ARCHIVED -  Public Notice CRTC 1986-66

Public Notice

Ottawa, 19 March 1986

Public Notice CRTC 1986-66

PROPOSED REGULATIONS RESPECTING RADIO (A.M.) AND RADIO (F.M.) BROADCASTING

TABLE OF CONTENTS

Pages

I. INTRODUCTION 1

II.FORMAT OF THE PROPOSED REGULATIONS 4

Networks

III. PART I - BROADCAST CONTENT 5

i) Content Categories and 6 Sub-categories

ii) Advertising in a Newscast 7

iii) Telephone Interviews and Conversations 7

iv) Station Contests 8

v) Programs of the Corporation 8

vi) Network Affiliation 9

vii) Ethnic Programs 9

viii) Transfer of Ownership or 10 Control

ix) Bonds, Shares and Securities 10

x) Advertising of Alcoholic Beverages 11

xi) Advertising of Food and 12 Drugs

IV. PART II - AM RADIO 13

i) Canadian Content in Music 13

ii) Advertising Time 14

V. PART III - FM RADIO 16

Concerns 17

a) Foreground and Mosaic 19 Programs

b) Canadian Syndication 20

c) Commercial Content 21

Proposals with Respect to Foreground, Mosaic and Commercial 22 Limitations

Other Changes to the FM Regulations 25

Guidelines for Music on FM Radio 27

i) Maximum Repeat Factor 27

ii) The Use of Hit Material 27

iii) Traditional and Special 28 Interest Music

iv) French-language Foreground 29 Format Programming

v) Canadian Content Guidelines 30 for Country Music Stations

VI. FRENCH-LANGUAGE MUSIC 31

VII. SUBMISSION OF PUBLIC COMMENTS 31

APPENDIX

I. INTRODUCTION

Broadcasting in Canada has been regulated virtually from the beginning of radio communications, reflecting the need to manage a limited spectrum and the continued public policy objective reiterated by successive Canadian Parliaments that it play a significant role in reaching Canadian cultural goals. In l932, regulations enacted by the Canadian Radio Broadcasting Commission (CRBC) represented the first comprehensive set of broadcasting laws and regulations. In 1936, the Canadian Broadcasting Corporation (CBC) succeeded the CRBC as the national broadcasting service as well as Canada's broadcasting regulator and enacted additional regulations. In 1958, a new Broadcasting Act was enacted, creating the Board of Broadcast Governors (BBG) to regulate broadcasting.

In l96l and l964 respectively, the BBG enacted separate radio broadcasting regulations for AM and FM radio. In l968, under the terms of a new Broadcasting Act (the Act), the BBG was succeeded by what is now the Canadian Radio-television and Telecommunications Commission (CRTC).

Since its inception the Commission has promulgated a number of significant regulatory changes to radio. In l97l, a regulatory requirement for the broadcast of Canadian musical recordings on AM radio was introduced. In l976, following the development of its new FM policy, the Commission implemented a series of new regulations to incorporate the initiatives proposed in the FM policy into the FM Regulations. In addition, a number of administrative practices to implement this policy were adopted in the late l970s. The Commission's 1983 Policy Statement on the Review of Radio led to additional changes to the FM Regulations and related administrative practices. In addition, the Commission has introduced throughout the years a number of amendments to individual AM and FM regulations to accommodate new policy refinements and changing industry conditions.

Currently, Canada is experiencing substantial change which exerts a profound influence upon the broadcasting system. In radio, a variety of technological, social and economic forces are converging to stimulate new competition, new audio service concepts, improved and more efficient delivery options and new patterns of consumer utilization. Furthermore, the Commission notes that many of its radio licensees have experienced financial difficulties over the past few years. An increasing number of stations have not had significant growth in their revenues at a time when their operating costs have increased dramatically.

In addition, the Commission notes the concerns expressed by broadcasters, record industry representatives and the federal and some provincial governments over the difficulties encountered by the Canadian recording industry in supplying sufficient Canadian recordings for broadcast in all formats.

These factors present substantial challenges to both the radio industry and to the Commission's regulatory approach.

