ARCHIVED -  Public Notice CRTC 1988-89

Public Notice

Ottawa, 1 June 1988

Public Notice CRTC 1988-89

A POLICY PROPOSAL RESPECTING RADIO BROADCASTING NETWORKS AND RADIO SYNDICATION; AND PROPOSED AMENDMENTS TO THE RADIO REGULATIONS, 1986

TABLE OF CONTENTS Page

I. INTRODUCTION 1

II. BACKGROUND 3

III. THE 13 APRIL 1987 PUBLIC HEARING

4 1. Definition of a Network
4 2. Regulatory Approach
6 3. Limits on Acquired Programs at the Local Station Level
7 4. Limits on Foreign Programming
7 5. Incentives 9

IV. PROPOSED POLICY RESPECTING RADIO BROADCASTING NETWORKS AND 10 SYNDICATION

Section One

Proposed Approach to Defining 12 Radio Networks

1. Delegation of Control 12
a) Formal Reserved Time 13
b) De Facto Reserved Time 13
c) Editorial Control 13
i) Tape Delay 15
ii) Rebroadcasting of Programs from Other 16 Stations
iii) Brokerage 16 2. Use of the Word "Includes" 17 3. Two or More Broadcasting Undertakings 18

Section Two

A. Proposed Network Licensing 18 Framework
B. Proposed General Regulations 21 on Network Broadcast Matter

Section Three

Proposals for AM and FM Licensees 22

1. Stations' Usage of 22 Non-Local Programming
2. Use of Canadian Acquired 23 Programming
3. Overnight Programming 26 Services
4. Additional Incentives for 26 the Broadcasting of Network and Syndicated Programs

V. SUBMISSION OF PUBLIC COMMENTS 28

Schedule I: Recognition for Canadian Acquired Radio Programs

Schedule II: Proposed Amendments to the Radio Regulations, 1986

RELATED DOCUMENTS: Public Notices CRTC l986-248 dated l9 September l986, l986-355 dated 23 December l986 and l988-90 dated 1 June 1988; Circular No. 330 dated 25 February l987.

I. INTRODUCTION

Following a Public Hearing from l3 to 20 April l987 in the National Capital Region, the Commission issues for public comment a proposed policy framework for radio networking and syndication and proposed amendments to the Radio Regulations, 1986. A separate policy proposal for television networks entitled "Review of Television Network Policy", Public Notice CRTC l988-90 is also being published today.

Pursuant to the requirement in the Broadcasting Act (the Act) to license networks, the Commission proposes a series of criteria for the purposes of licensing radio network operations.

As set out in Part IV of this document, the Commission proposes to employ three criteria to determine delegation of control: Formal reserved time; De facto reserved time; and Editorial control. Formal reserved time refers generally to the existence of an affiliation or similar contractual agreement between a station and a third party that requires the station to broadcast particular programs at specified times or within specified time frames. Defacto reserved time refers generally to the scheduling of programs by stations in a pattern similar to that broadcast according to a formal reserved time agreement, but where no formal reserved time or similar agreement exists. Editorial control refers to the ability of a station to exert control over the content of live programming received directly over the air.

Where any of these criteria for delegation of control exist, a network operation will be deemed to exist.

However, arrangements where pre-recorded syndicated programs are broadcast on a direct-to-air basis with no reserved time requirements will not generally be considered as network operations.

As suggested in some of the comments received and as argued at the public hearing, the Commission will continue to include as networks certain program distribution arrangements that de do not involve delegation of control but which produce a similar and significant impact on the broadcasting system as that achieved by network operations.

The Commission also proposes to make the generally applicable sections of the Radio Regulations, 1986, excluding certain logging requirements, applicable to networks. In addition, the Commission proposes a policy for networks that expects at least 66% of their network programming provided yearly to be Canadian in terms of total programming time, where the operator distributes an average of seven or more hours per week of network programs per year. For the purposes of administering this policy, the Commission proposes a definition for a Canadian acquired program.

