ARCHIVED -  Public Notice CRTC 1986-248

Public Notice

Ottawa, 19 September 1986

Public Notice CRTC 1986-248

REGULATIONS RESPECTING RADIO BROADCASTING

Related Documents: Public Notice CRTC 1986-66 dated 19 March 1986.

I) Introduction

Pursuant to subsection 16(1) of the Broadcasting Act, the Commission has enacted Regulations Respecting Radio Broadcasting. These new Regulations, which will govern both AM and FM radio broadcasting, have been registered with the Clerk of the Privy Council to come into effect today. A copy of the Regulations will be published shortly in the Canada Gazette, accompanied by an order revoking the previous Radio (A.M.) Broadcasting Regulations C.R.C. c.379 and the Radio (F.M.) Broadcasting Regulations C.R.C. c.380, as amended. A copy of the new Regulations is included as the Appendix to this Public Notice.

These new radio broadcasting regulations are the culmination of an extensive and thorough public review process which elicited comments from individuals, consumer groups, industry associations, independent program producers, radio broadcast licensees, provincial securities commissions and governments. These regulations include modifications to the regulations concerning the advertising of alcoholic beverages and other products to which the Food and Drugs Act applies which were the subject of a separate public hearing and which are discussed in more detail in Public Notice CRTC 1986-247, issued today.

II) Background

In Public Notice CRTC 1986-66, dated 19 March l986, the Commission issued for public comment "Proposed Regulations Respecting Radio (A.M.) and Radio (F.M.) Broadcasting". The proposals for regulatory reform contained in that document represented a fundamental review of the existing radio regulations within the context of a rapidly changing communications environment. The Commission's primary objective was to provide a regulatory framework that will ensure that the Canadian broadcasting system remains strong and viable in order to place an increased emphasis on the use of Canadian creative resources, and to accommodate the evolving needs and tastes of the Canadian public. The regulatory proposals also reflected the Commission's commitment to a more streamlined and supervisory regulatory framework.

In response to its call for comments, the Commission received a total of 64 submissions from a wide variety of sources including: individuals, the Canadian Association of Broadcasters (CAB), the British Columbia Association of Broadcasters, the Canadian Independent Record Producers Association (CIRPA), the Consumer's Association of Canada, radio broadcast licensees, independent Canadian program producers, the Alberta Educational Communications Authority, provincial securities commissions, the Government of Ontario and a Member of Parliament. Of these, a total of 14 parties appeared at a Public Hearing, that began 21 May 1986 in Hull, Quebec.

The Commission wishes to acknowledge the important contribution made by all parties to the review process. The participants' expertise and views played a significant role in the Commission's final deliberations on the new Radio Regulations.

III) The Regulations

As proposed in Public Notice CRTC 1986-66, the new Radio Regulations form a single set of regulations to govern both AM and FM radio broadcasting. The Regulations are divided into three parts: Part I, containing provisions applicable to both AM and FM radio broadcasting; Part II, containing provisions applicable solely to AM radio broadcasting; and Part III, containing provisions applicable solely to FM radio broadcasting.

Part I of the new Regulations incorporates and refines certain provisions of the past AM and FM Regulations pertaining to broadcasting generally. Other provisions of the previous Regulations have been omitted, particularly those considered to be not essential to achieve the objectives of the Act. Among the sections eliminated are those which pertained to programs dealing with birth control and venereal disease, advertising in a newscast, appeals for donations, lotteries, station contests, offensive promotional programs, CBC affiliation agreements, rebroadcasting, financial returns and chain broadcasting. The Commission has also eliminated provisions dealing with the advertising of bonds, shares and other securities as it considers that those matters do not fall within its mandate under the Broadcasting Act.

New provisions have also been enacted. These include a prohibition on the broadcast of telephone interviews and conversations on FM radio without the permission of the person interviewed (which in the previous regulations applied only to AM radio), provisions concerning the broadcast of ethnic programs and a new provision dealing with changes of ownership or control of undertakings. In addition, there are changes to the provisions concerning the advertising of foods, drugs and alcoholic beverages to implement the policy announced in Public Notice CRTC 1986-247 published today.

