INTRODUCTION
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1. In Public Notice CRTC 1997-104
dated 1 August 1997 and entitled A Review of the Commissions
Policies for Commercial Radio, the Commission announced
that it would hold a public hearing, beginning on 1 December
1997, to review its policy framework for commercial radio.
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2. The Commission received written submissions from 58 parties
in response to its call for comments contained in that public
notice. Thirty-two parties appeared during the hearing to elaborate
on their comments and suggestions. The Commission thanks all
who filed comments for the thoughtfulness and quality of their
submissions. They have assisted the Commission greatly in its
deliberations.
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3. As indicated in the Commission's 1997 Vision Statement,
the Commission manages a delicate balance between achieving
various social and cultural objectives and ensuring an economically
strong and competitive communications industry. The Commission
considers that its policy framework for commercial radio should
focus on enhancing the access that Canadians have to Canadian
music and other programming reflective of their communities
and their country. A strong and competitive radio industry is
vital to the achievement of this goal. As radio moves toward
digital transmission and increased competition, it is important
that it retain the flexibility to respond to these and other
challenges if it is to continue to make its important contribution
to the goals set out in the Broadcasting Act (the Act).
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4. In the following pages, the Commission sets out its revised
policy for conventional commercial radio stations only. As indicated
in Public Notice CRTC 1997-105
entitled An Agenda for Review of the Commission's Policies
for Radio, the Commission intends to review its approach
to the various other types of radio programming undertakings
within the next two years.
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Highlights of the Commissions Revised Policy for Commercial
Radio
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5. The Commissions radio policy reflects the broadcasting
policy objectives set out in section 3 of the Act. These objectives
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 Canadian
Broadcasting Corporation (CBC), private commercial stations
and not-for-profit stations. The presence of different news
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 Canadas linguistic duality,
and;
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· Programming should reflect Canadas cultural and racial
diversity, including the needs and interests of Aboriginal peoples.
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6. The Commission's revised policy for commercial radio has
three major objectives. The first major objective of the Commission
is to ensure a strong, well-financed radio industry that is
better poised to achieve its obligations under the Act and to
meet the challenges of the 21st century. In the Commission's
view, increased consolidation of ownership will enable the radio
industry to strengthen its overall performance, attract new
investment, and compete more effectively with other forms of
media. Accordingly, the Commission has revised its policy on
common ownership. The Commission is satisfied that the revised
policy will provide for a strengthened radio industry, while
responding to longstanding concerns regarding diversity of news
voices, media cross-ownership and fair competition.
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7. Accordingly, in markets 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. In markets with eight commercial stations or more operating
in a given language, a person may be permitted to own or control
as many as 2 AM and 2 FM stations in that language.
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8. In assessing an application filed in accordance with the
revised common ownership policy, the Commission will consider
the impact of the application on the diversity of news voices
and the level of competition in the market. In particular, it
will take into account the amount of equity the applicant may
have in other radio stations operating in the same language
in that market, as well as the applicant's holdings in other
local media and the existence of any local radio management
agreements (LMAs) to which the applicant is a party.
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9. Further, pending completion of a review of its policy regarding
LMAs, the Commission will expect the applicant to undertake
not to enter into an LMA on a going forward basis without the
Commission's approval.
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10. In order to encourage competition and choice for listeners,
the Commission has also revoked its Radio Market Policy. The
Commission, following its consideration of applications for
new market entry, will be prepared to issue licences, depending
on the individual merits of the applications, in particular
the benefits their approval will bring to the communities concerned
and the broadcasting system as a whole.
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11. The second major Commission objective is to ensure pride
of place for Canadian artists. The Commission will therefore
issue a proposed amendment to the Radio Regulations, 1986
(the regulations) increasing the required level of Canadian
content for popular music selections (category 2) broadcast
each week to 35%. This will expand the exposure given to Canadian
artists and works, and provide increased support to the Canadian
music industry as a whole.
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12. The Commission is confident that, as stronger, more effective
strategic relationships between the radio and music industries
develop, the cooperative initiatives and efforts of these industries
to promote and support Canadian music will succeed in bringing
about a level of Canadian content that reaches 40% in five years.
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13. As a further means to ensure that Canadian music is exposed
during periods of high listening, the Commission will issue
a proposed amendment to the regulations requiring that a minimum
of 35% of popular music selections broadcast between 6:00 a.m.
and 6:00 p.m., Monday through Friday, be Canadian. Only Canadian
selections played in their entirety may be included in calculating
the percentage of Canadian category 2 musical selections broadcast
by a station.
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14. The Commission will also expect licensees that offer high
levels of traditional and special interest music (category 3)
to increase their commitments to Canadian music in this category
at the time of licence renewal. Concert music stations will
also be asked to provide specific commitments with respect to
the broadcast of works by Canadian composers. In addition, the
Commission generally considers that there should be an increase
in the level of Canadian music broadcast during ethnic programming
periods. This issue will be addressed at the time that the Commission
reviews its policy on ethnic broadcasting.
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15. The Commission will maintain the current definition set
out in the regulations of a Canadian selection. This definition,
commonly referred to as the MAPL system, helps to ensure that
Canadian artists and works have access to the airwaves, and
helps support a Canadian-based music and recording industry.
The Commission considers that the current system has been successful
in meeting these goals, and has the added virtue of being relatively
simple to administer.
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16. The third major Commission objective is to ensure that
a French-language presence in radio broadcasting is maintained.
Accordingly, the Commission will retain its requirement that
at least 65% of the vocal popular (category 2) music selections
broadcast each week by French-language AM and FM stations is
in the French language. In order to ensure that French-language
selections receive exposure during periods of high listening,
the Commission will issue a proposed amendment to the regulations
requiring that a minimum of 55% of the popular vocal music selections
broadcast between 6:00 a.m. and 6:00 p.m., Monday through
Friday, be in the French language.
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17. Furthermore, in order to ensure that French-language selections
receive the intended exposure prescribed by the regulations,
only those French-language selections played in their entirety
may be included in calculating the percentage of category 2
French-language vocal music.
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18. The Commission considers that, beyond the measures described
above, increased cooperation between the radio and music industries
to promote Canadian music and foster new talent will be essential
to ensure a vibrant Canadian music scene and the continued availability
of quality recordings for airplay. This will, in turn, contribute
to the success and distinctiveness of Canadian radio as it moves
into an increasingly competitive environment.
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19. The Commission commends the Canadian Association of Broadcasters
(CAB) for making a number of valuable commitments at the hearing
designed to promote Canadian music and foster a closer working
relationship with the music industry. The Commission strongly
supports these initiatives, and expects the CAB to report annually
on its activities in this regard, including activities to support
and promote both the French- and English-language sectors of
the music industry, especially with respect to new Canadian
talent.
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20. The Commission has also requested the recording industry
to provide the Commission with annual updates of its own initiatives,
as well as those undertaken by the recording industry in cooperation
with broadcasters, to support and promote Canadian music.
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21. The Commission has revised its benefits policy to ensure
support for the development and promotion of Canadian music
talent, and to foster cooperation between the radio and music
industries. Specifically, the Commission has amended the benefits
test for commercial radio to require, as a general rule, a minimum
direct financial contribution to Canadian talent development
representing 6% of the value of transactions involving transfers
of ownership and control. Consistent with the Commission's existing
benefits policy, the Commission will not impose benefits requirements
in the case of transactions involving unprofitable undertakings.
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22. The contribution will be allocated to: a new Canadian music
marketing and promotion fund to support co-operative broadcaster/music
industry activities and initiatives; eligible third party organizations
directly involved in the development of Canadian musical and
other artistic talent, including FACTOR and MusicAction; and
other Canadian talent development initiatives.
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23. The Commission notes that the highlights described above
are intended for the convenience of the reader only. In the
following pages, the Commission addresses in greater detail,
these and its other policy determinations with respect to commercial
radio. 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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Ownership Issues
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Common Ownership Policy
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24. In the past, the Commission has viewed its common ownership
policy as one of the more effective tools at its disposal to
ensure that a diversity of voices exists in a community. Under
this policy, the Commission has generally restricted a person
to ownership of a maximum of one AM and one FM undertaking operating
in the same language and in the same market.
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25. At the hearing, representatives of the music industry and
others argued that diversity would best be served by increasing
the number of licensees in a market rather than by allowing
increased consolidation. Some of these parties also expressed
concern that increased common ownership could lead to a reduction
in the diversity of news voices in a market and could have a
negative impact on smaller, independent radio stations, as well
as on community radio stations.