For AM and FM licensees, the Commission proposes a policy wherein it would expect that at least 66% of network and syndicated programs broadcast weekly by a station (to) be Canadian as defined in this notice, excluding play-by-play sports. In addition, the Commission proposes an amendment to the regulations respect ing the logging of acquired programs. A policy for FM stations that would allow only Canadian programs to be eligible for the existing double credit for mosaic segments is also proposed.

In this document, acquired programs generally refer to programs distributed as, or intended to be, network or syndicated programs.

II. BACKGROUND

In Public Notice CRTC 1986-248 dated 19 September 1986, the Commission announced new Regulations Respecting Radio Broadcasting (the Radio Regulations, l986) governing both AM and FM radio. With respect to networks, these regulations deleted all previous provisions for networking, or "Chain Broadcasting", with the exception of the provision which prohibits radio stations from affiliating with a foreign network.

In publishing the Radio Regulations, 1986 the Commission also announced its intention to conduct a review of radio networking and syndication, including the related issue of new audio service developments. Subsequently, the Commission issued Public Notice CRTC 1986-355, dated 23 December 1986, calling for public comment on several issues related to the licensing of both radio and television networks, and other issues specifically related to radio.

In response to its call for comments, the Commission received a total of 25 submissions directly related to radio from broadcasters, their associated production and distribution companies, the radio board of the Canadian Association of Broadcasters (CAB), independent radio program producers and distributors, network operators and other interested organizations and individuals. A total of l7 parties appeared at the 13 April 1987 public hearing to expand on their written comments. The Commission wishes to acknowledge the important contribution made by all participants to the review process. Their ideas and expertise have played a significant part in the development of this proposed network policy for radio.

III.THE 13 APRIL 1987 PUBLIC HEARING

Prior to outlining the Commission's proposed policy, it is useful to review the major radio issues discussed by those who appeared at the hearing, together with the issues presented in the written comments filed by interested parties.

1. Definition of a Network

Section 2 of the Broadcasting Act defines a "network" as follows:

"network" includes any operation involving two or more broadcasting undertakings whereby control over all or any part of the programs or program schedules of any of the broadcasting undertakings involved in the operation is delegated to a network operator.

With respect to criteria for delegation of control, a considerable range of ideas was canvassed. Sonic Work shop suggested that the simultaneous pick-up and local broadcast of an outside program feed indicated a clear delegation of control. Télémédia Communications Inc. (Télémédia), the Canadian Broadcasting Corporation (CBC), and Westwood One Canada argued that programming simultaneously received and broadcast by a station is not necessarily a condition for a network operation to exist. The CKO Network (CKO) expressed the view that the existence of reserved time agreements was a definite indication of a network operation. Broadcast News Ltd. and Different Drummer Productions stated that, in their view, the existence of reserved time agreements coupled with programming simultaneously received and broadcast would constitute a network operation. The CBC and other broadcasters stressed that the intent of the program distributor is a critical factor in determining the existence of a network. Maclean Hunter Limited suggested that a radio network operation might exist only when a station broadcasts acquired programs without maintaining an operator at its control board.

The CAB argued that, in theory, the acquisition of programs by stations does not involve a delegation or loss of control, and hence cannot be considered as network programming, because the Act states that stations are ultimately responsible for the programs they broadcast. In this vein, the CAB made note of its recommendation to the Minister of Communications that the Act be amended to exempt networks from the requirement to hold a licence. Alternatively, the CAB suggested that blanket network licences be issued by the Commission with no programming requirements.

With respect to the use of the word "includes" in the definition of net work, interveners such as the CBC and CKO continued to support the interpretation that the Act contemplates as network programming arrangements in which delegation of control may not be present.

2. Regulatory Approach

A large number of interveners, particularly the CAB and some individual broadcasters, suggested that the Commission should address its programming and other regulatory concerns for network and syndicated programs at the level of individual stations. Supporters of this approach argued that the Commission could regulate local stations' usages of acquired programs via individual licensees' Promises of Performance and the Radio Regulations, l986. It was argued that this approach would not require the Commission to form ulate conditions of licences or enact separate regulations for networks.

