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Public Notice

Ottawa, 17 December 1990
Public Notice CRTC 1990-111
AN FM POLICY FOR THE NINETIES
Table of Contents
I. INTRODUCTION - Blueprints for Change
II. THE GENERAL APPROACH -- Laying the Foundation
A) The Objectives
1) Canadian Resources-- The First Priority
2) Maintaining and Developing Diversity
3) Maintaining and Developing High Standards
B) Key Considerations
1) Reliance on Competitive Forces
2) Protection of AM
3) Reduced Regulation
4) French-language Broadcasting -- A Distinct Environment
III. THE TOOLS -- RESPONDING TOTHE ISSUES
A) CANADIAN CONTENT
B) CANADIAN TALENT DEVELOPMENT
C) STATION FORMATS
D) MUSIC USAGE INDICATORS
1. Hits
2. Vocal-to-Instrumental Ratio
3. Maximum Repeat Factor and Weekly Music List Size
4. New Canadian Music
5. Current:Recent:Past Indicator
E) TRADITIONAL AND SPECIAL INTEREST MUSIC
F) SPOKEN WORD
G) COMMERCIAL CONTENT
H) ACQUIRED PROGRAMMING
I) DEFINITION OF A MARKET
J) SMALL MARKETS AND BORDER MARKETS
IV. IMPLEMENTATION -- CUTTING THE RIBBON
A. THE SCOPE OF THIS POLICY
B. THE DATE OF IMPLEMENTATION
C. OTHER ASPECTS OF IMPLEMENTATION
D. RADIO MARKET CRITERIA
E. THE FREEZE
F. THE PROMISE OF PERFORMANCE
1. Compliance
2. The Form
a. Language of Programming
b. Program Origination
c. Spoken Word
d. Station Format
e. Music Categories 2 and 3
f. Station Policies
g. Canadian Talent Development
V. CONCLUSION -- A NEW RADIO LANDSCAPE
APPENDIX I -- CANADIAN TALENT DEVELOPMENT
APPENDIX II -- CONTENT CATEGORIES AND SUBCATEGORIES
APPENDIX III - SUMMARY OF THE MEASURES TAKEN
AN FM POLICY FOR THE NINETIES Related documents: Public Announcements dated 19 April 1973, "A Proposal for an FM Radio Policy in the Private Sector"; 20 January 1975, "FM Radio in Canada: A Policy to Ensure a Varied and Comprehensive Radio Service"; 19 July 1976, "Policy regarding the carriage on cable television of FM signals"; 20 April 1979, "Implementation of the FM Policy"; Public Notices CRTC 1983-43 dated 3 March 1983, "A Review of Radio"; CRTC 1984-285 dated 26 November 1984, "FM Policy: Additional Flexibility in the Scheduling of Mosaic Programming"; CRTC 1984-84 dated 5 April 1984, "The Consultative Committee on Music on FM Radio"; CRTC 1986-248 dated 19 September 1986, "Regulations Respecting Radio Broadcasting"; CRTC 1989-30 dated 14 April 1989 "A Plan to Conduct an FM Policy Review"; CRTC 1990-20 dated 16 February 1990, "A Review of the Policy for FM Radio".
I. INTRODUCTION -- Blueprints for Change
On 16 February 1990 the CRTC issued Public Notice CRTC 1990-20 entitled "A Review of the Policy for FM Radio." In the notice, the Commission announced that it considered the time right to conduct a comprehensive review of its policy for FM radio in the private sector. The current FM policy has been in effect for 14 years. Since that time the radio industry has changed dramatically. FM radio has experienced growth in the number of stations and level of listening, as well as in revenues and profits. At the same time the audience share, revenues and profits of AM radio have declined. This period has also seen expansion in the Canadian music industry as well as in the number of private Canadian radio networks and program syndicators.
The Commission believes that the policy had to be reviewed to ensure that it was still relevant, given the changes that have taken place in the broadcasting and related industries, and in view of the Commission's goal of streamlining its policies, regulations and administrative practices to retain only those mechanisms necessary to attain the objectives set out in the Broadcasting Act.
In Public Notice CRTC 1990-20, the Commission therefore requested public comment on its FM policy and announced that it would hold a public hearing beginning on 26 June 1990 to consider the matter. To provide a framework for the discussion, the Commission also put forward a proposal for changes to the FM policy, and outlined a number of objectives and key considerations.