Part II of the new Regulations relating to AM broadcasting contains provisions concerning the broadcast of Canadian musical recordings, including a provision for the broadcast of Canadian selections during ethnic programs. Previous restrictions on commercial advertising on AM radio been eliminated, as discussed later in this Notice.

Part III of the Regulations relating to FM radio contains, among other things, new provisions for the broadcast of foreground format programs and commercial messages, as well as new incentives designed to promote the production of high quality foreground format programs using Canadian talent and to stimulate the Canadian program syndication industry.

In addition to enacting the Radio Regulations, the Commission is also introducing a number of changes to its FM policies and administrative practices as outlined later in this document. A provision that would have redefined the "hit" musical recording as proposed in Public Notice CRTC 1986-66 has been deferred.

In keeping with the Commission's goal of placing a greater emphasis on the supervisory aspect of its mandate under the Act, the Commission has requested the radio industry to play a greater role in ensuring that the objectives of the Act are met. To this end, the radio industry has been asked to develop industry codes and guidelines in certain areas previous direcly covered by regulation.

A number of regulations and policies raised in Public Notice 1986-66 were explored at the Public Hearing and are discussed below. The remaining sections of the proposed Radio Regulations are adopted essentially as proposed in Public Notice CRTC 1986-66.

i) Advertising Limits for AM Radio

In Public Notice CRTC 1986-66, concern was expressed regarding the financial viability of AM radio in part due to the growing popularity and increasing audience share of FM radio. In response to this situation, the Commission proposed to eliminate restrictions on advertising time for AM. It was hoped that increased flexibility to schedule commercial time would help strengthen AM revenues, which in turn would be used to generate increased support for the development of Canadian musical talent and the production of high quality programming.

Written submissions were received by the Commission from some members of the public opposing the elimination of advertising limits for AM radio. A Member of Parliament, Ms Lynn MacDonald, appeared at the hearing to express opposition to this proposal. It was generally felt by these intervenors that the removal of advertising restrictions might lead to an excessive amount of commercials on AM stations without any concomitant increase in program quality.

Licensees appearing at the hearing, as well as representatives of the Ontario Ministry of Transportation and Communications and the CAB, how ever, supported the proposal, stating that, in the absence of the existing restrictions, market forces would serve to limit the amount of commercial content aired by AM stations. The consensus among broadcasters at the hearing was that the removal of advertising limits would not result in significant changes in general advertising practices and policies. The change would, however, give AM licensees flexibility to accept additional advertising at times, such as Christmas, when there is more demand for advertising time.

The Commission is confident that competition within the radio industry, from other advertising media, and from alternative information and entertainment sources, in combination with audience response to the amount of advertising and advertisers' reluctance to have their messages lost in a clutter of other advertise ments, are factors which tend to limit the amount of commercials aired by AM broadcasters. The Commission, therefore decided to adopt this proposal to eliminate advertising limits for AM radio and to assess the impact that this change has on advertising levels on AM after two years. It will also examine, among other things, the use of additional advertising revenues for the development of Canadian creative and other resources at the time of the renewal of the licences of individual AM stations.

The Commission stated in Public Notice CRTC 1986-66 that it expected the radio industry to establish self-regulatory codes pertaining to advertising levels on AM radio. The Commission has since received preliminary codes from the CAB. At the hearing, representatives of the CAB explained that these preliminary codes would be more thoroughly developed after further discussions with CAB members. A submission of the final draft of the CAB's codes is expected in the near future. The Commission wishes to stress the importance that these codes will play in the new regulatory environment and reiterates that the effectiveness of these codes will be considered within the context of the two-year review.

ii) Transfer of Ownership

All radio licences currently have certain conditions of licence specifying Commission requirements with respect to changes in ownership or in the effective control of the licensed undertaking. These requirements, now somewhat modified and less onerous, have been incorporated into Section of the Radio Regulations.