Polar Productions and the CBC, however, advanced the view that the Comission should take a dual regulatory approach to acquired programming through the regulation of networks, in addition to regulatory require ments for local stations respecting acquired programming. These interveners regarded networks as a major component of the broadcasting system, and expected network operators to contribute to the public policy objectives enunciated in the Act.

In terms of network licensing, a number of broadcasters, particularly Maclean Hunter Limited, suggested that the Commission move towards licensing networks for the distribution of a variety or range of programs under a single network licence, where appropriate.

3.Limits on Acquired Programs at the Local Station Level

Maclean Hunter Limited, Westwood One Canada and Communications Radiomutuel Inc., among other broadcasters, argued that it was both unnecessary and impractical to restrict the level of acquired programs broadcast by local stations since radio is in trinsically a locally-oriented medium, a fact that should ensure that most of a station's programming is local in character. Other participants, such as the CBC and independent producers, suggested that the Commission may wish to safeguard local programming by regulating the level of acquired programs broadcast on individual AM and FM stations. Maclean Hunter Limited suggested that a maximum level of 30% non-local programming per broadcast week might serve as a useful policy guideline for limiting the broadcast of acquired programs.

4. Limits on Foreign Programming

The competitive impact of foreign programs on Canadian production with in the Canadian broadcasting system was a major issue in the comments received and in discussions at the public hearing. Consequently, some participants argued for a limitation on foreign programs in the system. At the level of production and distribution, Polar Productions and NEOS Creative Production Agency, for example, suggested that program distributors be required to provide an appropriate balance between Canadian and foreign productions. Télémédia suggested that distributors be required to hold a licence or permit for the distribution of foreign audio productions. To this end, it suggested a definition for a Canadian program based on a point system, where the existence of 3 of any 5 of the following criteria would qualify a program as Canadian:

- Canadian written - Canadian produced - Canadian recording facilities - Canadian hosted - Canadian music

Several independent program producers suggested that the Commission should enact maximum regulatory limits on the amount of broadcast time to be devoted to foreign programs by local AM and FM stations. Alternatively, these producers argued in favour of permitting the local broadcast of foreign programs as a bonus for the broadcast of Canadian productions.

Other participants, however, such as Westwood One Canada, saw no need to limit foreign programming at the level of either the distributor or local station. They argued that the existing regulatory requirements and programming commitments of local broadcasters respecting the use of Canadian resources, and the commitment of distributors to Canadian production, in addition to the necessity for local stations to provide their audiences with relevant programming, serve to limit the broadcast time devoted to foreign programming notwithstanding the increased volume of foreign programs in distribution.

5. Incentives

In the Radio Regulations, l986 the Commission implemented an incentive scheme that allows FM broadcasters to exceed their daily advertising limits through the production and broadcast of foreground format programs that qualify as "Canadian feature segments" (CFS). These segments include network and syndicated programs produced by a Canadian.

In Public Notice CRTC l986-355 announcing the 13 April l987 public hearing, the Commission requested comments on additional incentives that it could implement to encourage the production and broadcast of high quality network or syndicated programs.

In response, a number of additional incentives were suggested that can be summarized as follows:

- The current CFS incentive scheme should be extended to mosaic format segments.

- AM and FM broadcasters should be allowed a dispensation from Canadian content requirements for musical selections during the broadcast of Canadian network or syndicated programs.

- The existing policy of providing a double credit to mosaic program segments that meet increased enrichment levels, as set out in Public Notice CRTC 1984-285, should apply only to mosaic segments that are Canadian.

- To promote the attractiveness of Canadian network and syndicated programs to advertisers, a l50% tax credit for sponsors who advertise in Canadian productions was suggested. Interveners who advanced this idea recognized that the implementation of this proposal was beyond the mandate of the Commission.