The Commission received 76 written submissions in response to the public notice, and 31 parties appeared during the hearing to elaborate on their comments and suggestions. The Commission was impressed with the thoughtfulness and quality of the submissions. The written and oral submissions have been carefully considered. In the following pages, the Commission sets out its revised policy for private commercial FM radio which, it expects, will allow private broadcasters to develop the diverse, high quality, predominantly Canadian programming that listeners deserve.
II. THE GENERAL APPROACH -- Laying the Foundation
After considering the submissions received and the discussion at the hearing, the Commission remains convinced that the objectives and key considerations identified at the beginning of the process provide a sound foundation for the new FM policy. As well, the Commission accepts as valid the arguments put forward by several French-language broadcasters that the new policy must recognize the special circumstances and challenges that they face.
This section provides a brief discussion of each of the Commission's objectives and key considerations.
A) The Objectives
1) Canadian Resources -- The First Priority
The Broadcasting Act stipulates that programming provided by each broadcaster should make use of "predominantly Canadian creative and other resources".
The maturation of the Canadian music industry over the past two decades has made it practical to increase the Canadian broadcasting system's reliance on Canadian talent. Programming must give pride of place to Canadian performers and address matters of Canadian concern. Accordingly, increased emphasis on Canadian musical and other creative resources is the primary thrust of the new policy.
2) Maintaining and Developing Diversity
The notion of diversity comes from the Broadcasting Act's call for programming that is "varied and comprehensive". This concept implies not only that different types of programming should be available, but that programming should cover a wide range of tastes and interests.
Strategies to provide diversity are not limited to commercial radio. The Commission continues to view the diverse and balanced programming of the CBC's radio service as the cornerstone of Canadian radio. In addition, educational, community and campus radio contribute alternative programming and access by local community groups.
While diversity among commercial pop and rock stations is a desirable objective, the private sector is limited in this regard. At a certain point, programming becomes so specialized that audience levels become too low to generate the revenues that commercial stations need to survive. Almost all commercial FM stations concentrate on the presentation of popular music. This approach enables them to appeal to the broad general audiences they must attract to generate adequate advertising revenues. However, with the convergence of pop and rock music styles over the years, it has become increasingly difficult to retain the distinctions between stations basing their programming on pop and rock music. The Commission believes that a level of diversity will result as stations differentiate themselves in order to serve different audiences. At the same time there is still a necessity to ensure that a wide range of all types of musical and spoken word programming is available in the broadcasting system.
3) Maintaining and Developing High Standards
The Broadcasting Act requires that the programming provided by each broadcaster be of "high standard". The 1975 FM policy expressed the view that quality was directly related to the level of care and preparation that was invested in program production. The policy therefore introduced the concept of foreground format programming. The Commission, however, is convinced that well-prepared and thoughtful programming should be present throughout a station's programming and not limited to a station's foreground format.
For example, regular newscasts provide an important source of information for many Canadians. As well, radio continues to provide the only daily broadcast source of local information in many communities. Analysis of local issues, commentary on music played, and even coverage of local sports events, can contribute to a high quality radio service.
The Commission has therefore decided, through its new policy, to continue to encourage stations to complement their music with high quality spoken word programming, including news, that is relevant to the communities they serve. Broadcasters are encouraged to demonstrate that the increased freedom in this regard will result in creative, quality programming.
B) Key Considerations
1) Reliance on Competitive Forces
As noted earlier, the number of FM stations has increased significantly since 1975. Many communities are served by several local stations and also receive signals from stations in other communities.
The Commission considers that the need to maintain format distinctions has diminished and that competition between broadcasters striving to attract audiences in a multi-station environment will ensure a measure of diversity among stations seeking mass audiences. In addition, it believes that broadcasters are best situated to determine which spoken word and special interest programs serve their audiences best. Accordingly, the Commission will lessen its regulatory involvement in this area, while maintaining some basic policy objectives.
2) Protection of AM
AM stations have generally encountered lower audiences and revenues in recent years, in the face of growing competition from FM stations and their superior technical sound. The Commission considers that AM should be provided a measure of protection until a more effective strategy for strengthening it is realized. The new policy will therefore make provision for programming strategies designed to allow AM stations a measure of competitive flexibility.
3) Reduced Regulation
The reduction and simplification of regulations has again been an important consideration in the current review.