All radio licensees are, therefore, invited to apply to the Commission to delete their existing conditions of licence regarding ownership or effective control of their undertakings.

iii)  Advertising of Alcoholic Beverages and Food and Drugs

In its Public Notice CRTC 1986-68, issued concurrently with Public Notice CRTC 1986-66, the Commission proposed to eliminate the long-standing requirement for Commission preclearance of scripts for beer, wine and cider commercials. The Commission also proposed to discontinue the regulatory requirement that the Commission approve scripts for other products to which the Food and Drugs Act applies.

The Commission considered submissions on this subject and briefs presented at a public hearing held in the National Capital Region concurrently with the Radio Regulations hearing. As a consequence, the Commission has concluded that elimination of the requirement for Commission preclearance of commercials for alcoholic beverages would not be in the public interest at this time. How ever, the Commission will discontinue the pre-clearance of other products to which the Food and Drugs Act applies, beginning 1 April 1987.

For greater detail please refer to the Commission's Public Notice 1986-247 entitled "Broadcasting Advertising of Alcoholic Beverages and Food and Drugs" issued today.

iv)  Definition of the Market Served by an AM Station

In Public Notice CRTC 1986-66, the Commission proposed to define the term "market" as follows:

 "market" means the geographical area

 a) within the 500 microvolt per metre day-time official contour of an A.M. station, or

 b)within the 500 microvolt per metre official contour of an F.M. station.

This definition is used to determine if an FM station falls into the joint, independent or first radio service class of licence.

In its submission, the CAB expressed concern with respect to this definition as it related to AM radio. It q noted that a 500 microvolt per metre day-time official service contour often covers a very large area, particularly where ground conductivity is high. It contended that adoption of this definition would lead to situations whereby a licensee would classified as a joint FM licensee because its market was covered by the 500 microvolt per metre official service contour of a co-owned AM station licensed to serve a community located a considerable distance away. It suggested, instead, that the market of an AM station be determined using the area encompassed by the station's night-time interference free official service contour (NIF).

While acknowledging the concerns raised by the CAB, the Commission notes that there are difficulties in using the NIF to determine an AM station's market. In many cases, a station's night-time coverage area is considerably different than that covered during the day. In these situations, using the NIF could provide a distorted picture of the market which a station actually serves. As well, the Commission notes that stations that are authorized only for day-time operation have no NIF.

The Commission, therefore, has decided to define the market served by an AM station as the area encompassed by the station's 5 millivolt per metre service contour for purposes of defining joint and independent FM licences. It considers that this definition will respond to the concerns raised by the CAB while providing a realistic indication of the market served.

v) Logging Requirements

The Commission has adopted section 8 of the Regulations (Logs and Records) as proposed in Public Notice CRTC 1986-66.

The new provision will require a number of changes in logging practices used by stations in the past.

With respect to program logs, the new Regulations require that entries for commercial messages indicate only the quarter-hour of broadcast as well as the duration and content subcategory of each commercial message. The exact time of the broadcast of each commercial message aired is no longer required. However, stations may continue to note this information if it is more convenient.

Licensees are also asked to note the Schedule appended to the Regulations which sets out the proper codes and format for indicating the origin and language(s) of programming. For ethnic programs, licensees must also indicate the ethnic group(s) to which the programs are directed as well as the ethnic program type, as set out in Public Notice CRTC 1986-65.

FM licensees are asked to note the portion of the Schedule dealing with the applicable codes and format for identifying foreground segments and Canadian feature segments. As discussed later in this document, the Commission is adopting an incentive system whereby commercial messages broadcast during Canadian feature segments are not counted for purposes of the limit of l50 minutes of commercials allowed to be broadcast by independent or joint FM licensees during a broadcast day. FM licensees wish ing to take advantage of this in centive must ensure that Canadian feature segments are clearly and accurately identified in their program logs.

Subsection 8(5) of the Regulations requires that licensees retain a clear and intelligible tape recording or other exact copy of all matter broadcast. Under the previous Regulations, responsibility for maintaining tapes of network programming was placed upon the network operator. However, under the new Regulations, tape recordings or other exact copies must include all programming broadcast by a station, including network programming.