IV. PROPOSED POLICY RESPECTING RADIO BROADCASTING NETWORKS AND SYNDICATION

Following the conclusion of the l3 April l987 public hearing and taking into consideration the comments made during that process, the Commission now issues for further public comment a proposed policy framework for radio networks and acquired programming. For discussion purposes, the proposed policy is divided into three sections. Section One sets out criteria to determine radio networks. Section Two sets out the licensing approach to radio networks and outlines new regulatory proposals. Section Three discusses proposals for AM and FM licensees. As there was little discussion of policy issues associated with new audio programming developments, this document pertains solely to conventional radio networking and syndication.

In setting out this proposed network policy for radio, the Commission's primary objective is to provide a more streamlined, efficient and flexible regulatory framework to meet the objectives of the Act.

The Commission regards networks as a central component of the Canadian broadcasting system. The nature of networks and other syndicated programming arrangements is uniquely capable of reaching, informing and entertaining Canadians with high quality, diverse programming. Consequently, the Commission regards networks as important vehicles to achieve the goals set for the system in the Act.

As discussed at the public hearing, it is the Commission's view that the primary responsibility of AM and FM licensees is to provide locally oriented and original programming suited to the needs, interests and character of local communities. To this end, the Commission will continue, to the extent possible, to seek assurances that the programming broadcast by local stations is of direct relevance to local communities, particularly during peak audience periods, notwithstanding the benefits that may accrue to local stations and their respective audiences from quality programs acquired from other sources.

Indeed, the Commission understands the position advanced at the public hearing by most broadcasters that future growth for certain radio stations may come from developing a complementary mixture of high quality local and acquired programs, particularly in light of the decreasing profitability of the radio industry and increased fragmentation of radio markets. In this vein, the proposed policy seeks to ensure that network and syndicated programs distributed and broadcast in Canada maximize the use and exposure of Canadian creative and other resources.

Section One

Proposed Approach to Defining Radio Networks

There are three essential elements to the definition of a network that is set out in the Act. These are: the concept of delegation of control; the use of the word "includes"; and the existence of two or more broadcasting undertakings. A discussion of these three elements follows.

1. Delegation of Control

The specific reference in the Act to the concept of delegation of control over programs or program schedules requires the Commission to consider any program distribution arrangement where this action is present as a network operation, without exception.

To ascertain the existence of delegation of control from a radio station to another party with respect to the broadcast of acquired programs, the Commission proposes to employ three criteria. These are: formal reserved time; de facto reserved time; and editorial control.

a) Formal Reserved Time

Formal reserved time will be said to exist where a local station, as a condition of the acquisition of a program or parts thereof, is required by formal agreement to broadcast a particular program or programs at a specific time or within specified time frames. Where formal reserved time exists, the Commission will consider that a network operation exists.

A formal reserved time agreement is generally contained in an affiliation or similar contractual agreement. In contrast, purchase contracts for programs that do not attach conditions or restrictions on the scheduling of the programs beyond a suggested time frame for their broadcast would not constitute a formal reserved time agreement.

b) De Facto Reserved Time

De facto reserved time exists between a radio station and another party where there is no formal reserved time agreement but where there is evidence that a program or programs are being broadcast at or within designated times by stations in a pattern similar to that broadcast according to a formal reserved time commitment.

c) Editorial Control

Section 3(c) of the Act states that broadcasting undertakings have a responsibility for the programs they broadcast. Where programming is simultaneously received and broadcast by a station, a network will exist if it is beyond the capability of the station to exert any editorial or similar control on the program or its scheduling.

The Commission notes that the increasing use of satellites to deliver audio programming has augmented the incidence of direct over-the-air reception and retransmission of programming by stations. Moreover, syndicators and network operators may distribute their programming in a similar technical fashion. From a regulatory perspective, this has the effect of blurring the distinction between network and syndicated operations for the purposes of satisfying the network licensing requirements of the Act.