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26. On the other hand, there was general agreement among the
CAB and most representatives of the radio industry that the
common ownership policy should be relaxed to permit a person
to own more than one AM and one FM station in a market. The
CAB, on behalf of its member radio stations, explained that
the current ownership restrictions make it difficult for radio
to compete effectively with other forms of media for advertising
revenue, and harm the industry's financial performance. The
industry representatives argued that increased consolidation
of ownership would allow the radio industry to become more competitive
with other forms of media, strengthen its overall performance,
and help attract new investment. Other benefits identified by
the CAB included increased diversity among formats and increased
resources for programming.
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27. Several individual broadcasters offered suggestions at
the hearing as to possible ownership models. Most, however,
indicated that they would be willing to support a proposal advanced
by the CAB that the Commission amend its policy by increasing
the permissible level of common ownership of radio undertakings
in a given market by an amount that would vary depending on
the total number of stations serving that market in a given
language. Thus, in markets served by four or fewer radio stations
in a given language, as well as in markets served by six stations,
a person could be permitted to own as many as two AM and two
FM stations operating in that language.
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28. In a market served by five stations in a given language,
a person would be restricted to ownership of no more than three
stations, provided that this number includes at least one AM
and at least one FM station.
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29. The CAB further proposed that, in markets served by seven
or more English-language stations, common ownership would be
restricted to no more than three AM and two FM stations, while
in markets served by seven or more French-language stations,
such ownership would be restricted to no more than two AM and
three FM stations.
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30. The Commission is convinced that increased consolidation
of ownership within the radio industry will enable it to strengthen
its overall performance, and attract new investment. This, in
turn, will assist the industry to compete more effectively with
other forms of media and enhance its contribution to the support
of Canadian cultural expression.
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31. In reviewing its common ownership policy and determining
which ownership model it should adopt, the Commission also considered
a number of factors, including: the impact on diversity of news
voices in markets of different sizes; the impact of cross-media
ownership; possible impact on diversity of formats; and implications
for competition.
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Diversity of News Voices
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32. One of the objectives of the Commission's longstanding
policy on common ownership has been to preserve the availability
of distinct news voices in a community. The Commission notes
that, in recent years, there has been a considerable increase
in the number of local, regional and national news sources available
in most markets, including new conventional radio and television
stations, specialty programming services, community radio stations
and regional newspapers, as well as emerging alternative sources
of information such as the Internet. In determining a model
for a new common ownership policy, the Commission has sought
to strike a reasonable and acceptable balance between its concerns
for preserving a diversity of news voices in a market, and the
benefits of permitting increased consolidation of ownership
within the radio industry.
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Cross-ownership and Equity Interests
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33. The Commission is alert to concerns regarding the impact
on competition and the diversity of news voices in a market
raised by media cross-ownership and the equity interests of
a person in a multiple of local radio stations. In particular,
ownership or control by one person of radio, television, print
and/or distribution undertakings, or equity interests held by
that person in a multiple of radio licensees in a given market,
might give the person a market dominance that could affect the
level of true competition available in the market. This situation
would also give rise to concerns such as the potential for gate-keeping
with respect to information, and the concentration of the advertising
market in one person's hands.
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34. The Commission will therefore assess these concerns when
examining an application for a new licence or for authority
to transfer the ownership or effective control of an undertaking.
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Diversity of Formats
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35. A number of broadcasters at the hearing 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 agrees that one of the benefits
of consolidation could be some increase in the diversity of
formats offered in some individual markets. Nevertheless, it
does not consider that the extent of any such increase overall
would be as great as that forecast by the broadcasting industry.
For example, while the Commission accepts the argument that
one owner with several stations in a market will likely offer
different formats on each of these stations, it is not convinced
that this owner would maintain formats that differ from those
employed by stations that are owned by other broadcasters in
that market.
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Competitive Implications
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36. The radio industry operates in a competitive environment
in which some of its competitors in other media have been allowed
to consolidate. The Commission acknowledges that increased consolidation
of ownership will reduce the number of competitors in some markets.
It is the Commissions view, however, that the CABs
specific proposal for a revised common ownership policy could
lead to an unacceptable reduction in the number of individual
broadcasters, particularly in larger markets. In fact, this
proposal could lead to a situation where only four markets in
Canada would have more than two radio stations owners operating
in any one language (Toronto, Vancouver, Edmonton and Winnipeg).
The Commission believes that such a reduction in the number
of radio broadcasters could also lead to an unacceptable reduction
in the diversity of news voices and in competition.
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37. Accordingly, the Commission focused on developing a model
that will allow for some measure of consolidation, while taking
into account its general concerns for preserving a diversity
of news voices and maintaining competition.
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The Commission's Conclusions
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38. Having considered all of the foregoing, the Commission
has revised its common ownership policy as follows. In markets
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. In markets with eight
commercial stations or more operating in a given language, a
person may be permitted to own or control as many as two AM
and two FM stations in that language.
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39. For the purpose of the revised common ownership policy,
"control" shall mean "effective control"
as the latter term is defined in section 11(3) of the regulations.
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40. In addition to other issues that may be raised in the
context of a particular application, persons filing applications
under the revised common ownership policy will be required to
address the impact on diversity of news voices and the level
of competition in the market.
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41. In assessing these matters, the Commission will take
into account the amount of equity (voting and non-voting) that
the applicant may have in other radio stations operating in
the same language in the market concerned, as well as its equity
holdings in other local media.
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42. In addition, the Commission will issue a proposed amendment
to section 11(4)(d) of the regulations to specify that the licensee
of a radio station must obtain the Commission's approval prior
to acquiring a certain level of equity in another radio station
operating in the same language and in the same market. The level
of equity that would trigger the filing of such an application
would be examined in the context of the public process held
to consider this amendment.
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Local Management Agreements
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43. In Public Notice CRTC 1996-138
dated 16 October 1996 and entitled Commission's Approach
to Dealing with Local Management Agreements in Canadian Radio
Markets, the Commission stated that it will generally accept
local management agreements (LMAs) in markets of any size, without
requiring prior approval, provided the parties to the agreement
respect certain specific criteria.
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44. The Commission's 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.
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45. As this policy was enacted at a time when the common
ownership policy generally restricted persons to ownership of
no more than one AM and one FM undertaking in the same language
and in the same market, the Commission considers it appropriate
to review its LMA policy. In particular, 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. In Public Notice CRTC 1998-42
of today's date, the Commission has announced a public process
to examine this matter.
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46. Existing LMAs will be taken into account by the Commission
in considering applications by persons to acquire ownership
or control of more than one AM and one FM station in the same
language and in the same market. Moreover, until the review
of the LMA policy is completed, a person who applies to acquire
ownership or control of more that one AM and on FM station in
the same language and in the same market will be expected to
undertake not to enter into an LMA, on a going forward basis,
without the Commission's prior approval.
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Programming Commitments In Ownership Transactions
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47. As part of this process, parties were asked to comment
on whether or not the Commission should expect additional programming
commitments from applicants proposing to enter into transactions
that would result in them owning more than one AM and one FM
station in a market.
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48. General concerns about the impact that consolidation of
ownership could have on news programming were raised by several
parties. They emphasized the important role that radio plays
in the dissemination of local news and information. Some parties
expressed the view that local news cover-age has declined in
Quebec as a conse-quence of the consolidation of ownership that
has occurred in that province in recent years. They were concerned
that this trend could continue if ownership requirements were
loosened further.
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49. On behalf of the recording industry, the Association québécoise
de l'industrie du disque, du spectacle et de la vidéo (ADISQ)
argued that the Commission should not introduce a two-tier regulatory
system with respect to radio programming. It considered that
all stations, not just those coming under the requirements of
any new policy on common ownership, have a responsibility to
raise the level of Canadian music they play and ensure reasonable
distribution of French-language Canadian musical selections.
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50. The Canadian Independent Record Production Association
(CIRPA) added that obligations to ensure diversity in the market
through the provision of different formats should be expected
and enforced by condition of licence. The CBC also raised the
possibility of re-regulating formats.
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51. The CAB and several individual owners of commercial radio
stations did not consider that programming commitments any greater
than those required of other broadcasters should be imposed
on applicants proposing a consolidation of radio ownership in
a community. It was generally argued that additional requirements
would slow the financial recovery of radio.
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The Commissions Conclusions
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52. The Commission considers that all radio licensees have
an obligation to contribute to the cultural objectives set out
in the Act, and that this obligation is particularly important
in situations where one owner is allowed the privilege of owning
several stations in a community. It is not prepared, however,
to return to a regime where FM radio formats would
be strictly defined and regulated. The Commission essentially
abandoned this strategy in 1990 largely because of the difficulties
in defining and distinguishing between various types of popular
music.