Therefore, the Commission has under taken a thorough review of the Radio (A.M.) and Radio (F.M.) Broadcasting Regulations and of its FM administrative practices.

In so doing, the Commission is determined to promote a regulatory environment conducive to the development and support of Canadian musical talent and artistic expression as well as the maintenance of a strong Canadian broadcasting system. The Commission believes that its radio regulations should be sufficiently flexible and efficient to enable the industry to remain strong and viable so as to meet the increased emphasis on Canadian creative resources.

The Commission is mandated to regulate and supervise the Canadian broadcasting system so as to implement the goals set out in the Act. Because of the rapid changes occurring in the system, the Commission has decided to place a greater emphasis on the supervisory aspect of its mandate under the Act. It therefore intends to request the radio industry to play a greater role in ensuring that the public be well served and the objectives of the Act be met. The Commission notes that there already exist industry codes in the areas of sex-role stereotyping and Children's Advertising and proposes in this document that the industry develop additional guidelines in a number of areas previously covered by regulation.

In its approach to this review, the Commission has attempted to determine which regulations belong in each of the following categories: those absolutely necessary to achieve the goals of the Act and to strengthen and enrich a distinctive Canadian broadcasting system; those no longer necessary to reach the objectives of the Act; those more appropriate to industry self-regulation; and those regulations that need to be updated, streamlined and clarified.

Accordingly, the Commission now issues for public comment, pursuant to subsection l6(2) of the Act, a proposal for new regulations respect ing radio broadcasting, as set out in the appendix to this notice.

II. FORMAT OF THE PROPOSED REGULATIONS

Many AM and FM regulations are similar, if not identical, particularly where they are not related to separate AM or FM broadcasting policies of the Commission.

Accordingly, the Commission proposes to implement a single set of radio regulations entitled Regulations Respecting Radio Broadcasting to govern both AM and FM radio broadcasting.

The proposed new Regulations are divided into three sections. Regulations applicable to both AM and FM broadcast stations constitute the greater part of the Regulations and form Part I, Broadcasting Content. Part II contains regulations applicable solely to AM broadcasting. Part III contains regulations applicable solely to FM broadcasting.

Networks

The regulations governing the use of radio networks or Chain Broadcasting are identical for both AM and FM and set out conditions under which radio networks may operate. The substance of these regulations has remained relatively unchanged over the years. Yet, the broadcasting system and programming practices have changed dramatically.

The Commission intends to conduct a review of radio networking and syndication in the near future. This review would consider new audio service and delivery concepts, specialty and other nationally-distributed services and other new audio developments taking place in a rapidly changing communications environment. The Commission will issue a Public Notice on this matter at a later date.

Consequently, the Commission proposes at this time to delete all references to networks in the Radio Regulations with the exception of prohibiting stations from affiliating with a foreign network.

III. PART I - BROADCAST CONTENT

Part I of the attached regulations incorporates and refines certain provisions of the existing AM and FM Regulations that pertain to both types of radio broadcasting. New provisions have also been added.

In addition, certain other provisions of the existing regulations, not related to specific AM or FM policies, which the Commission considers as outdated, covered by other legislation or regulations, superfluous or not essential to achieve the objectives of the Act have been omitted from the regulations proposed in Part I. These include regulations with respect to: programs on birth control and venereal disease; advertising in a newscast; appeals for donations and subscriptions; lotteries; program reconstruction; station contests; bonds, shares and securities; offensive promotional programs; programs of the Corporation; rebroadcasting; and financial returns.

The major changes are as follows:

i) Content Categories and Sub-categories

In Public Notice CRTC 1983-43, dated 3 March 1983, the Commission defined new categories and sub-categories for FM broadcast matter and reduced the number of popular music-based formats for FM radio to four groups.

The Commission now proposes that AM radio adopt the same definitions of content categories and subcategories, and, for popular music-based stations, the same four station format groups as for FM radio, as described in Public Notice CRTC 1983-43. The Commission considers that a common set of format definitions and content categories would simplify applicants' preparation of applications, remove the confusion arising from two sets of content categories, and improve the Commission's administrative efficiency.