In keeping with its objective for a streamlined, efficient and responsive regulatory framework, and to eliminate licensing where no regulatory purpose is served, the Commission proposes to exclude from the require ment to hold a network licence pre-recorded audio programs intended for syndication but distributed in a manner that allows them to be transmitted directly over-the-air. To accomplish this, the Commission proposes to divide the simultaneous reception and retransmission of acquired programming into two distinct categories: live and live-from-tape. A live program refers to a program transmission that is received and broadcast by a station simultaneously, where the program has not been pre-recorded and is instead an actual event occurring at that moment. An example would be the original broadcast of a live sports event or open-line show. A live-from-tape program refers to program ming distributed from an outside source that is also received and broadcast simultaneously by a station but where the program has been pre-produced or pre-recorded. Using these distinctions, the Commission proposes to regard only the distribution of live programs as an indication of loss of editorial control for the purpose of defining a radio network operation.

It is conceivable that an outside feed could consist of both live-from-tape and live programming elements within a single segment or continuous block of acquired programming. In such cases, the Commission proposes that acquired programs that contain both live and live-from-tape elements be considered network programming.

With respect to live programs, several related issues are discussed below.

i) Tape Delay

Under the proposed framework to consider live programs as a criterion for determining a network operation, the Commission proposes to continue to regard the application of a momentary tape delay to live programs (as defined in this document) as a loss of editorial control and hence a network operation. However, the Commission proposes to accept the use of a tape delay as a means for a local licensee to maintain control over live programming if the length of the delay is sufficient to allow reasonable screening of the program. To provide greater clarity, the Commission proposes the following:

for the purposes of live programs that are tape delayed at the local station prior to the local broadcast of the program, the Commission will consider the programs as live programs unless the time delay is at least equal to the duration of the actual program.

ii) Rebroadcasting of Programs From Other Stations

In certain situations involving local licensees, the Commission has authorized local radio broadcasters to pick up and rebroadcast the programming of other stations temporarily in situations where the local station is experiencing difficulty, financial or other, in filling its program schedule. Where the Commission has been satisfied in such cases that the terms of the arrangement between the originating and rebroadcasting stations is based on a form of co-operation that does not affect the ability of the rebroadcasting station to exercise control over its programs or program schedules, a network licence has not been required. The Commission proposes to continue this policy.

iii) Brokerage

Brokerage refers to the common practice of purchasing blocks of time from stations to produce and present programming oriented to specific audiences. As stated in Public Notice CRTC 1985-139 entitled "A Broadcasting Policy Reflecting Canada's Linguistic and Cultural Diversity", the Commission recognizes that brokerage is an important source of programming, particularly for certain audiences not well served by mainstream broadcasting.

It is the Commission's view that the practice of brokerage will not be considered as a network arrangement operation provided the local stations that broker time maintain control over the content of the programs and program scheduling, contractually and otherwise, and that the brokered programming is not distributed as live programs to other stations.

2. Use of the Word "Includes"

In Decision CRTC 80-704 approving the satellite distribution of the proceedings of the House of Commons, the Commission determined that

... the Act contemplates an extension of the definition of "network" beyond programming arrangements in which delegation of programming control is present to other programming relationships. The Commission agrees with this ... use of the word "includes" ... More over, this conclusion is supported by the directive in paragraph 3(j) of the Act that the regulation and supervision of the Canadian broadcasting system should be flexible and adaptable. In the Commission's view, its mandate to supervise and regulate the Canadian broadcasting system must be considered to extend to and include programming distribution involving broadcasting undertakings and programming originators which produces the same result as that achieved by networks that have been historically licensed and regulated.

Where appropriate and in such cases where programming arrangements may have a significant impact on the system, the Commission will continue to apply this interpretation of the Act's use of the word "includes". The Commission is of the view, however, that the vast majority of program distribution arrangements that fit the definition of a radio network will do so through the criteria established for determining delegation of control as discussed above in this document.

3.Two or more Broadcasting Undertakings

The network definition set out in the Act applies to situations which involve two or more broadcasting undertakings. In the past the Commission has received several requests for an interpretation of this clause.

The Commission considers that a network operation may exist in the case of a program arrangement involving a network operation and only one station where the network operator also transmits the programming as a broadcaster. For private broadcasters where the undertakings are owned by the same licensee, no network licence is required.