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53. With respect to commitments in other areas, such as levels
of news and spoken word, the Commission considers that setting
across-the-board requirements would not take into account the
particular needs of different communities or the differing resources
of licensees.
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54. The Commission has therefore 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 will be required to
outline how their proposed programming will benefit the community
and further the objectives of the Act. The Commission will retain
the option of requiring adherence, by condition of licence,
to particular commitments made by applicants.
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Other CAB Proposals
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55. The CAB presented three other proposals in the context
of its proposed changes to the common ownership policy.
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56. The first proposal was that any change to the policy should
be reviewed in three years. The Commission expects that it will
take more than three years before the effects of the ownership
consolidation that will take place under this revised policy
are fully known. Therefore, the Commission intends to review
its common ownership policy in five years, at the same time
as it reviews its overall policy approach to commercial radio
broadcasting.
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57. The CAB also made a proposal intended to strengthen the
position of small market radio stations. Specifically, it suggested
that the Commission refrain from issuing calls for competing
applications in situations where the owner of a single station
in a small market applies for a second licence (AM or FM), or
seeks authority to move its existing AM station to the FM band.
It also proposed that the owner of one AM and one FM station
in a small market be permitted to apply for a third station
in that market without the Commission issuing a call for other
applications.
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58. The Commission considers that implementation of this proposal
would be inconsistent with its efforts to encourage competition
and diversity in the radio industry, as it may unduly favour
incumbent radio station owners.
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59. Accordingly, consistent with its objective of encouraging
competition and choice, the Commission will assess each application,
whether for a licence to carry on a new radio station or to
convert an existing AM station to the FM band, on its merits,
and will issue a call for competing applications in those circumstances
where it determines that a call is warranted.
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60. The third CAB proposal was that the Commission simplify
and accelerate the processing of applications for authority
to transfer ownership or control, or to acquire the assets,
of a radio station. The CAB indicated that the intent of its
proposal is to ensure that the delay associated with the Commission's
public process does not unduly impede implementation of industry
consolidation.
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61. The Commission notes that it has already taken numerous,
significant steps to streamline the application process now
in place, and will continue to process all applications as expeditiously
as possible, taking into account the particular circumstances
of each case.
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The Benefits Test
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62. The Commission currently applies the benefits test in its
consideration of applications for authority to transfer ownership
or control of programming undertakings. Because the Commission
does not solicit competing applications, the onus is on the
applicant to demonstrate that the application filed is the best
possible proposal under the circumstances and that the benefits
proposed in the application are commensurate with the size and
nature of the transaction.
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63. The Commission assesses the benefits proposed in each application
on a case-by-case basis. Although there are no set guidelines
or benchmarks concerning what would constitute an acceptable
level of tangible benefits in such transactions, the Commission
notes that these have generally represented approximately 10%
of the value of a transaction.
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64. CIRPA and ADISQ stated that, if the Commission does permit
multiple station ownership, the benefits policy should be maintained,
and support for Canadian music, including financial contributions
to Canadian talent development, should increase.
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65. Broadcasters, on the other hand, generally expressed the
view that the Commission should eliminate the benefits test
for transactions involving radio undertakings. The CAB argued
that the radio industry faces significant economic challenges
and that consolidation, itself, will be costly. It also claimed
that many benefits to listeners will result from multiple station
ownership and the development of a healthy radio industry. Examples
given of such benefits were an increase in the number of formats
and the capacity for improved news programming.
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66. In its final argument, the CAB submitted a proposal to
replace the existing benefits test with a contribution that
would flow through to FACTOR, MusicAction and a new Canadian
music marketing and promotion fund; and would also be used to
assist the transition of stations to digital radio.
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67. This contribution would represent 3% of the value of the
total transaction. According to the CAB's proposal, the value
of unprofitable stations involved in a transaction would not
be included in calculating the required contribution, nor would
contributions be required in respect of transactions with a
value of less than $7.5 million.
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The Commission's Conclusions
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68. The Commission is of the view 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 will continue to be an
appropriate mechanism for ensuring that the public interest
is served in the case of transfers of ownership and control.
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69. The Commission considers that the introduction of digital
technology, technical upgrades, programming improvements and
other benefits, are likely to be implemented, or implemented
more quickly, as a result of multiple station ownership and
a financially healthy radio industry. Accordingly, the Commission
generally considers it reasonable that there be some reduction
in the level of tangible benefits associated with ownership
transactions. It also finds it reasonable that benefits be directed
to the support of the Canadian music industry, including third
party organizations such as FACTOR and MusicAction which are
involved in the development of Canadian talent.
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70. In consideration of the above, the Commission has decided
to modify its benefits policy in respect of all transfers of
ownership and control of radio undertakings. Specifically, the
Commission has determined that it will henceforth expect that,
in the case of such applications, commitments be made to implement
clear and unequivocal benefits representing a minimum direct
financial contribution to Canadian talent development of 6%
of the value of the transaction. Consistent with the Commission's
existing benefits policy, and as stipulated in Public Notice
CRTC 1993-68 dated 26 May
1993, the Commission will forgo benefits requirements for unprofitable
undertakings. The Commission will measure profitability according
to the average profit before interest and taxes (PBIT) of the
undertaking over the three years preceding the filing date of
the application. The Commission will not systematically apply
this exemption to stations in the first five years of operation.
In cases where an applicant is applying to acquire a group of
stations, all or some of which fall below this threshold, the
Commission will consider profitability on an aggregate basis.
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71. As also stated in Public Notice CRTC 1993-68, the Commission
will continue to expect the purchaser of an undertaking to fulfil
any benefits commitments that the current licensee of the undertaking
has not fulfilled. The Commission considers that benefits commitments
are part of the obligations of a licensee and should be implemented
regardless of ownership changes.
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72. The Commission will expect financial contributions to
be distributed as follows:
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· 3% to be allocated to a new Canadian music marketing and
promotion fund;
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· 2% to be allocated, at the discretion of the purchaser,
to FACTOR or MusicAction; and
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· 1% to be allocated, at the discretion of the purchaser,
to either of the above initiatives, to other Canadian talent
development initiatives, or to other eligible third parties
directly involved in the development of Canadian musical and
other artistic talent, in accordance with Public Notice CRTC
1995-196, as may be amended
from time to time.
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73. The purpose of the Canadian music marketing and promotion
fund will be to support co-operative activities by broadcasters
and the music industry to market and promote Canadian music,
including new talent. The Commission expects the fund to be
jointly administered by representatives of the broadcasting
and recording industries. Accordingly, the Commission expects
the CAB, in co-operation with representatives of the recording
industry, to submit a proposal for the Commission's prior approval,
detailing how the fund will be administered and operated. The
proposal should be submitted no later than 1 September 1998,
and should specify how the fund will be allocated to ensure
support for both French- and English-language music, including
the development of new Canadian talent. The Commission will
also require the submission of annual reports on the fund's
activities, including details of all disbursements from, and
activities supported by, the fund.
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74. The Commission notes that commitments for contributions
to Canadian talent development made in the context of applications
for authority to transfer ownership or effective control of
a radio programming undertaking will remain separate and apart
from the annual contributions to Canadian talent development
by commercial AM and FM stations made either in accordance with
commitments given at the time of previous transfer applications,
or pursuant to conditions of licence imposed in accordance with
the policy set out in Public Notice CRTC 1995-196,
as amended from time to time.
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Radio Market Policy
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75. The Commission set out its Radio Market Policy in Public
Notice CRTC 1991-74 dated
23 July 1991. The purpose of this policy was to ensure that
the introduction of an additional commercial AM or FM station
in a given market would not unduly affect the ability of existing
AM and FM stations to discharge their programming responsibilities.
The radio market policy established three criteria that the
Commission would use to assess the capacity of markets to support
additional commercial radio stations. The three criteria represent
measurements of group profitability, individual profitability
and revenue growth within specific markets. Data concerning
these measurements have been published annually by the Commission
for use by potential applicants and other interested parties.
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76. At the hearing, the CAB argued that the Radio Market Policy
should be maintained. According to the CAB, the criteria of
the Radio Market Policy: "... are an information system.
They have never prevented anybody from applying for a licence,
and indeed, never prevented [ the Commission] from granting
a licence." Some representatives of the music industry
argued, however, that the Commission should consider issuing
more licences, thereby creating a more competitive environment.