The recordings provided to the Commission should also include all programming broadcast by part-time rebroadcasting stations, including programming originated by another station. The Commission is aware that some partial rebroadcasting stations maintain tapes only for that portion of their programming that is originated locally. However, the Commission considers that such stations could satisfy a request to furnish tapes by providing chronologically identified tapes of locally originated programming recorded at the station together with the tapes programming aired when the station was operating in a rebroadcasting mode.

The Commission also draws the attention of radio licensees to section 9 the Regulations which requires them to furnish such additional in formation as is reasonably necessary for the proper administration of the Act and Regulations. One example of additional information on occasion requested is a sequential list of musical selections broadcast along with the name of the artists that performed them with an identification using the MAPL system for selections considered to be Canadian. This information is generally used to measure the compliance of stations with the requirements regarding Canadian musical content. Music lists from FM stations are also used to measure compliance with the commitments set out in their Promises of Performance. The Commission expects licensees to be prepared to provide accurate music lists when requested to do so.

vi) Content Categories and Subcategories

In Public Notice CRTC 1986-66, the Commission proposed that AM radio adopt the same definitions of content categories and subcategories as used for FM stations, and, for popular music-based stations, the four FM station format groups.

While the adoption of a common set of content categories and subcategories received a favourable reaction, some intervenors expressed concern about using the FM format group system to describe the sound of AM stations. They believed that these groups did not adequately describe the wide variety of programming available on many AM stations and were, therefore, not appropriate for AM radio.

In order that all licensees use a common set of definitions in their applications, the Commission has decided to implement its proposal that AM stations use the same system of content categories and subcategories as FM stations, as set out in Public Notice CRTC 83-43 dated 3 March 1983. However, AM stations will not be required to make a commitment to operate within a specific format group. Instead, they will continue to follow the current practice of providing a breakdown of the music they propose to broadcast by content sub-category when filing applications.

vii) Networks

As proposed in Public Notice CRTC 1986-66, the Commission has deleted all references to radio networks in the new Radio Regulations with the exception of prohibiting stations from affiliating with a foreign network. However, the Commission intends to conduct a review of radio networking and syndication. The Commission will issue a Public Notice on this matter at a later date.

In the interim, the Commission wishes to reiterate its policy contained in CRTC Circular No. 258 (dated 23 April 1980) concerning the licensing of temporary network operations.

The Act defines a temporary network operation as "a network operation with respect to a particular program or series of programs extending over a period not exceeding one month". An application to operate a network to broadcast events covering a period beyond one month calls for the issuance of a network licence which must be processed in the context of a public hearing, in accordance with section 19 of the Broadcasting Act. Accordingly, as a general rule, the Commission will not be prepared to approve applications for temporary network licences for the broadcast of events of more than one month's duration.

viii) Provisions with Respect to Foreground and Mosaic Programming and Commercial Limitations

In order to encourage the production of high quality foreground format programs and to stimulate syndication of Canadian programming, the Commission, in Public Notice CRTC 1986-66, proposed an incentive scheme whereby FM stations would be allowed to exceed the current 150 minute daily limit on commercials if they aired certain types of high quality foreground programs.

At the hearing, some intervenors, although agreeing with the concept of an incentive scheme, expressed concern about the actual mechanism proposed. It was argued that under the Commission's prior proposal, there would be little incentive to produce the four types of high quality foreground programs described in the Public Notice for stations who chose to do a level of foreground programming at or slightly above the regulatory minimal. Others expressed concern about the apparent complexity of the proposal and believed that it would be difficult to administer.

