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(b) that is an instrumental performance of a musical composition
that meets the conditions set out in subparagraph (a)(ii) or (iii);
(c) that is a performance of a musical composition that a
Canadian has composed for instruments only; or
(d) that has already qualified as a Canadian selection under
regulations previously in effect.
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(3) The licensee shall, in a broadcast week, devote 10% or more of
its musical selections from content category 3 broadcast on each
channel to Canadian selections and schedule them in a reasonable
manner throughout each broadcast day.
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(4) Where 7 % or more of the musical selections broadcast by the
licensee on any channel during an ethnic programming period are
Canadian selections and are scheduled in a reasonable manner
throughout that period, condition of licence 4(6) shall apply only in
respect of those musical selections that are broadcast on that channel
during that part of the broadcast week that is not devoted to ethnic
programs.
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(5) The licensee may on any channel in a broadcast week, reduce the
percentage of its Canadian musical selections from content category 2
referred to in condition of licence 4(6) to
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(a) not less than 20% if, in that broadcast week, the licensee
devotes 35% or more but less than 50% of all its musical selections
to instrumental selections; and
(b) not less than 15% if, in that broadcast week, the licensee
devotes 50% or more of all its musical selections to instrumental
selections.
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(6) The licensee shall, on each channel, in a broadcast week,
devote 35% or more of its musical selections from content category 2
to Canadian selections broadcast in their entirety and schedule them
in a reasonable manner throughout each broadcast day.
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(7) For the purpose of this condition of licence, a montage is
deemed to be a Canadian selection broadcast in its entirety if
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(a) the total duration of the excerpts of Canadian selections
from content category 2 is greater than 50% of the total duration of
the montage; and
(b) the total duration of the montage is four minutes or more.
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(8) The licensee shall, as an exception to the percentage of
Canadian musical selections set out in condition of licence 4(6)
above, on a channel where at least 90% of the musical selections from
content category 2 that it broadcasts are selections released before 1
January 1981:
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in that broadcast week, devote 30% or more of its musical
selections from content category 2 to Canadian selections
broadcast in their entirety.
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For purposes of this condition, the
licensee will also be responsible for specifying, on the music lists it
provides to the Commission, the year of release for all musical
selections it broadcasts. |
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5. The licensee shall, on its French-language channels, considered
together, in each broadcast week, devote 65% or more of its vocal
music selections from content category 2 to musical selections in the
French language and schedule them in a reasonable manner throughout
each broadcast day.
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For the purpose of this condition, a montage is deemed to be a
musical selection in the French language broadcast in its entirety if
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(a) the total duration of the excerpts of vocal musical
selections in the French language in content category 2 is greater
than 50% of the total duration of the montage; and
(b) the total duration of the montage is four minutes or more.
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6. During each broadcast year, the licensee shall contribute a
minimum of 2% of gross annual revenues to Canadian talent development,
as described in this decision. Three-quarters of the total amount
shall be devoted to initiatives to support Canadian English-language
talent and the remainder shall be devoted to initiatives to support
Canadian French-language talent. The licensee shall file reports on
its fulfilment of its commitments with respect to Canadian talent
development with each annual return. The report shall set out the
initiatives that the licensee has supported, the amount of money spent
on each initiative, as well as the total money devoted to Canadian
English-language and French-language talent.
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7. The licensee shall not broadcast any local surveillance
information or other programming designed specifically for a
particular geographic community or locality.
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8. The licensee shall not broadcast any commercial messages.
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9. The licensee shall adhere to sections 3, 6, 8(1) to 8 (6), 9,
10, 10.1 and 11 of the Radio Regulations, 1986.
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10. The licensee shall adhere to the guidelines on gender portrayal
set out in the Canadian Association of Broadcasters’ (CAB) Sex-Role
Portrayal Code for Television and Radio Programming, as amended
from time to time and approved by the Commission. The application of
the foregoing condition of licence will be suspended as long as the
licensee is a member in good standing of the Canadian Broadcast
Standards Council.
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11. For the purposes of all of the conditions of licence set out
above, the terms "A.M. station," "broadcast day," "broadcast week,"
"commercial message," "content category," "content subcategory,"
"ethnic program," "F.M. station," "licensed," "montage," and "musical
selection," shall have the meaning set out in section 1 of the
Radio Regulations, 1986. All times shall be determined according
to the Eastern time zone.
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Footnote:
The
Commission notes that the Commission’s prior approval would be required
in the event Astral were to decide to exercise its option to increase
its ownership position in CHUM/Astral. |
Date Modified: 2005-06-16 |