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The Commission's Conclusions
|
77. The Commission's strategy, as set out in its 1997 Vision
statement, is to "rely more on market forces to permit
fair and sustainable competition." In the Commission's
view, the new common ownership policy should allow existing
radio station owners to improve their existing financial situation
and their ability to compete effectively with new entrants.
|
78. Accordingly, consistent with its desire to encourage
competition and choice, the Commission has determined that it
will no longer apply the criteria outlined in the Radio Market
Policy. The Commission, following its consideration of applications
for new market entry, will be prepared to issue licences, depending
on the individual merits of the applications, in particular
the benefits their approval will bring to the communities concerned
and the broadcasting system as a whole.
|
79. The Commission does, however, recognize the usefulness
of relevant market information to potential applicants for radio
licences in making their assessment of the relevant strength
of a market. Therefore, the Commission intends to make available
to potential applicants and other interested parties, aggregate
financial summaries for medium and large markets. This aggregate
market information will be made available on an annual basis.
|
ISSUES RELATED TO CANADIAN MUSIC
|
Promotion of Canadian Music
|
80. The Commissions primary approach to ensuring Canadian
content on radio has been to require stations to play specific
minimum levels of Canadian music. Broadcasters are also required
to make annual contributions toward the development of Canadian
talent.
|
81. At the public hearing, both the broadcasting industry and
the recording industry generally agreed that increased co-operation
between the two sectors to promote Canadian music and support
new talent is important. Such co-operation could provide increased
support to Canadian artists, and help ensure the continued success
of the Canadian music industry and increase the supply of Canadian
recordings.
|
82. The CAB made commitments to move forward with a number
of initiatives designed to promote Canadian music and to increase
the sales of Canadian recordings. These initiatives are:
|
· A new Annual Canadian Radio Music Awards event will be held
to celebrate new Canadian artists.
|
· A Canadian Radio Music Month will be held annually in the
month prior to the Canadian Radio Music Awards. Candidates for
the awards will be promoted during radio programming.
|
· A Virtual Music Store will be established to help make Canadian
music played on commercial radio available for purchase through
a central site on the Internet.
|
· A Radio Stars program will be established to provide free
promotion to new artists and new recordings. Under this plan,
music-based stations will broadcast commercial messages on behalf
of record companies or Canadian artists at no charge.
|
· The CAB will host a conference to launch a new initiative
to bring together all sectors involved in the promotion of Canadian
music.
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The Commissions Conclusions
|
83. Historically, radio has played an important role in promoting
Canadian artists and music. The Commission notes that the radio
industry in Quebec has been particularly active in this regard.
In that province, artists sometimes co-host radio programs to
promote their appearances. Artist interviews are also used to
promote both the artist and the station.
|
84. The Commission considers the CABs commitments to
be of great potential significance for the future promotion
of Canadian music. It encourages the CAB to continue to explore
ways of working with all sectors in the music industry to ensure
the industry's continued success. Such efforts to increase the
availability of high-quality Canadian recordings will, in turn,
contribute to the success and distinctiveness of Canadian radio.
|
85. The Commission commends the CAB for these valuable initiatives.
It expects the CAB to report annually on its activities in this
regard, including its activities to support and promote both
the French- and English-language sectors of the music industry,
and new Canadian talent in particular.
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Level of Category 2 Music
|
86. Currently, section 2.2 of the regulations requires that
at least 30% of musical selections (category 2) broadcast each
week be Canadian, and that these selections be distributed in
a reasonable manner throughout each broadcast day.
|
87. This regulation ensures that Canadian artists and Canadian
works are heard on radio. It also has played an important role
in the development of a Canadian music and recording industry.
|
88. In their comments, broadcasters generally agreed that the
requirement for Canadian content in category 2 music should
be maintained at the existing level, but noted that it is sometimes
difficult to fulfil the existing quota without playing some
material that is of lower quality, or without keeping some selections
on the playlist for longer periods. The CAB contended that no
increase in the required level of Canadian content should be
implemented until sales of Canadian recordings, as a percentage
of total recordings sold, exceed 15%. The CAB further suggested
that the requirement for Canadian music would then be set at
a level that is two times the retail sales of Canadian music,
as a percentage of all record sales in Canada. The percentage
would be averaged over a three-year period to remove
the impact of year-to-year fluctuations.
|
89. On the other hand, several representatives of the recording
industry argued that the level should be increased immediately
to levels that, they suggested, should range from 35% to 40%.
Others recommended further increases, to be introduced over
time until a 50% level is achieved. Those advocating increases
argued that these are necessary to achieve the objectives of
the Act. They also considered that the current level of new
releases, plus the extensive catalogue of Canadian recordings
that has accumulated since Canadian content requirements were
first implemented, is assurance that sufficient material will
be available to fulfil a higher requirement.
|
90. Music industry representatives generally opposed the CABs
plan to tie Canadian content levels to record sales. They argued
that statistics with respect to record sales are released infrequently,
and expressed concern about their reliability. According to
these parties, the lack of reliable annual statistics would
make it very difficult to implement the CABs plan. They
also argued that the increased airplay of recordings has a demonstrated
positive influence on sales, and that to make an increase in
Canadian record sales a prerequisite for any increase in Canadian
content would ignore this reality.
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The Commissions Conclusions
|
91. The Commission considers that playing Canadian music is
a vital contribution that radio makes toward fulfilling the
cultural goals set out in the Act. It also considers that the
regulations requiring minimum levels of Canadian music have
been important elements in bringing the Canadian music industry
to its current level of success.
|
92. Moreover, the Commission is convinced that there is an
adequate supply of Canadian recordings available to support
an increase in the required level of category 2 music on radio
stations. It notes that French-language radio stations already
provide levels of Canadian music that are generally well in
excess of 35%.
|
93. The Canadian content requirements set out in the radio
regulations, unlike those applied to television broadcasters,
do not generally involve large incremental direct expenses since
radio stations do not have to pay for the production of the
recordings. Therefore, playing Canadian music is a contribution
to the Acts objectives that radio can make, even in times
of economic difficulty. The Commission also notes that the 1990
increase in the required Canadian content level for most FM
stations has had no apparent inhibiting effect on the growth
of listening to FM stations.
|
94. Based on the foregoing, and taking into account the maturity
of the Canadian radio industry, the Commission considers that
an immediate increase in the level of Canadian content from
30% to 35% is both manageable and appropriate. It will expand
the exposure given to Canadian artists and provide increased
support to the Canadian music industry as a whole.
|
95. Accordingly, the Commission will issue a proposed amendment
to the regulations shortly requiring that at least 35% of category
2 musical selections broadcast by commercial AM and FM stations
each broadcast week be Canadian selections.
|
96. The Commission notes that some licensees, in exceptional
circumstances, are currently subject to conditions of licence
allowing for lower minimum Canadian content levels than that
generally required by way of regulation. Some others are required
to broadcast higher levels than the required minimum. The Commission
expects these licensees to continue to operate in accordance
with their current commitments.
|
97. The Commission is confident that the cooperative initiatives
and efforts of the broadcasting and music industries to promote
and support Canadian music will succeed in bringing about a
level of Canadian content that reaches 40% in five years.
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Distribution of Canadian Category 2 Selections
|
98. To ensure that Canadian selections are played during periods
of high listening, the regulations require that Canadian selections
be reasonably distributed throughout the broadcast day.
|
99. In Public Notice CRTC 1990-111
dated 17 December 1990 and entitled An FM Policy for the
Nineties, the Commission set out the following criteria
for determining if the distribution of Canadian selections is
reasonable:
|
· at least 25% of the popular music selections (category 2)
broadcast between 6:00 a.m. and 7:00 p.m. Monday through Friday
must be Canadian;
|
· there should be a reasonably even distribution of Canadian
selections in the above dayparts and throughout the broadcast
week; and
|
· there should be a significant presence of Canadian music
in high audience periods, these traditionally being the morning
and afternoon drive.
|
100. The terms "reasonably even" distribution and
"significant presence" have never been specifically
defined.
|
101. Representatives of the broadcasting industry suggested
that the current guidelines, including the 25% minimum for weekdays
between 6:00 a.m. and 7:00 p.m., are sufficient. They do
not believe that special requirements are necessary for the
morning and afternoon periods, noting that many stations are
enjoying increased listening in the midday period. They also
noted that fewer records are generally played in the morning
drive period, so that the addition or deletion of even one record
could make a major change to Canadian content levels in this
period.
|
102. Some broadcasters also argued that programming higher
levels of Canadian content in the evening could be beneficial,
since listening by younger people, who are major buyers of recordings,
is often higher at that time.
|
103. Representatives of the recording industry, on the other
hand, considered that more stringent distribution requirements
are necessary. They suggested that the current system allows
stations to concentrate higher levels of Canadian selections
in the evening and on weekends when listening is often lower.