The Commission intends to publish new AM application forms to implement these changes at the conclusion of this review.

ii) Advertising in a Newscast

The existing AM and FM Regulations limit any advertising content in the body of a newscast. These regulations are meant to ensure that news casts remain impartial and uninfluenced by advertisers.

The Commission notes the growing number of competing media sources providing news and information programming and considers that this competitive situation lessens the possibility of advertiser influence on the reporting of news. Therefore, the Commission proposes to eliminate these current restrictions as being one area in which broadcasters should develop guidelines as part of an industry code.

iii) Telephone Interviews and Conversations

The existing AM Regulations contain a provision which prohibits the broadcast of telephone interviews and conversations without the permission of the person interviewed. To date, the regulation has not applied to FM broadcasters.

The Commission considers that the principle of protecting a person's comments on the air should also apply to FM radio. As such, the Commission now proposes to extend the current AM regulation governing telephone interviews and conversations to FM broadcasting.

iv) Station Contests

The Commission proposes to eliminate the existing AM and FM regulation governing the frequency of station contests and the value of prizes used in such contests. The Commission is of the view that the current regulation is outdated and may limit the flexibility of stations in structuring promotional campaigns and attracting advertisers.

However, the Commission remains concerned that stations not stage or accept contests or promotional campaigns that are in bad taste, and that they not fund contests at the expense of their programming budgets. The Commission expects broadcasters to use discretion in broadcasting such matter and will expect them to address this area in the development of an industry code.

v) Programs of the Corporation

The Commission notes that the CBC radio network is comprised largely of the Corporation's owned-and-operated stations and rebroadcasting transmitters, as a result of the Corporation's Affiliate Replacement and Accelerated Coverage Plans. CBC privately-owned radio affiliates play a decreasing role in extending the national service.

An existing AM and FM regulation provides for the Commission to intervene in disputes between the CBC and its affiliates with respect to affiliation agreements and reserved time. However, the contractual obligations of affiliates are conditions of their licences and conflicts can be dealt with by the Commission on this level.

Therefore, the Commission considers that the regulation is no longer needed and proposes to delete it.

vi) Network Affiliation

As noted earlier, the Commission intends to conduct at a later date a policy review of network and program exchange developments in radio communications.

For the purposes of this immediate review, the Commission proposes to delete all references to network operators in the existing AM and FM Regulations from the new proposed Regulations as well as that portion of the Regulations entitled "Chain Broadcasting", except for the prohibition against entering into an affiliation agreement with a non-Canadian operator.

vii) Ethnic Programs

The proposed Regulations incorporate recent amendments enacted by the Commission following its recent ethnic broadcasting policy review. Specifically, the regulation sets out requirements for the broadcast of ethnic programs and the definition of such programs.

These amendments were recently issued by the Commission for comment in Public Notice CRTC 1985-261 dated 4 December 1985 and were enacted on 19 February 1986 as announced in Public Notice CRTC 1986-65 dated 14 March 1986.

viii) Transfer of Ownership or Control

The Commission proposes to incorporate into the Regulations, in a slightly revised form, the revised condition of licence as set out in the Public Announcement issued by the Commission on 7 January 1980, entitled Transfers of Ownership of Licensed Broadcasting Undertakings. The proposed regulation requires that licensees notify the Commission of any act, agreement or transaction whereby a person ends up with 20 to 39 percent of the voting shares of a licensee. A similar obligation exists whenever control over 40 percent or more of the voting shares is obtained. This change is proposed to reduce the regulatory lag facing licensees. The Commission has retained the requirement for prior approval for changes in effective control and has added a provision for changes involving over 30 percent of the issued voting securities.

ix) Bonds, Shares and Securities

The existing AM and FM Regulations set out conditions for the broadcast of advertisements concerning certain bonds, shares, securities and commodities. These regulations were enacted to safeguard the investing public from the advertisement of fraudulent or misrepresented investment schemes.