Consistent with these goals, the Commission now plans to reduce significantly the scope of the Promise of Performance. Only essential aspects of a station's programming will be included in the Promise of Performance, and a licensee's adherence to its commitments in these areas will be strictly enforced. The new Promise of Performance will be based on objective, measurable commitments to the greatest extent possible, and the number of content Categories and Subcategories will be reduced.
To reduce the paper burden further, stations applying to renew their licences will no longer be required to file a Description of Programming form. However, a section entitled "Part III - Supplementary Questions" has been appended to the Promise of Performance. Following the upcoming round of licence renewals, the Commission also intends to introduce a "postcard" application renewal form for stations that do not propose changes to their Promise of Performance.
To emphasize the importance of Canadian music and the provision of Spoken Word programming further, the Commission will propose, at a later date, amendments to the Radio Regulations, 1986 (the regulations) by adding requirements dealing with these areas.
4) French-language Broadcasting -- A Distinct Environment
During the Commission's review at the public hearing of the impact of its proposals on French-language broadcasting, the necessity of introducing a fourth key consideration became apparent. French-language AM and FM radio have evolved differently from their English-language counterparts. English-language AM stations offer a variety of music formats, including contemporary hit, adult contemporary, Gold and Country music formats, whereas most French-language AM stations offer formats based on spoken word programming. Thus, restrictions on the music of French-language FM stations would not be effective in providing a diversity of music formats, or any meaningful measure of protection for French-language AM stations.
French-language FM stations, however, still face stiff competition from English-language music stations in communities such as Montréal and Ottawa-Hull which are also served by stations broadcasting in English. The French-language stations must ensure that at least 65% of the vocal selections they broadcast are in French. English-language stations generally have no obligation to broadcast French-language music, although the Commission notes that some stations in Montréal and Ottawa-Hull have made a minimum commitment of 5%. Some enjoy considerable success in attracting young francophones with rock music formats. Moreover, the "pool" of French-language music available to French-language broadcasters is considerably smaller than that of English-language music available to English-language broadcasters.
Recognizing the difficulties that French-language stations face -- particularly in bilingual areas -- and in light of the fact that there are few music-oriented French-language AM stations, the Commission has made allowances with respect to Music Usage Indicators.
III. THE TOOLS - RESPONDING TO THE ISSUES
A) CANADIAN CONTENT
The Commission had proposed that all popular music-based stations except those in the Easy Listening (predominantly instrumental) format be required to program a level of at least 30% Canadian content in their popular music, on a daily basis. The Commission further proposed that levels for Category 6 and Ethnic music remain at 7%, measured on a weekly basis.
In general, broadcasters agreed with the Commission's proposal for popular music, although at the hearing several broadcasters opposed the proposed increase in Canadian content for FM stations. Some broadcasters argued that there is insufficient Canadian recorded music available to meet the proposed requirements, especially for certain formats. Télémédia Communications Inc. (Télémédia) argued that French-language broadcasters should be permitted to program a greater number of non-Canadian recordings in order to meet the demands of the 65% French-language selection requirement.
The Canadian Association of Broadcasters (CAB) and several licensees of Easy Listening FM stations opposed the 20% Canadian content requirement that was proposed for Easy Listening stations, arguing that there is a lack of Canadian easy listening recordings. As an alternative, the CAB suggested a sliding scale of Canadian content levels directly proportional to the vocal:instrumental ratio. The CAB also proposed that the increase in Canadian content requirements be implemented over a two-year period.
The Canadian Independent Record Producers Association (CIRPA), the British Columbia Music Industry Association (BCMIA) and the Association québécoise de l'industrie du disque, du spectacle et de la video (ADISQ) supported the proposed increase in the Canadian content level and advocated further increases in the requirement over the next five years. Representatives of the music and recording industries further proposed that the 30% Canadian content requirement be implemented immediately.
The CAB proposed that the Commission continue to measure Canadian content for FM on a weekly basis. It argued that a daily requirement for FM stations would reduce programming flexibility and diversity and would conflict with the industry practice of programming FM stations on a weekly basis. Furthermore, the CAB proposed that the flexibility of weekly measurement for Canadian content should also be applied to AM radio.