They claimed that this practice lowers the exposure of Canadian
selections, with a consequent negative effect on record sales.
|
104. They therefore recommended that compliance with Canadian
content requirements be measured over shorter periods, for example,
every three hours, and hourly in prime morning and afternoon
periods.
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The Commissions Conclusions
|
105. The Commission agrees with the recording industry that
the current system, which specifies a minimum level of only
25% Canadian content on weekdays between 6:00 a.m. and 7:00
p.m., can lead to lower levels of Canadian content during those
periods when most people are listening. The Commission
notes in this regard that the music use study it carried out
in preparation for the hearing does indicate that some stations
program lower levels of Canadian content in peak listening times,
especially in the morning drive. On the other hand, it acknowledges
the argument made by the radio industry that stations should
have some flexibility to adjust their programming. Further,
the Commission does not want to implement a system that would
have it regulating programming content unduly over short time
periods.
|
106. The Commission will therefore issue shortly a proposed
amendment to the regulations 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.
The Commission considers that this increased level, as well
as the reduction of the daytime measurement period from 13 to
12 hours, will increase exposure of Canadian music during hours
of higher listening, but will still give licensees considerable
flexibility in adjusting their programming.
|
107. The Commission notes that, in exceptional cases, licensees
are currently subject to conditions of licences allowing for
minimum Canadian content levels that are lower than the current
or the proposed regulated minimum level. The Commission invites
these licensees to apply for a condition of licence that would
specify a level of distribution for Canadian content between
the hours of 6:00 a.m. and 6:00 p.m., Monday through Friday,
that corresponds with their overall category 2 Canadian content
requirement.
|
108. The Commission further notes that it will issue a proposed
amendment to the regulations requiring that category 2 Canadian
selections be played in their entirety for the purpose of meeting
Canadian content requirements.
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Level of Category 3 Music
|
109. Section 2.2 of the regulations requires that at least
10% of the traditional and special interest music selections
(category 3) broadcast each week by commercial radio stations
be Canadian. The lower requirement for Canadian content in category
3 music was established because of the generally limited availability
of Canadian recordings of specialized types of music,
such as concert music and jazz.
|
110. Of the music industry representatives that appeared
at the public hearing, the Society of Composers, Authors and
Music Publishers of Canada (SOCAN) commented extensively on
the minimum level of category 3 music that should be required.
SOCAN considered that the level of Canadian category 3 music
required should be raised from 10% to 25%. Further, it recommended
that at least 15% of the concert music broadcast be by Canadian
composers.
|
111. The CBC, whose networks and stations are required to broadcast
a minimum level of 20% category 3 music, opposed raising the
level required of commercial stations. The CBC noted that, in
order to meet the 20% level, it often records concerts and produces
its own recordings for broadcast. The CBC did not consider that
those commercial stations whose program formats are based on
category 3 music would have the resources to undertake extensive
recording activities or the broadcast of live music.
|
112. There was very little comment from commercial broadcasters
regarding the requirement for category 3 music.
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The Commissions Conclusions
|
113. Most of the category 3 music that is programmed
on Canadian radio is broadcast on stations owned and operated
by the CBC and on not-for-profit stations. The appropriate level
of Canadian music for these stations will be considered during
the separate reviews for these sectors proposed by the Commission
in Public Notice CRTC 1997-105.
|
114. Most commercial radio stations play little, if any, category
3 music. Exceptions include a concert music station serving
Toronto/Cobourg, as well as a commercial concert music station
that has been licensed for Montréal but is not yet on the air.
There are also a few commercial stations in Canada that offer
gospel music formats.
|
115. Given the limited number of commercial stations involved,
the Commission has concluded that it would be best to deal with
the issue of Canadian content levels for category 3 music on
these stations on a case-by-case basis. At licence renewal time,
commercial FM stations operating in the specialty format, as
well as AM stations that offer high levels of category 3 music,
will generally be expected to propose an increase in the current
level of Canadian music they play. They will also be asked to
indicate why they consider their proposed levels to be adequate.
Concert music stations will also be asked to provide specific
commitments with respect to the broadcast of works by Canadian
composers. All interested parties will have a chance to comment
on the reasonableness of these commitments during the intervention
process.
|
Music Broadcast During Ethnic Programming Periods
|
116. Section 2.2 of the regulations states that, where 7% or
more of the music selections broadcast during an ethnic programming
period are Canadian selections, this time period will not be
considered when determining whether or not a licensee is in
compliance with the required levels of Canadian content for
category 2 and category 3 music.
|
117. Only SOCAN commented on this particular regulation, and
recommended that the required level of Canadian content for
ethnic programming periods be raised to 12%.
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The Commissions Conclusions
|
118. As noted in the Commission's Vision Action Calendar issued
on 17 April 1998, the Commission will hold a public process
to review its ethnic broadcasting policy in 1998/99. Although
the Commission considers that an increase in Canadian content
during ethnic programming periods may well be appropriate, any
examination of this issue should take place in the context of
that review. All interested parties will then have an opportunity
to comment.
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Overnight Canadian Content
|
119. The current Canadian content regulations relate only to
the broadcast day, that being the time period between 6:00 a.m.
to midnight, Sunday to Saturday.
|
120. The recording industry considered that Canadian content
requirements should be extended to include the overnight period,
even though listening during this period is very low. Airplay
for Canadian music in the overnight period has assumed greater
importance since the development of Broadcast Data Systems (BDS)
monitoring technology. This system electronically monitors the
programming of radio stations to measure the number of times
that individual selections are played. The information is used
to assemble charts that appear in music magazines. The recording
industry argued that, since the overnight period is included
in the BDS monitoring program, it is important that Canadian
selections be played during this period if they are to obtain
the highest possible placement on the charts.
|
121. Commercial broadcasters argued that there is no need to
extend the Canadian content regulations to cover the midnight
to 6:00 a.m. period. They noted that the Commissions
music use study, which analyzed an overnight programming period
for five English-language music stations in Toronto and five
French-language music stations in Montréal, found that the Montréal
stations achieved an average Canadian content level of 38%,
while that for the Toronto stations was 28%.
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The Commissions Conclusions
|
122. The Commission recognizes the importance of airplay for
Canadian music selections in terms of their placement on charts
assembled using BDS technology. It notes from its monitoring
study, however, that some stations play significant levels of
Canadian content in the overnight period. In the circumstances,
the Commission is reluctant to allocate what would be a substantial
increase in resources to monitor radio programming during a
time period when listening is very low.
|
123. The Commission therefore does not propose to introduce
any new regulatory requirement for Canadian content in the overnight
period at this time. It does, however, encourage broadcasters
to meet the daytime levels of Canadian content required during
the overnight hours as well.
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New Canadian Artists
|
124. There is currently no specific requirement with respect
to playing music by new Canadian artists. Licensees are required,
however, to make an annual financial contribution to the development
of Canadian talent.
|
125. The CAB did not support the establishment of an across-the-board
requirement for broadcasting music by new Canadian artists.
It noted that it would be difficult to establish a quota that
would be fair for stations in all formats. The CAB did, however,
outline a strategy for promoting Canadian music, including music
by new artists. This strategy is described in an earlier section
of this notice.
|
126. Some individual licensees of private commercial radio
stations suggested that a bonus system for selections by new
Canadian artists be established. Under this system, selections
by new Canadian artists would be given additional credit toward
meeting Canadian content requirements.
|
127. Although representatives of the music industry agreed
that it is important that there be opportunities for listeners
to hear music by new Canadian artists, they generally opposed
any bonus system for new Canadian artists that may ultimately
result in a lowering of the overall level of Canadian music
that stations broadcast.
|
128. Two representatives of the francophone music industry
considered that one-third of all French-language selections
played should be new selections or selections by new artists.