The Commission remains convinced that a properly-constituted incentive system can be an effective means to increase the production of quality Canadian-produced foreground programming and to stimulate Canadian program syndication. Therefore, after carefully considering comments received, the Commission has decided to adopt a modified incentive program which will operate as follows:

1) the overall guidelines for combined foreground and mosaic format programming remain at 50% for joint licensees and 33% for independent licensees;

2) the minimum levels specified in the Regulations for foreground format programming are reduced to 15% for joint licensees and 9% for independent licensees;

3) the hourly limits on commercial content are eliminated;

4) the maximum number of commercial minutes permitted on a daily basis remains at 150. However, any commercial messages contained in the three special types of foreground programs listed below will not be counted in calculating a station's daily commercial content for the purpose of ensuring compliance with the regulation. The three types of foreground format programs are identified in the Regulations as "Canadian feature segments". They are:

 a) programs of journalistic and artistic expression produced by Canadians using primarily material from content category 3 - Enrichment;

 b) programs produced by Canadians, whether by syndicators or licensees and broadcast by more than one station other than the producer;

 c) musical foreground programs devoted totally to a Canadian artist or a Canadian group who has not achieved gold certification for an album during the 5 calendar years preceding the broadcast.

After considering comments made by CIRPA and other intervenors at the Hearing, the Commission believes that its modifications to the third type of Canadian feature segment will address concerns raised by intervenors about the original proposal and will allow a greater number of deserving Canadian artists to enjoy the benefits that exposure in such foreground programs will provide.

Stations wishing to take advantage of the incentive must ensure that Canadian feature segments are clearly identified on their program logs using the codes and format set out in the Schedule to the Regulations. As well, on request by the Commission, stations should be prepared to provide documentation showing that programs identified as Canadian feature segments actually qualify as such.

The Commission expects that any additional revenues earned through this incentive program will enable licensees to increase their contributions to mechanisms in support of Canadian musical talent such as FACTOR/CTL and Musicaction or to their own initiatives as well as to increase their use of Canadian syndicated or networked programs. The Commission intends to review licensees' commitments in this regard at the time of their licence renewal.

Although the Commission is now introducing reductions in the minimum levels of foreground format programming required by regulation, it realizes that many licensees have made commitments in their Promises of Performance to broadcast levels of foreground format programming beyond the previous minimum levels specified in the Regulations. In order to allow joint and independent FM stations to take immediate advantage of the reductions on an equitable basis without the necessity to ask for an amendment to their Promises of Performance, the Commission will consider joint and independent FM stations to be in compliance, during this term of licence, if they meet 75% of the commitment for foreground format programming set out in their current Promises of Performance or in other conditions of licence. The Commission expects that licensees choosing to reduce the number of hours of foreground format programming will increase concomitantly the quality of the foreground programs they schedule.

The Commission emphasizes that the change respecting foreground format programs and commercial content apply only to joint, independent and experimental FM licensees. FM licensees holding other classes of licence must continue to respect their existing conditions of licence and the guidelines of the Commission. ix)

Mosaic Format Programs

At the hearing, several persons engaged in the syndication of shorter programs suggested that the Commission's incentive program be extended to include syndicated mosaic features. While recognizing the difficulties faced by syndicators of such programming, the Commission considers that the incentive program is constituted in a way that will encourage the production of high quality foreground format programs which are a distinctive feature of FM radio. In addition, the Commission is confident that the new incentive scheme for broadcasting Canadian feature segments will provide enhanced opportunities for independent Canadian program producers.

The Commission agrees, however, that additional incentives to encourage high quality Canadian syndicated programs in a variety of forms would be desirable and plans to consider proposals in this regard in the future public process to focus on networks and program syndication, as indicated earlier in this document.

x) Guidelines for Music on FM Radio

l) The Use of Hit Material

The Commission currently requires FM licensees to limit the use of hit material to less than 50% of the popular music selections broadcast during a broadcast week. A "hit" has been defined as any musical composition that has reached one of the Top 40 positions on a chart in a nationally or internationally recognized trade publication.

In Public Notice CRTC 1986-66, the Commission proposed to exclude from the calculation of a station's use of hits any selection broadcast more than two years after it originally entered one of the Top 40 positions on the charts.