Representatives of the music and recording industries and Rawlco Communications Ltd. (Rawlco), on the other hand, believed that compliance should be measured on a daily basis. CIRPA and ADISQ further suggested that compliance be measured in three- or four-hour time blocks in order to prevent stations from relegating Canadian content to periods when audiences are small.
Representatives of the Canadian classical music industry suggested that the current 7% Canadian content requirement for Category 6 music be increased to 30%, particularly for concert music (Subcategory 61), to stimulate that segment of the Canadian music industry. These submissions also proposed that the Commission increase the requirement for music composed by Canadians. The CAB, however, submitted that the Canadian content requirement for Category 6 should continue to be lower than for Category 5 music.
As stated in the proposed policy, in light of the growth of the Canadian music industry and the FM broadcasting sector, the Commission considers that FM stations should no longer have lower Canadian music requirements than AM stations in the popular music categories. Accordingly, the Commission will increase the Canadian content requirement for popular music to 30% for all FM stations except those with commitments to a level of instrumental selections of 35% or greater. The Commission considers that the flexibility being given to FM stations with respect to other programming commitments will allow broadcasters to adjust to these increases.
The Commission does not agree with the suggestion that an increased Canadian content requirement for popular music should not apply to French-language broadcasters. As Télémédia pointed out, French-language broadcasters generally exceed the current Canadian content requirement. Moreover, the lack of restrictions on hits and the ability to program both French- and English-language selections should aid French-language broadcasters in increasing their Canadian content.
To provide an added measure of stimulation for the production of Traditional and Special Interest Music by Canadian artists, the Commission will increase the requirement for Canadian content for Traditional and Special Interest Music to 10% within the regulations. An appropriate level of Canadian music for the CBC stereo networks and the few private stations specializing in Concert Music will continue to be governed by their existing condition of licence and will be explored at the time of their next licence renewal. The Canadian content requirement for Ethnic Music will remain at 7%.
The Commission will continue to measure compliance with Canadian content regulations on a weekly basis for FM stations. The Commission will also measure compliance with the Canadian content regulation on a weekly basis for AM stations, in order to put them on an equal footing with FM stations.
The Canadian content requirements for AM and FM radio will be incorporated into the regulations. The Commission considers that the required time to enact the revised regulations should be sufficient for FM broadcasters to adjust their programming in this area.
To ensure an even distribution of Canadian selections throughout the broadcast day and week, the Commission will expect that at least 25% of popular music selections broadcast by AM and FM stations between 6 a.m. and 7 p.m. Monday through Friday be Canadian. Furthermore, the Commission will expect reasonably even distribution of Canadian selections throughout these dayparts and throughout the broadcast week. The Commission will further expect a significant presence of Canadian music in high audience periods -- these traditionally being the morning and afternoon drive periods.
The Commission will monitor the distribution of Canadian music to ensure that the above guidelines are observed. If, however, the distribution of Canadian music should not reflect the guidelines, the Commission is prepared to establish more stringent measures.
B) CANADIAN TALENT DEVELOPMENT
In its Public Notice, the Commission asked for comments regarding the efficacy of Canadian talent development initiatives and for suggestions as to how they may be assessed.
At the hearing, a number of submissions, including those by the Government of Ontario, CIRPA and the CAB, suggested that a separate process involving all interested parties should be established to review Canadian talent development. The CAB recommended that, since the issue relates to AM as well as FM broadcasters, an overall industrial strategy be developed for such a process.
Rawlco suggested that a major research project be undertaken, involving the Commission, the CAB, the Department of Communications and music industry associations, to determine the most effective ways to support and encourage Canadian talent.
Some broadcasters suggested that off-air initiatives, such as contributions to the Foundation to Assist Canadian Talent on Records (FACTOR) and MusicAction, are adequate and suggested that additional initiatives may not be necessary. Moffat Communications (Moffat), on the other hand, stated in its written submission that the Commission should not be involved in areas that do not directly relate to on-air activities. Moffat suggested that an increase in Canadian content levels to 35% or 40% would accomplish more than financial contributions for Canadian talent development.
The CAB and the Association canadienne de la radio et de la télévision de langue française (ACRTF), and many private broadcasters stressed that the Commission should accept non-musical initiatives as contributions toward Canadian talent development, for example, initiatives for information programming, comedy and other spoken word programming for radio.
The CAB also questioned the need for smaller market stations to make cash commitments. The Government of Ontario suggested that smaller market stations should pool their resources in this respect.