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The Commissions Conclusions
|
129. The Commission agrees with representatives of the broadcasting
industry that it would be very difficult to develop an across-the-board
requirement for the broadcast of recordings by new Canadian
artists that could be fairly applied to all formats. It agrees
that a bonus system would eliminate some of these difficulties,
but shares the concerns of the music industry that this could
decrease the overall level of Canadian music that stations play.
|
130. The Commission considers that the promotion and development
of new Canadian artists is an area that will benefit greatly
from increased co-operation between the music and broadcasting
industries. Earlier in this document, the Commission noted that
the various commitments by the CAB to promote Canadian music,
and benefits contributions resulting from transfers of ownership
and control, will provide additional support for new talent.
|
131. The Commission reiterates its expectation that the CAB
report annually on its activities to promote and support both
the French- and English-language sectors of the music industry,
especially with respect to new talent.
|
132. The Commission considers that it would be appropriate
to allow these initiatives to develop, and for it to evaluate
their success, before deciding if any new regulatory initiatives
with respect to playing the music of new Canadian artists are
necessary.
|
Canadian Talent Development
|
133. In Public Notice CRTC 1995-196,
the Commission set out a new approach to contributions to Canadian
talent development by commercial AM and FM stations. Under this
policy, the licensee of each commercial station was given the
opportunity to apply for relief from previous direct cost commitments
for Canadian talent development made as part of its last licence
renewal, and to amend its licence by adding a condition of licence
requiring it to make annual payments to eligible third parties
involved in Canadian talent development at the level identified
for it in the CAB's Distribution Guidelines for Canadian
Talent Development. The licences of most private commercial
stations now include this condition.
|
134. The purpose of the CAB guidelines is to ensure that Canadian
commercial radio stations allocate, in total, a minimum of $1.8
million each year to eligible third parties associated with
Canadian talent development. This $1.8 million is over
and above commitments made in the context of applications for
new licences or in applications involving the transfer of ownership
or effective control of radio stations.
|
135. The Commission wishes to emphasize the importance it places
on Canadian talent development. It notes that compliance with
these conditions of licence is required on an annual basis and
expects all stations to ensure that these commitments are fulfilled
so that eligible third parties receive the funding to which
they are entitled.
|
Defining a Canadian Selection: the MAPL System
|
136. Currently, a musical selection must generally meet at
least two of the five criteria set out below in order to qualify
as a Canadian selection. This is commonly referred to as the
MAPL system.
|
· M (music) the music is composed entirely by
a Canadian.
|
· A (artist) the music is, or the lyrics are,
performed principally by a Canadian.
|
· 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.
|
· L (Lyrics) The lyrics are entirely written
by a Canadian.
|
· The musical selection was performed live or recorded after
1 September 1991, and a Canadian who has collaborated with
a non-Canadian receives at least half of the credit as a composer
and lyricist.
|
137. There are also three special cases
where a musical selection may qualify as Canadian, even if it satisfies
fewer than two of the MAPL criteria. 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, are all deemed
to be Canadian selections. |
138. Representatives of SOCAN and La Société professionnelle
des auteurs et des compositeurs du Québec (SPACQ), as well as
some broadcasters and individuals, considered that the existing
system should be maintained. They were generally of the view
that the current MAPL system provides for balanced consideration
of a range of factors and elements that are essential to a strong
Canadian music industry.
|
139. ADISQ, on the other hand, suggested that a consultative
process be established to develop a system that would better
balance artistic criteria with the resources necessary to produce
a recording. MusicLane Inc. was also concerned about the industrial
aspect of recording, and generally recommended that "pre-mastering"
by a Canadian company be required if a recording is to qualify
under the production criterion.
|
140. The Canadian Recording Industry Association (CRIA) considered
that the performance of a Canadian artist in a recording should
carry extra weight in the MAPL system. The CAB and some individual
licensees of commercial radio stations carried this argument
further, and proposed that the definition be changed so that
the recorded performance of a Canadian artist would qualify
as Canadian, even if the recording did not meet any other of
the MAPL criteria. The CBC proposed a variation of this proposal,
suggesting that the existing requirement that two MAPL criteria
be met should be maintained for category 2 selections, but that
subcategory 31 (concert music) selections by Canadian artists
should automatically qualify as Canadian.
|
141. The Alberta Recording Industries Association (ARIA), on
the other hand, suggested that the MAPL criteria be made stricter
than they currently are by requiring that, in order for a selection
to qualify as Canadian, the artists, composers and lyricists
must have Canadian residency, and that copyrights must either
be owned by a resident Canadian or assigned to a Canadian-owned
publishing company.
|
The Commissions Conclusions
|
142. The MAPL system and the minimum requirements for Canadian
content have two essential objectives:
|
· To ensure that Canadian artists and their works have access
to Canadian airwaves; and
|
· To support a Canadian-based music and recording industry.
|
143. The two objectives go hand in hand. If Canadian artists,
other than the relatively few who have been signed directly
by non-Canadian labels, are to make recordings, Canadian recording
facilities have to be available. If works by Canadian composers
are to be recorded, there should be an incentive to make use
of Canadian compositions.
|
144. The Commission continues to view these two goals as critical.
The Commission recognizes that allowing a recording to automatically
qualify as Canadian if the principal artist is Canadian may
ensure some additional access for Canadian artists to radio
playlists. The Commission notes, however, that, under such a
regime, a recording made outside of Canada of a non-Canadian
song would qualify as Canadian, provided the performing artist
is Canadian. The Commission is not convinced that such a change
would assist in achieving the second objective, namely the support
of a Canadian-based recording industry. The Commission also
notes that many of the artists who would benefit from such a
change have already received considerable international success.
|
145. Another goal of the Commission has been to make the system
of defining a Canadian selection readily verifiable and easy
to administer. The Commission notes in this regard that the
proposed addition of new criteria, such as Canadian residency,
or any other modification related to production and copyright
ownership, would make the system more complicated and difficult
to verify.
|
146. The Commission will therefore maintain the current
MAPL system.
|
Role of the Recording Industry
|
147. As noted earlier, the CAB has proposed a number of important
initiatives to promote and support Canadian music. The recording
industry also plays an integral role within the Canadian broadcasting
system. Given that this industry has a critical interest in
ensuring that the Commission's policies and the broadcasters'
initiatives achieve their common objectives, the Commission
expects the recording industry to collaborate fully with the
broadcasting industry in efforts to support and promote Canadian
music.
|
148. To this end, the Commission strongly encourages the
recording industry, in particular CIRPA, ADISQ and CRIA, to
provide the Commission with annual updates concerning their
own initiatives, and those they undertake with the broadcasting
industry, to support and promote Canadian talent. As part of
these annual updates, the Commission requests CIRPA, ADISQ and
CRIA to provide it with relevant information that will assist
the Commission in evaluating the impact of its policies and
the industries' effort to provide increased support to Canadian
music. Such information might include data on the release and
sales of Canadian recordings, and on industry employment.
|
149. The Commission will review its policies related to Canadian
music in five years when it again reviews its overall policy
approach to commercial radio broadcasting.
|
PROGRAMMING THAT REFLECTS CANADAS LINGUISTIC DUALITY
|
Level of French-Language Vocal Music
|
150. 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
that they broadcast each week must be in the French language,
and must be scheduled in a reasonable manner throughout the
broadcast day.
|
151. The Commissions requirements are based on two related
goals. It wishes to support a francophone recording industry
in Canada and to allow francophones to have access to music
reflecting their culture. The Commission has always considered
it to be the responsibility of French-language broadcasters
to continue their efforts to contribute to the development of
French-language expression.
|
152. Most parties, including representatives of the broadcasting
and music industries, agree that the current required level
of French-language vocal music is generally appropriate.
|
153. Broadcasters, however, argued that there is a shortage
of French-language material; as a result, stations make excessive
use of many of the same artists and selections, leading, in
turn, to an overexposure of some songs and a similarity in sound
between stations.
|
154. Broadcasters also noted that, in addition to the airplay
they provide for French-language selections, they make an important
contribution to the promotion of French-Canadian artists through
interviews, on-air promotion of events, and other talent development
initiatives.
|
155. While supporting the maintenance of the 65% requirement,
the CAB recommended that the Commission reduce the requirement
to 55% in the Montréal and Ottawa-Hull markets. The CAB argued
that French-language music stations operating in bilingual markets
are losing listeners to English-language stations, and that
a reduction in the requirement would help these stations to
compete more effectively.
|
156. Radiomutuel inc. (Radiomutuel) proposed that the Commission
reduce the requirement for French-language vocal music to 55%
in Montréal and 51% in Ottawa-Hull. Radiomutuel further recommended
that the French-language popular music requirement be lowered
for AM stations to allow them to develop formats not generally
offered by FM stations. In particular, Radiomutuel indicated
that there is an insufficient number of French-language recordings
in the contemporary hit radio, country, and oldies/gold formats
to achieve the 65% level. It suggested that a reduction in the
minimum requirement for AM stations would provide diversity,
as well as a window for the exposure of French-language Canadian
artists in different genres.
|
157. Representatives of the music industry emphasized the importance
of the French-language vocal music requirement in providing
exposure for French-language talent. ADISQ disagreed with the
claim by broadcasters that there is a lack of French-language
material, and suggested that broadcasters are often reluctant
to try new sounds.
|
158. Representatives of the music industry also opposed the
granting of any exception to the 65% requirement. With respect
to the broadcasters' request that the Commission reduce the
level for the Montréal and Ottawa-Hull markets, ADISQ agreed
that young people generally prefer to listen to English-language
rock music, but added that they generally return to French-language
music as they get older. ADISQ also argued that the movement
of audiences to English-language stations is not as extensive
as broadcasters suggested.
|
The Commissions Conclusions
|
159. The Commission recognizes that the inventory of French-language
popular music available to French-language broadcasters is smaller
than the amount of English-language music available to English-language
broadcasters. The Commission notes, however, that after almost
25 years of regulated requirements for French-language vocal
music, these broadcasters have a considerable catalogue of current
and past French-language selections available to them. It also
considers that the maintenance of the 65% French-language popular
music content requirement will continue to stimulate the record
industry and ensure the continued availability of high quality
French-language recordings.