This proposal brought a mixed reaction at the hearing. FM broadcasters were generally in favour of the proposal. They believed that such a change would allow them to respond more fully to the tastes and interests of their audiences the same time, however, many licensees of AM stations, including some who held both AM and FM licences, expressed concern about the proposal.

In general, AM licensees felt that one of an AM station's few advantages in facing the challenge of FM stations is the ability of AM radio to broadcast a hit-oriented format. However, they noted that the change proposed by the Commission would allow FM stations to rely more heavily on hits. AM licensees felt that this change, coupled with FM's technical advantage and the fact that many FM stations have lower Canadian content requirements than the 30% generally required of AM stations, would have a devastating effect on the viability of AM stations that program music-oriented formats. As well, it was pointed out that the proposed change would decrease the diversity of music available on radio.

In light of the serious misgivings expressed by many AM broadcasters and joint FM licensees about the proposal, the Commission has decided to retain its current policy with respect to hits for a two-year period. It will enter into a consultative process with broadcasters and other concerned parties to discuss what changes, if any, would be desirable. The Commission considers that the two-year period will allow time for further research on the impact that a change in the policy on hits would have on the competitive balance that exists between AM and FM radio and provide an opportunity for broadcasters to search out a consensus on the issue. Hopefully, it will also provide an opportunity to assess the impact that AM stereo technology and other new developments may have on the popularity of AM radio.

The Commission frequently receives inquiries concerning its interpretation of the definition of a hit for administrative purposes, and would like to use this notice as an opportunity to provide clarification. The Commission has prepared, and constantly updates, a list of selections that have reached Top 40 positions on a number of charts in major trade publications. Charts included in the file are "RPM - 100 Singles", "RPM - Country Chart", "The Record - Top Singles", "The Record - Top 50 Country Chart", "Radioactivité Radio", "Billboard - Hot 100 Singles", and "Billboard - Hot Country singles". Selections that reach one of the Top 40 positions on any of these charts are recorded using the title of the selection and the name of the artist who performed it. When the Commission wishes to calculate a station's use of hits, it compares a list of musical selections played by the station with the file it has assembled from the above-mentioned charts. Selections on the music list that match a selection in the Commission's file both by title and by artist are counted as a hit. It is important to note that only music recorded for retail sale and broadcast by the station is counted as a hit. Selections heard during a live broadcast or a live performance recorded primarily for broadcast use are not counted as hits in the Commission's calculations.

Recently, the Commission has received correspondence in which it was suggested that hits should be identified, not just by the title of the selection and the name of the artist, but also by the actual numeric code that appears on the single version of a record that enters the Top 40. In this way, stations playing different studio-produced versions of records that have made the hit charts as singles, such as "12-inch-singles" or different mixes of the selections, would not be counted as hits in the Commission's calculations. The Commission believes that adopting this system, which would allow FM stations to play a high percentage of music that is largely similar to that on the hit charts (same selection, same artist), raises the same concerns that were raised with respect to the Commission's proposal in Public Notice CRTC 1986-66. Therefore, for the reasons noted above, the Commission is making no changes with respect to the use of hit material at this time.

2) Maximum Repeat Factor

In Public Notice CRTC 1986-66, the Commission proposed to exempt all Canadian music selections from the application of the Commission's policy guideline that stipulates that no musical selection may be repeated more than l8 times during a broadcast week. New Canadian non-hit selections were already exempt from the Maximum Repeat Factor.

The change was proposed in response to submissions from the Canadian record industry to the effect that the limit on the repetition of Canadian hits lessens FM listeners' exposure to Canadian records and, therefore, decreases sales of Canadian records.

At the hearing, some intervenors expressed concern that the proposed change would lead FM stations to repeat selections by established Canadian artists more frequently and consequently decrease the exposure given to new Canadian artists. While acknowledging these concerns, the Commission notes that CIRPA supported the Commission's proposal. It also notes that FM licensees make commitments in their Descriptions of Programming with respect to the airing of new untried music. It expects that licensees will include new untried Canadian music when selecting music to fulfill these commitments. It also considers that the inclusion of programs entirely devoted to Canadian artists who have not achieved gold certification for an album in the previous 5 years in its incentive system designed to stimulate the production of quality foreground programming will provide additional exposure for new Canadian talent.