While maintaining a strong concern for the public interest in the on-air promotion of stock, equity and commodity investments, the Commission notes that its regulations in this area overlap those of the various provincial securities commissions. Since there are other means of safe guarding potential investors, the Commission is confident that it no longer needs to regulate this area.

x) Advertising of Alcoholic Beverages

The current regulation of the Commission prohibits the broadcast advertising of spirituous liquor, and sets out conditions for the broadcast advertising of beer, wine and cider in provinces in which such advertising is permitted. The regulations are also accompanied by a set of guide lines which assist the Commission in their application. A key objective of the regulation is to ensure that alcohol-related commercial messages do not promote greater use of alcohol or represent the consumption of alcohol as a necessary part of any social activity or as a necessity for the enjoyment of life.

In Public Notice CRTC 1985-209 dated l0 September 1985, the Commission invited comments from concerned industries and government bodies, advertising agencies and the general public with respect to the Commission's continued role in the regulation of broadcast advertising of beer, wine and cider.

In Public Notice CRTC 1986-68, of today's date, the Commission discusses several modifications to stream line the existing regulation. These proposals are incorporated into the draft regulations appended to this document. While continuing to regulate the advertising of alcoholic beverages, the Commission proposes to discontinue its involvement in the clearing of advertising continuities prior to their broadcast. In the Notice, the Commission states that it expects licensees along with other concerned parties to address this area in the development of an industry code.

xi) Advertising of Food and Drugs

The Commission currently requires that all continuities of advertisements of food and drugs to which the Food and Drug Act applies be submitted in advance of their broadcast to the Minister of National Health and Welfare or the Minister of Consumer and Corporate Affairs, and to the Commission for approval and registration.

In Public Notice CRTC 1986-68, of today's date, the Commission proposes to modify its existing regulation by prohibiting the broadcasting of commercial messages concerning food and drugs to which the Food and Drug Act applies unless they have been received by the Minister of National Health and Welfare or the Minister of Consumer and Corporate Affairs and bear the appropriate clearance number.

IV) PART II - AM RADIO

In the existing AM Regulations, two particular regulations serve to distinguish the AM Regulations from the FM Regulations. These two regulations involve i) the broadcast of Canadian musical selections and ii) restrictions on the level of commercial advertising.

i) Canadian Content in Music

A major provision of the existing radio AM Regulations is the requirement that at least 30% of the musical selections broadcast between the hours of 6:00 a.m. and midnight daily shall be Canadian (as defined in the regulation) and shall be scheduled in a reasonable manner throughout that period. A continued major policy objective of the Commission is to ensure that Canadian artists have access to Canadian airwaves and to maintain support for the development of Canadian musical talent. The Commission does not propose to vary the existing requirements of this regulation. However, the language of the existing regulation has been clarified.

The Commission also proposes an additional change to this regulation. In Public Notice CRTC 1985-241, entitled "CRTC Consultative Committee on Ethnic Broadcasting", dated l3 November 1985, the Commission, on the recommendation of the consultative committee, proposed to modify the existing Canadian content regulation to require a separate Canadian content requirement for ethnic programs, generally 7%. This reflects the finding of the consultative committee that the supply of ethnic music recordings qualifying as Canadian is generally insufficient at this time to meet the current regulatory requirement.

Accordingly, the Commission proposes to modify the existing Canadian content regulation to provide for a minimum of 7% of the musical selections broadcast each week by an A.M. licensee during its ethnic programs to be Canadian and a minimum of 30% Canadian content at all other times. A licensee that does not meet the 7% requirement over the week for ethnic programs must ensure that 30% of the musical selections broadcast each day are Canadian, whether they are broadcast during ethnic programs or not.

The Commission emphasizes that it considers the 7% level of Canadian content for ethnic programming periods to be a minimum and that it expects radio broadcasters to make every effort to gradually increase the Canadian content levels of ethnic programs. This expectation reflects the Commission's concern that Canadian ethnic artists be afforded maximum access to the airwaves.

ii) Advertising Time

The Commission is concerned that existing regulations restricting the levels of advertising may hamper the financial viability of certain licensees, particularly marginal stations, and may represent an unnecessary regulatory burden to the selling practices of the industry. The Commission is concerned about the difficult financial situation of many AM licensees, particularly in light of the growing audience share of FM radio.