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160. Commitments made by the CAB to promote Canadian music,
as well as the increased support for Canadian music derived
from benefits contributions, will also help to increase support
for the French-language music industry, and foster partnership
and cooperation between that industry and broadcasters. As noted
earlier, the radio industry in Quebec is already very active
in promoting Canadian artists and music. The Commission is satisfied
that these initiatives will assist greatly in addressing broadcasters
concerns regarding the supply of French-language vocal music.
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161. The Commission recognizes that some movement of listening
from French-language to English-language stations has occurred
in Montréal and Ottawa-Hull, especially among younger listeners.
The Commission, however, is not convinced that permitting French-language
stations to increase the level of English-language selections
will repatriate significant audiences. The Commission also considers
that the importance of providing exposure for French-language
popular music in francophone communities outweighs the benefits
to be derived from any marginal increase in audience. The Commission
further notes that other adjustments in programming may be effective
in ensuring that listeners needs are met.
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162. With respect to French-language AM stations, the Commission
is not convinced that the 65% requirement for French-language
vocal music is an obstacle to providing diverse formats of music.
This is especially the case, given that most of these stations
are talk oriented, and the fact that the number of musical selections
they broadcast is limited, relative to the available inventory
of French-language vocal music selections.
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163. The Commission reiterates the importance of maintaining
a French-language presence in radio broadcasting and of providing
exposure for francophone artists. Accordingly, the Commission
will maintain its requirement for all French-language radio
broadcasters that at least 65% of the vocal category 2 music
selections that are broadcast each week be in the French language.
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Distribution of French-Language Vocal Music
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164. Section 2.2 of the regulations requires that French-language
vocal music selections be scheduled in a reasonable manner throughout
each broadcast day. This requirement is intended to ensure that
French-language selections are heard during periods of higher
listening.
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165. The CAB and other broadcasters considered that French-language
stations distribute French-language vocal music in a responsible
manner, and that no revision to the current requirement is needed.
Broadcasters also argued that, given the high level of French-language
vocal music required, the Commission should maintain the flexibility
provided by the current scheduling requirement. Télémédia Communications
Inc. further suggested that the distribution of French-language
vocal selections be calculated on a weekly basis, rather than
a daily basis. The CAB also argued that tightening distribution
requirements would reduce programming diversity and would result
in a more homogeneous sound from station to station.
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166. ADISQ, on the other hand, claimed that broadcasters are
not providing sufficient exposure to French-language selections
during peak hours. Representatives of the music industry and
of community broadcasters recommended that stricter scheduling
requirements be imposed to ensure that French-language vocal
music is reasonably distributed during all time periods.
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The Commissions Conclusions
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167. The intent of the regulatory requirement pertaining to
the scheduling of French-language music is to ensure that these
selections are heard during periods of higher listening. Prior
to the public hearing, the Commission conducted an analysis
of the programming of French-language vocal music by commercial
stations in Montréal and Québec. The analysis indicated that
some stations scheduled relatively low levels of French-language
music during peak audience times, and made up for the shortfall
in the other time periods.
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168. The Commission recognizes the importance of providing
broadcasters with flexibility to adjust their programming to
meet the needs of their audiences and to compete effectively.
On the other hand, it considers that stricter measures are needed
to ensure that French-language music is reasonably scheduled
throughout the day.
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169. Accordingly, the Commission will issue shortly a proposed
amendment to the regulations requiring 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. This, combined with the further requirement set
out below, will ensure that French-language music selections
are played in their entirety, and are exposed during periods
of high listening.
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Shortening of Selections
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170. SPACQ and ADISQ expressed concern that some stations are
shortening French-language selections, and recommended that
only selections played in their entirety should qualify for
credit as a French-language vocal selection or as Canadian content.
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171. Radiomutuel confirmed that selections are, in fact, shortened,
and claimed that this practice allows broadcasters to present
selections that may not otherwise be broadcast, especially songs
by new artists and new selections from established artists.
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The Commissions Conclusions
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172. The Commission considers that the practice of shortening
French-language vocal music selections for the purpose of meeting
the content requirements for such music is inconsistent with
the objectives of the Act and the regulations.
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173. The Commission notes that the definitions for the radio
content categories and sub-categories set out in Public Notice
CRTC 1991-19 and in the
1991 Glossary of Radio Terms, define a musical selection
as "Music of one minute in length or more, broadcast uninterrupted
".
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174. In addition to the above definition, and in order to
eliminate any ambiguity as to the Commission's objectives, the
Commission will issue a proposed amendment to the regulations
requiring 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. The Commission expects broadcasters to take
measures immediately to ensure that such selections are played
in their entirety.
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175. With respect to medleys and montages, the Commission reminds
licensees that it evaluates these as a single musical selection
when calculating compliance with the regulations. Circular No.
343, dated 11 May 1988 and entitled Analysis by the
Commission of medleys and montages, describes medleys and
montages as "musical selections in which artists or musicians
combine excerpts from several songs
within a single performance".
In the circular, the Commissions advised licensees that it:
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regards a montage or medley as having all of the characteristics
of a single musical selection, regardless of whether there
is verbal material between the excerpts, and accordingly evaluates
a medley or montage as a single selection. In determining
the main content of such a selection, the Commission uses
the duration of the predominant type of material.
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176. The Commission will review its approach to maintaining
a French-language presence in radio broadcasting, and specifically
its policy on French-language vocal music, when it conducts
its next review of its policies for commercial radio in five
years. This will enable the Commission to assess the effectiveness
of the broadcasting and music industries efforts in promoting
Canadian music in the French language, as well as the contributions
in this area resulting from transfers of ownership or control.
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FOREIGN-PRODUCED PROGRAMMING
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177. There is currently no regulation or policy specifying
any minimum amount of Canadian-produced programming that a radio
station must broadcast. Canadian content regulations relate
only to the level of Canadian musical selections that are broadcast.
In recent years, some Canadian radio stations have increased
their use of foreign-produced syndicated programming. In light
of this development, the Commission asked parties to comment
on whether or not it would be appropriate to impose an additional
requirement on radio stations that they broadcast a minimum
amount of Canadian-produced programming.
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178. A survey of ten markets conducted by the Commission in
preparation for the hearing revealed that approximately half
of the English-language stations surveyed scheduled some non-Canadian
syndicated programming. No non-Canadian programming was found
on any French-language station.
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179. While the use of non-Canadian programming was generally
not extensive, the survey showed that three AM talk stations
were broadcasting more American- produced programming than Canadian-produced
programming.
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180. The CAB and some individual commercial broadcasters suggested
that regulations limiting the level of foreign-produced programming
are unnecessary. They considered that the strength of radio
is its local programming, and that most stations with very high
levels of non-Canadian programming would ultimately be unsuccessful.
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181. The CAB also argued that, in assessing the predominant
use of Canadian creative and other resources in the creation
and presentation of programming, the administrative, technical
and creative infrastructure should also be taken into account.
It contended that these factors, coupled with Canadian music
requirements, are sufficient to ensure that radio is predominantly
Canadian.
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182. The licensees of two AM stations operating in the talk
format pointed out that talk stations are comparatively expensive
to operate. They considered that it is important to have the
flexibility to supplement Canadian programming with non-Canadian
programming in order to allow such stations to successfully
launch and maintain their formats. They also considered that
imported syndicated programming serves as a low-cost method
of filling out the programming schedules of talk stations, especially
during periods of lower listening.
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183. Several other parties, including the Friends of Canadian
Broadcasting, the CBC, Union des artistes, CIRPA and some individual
broadcasters, expressed concern about the increased use of foreign
programming, and suggested that regulatory requirements should
be considered in light of the Act's objectives.