The Commission has therefore decided to implement the exemption of a Canadian selections from the maximum repeat factor guideline as originally proposed.

3) Traditional and Special Interest Music

The Commission hereby announces that it will review applications by FM licensees for reductions in their commitments to broadcast Traditional and Special Interest music (Category 6) on a case-by-case basis, taking into account the availability of such music on other stations serving their respective communities. This change was proposed in Public Notice CRTC l986-66 in response to the growing availability of CBC-FM stereo services and the possible development of new specialty audio services.

4) Canadian Musical Content on Country FM stations

In response to Public Notice CRTC l986-66, the CAB submitted a report responding to a study conducted by the Commission with respect to the availability of all types of country music. The Commission had conducted this study after receiving submissions from broadcasters contending that there was not a sufficient number of Canadian recordings available for stations with a format based on Urban or Contemporary country music to maintain a 30% level of Canadian musical content.

The Commission will shortly issue a Public Notice on this matter.

xi) Other Matters

In both its written submission and oral presentation, the CAB recommended amendments to the Radio Regulations proposed in Public Notice CRTC l986-66 concerning simulcasting and enrichment programming. Specifically, the CAB recommended that the regulations prohibiting joint FM licensees from broadcasting programs simultaneously over their AM and FM stations in the same market, and regulation setting out minimum foreground levels for FM stations, be amended to allow for exceptions in their application.

The CAB based its arguments on the need for increased flexibility for stations serving smaller markets, particularly given the precarious financial situations of many of these broadcasters.

The Commission is confident that the regulatory and policy reforms which have resulted from its review process bode well for the continued growth and success of FM radio. As regards the restrictions on simulcasting, the Commission remains adamant that the objective of maximizing program diversity in the system be maintained. To this end, the Commission will continue its restrictions on simulcasting. The Commission notes that the Regulations do contain provisions for AM and FM simulcasting under certain conditions.

As for the regulatory requirements for enriched programming, the Commission is confident also that the new levels established for foreground format programs will help to alleviate the current difficulty encountered by some FM stations, particularly in smaller markets, in financing the high quality foreground programs expected of them.

The new incentive scheme for foreground format programming embodied in the Regulations should benefit broadcasters as it is designed to increase the revenue potential of broadcasters while providing new sources and opportunities for the production and acquisition of high quality foreground format programming. Canadian audiences will consequently have access to higher quality foreground programs. Independent producers will have additional opportunities to sell their programs. New Canadian artists can expect additional exposure of their works on radio stations.

The Commission is intrigued by the innovative proposal presented by Mr. Robert Wood which he called the START program, to attract additional revenues to the development of new Canadian musical talent. It would draw the attention of the industry to the initiative and encourages the industry to consider this or other means to generate additional funds for the development of Canadian musical artists.

Minority Opinion of Commissioner Monique Coupal relating to The Radio Policy

Commissioner Monique Coupal is dissenting on two issues: the removal of the hourly limit for advertisements and the reduction of the requirement for foreground programming.

As usual we are giving even more to the industry than they requested. While the industry sought to have a certain flexibility to place a few more ads at specific times of the year, we are removing any hourly restrictions. In so doing we are almost destroying the diversity that we sought to establish between AM and FM radio and ensuring that the public will increase its usage of cassettes to avoid the clutter of ads now heard on AM radio. The argument that the industry is in a difficult financial situation and needs some relief may be true for some marginal stations but not for the majority. If the situation is so difficult, why is it then that we continue to receive and approve so many applications for radio licences?

With regard to the reduction in the level of foreground programming, the Commission has already made considerable adjustments to its FM policy enabling licensees to meet the requirement of the policy without any difficulty. A further reduction without any significant contribution by the industry towards the objectives of the Broadcasting Act is unacceptable.

Fernand Bélisle Secretary General