In response to these factors, the Commission now proposes to eliminate restrictions on advertising time for AM radio. The Commission considers that increased flexibility in the scheduling and availability of advertising time will work to improve the revenue potential of AM radio by expanding its advertiser-support base.

The Commission expects that a more stable and improved financial base for AM radio should allow radio broadcasters to strengthen their commitments to support the development of Canadian musical and other talent and alleviate many of the difficulties encountered by Canadian syndicators and networks offering programs on a time-bartered basis.

In this regard, the Commission intends to assess at licence renewal time the use by broadcasters of any additional revenues in relation to their use of Canadian creative and other resources. This assessment will include their contributions to mechanisms in support of Canadian musical talent such as FACTOR/CTL, MUSICACTION or to their own initiatives as well as to their production of high quality programs and their use of Canadian syndicated and network programs.

In proposing to remove time restrictions on advertising from AM radio, the Commission has been very concerned with the potential impact of this approach on programming. Under the current AM Regulations, broadcasters are already permitted unlimited commercial minutes on an hourly basis.

The Commission is confident that audience response to advertising content and the availability of a number of competing radio and other media services should generally dissuade broadcasters from airing an objectionable number of commercial messages.

Bearing in mind both its concern for programming and its supervisory approach to advertising levels, the Commission intends to review the advertising practices of the industry and their effects on programming, if any, after a two-year trial period.

The Commission considers that the radio industry should establish its own self-regulatory mechanism with clearly defined criteria for the broadcast of commercial advertising. Such guidelines should address the concerns raised about the impact of commercial activities on programming. The Commission will consider this code within the context of the two-year review.

V. PART III - FM RADIO

In l975, after a comprehensive public process, the Commission issued its FM Policy calling for FM radio to play a particular role in the provision of a varied and comprehensive radio service of high standard. It stated that it would require FM radio to provide programming significantly different from that provided by AM stations in form and content. In 1976 regulations were introduced and administrative practices developed to implement the goals of the Policy.

Regulations requiring the provision of thematic foreground format programs and guidelines for the provision of mosaic programming were enacted to ensure that FM programming be different in form than that of AM. To ensure that radio have a less commercial sound on FM, the FM Regulations permitted FM stations fewer commercial minutes per day than AM stations and limited them to l0 minutes of advertising per hour. Guidelines were introduced to require minimum amounts of combined foreground and mosaic programming, to limit the use of "hit" musical material and the repetition of musical selections in order to ensure musical diversity, as well as to require that stations authorized to broadcast Traditional and Special Interest music not reduce the amount of this music below a certain level.

Concerns

The Commission is pleased with the growth and success of the FM sector in the years since it adopted its FM Policy and it follows with interest AM radio's response to the challenge of FM. The audience for FM radio has increased over the last l0 years. In l977 FM stations garnered l7% of all listening to Canadian radio; by the fall of 1985, its share had risen to 4l%.

In its Policy Statement on the Review of Radio, (Public Notice CRTC 1983-43), announcing changes to update and streamline its regulation of FM, the Commission announced the formation of a Consultative Committee which included representatives of the music and radio industries as well as the Commission to examine aspects of FM radio administrative practises as sociated with the broadcast of music. In Public Notice CRTC 1984-151, dated l8 June 1984, the Commission announced that it had adopted the recommendations of the Consultative Committee with respect to new definitions for music subcategories, popular music formats and vocal selections. Canadian content requirements based on the new popular music formats for FM stations were also established.

The Commission is pleased with the results of the reviews undertaken in 1983 and 1984 and wishes to continue the process of review in this document to examine matters not dealt with at that time.

In approaching the present review the Commission considers it absolutely essential to retain the broad policy objectives of the FM Policy and, in particular, that FM radio play a special role in the provision of a varied and comprehensive radio service of high quality. It also reiterates that FM radio should continue its unique contribution to the development of Canadian musical and other expression.

a) Foreground and Mosaic Programs

At present, the FM Regulations require that joint FM and CBC FM licensees devote 20% of their broadcast week to programs in the foreground format; for independent FM licensees the requirement is l2%. By guide line, joint licensees are expected to devote at least 50% of the broadcast week to programs in the foreground and mosaic formats; independent licensees are expected to devote at least 33%.