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The Commissions Conclusions
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184. The Commission considers that the broadcast of Canadian-produced
programming is a key component of the general objective set
out in section 3(1)(f) of the Act, that "each broadcasting
undertaking shall make maximum use, and in no case less than
predominant use, of Canadian creative and other resources in
the creation and presentation of programming."
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185. The Commission notes that most stations broadcast very
low levels of non-Canadian programming. Accordingly, it is not
convinced that a regulation specifying a minimum requirement
for Canadian programming would be the best approach.
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186. Accordingly, the Commission will address situations
involving stations that broadcast high levels of non-Canadian
programming on a case-by-case basis, at the time of licence
renewal. Any requirement for a minimum level of Canadian-produced
programming will be imposed by way of condition of licence where
deemed appropriate.
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187. The Commission also intends to amend the logging requirement
set out in the regulations to require that licensees identify
all non-Canadian produced programming broadcast. This will facilitate
the Commissions ability to monitor performance in this
area.
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LOCAL PROGRAMMING
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188. Section 3(1)(i)(ii) of the Act states that the
programming provided by the Canadian broadcasting system should
be drawn from local, regional, national and international
sources" (emphasis added). The radio industry has historically
been the sector of the broadcasting system that has provided
the lions share of programming addressing local issues
and concerns. In many smaller communities, local radio stations
are the only daily source of local news, information and emergency
messages.
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189. The Commissions local programming policy for radio
is set out in Public Notice CRTC 1993-38
entitled Policies for Local Programming on Commercial Radio
Stations and Advertising on Campus Stations. Under this
policy, licensees of commercial FM stations in markets served
by more than one private commercial radio station are generally
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.
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190. Local programming is defined as follows:
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Local programming includes 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.
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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.
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191. 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. The Commission also has the discretion to impose
certain requirements by condition of licence where necessary.
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192. In practice, however, questioning of applicants at renewal
time about the levels of local programming on their AM stations
has generally been directed to those for whom low levels of
local programming have been identified as a problem in previous
renewal decisions.
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193. The CAB and some individual commercial broadcasters considered
that local programming requirements for commercial stations
are unnecessary. They suggested that radio is essentially local
in nature and will remain responsive to local markets without
regulations. They further believed that loosening current restrictions
on the number of stations an individual licensee may own in
a market will give broadcasting companies more revenue to re-invest
in local service.
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194. The CBC, as well as some commercial broadcasters, considered
that the current approach is appropriate in that it ensures
minimum levels of local programming while allowing flexibility
for AM stations.
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195. Two parties associated with the music industry believed
that the local programming guideline for FM stations should
be applied to AM stations as well. They suggested that this
would provide additional opportunities for recordings by local
and regional artists to receive airplay.
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The Commissions Conclusions
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196. In the Commission's view, the local programming guideline
for commercial FM stations serves to ensure that a strong local
presence is maintained. As noted in the previous section
of this document, a few stations are making significant use
of acquired programming. The Commission, however, agrees with
the CAB that most radio stations will continue to focus on local
programming.
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197. A more flexible approach for AM stations was chosen by
the Commission to allow syndicated programming formats to develop.
Such formats provide a complete music 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 is concerned
that imposing an overall local programming requirement on AM
stations could have a negative impact on some stations that
are in financial difficulty, as well as well as on some Canadian
networks.
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198. The Commission will therefore maintain its one-third
local programming guideline with respect to FM stations in competitive
markets. It will also generally maintain its case-by-case approach
for AM stations. In the future, all AM stations will
be asked to make commitments in their licence renewal applications
to a minimum level of local programming, and to describe how
they will provide sufficient service to their local communities.
Conditions of licence will be imposed in cases where the Commission
deems them to be appropriate.
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Weather Warnings
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199. The Canadian Meteorological and Oceanographic Society
expressed concern that it is often difficult to ensure that
weather warnings are broadcast in a timely manner. It recommended
that the CRTC convene a meeting of interested parties from government
and the broadcasting industry to document existing standards
with respect to broadcasting weather warnings and to make recommendations
for improvements.
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200. The CAB, as well as several individual broadcasters, agreed
that such a process could be useful and expressed a willingness
to participate.
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The Commissions Conclusions
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201. The Commission agrees that radio plays an important role
in assisting members of the public to deal with weather emergencies.
It notes that many stations provided outstanding service to
their communities during the January 1998 ice storms and other
weather emergencies in recent years in different regions of
the country.
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202. It is concerned, however, that ensuring the prompt
broadcast of weather warnings may present difficulties for stations
that make use of automated systems and satellite programming,
especially in the evenings and on weekends. In these cases,
there may be limited staff available to attend to such warnings.
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203. The Commission will therefore convene a meeting of
interested parties to discuss ways to ensure the prompt broadcast
of weather warnings.
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Broadcast Standards
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204. To help ensure that radio programming is of high standard,
the regulations prohibit the broadcast of: anything in contravention
of the law; any abusive comment that, when taken in context,
tends or is likely to expose an individual to hatred or contempt
on the basis of race, national or ethnic origin, colour, religion,
sex, sexual orientation, age or mental or physical disability;
any obscene or profane language; any false or misleading news;
any telephone conversation or interview without consent; and
any advertisement of alcoholic beverages unless it meets the
standards of the applicable code and the regulations.
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205. Radio broadcasters must also adhere, by condition of licence,
to the Broadcast Code for Advertising to Children
and the Sex-Role Portrayal Code for Television and Radio
Programming. Application of the condition of licence pertaining
to the sex-role portrayal code may, upon request by a licensee,
be suspended so long as it remains a member in good standing
of the Canadian Broadcast Standards Council (CBSC). The Commission
has also established a policy on open-line programming, which
is set out in Public Notice CRTC 1988-213.
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206. The CAB argued that it is not necessary to maintain the
regulation that generally prohibits the broadcast of any telephone
conversation with a person unless that persons consent
is received prior to the broadcast or unless the person telephoned
the station for the purpose of participating in a broadcast.
Other parties, however, supported retention of the regulation,
and at least one commercial broadcaster indicated that the regulation
did not impose an undue burden on broadcasters.
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207. Friends of Canadian Broadcasting expressed concern about
the self-regulatory process noting that some broadcasters appear
to be broadcasting programming produced outside Canada that
contravenes guidelines administered by the CBSC.
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The Commissions Conclusions
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208. The Commission considers that the policies and regulations
described above, despite the minimal constraints they may impose
on broadcasters, are necessary to ensure that programming is
of high standard and otherwise meets the objectives of the Act.
The Commission will therefore maintain the requirements in their
current form.
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209. With respect to concerns about foreign-produced programming,
the Commission reminds broadcasters that they are responsible
for all programming broadcast, whatever the origin.
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210. As indicated in the Commission's April 1998 Vision Action
Calendar, it will hold a public review of the self-regulatory
process in the winter of 1998/99. Issues related to the standards
applicable to both Canadian and non-Canadian syndicated programming
will be explored as part of that review.
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OTHER MATTERS
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Role of CBC Radio
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211. Several parties at the hearing noted that CBC radio plays
an important role in expanding the diversity of radio programming
available to Canadians, as well as in providing a national stage
for Canadian artists. Its financial support of Canadian musicians
and its commitments to broadcast performances by Canadian artists
make the CBC a leader in Canadian talent development. The Commission
encourages the Corporation to continue to explore appropriate
and effective ways of cooperating with private broadcasters
in matters related to Canadian talent development.
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212. The Commission plans to explore the role of CBC radio
more fully at the time it next considers the licence renewal
of the Corporations radio networks.
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Programming that Reflects Canadas Cultural Diversity
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213. Section 3(d)(iii) of the Act states, in part, that
the broadcasting system, through its programming and employment
opportunities arising out of its operations, should reflect
the multicultural and multiracial nature of Canadian society.
The Commissions Vision statement also emphasizes that
programming should reflect the cultural diversity of Canada.
The Commission encourages broadcasters to reflect the cultural
diversity of Canada in their programming and employment practices,
especially with respect to news, music and promotion of Canadian
artists.
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Radio and the Internet
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214. Discussion at the hearing concerning the Internet focused
primarily on a plan by the CAB to establish a "virtual
record store." This initiative, which was discussed earlier
in this document in the section dealing with promotion of Canadian
music, would enable listeners to order, through the Internet,
Canadian recordings they have heard on the radio.
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215. The Commission considers that the Internet can be a positive
vehicle for promoting and enhancing the business of radio and
the recording industry. As noted in the Commissions April
1998 Vision Action Calendar, it will hold a public process in
the fall of 1998 on new media. Issues related to the Internet
will be explored more fully in this process.
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Laura M. Talbot-Allan
Secretary General
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This document is available in alternative format upon request.
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