Section Two

A. Proposed Network Licensing Framework

Where it is appropriate or convenient to an applicant, the Commission proposes to consider authorizing network operators to distribute a variety of network programs over the term of a single licence, based on the programming proposals of the network applicant.

As a minimum, applicants for network licences will be required to complete and submit Part One of the existing application for a broadcasting transmitting undertaking. Additional information may be requested. The Commission is considering the development of separate application forms for network operations.

With respect to setting program requirements for radio network operators, the Commission recognizes that the wide variation in network configurations and programming make it difficult to construct generally applicable content regulations. The Commission is also sensitive to the arguments made by participants in the review process that a flexible and streamlined regulatory environment is the most appropriate framework for the development and dissemination of Canadian programming within the system.

The Commission considers it fundamental to the system, however, that operators help achieve the objectives of the Act. To this end, the Commission expects network operators to support and distribute programs that utilize or reflect Canadian creative and other resources.

Indeed, the Commission notes the views of several program producers that the best way to ensure Canadian production and creative expression in the system is to set requirements for the distribution of Canadian programming in relation to the amount of foreign programs distributed in Canada. To this end, Sonic Workshop, Polar Productions and NEOS Creative Production Agency suggested that distributors should be required to distribute an amount of Canadian programming at least equivalent to foreign programming. Similarly, Maclean Hunter Limited indicated that it would accept the idea of conditions of licences to limit the amount of non-Canadian programming broadcast by stations.

Consequently, as an additional aspect of its network policy, the Commission proposes the following:

- for network operators that distribute a weekly average of seven or more hours of network programming per year, the Commission will expect a minimum of 66% of the programs in that year to be Canadian, in terms of total programming time.

To define a Canadian program for the purposes of this policy, the Commission proposes to adopt the idea of a point system suggested by Télémédia where production points would be awarded for certain creative functions or elements of a program being Canadian. Specifically, the Commission proposes that, to be considered Canadian, a production must earn a minimum of 2 of the following points if it is a musical presentation, and 1 point if it is a non-musical presentation.

Producer - 1 point Writer - l point 30% Canadian musical selections l point (Cat. 5), or 7% Canadian musical selections l point (Cat. 6)

It is proposed that the point system be self-administered by network licensees to determine their Canadian programming levels for the purposes of meeting the proposed policy. Schedule I of this notice provides a more detailed outline of the proposed production elements ("Recognition for Canadian Acquired Radio Programs").

The Commission is of the view that network operations which distribute a weekly average of seven or more network programming hours per week (365 hours per year or 1 hour per day) exercise considerable influence with in the broadcasting system. Consequently, they are in a privileged position to help achieve the goals set out for the system. The Commission also considers that this approach will provide flexibility for smaller program distributors with fewer than seven hours of network programming in distribution.

B. Proposed General Regulations on Network Broadcast Matter

In the Radio Regulations, l986, there are no references to networks in the sections setting out general prohibitions and requirements for AM and FM licensees on matter broadcast. Consequently, network operators are not currently responsible for certain regulatory aspects of their programming. While any concerns for programming broadcast by an affiliate station during network periods could be dealt with by pursuing the matter with the affiliate, the Commission considers this to be an administratively inefficient practice. The Commission also considers that it is reasonable to address network programming concerns to the network operators who have by definition assumed control of the network programming broadcast by an affiliate station.

The Commission therefore proposes to amend the Radio Regulations, l986 so that the sections generally applicable to AM and FM licensees, excluding logging requirements, are also applicable to network operators. To achieve this, the Commission proposes to amend the definition of a licensee in section 2 of the regulations to include network operators. This change will also require an amendment to section l0 of the regulations, entitled "Affiliation" and an amendment to the "Code Indicating Origin". (See Schedule II).