Many licensees have responded to these requirements by producing high quality programs featuring Canadian musical, journalistic and other artistic talent. Such programs include public affairs and arts magazine programs, original humour, discussion of community issues, local sports commentary, drama, documentaries and programs on Canadian heritage and well-researched examinations of all genres of music. A number of broadcasters have purchased syndicated programs featuring the highest quality Canadian creative and artistic resources. These kinds of programs exhibit the research and preparation for which the Policy calls.

The Commission realizes that such programs are expensive to produce as they require the extensive use of human and other resources. For this reason, some licensees have produced programs that meet the letter rather than spirit of the regulation with foreground format programs featuring several songs by an artist with only a brief biography or comment, or poorly-researched musical programs. In addition, some licensees have indicated that they have had to rely on the repetition of foreground for mat programs in order to meet their commitments.

The Commission is concerned that some of its FM licensees do not have the financial or human resources to meet its requirements. The result is poor foreground programs that do not fulfill the goals of the Broadcasting Act and the FM Policy.

b) Canadian Syndication

In the FM Policy, the Commission expressed hope that a Canadian independent radio program production industry develop and encouraged licensees to investigate the purchase of such programs. However, a syndication industry has not yet flourished in Canada, although a few syndicators have proved successful. Nor have radio stations extensively exchanged or co-produced high quality foreground and mosaic programs.

Increasingly, licensees have acquired syndicated programs produced in the United States. The large American market allows the amortization of costs over a large number of domestic stations, thereby enabling the sale of these programs to Canadian stations at prices far below what Canadian syndicators must demand. Canadian syndicators are therefore severely economically disadvantaged, even though their programs may well equal or exceed the quality of their foreign competitors.

The Commission notes that many Canadian syndicators have relied on the "barter" system (whereby they provide stations with programs without a fee in exchange for advertising time within these programs) to offer their programs under more favourable economic conditions. Because of restrictions on their commercial inventory, some licensees have been unwilling to exchange their commercial time for these programs. Consequently, Canadian syndicators have been disadvantaged.

c) Commercial Content

While FM revenues have dramatically increased with new FM licensees and growing audience penetration, some licensees are still not profitable and the financial viability of others is not assured. With a growing number of stations as well as other new media choices, radio licensees face an increasingly fragmented and competitive marketplace.

By limiting the commercial inventory of FM broadcasters in the past, the Commission wished to maintain a less cluttered and commercial sound on FM than on AM. Indeed, the Commission is aware that the limited commercial inventory of FM may be one of the causes for its success. However, it is also concerned that total media advertising revenues flowing to radio have not kept pace with other media and that the restrictions on FM commercial inventory may negatively impact on the selling practices of FM broadcasters. As a result, it is difficult for many FM stations, particularly in smaller markets, to afford the high quality foreground and mosaic programs expected of them.

In order that Canadian FM broadcasters are able to maintain and expand their commitments to the objectives of the Broadcasting Act, the Commission wishes to ensure that they remain competitive and viable.

Proposals with respect to foreground, mosaic and commercial limitations

In order to maintain the objectives of the FM Policy the Commission wishes to give incentives to broadcasters to produce or purchase high quality foreground and mosaic programs which make use of Canadian musical and other talent. According ly, the Commission proposes to amend the FM Regulations to provide an opportunity for additional revenues and new incentives to produce high quality foreground format programs.

It therefore proposes the following scheme:

a) the overall guidelines for combined foreground and mosaic programs will remain at 50% for joint licensees and 33% for independents;

b) the regulation for foreground format will be reduced to l5% for joint licensees and 9% for independents;

c) the hourly limits on commercial content will be eliminated;

d) the daily limit for commercial content will remain at l50 minutes; joint licensees attaining or exceeding 20% foreground and independents reaching or exceeding l2% foreground of the type described below will be permitted up to 250 minutes per day; and joint licensees exceeding 22% foreground and independents exceeding l4% will have no commercial time limits.

The Commission will expect licensees with foreground levels of l5% or 9% to retain and expand the number of high quality programs since they will have fewer programs to produce, while the removal of hourly limits may provide additional revenues. Licensees wishing to take advantage of the additional commercial inventory must meet the higher foreground levels with programs of the following types:

l. spoken Word programs of journalistic and artistic expression using material from category 3 - Enrichment, produced by Canadians;

2. programs produced by Canadians other than the licensee, whether by syndicators or by other licensees;

3. high quality foreground programs produced by the licensee for broadcast on other stations; or

4. musical foreground programs featuring new Canadian talent. For purposes of this section, a new Canadian artist is considered one who has not had a selection listed in the Top 40 of a recognized national or international trade chart.

The Commission is confident that this proposal will encourage FM licensees to produce or purchase high quality Canadian spoken word programs, thus stimulating the Canadian independent program and syndication production industry.

Additional exposure for developing Canadian musical artists will also be provided. The additional revenues available to licensees through increased commercial inventories should enable them to broadcast these high quality programs and help assure financial viability. The Commission expects licensees to broadcast such programs at times when they would be accessible to significant numbers of listeners.

The concerns expressed earlier in this document on the possible consequences of the removal of advertising limits on AM radio also pertain to FM radio. Therefore, the Commission will expect its private FM licensees to participate in the establishment of an industry code for commercial content as discussed earlier.

The Commission emphasizes that the above proposals respecting foreground format programs and commercial content apply to joint and independent FM licensees only. FM licensees holding other classes of licence must continue to respect their existing conditions of licence and the guide lines of the Commission.

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

Other Changes to the FM Regulations

At present, licensees are required to make weekly announcements indicating their frequencies and call letters, the name of the licensee and a number of other items that indicate where their Promises of Performance can be examined. Similarly, joint licensees must announce once a day their common ownership with their AM stations. FM licensees must also make available for public examination a copy of their licences. These requirements do not apply to any other broadcast medium regulated by the Commission. The Commission, therefore, proposes to remove them from the Regulations. However, AM and FM licensees are expected to continue to make their Promises of Performance available for public inspection. The Commission, for its part, will continue to make all licensees' public files available for inspection at its headquarters and in its regional offices.

FM licensees are prohibited by regulation from entering into contracts with people other than employees of the station for the provision of pre-recorded matter unless the matter is: news; public service announcements; production or commercial content; is used in foreground or mosaic segments; is Canadian music, or is provided by a licensed network. Similar requirements do not exist for AM radio or for television. While this regulation was needed in the early days of the FM Policy to avoid reliance on pre-programmed foreign music services, particularly those in the gramophone and rolling formats, the Commission is confident that it is no longer needed since FM stations largely produce their own rolling and gramophone programming. The Commission, therefore, proposes to remove this regulation.

Guidelines for Music on FM Radio

i) Maximum Repeat Factor

At present guidelines do not permit repetition of any musical selection more than l8 times a week. New Canadian non-hit material is exempt from this limitation which is intended to ensure that a wider diversity of music is available on FM radio. However, the Commission has received submissions from the Canadian record industry to the effect that the limit on the repetition of Canadian hits lessens their exposure to Canadian FM audiences and thus limits their ability to generate sales of Canadian records. The Commission, therefore, proposes to exempt all Canadian musical selections from the application of the Maximum Repeat Factor.

ii) The Use of Hit Material

The Commission requires its licensees to limit the use of hit material to less than 50% of the popular music selections aired during a broadcast week so as to ensure a greater musical diversity. A "hit" has been defined as any musical selection that has reached one of the Top 40 positions on a chart in a nationally or internationally recognized trade publication. Some broadcasters have argued that this limitation has restricted some popular music formats from being broadcast on FM.

While the Commission wishes to continue to encourage musical diversity on FM, it does wish to give licensees the ability to program older musical selections. It proposes, therefore, 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.

iii) Traditional and Special Interest Music

In order to ensure that a variety of musical genres are available in most communities, the Commission has generally not permitted licensees who had proposed to broadcast more than 8 hours of Traditional and Special Interest (Category 6) music to reduce this commitment below 8 hours. Stations originally authorized for less than 8 hours have not been permitted to reduce their commitments.