Section Three

Proposals for AM and FM Licensees

In addition to the proposals for network operators respecting acquired programming set out in section two, the Commission proposes the following policy changes respecting local radio stations.

l. Stations' Usage of Non-local Programming

The Commission recognizes the numerous benefits, financial and other, that may accrue to local licensees and their audiences from unique and high quality acquired programming that could not otherwise be produced by local stations. The Commission also recognizes that the needs of stations for outside programming vary in accordance with a number of factors, such as individual station strategies, intra-market competition and resources. However, the Commission emphasizes that the fundamental responsibility of local licensees is to provide original programming of direct relevance to their immediate local audiences, particularly during peak audience periods.

The Commission does not propose regulations limiting stations' level of non-local programming at this time. Rather, in the interest of flexibility, the Commission favours a system where individual local licensees are required, at licence renewal time, to indicate and justify the levels and scheduling of acquired programming they intend to broadcast over a specific licence period. The Commission considers that the intrinsic nature of radio as a local medium should work to self-regulate the levels of network and syndicated programming broadcast by local licensees in the vast majority of cases. The Commission intends to review its existing AM and FM licence application forms to make existing sections outlining licensees' plans for network and syndicated programs clearer and more specific.

2. Use of Canadian Acquired Programming

A major policy objective of the Commission is to promote the maximum use of Canadian resources within the Canadian broadcasting system. To a certain extent, as argued by broadcasters at the public hearing, the existing regulatory requirements for local stations respecting Canadian musical selections, and the commitments broadcasters make to the support of Canadian talent and production in their individual applications, provide an indirect requirement for stations to broadcast Canadian network and syndicated programs. In terms of the use of Canadian spoken word programming, the Radio Regulations, 1986 provide no minimum regulatory requirements.

It is the Commission's view that stations that carry acquired programs should actively support Canadian program production. As discussed at the public hearing, Canadian programs experience considerable difficulty competing with the growing availability of lower cost foreign programing distributed in Canada, notwithstanding the growing success and quality of many Canadian programs.

The Commission wishes to encourage the production and broadcast of Canadian network and syndicated programming and notes the arguments made in support of the implementation of limits on foreign programming. Accordingly, the Commission proposes that at least 66% of all acquired programs broadcast by a local station over a broadcast week, other than play-by-play sports (sub-category 43), be Canadian. For the purposes of this policy proposal, a Canadian program will be defined according to the proposed point system discussed earlier and set out in Schedule I of this notice. As with networks, local stations will self-administer this point system.

For evaluation purposes, local licensees will be required to indicate in their logs the type and source of the acquired programs they broadcast. To implement this, an amendment to the regulations respecting the logging of acquired programs is proposed (see Schedule II). In addition, stations submitting self-assessment reports should describe their use of acquired programs. Programs produced and broadcast by a station and which are subsequently distributed as acquired programs, must be broadcast by more than one other station other than the originating station in order for the program to be claimed by the station as a Canadian acquired radio program.

The Commission will review the performance and participation of stations respecting the use of acquired programs at the time of their licence renewals. In this regard, the Commission may consider a station's support of Canadian acquired programs as part of its contribution to and involvement with other support mechanisms dedicated to Canadian programming, such as the radio syndication program administered by FACTOR/CTL.

The Commission considers that this new policy expectation will lead to more air play for Canadian network and syndicated programs in a wider variety of formats and styles. Such increased broadcaster support should in turn improve the financial base and attractiveness of Canadian productions vis-à-vis lower cost foreign productions. The Commission reminds stations of the important role they play in supporting Canadian acquired programming. In particular, the Commission underlines the importance of the support of larger market stations to the economic viability and success of many Canadian productions. Ultimately, the participation of large market stations helps to make acquired programming available to smaller market stations which are often most in need of such material.

3. Overnight Programming Services

As discussed at the public hearing, network and syndicated overnight programming services provided between midnight and 6:00 a.m. allow stations, particularly small market broadcasters, to provide programming that they otherwise could not afford to make available during these hours. Overnight programming services may also enhance the financial viability of broadcasters by providing new revenue sources. As such, many broadcasters, including CKO, stressed the importance of maintaining a relatively unburdened regulatory environment for overnight programming to protect its limited benefits and audiences.

The Commission does not propose at this time to apply to the overnight programming period the existing regulatory requirements for AM and FM stations that currently pertain to the broadcast day or broadcast week, such as the regulatory requirements and conditions of licence for Canadian musical selections. Instead, in keeping with its commitment to flexibility and Canadian creative resources, the Commission will expect overnight programming services to contribute voluntarily to the use and exposure of Canadian artists and talent.

4. Additional Incentives for the Broadcasting of Network and Syndicated Programs

As stated earlier, a number of new proposals designed to provide additional incentives for Canadian network and syndicated programming were suggested at the public hearing.

The majority of independent program producers suggested that the Commission should include mosaic format programs as part of the foreground incentive scheme for Canadian feature segments broadcast by FM broadcasters. As the Commission continues to regard the presentation of foreground format programming as an essential feature of FM broadcasting, it believes that the proposal to extend the new incentive scheme to mosaic programs could serve to undermine the primacy of foreground format programming on FM. The Commission also believes that it would be pre mature to amend this provision, given its relatively recent enactment. Hence, the Commission does not intend to accept this proposal.

The Commission also does not consider it appropriate at this time to accept the proposal to amend paragraph (c) of the definition of a "Canadian feature segment" as set out in section l5 of the Radio Regulations, l986 to allow features on Canadian musical performers with more than 50,000 albums sold in the last five years to qualify as "Canadian feature segments". The Commission considers that this proposal would lessen support for new artists. It also considers it premature to amend this new provision, given its relatively recent enactment.

The Commission proposes to adopt, however, the suggestion made at the public hearing by Marquee Magazine that the existing double credit for mosaic segments with substantial enrichment, as set out in Public Notice CRTC l984-285, be eligible only for programming that is Canadian, as defined in Schedule I. To be eligible, mosaic segments must have either 90 seconds of uninterrupted enrichment or at least a total of 3 minutes of enrichment and spoken word actuality.

V. SUBMISSION OF PUBLIC COMMENTS

As noted earlier, the Commission invites comment from interested parties on the proposals for radio networking and syndication set out in this document and in Appendix I, and on the proposed amendments to the Radio Regulations, 1986 contained in Schedule II. Comments should be submitted on or before 29 July 1988 and addressed to the Secretary General, CRTC, Ottawa, Ontario, KlA 0N2.

Fernand Bélisle Secretary General

SCHEDULE I

RECOGNITION FOR CANADIAN ACQUIRED RADIO PROGRAMS

The Commission proposes to use the following point system and criteria for audio productions as the basis for defining a Canadian program. The Commission is not proposing a system to certify programs in advance of their broadcast as Canadian programs. Rather, this system is to be self-administered by licensees for the purposes of determining levels of Canadian network and syndicated programs.

In the interest of flexibility, the definition of a Canadian program is based on simplified key production elements. Accordingly, the Commission proposes to recognize a program as Canadian where it achieves the necessary production units set out in the following point system.

1. THE POINT SYSTEM - to be considered a Canadian program, a musical presentation must earn a minimum of 2 units of production or "points", and in the case of a non-musical presentation, 1 point.

Producer - 1 point
Writer - 1 point
30% Canadian musical selections (Cat. 5) - 1 point, or
7% Canadian musical selections (Cat. 6) - 1 point

2. INTERPRETATION NOTES

a) Producer - The producer is the individual who controls and is the central decision maker of the original audio production from beginning to end. The producer is expected to be involved in developing the production concept, selecting and engaging the key creative personnel, budget preparation, financing, control of expenditures and distribution of the production. Technical producers are not eligible to earn points.

b) Writer - The writer is the individual who creates the original story script or dialogue for the program.

c) Canadian music - The points for Canadian musical selections refer to those that meet the criteria for a Canadian musical selection described in subsections 13(5), 13(6) and 13(7) of the Radio Regulations, 1986. To be eligible, music must be the primary feature of the program rather than background music, or musical themes, bridges, or stingers as described in Category 7, Production, in Public Notice CRTC 1983-43.