The Commission considers that the growth in the availability of CBC FM stereo services makes it worthwhile to re-examine this policy. It proposes to review applications by licensees to reduce the broadcast of category 6 music on a case-by-case basis, taking into account the availability of this kind of music on other stations in the community in question.

Within the context of its network review, the Commission also intends to examine the possibility of stations distributing Special Interest music by satellite-to-cable systems and the licensing of new satellite-to-cable specialty audio services.

iv) French language Foreground Format Programming

During the deliberations of the Consultative Committee on Music on FM radio, various concerns were raised about the lack of pre-produced French-language foreground format programs for use by French-language FM stations. It was suggested that the cost of producing all of their foreground format programs had created a significant financial burden for these stations. In Public Notice CRTC 1984-l5l, the Commission announced that it would contact French-language FM broadcasters and other interested parties in order to study the particular circumstances faced by these broadcasters in the provision of foreground format programs.

A Task Force of the Association de la radio et de la télévision de langue française (ACRTF) and Commission staff was then formed to conduct the study. A letter, under the signature of the Chairmen of the CRTC, the ACRTF and the CAB was sent to a number of French- and English-language broadcasters operating a number of formats in markets of various sizes. These broadcasters were asked various questions regarding the types of foreground format programs they aired, the costs and personnel involved in their production, and the revenues derived from these programs. The questionnaire placed special emphasis on the use of foreground format programs obtained from outside sources.

A significant number of stations have yet to reply to the questionnaire. The Commission will therefore release another Public Notice subsequent to the completion of the study.

v) Canadian Content Guidelines for Country Music Stations

In Public Notice CRTC 1984-84, dated 5 April 1984, the Commission endorsed the recommendations of the Consultative Committee on Music and Radio and issued them for public comment. In response, the Commission received a number of submissions from country music format broadcasters expressing concern about the Canadian content guideline for stations specializing in country music.

These broadcasters noted that while there is sufficient Canadian traditional country music to meet the current 30% guideline, they believed that there was not sufficient Canadian material to maintain a 30% level of Canadian music for stations with a format based on Urban or Contemporary country music.

In response, the Commission agreed to undertake a study on the availability of all types of Canadian country music and to make the results of the study available to interested parties. Applications from country broadcasters wishing to depart from the existing Canadian content guide lines for country stations would then be considered in light of the results of the study.

The study has been completed and those who were interviewed received copies of the initial draft in order to assure the accuracy of the information. In addition, a number of other parties who requested copies received them and were asked for their comments.

One of the interested parties, the CAB, has requested additional time to develop a submission based on the study and asked that the Commission delay any action until it is completed. The Commission therefore expects to issue an announcement dealing with Canadian content levels for country music stations after the CAB's submission is received.

VI. FRENCH-LANGUAGE MUSIC

Currently, the Commission requires that 65% of popular vocal music selections broadcast on French-language AM and FM stations be in French. This requirement has recently been subjected to an extensive review process by a consultative committee involving music and broadcast industry representatives, government officials and the Commission.

In Public Notice CRTC 1986-67, of today's date, the Commission announces that it will lower temporarily the guideline for the broadcast of French-language recordings to 55% for a period of two years. Licensees wishing to lower their French-language music content in light of this change must apply to the Commission before implementing any reduction.

VII. SUBMISSION OF PUBLIC COMMENTS

The Commission requests comments from interested parties on the proposed AM and FM radio regulations and FM practices as set out in the Appendix to this Notice. Comments should be submitted on or before l May 1986. The Commission will hold a Public Hearing in Hull at Phase IV, Place du Portage beginning 21 May 1986 to discuss the comments received.

The Commission wishes to stress that its existing policies and regulations as well as the obligations assumed by licensees as conditions of licence will, of course, remain in effect. The policies will continue to be applied and the regulations and conditions of licence will continue to be enforced until changes resulting from this review have been announced, or new regulations and conditions have been adopted.

Comments should be submitted to Fernand Bélisle, Secretary General, CRTC, Ottawa, Ontario K1A 0N2.

Fernand Bélisle Secretary General