The Commission is of the view that the Canadian broadcasting system has an important role to play in the development of Canadian artists, primarily through airplay. It believes that it is equally important to ensure that an adequate supply of Canadian material is available to offer Canadian listeners a diversity of high quality Canadian content on each station, and in various musical as well as spoken word categories. While broadcasters are not solely responsible for seeking out and developing Canadian creative talent, it is clearly in their interest to take an active role in this process to ensure that there is a sufficiently large pool of Canadian recorded music as well as other types of Canadian creative material available for broadcast.
To achieve these goals, the Commission has, for some time, expected Canadian broadcasters to include, as part of their Promises of Performance, some commitment to encourage and promote the development of new Canadian talent. These commitments have most often been of a financial nature directly related to record production, live concerts, and special on-air productions featuring Canadian artists.
In recent years, a number of licensees have asked the Commission to issue clear guidelines as to what exactly is expected of them in this area; some have even suggested a "percentage of revenue" formula that could be applied across the board.
Although the Commission recognizes the practical advantage of clear guidelines, a number of unresolved issues remain, some of which are not within the Commission's domain, and others which may have a significant impact on broadcasters' ability to commit to substantial initiatives in the near future. These include the revision to the Copyright Act to include "neighbouring rights", which may have an impact on licensees' budgets.
Another factor that is also likely to have an impact is the increased requirement for Canadian content proposed earlier in this document. Before it makes any final determination on a standard approach for assessing Canadian talent development initiatives, the Commission wishes to consider the impact of these factors on broadcasters' future commitments in addition to the impact that Canadian talent development initiatives have had on the Canadian broadcasting industry to date.
The development of a standard formula for determining the acceptability of Canadian talent development projects could form part of a separate process to be held at a later date, once a study of the impact of all factors mentioned above has been conducted, and after the Commission has completed its hearings on the renewal of most commercial FM stations in 1992.
In the meantime, the Commission will continue to assess Canadian talent development initiatives according to such criteria as a licensee's revenue and profitability, the resources available to it, and the size of the market in which it operates. Individual initiatives will also continue to be assessed according to their potential impact on the development of Canadian talent.
A major concern continues to be the provision of adequate exposure for new Canadian artists. Therefore the Commission will ask broadcasters to indicate any commitment to the on-air exposure of new Canadian talent through their Canadian talent development initiatives.
The Commission has generally treated certain types of direct and indirect expenditures as constituting acceptable Canadian talent initiatives, while others have been disqualified generally on the basis that they are more appropriately considered a "normal cost of doing business". To assist broadcasters in formulating developmental projects, a list of various types of initiatives that have generally been accepted or rejected by the Commission in the past is attached in Appendix I. This list is not exhaustive, and other types of initiatives not listed will continue to be assessed on a case-by-case basis.
C) STATION FORMATS
The Commission had proposed that station formats might be retained with some amendments principally relating to stations programming mainly popular music.
At the hearing, the majority of broadcasters supported the Commission's proposal to combine formats based mainly on popular music into one subcategory called "Pop and Rock". It was generally considered that in combining the two formats, competitive forces would serve to develop and maintain diversity while allowing stations flexibility to develop more creative and innovative niche programming.
The CAB proposed three format groups: pop and rock, country and other specialty formats. Specialty formats would be based on spoken word programming or on music other than pop, rock or country. Easy listening would be a sub-group of the pop and rock format. The CAB further proposed that music charts be used instead of definitions to discriminate between formats. While many of the broadcasters and several other parties supported the amalgamation of the current Group I and Group II formats, their proposals for grouping the remaining formats differed from those put forward by either the CAB or the Commission.
Some broadcasters opposed the Commission's proposal, suggesting that the elimination of distinctions between popular music formats would result in a homogenization of the sound of FM stations and a reduction in diversity.
The Commission continues to be of the view that there is sufficient competition among FM stations providing pop and rock programming in most Canadian communities to ensure the presence of diversity among formats, without the need for regulation. In order to reflect the emergence of dance music, the Commission is adding a reference to this music genre in its definitions, and couples it with pop and rock music. Stations specializing in dance music, and formerly finding themselves in the Group IV format, will now fall within a newly defined Group I format of Pop, Rock and Dance. In addition, the increasing convergence of music types and the inclusion of many new elements in popular music make differentiation by musical category increasingly difficult in the pop, rock and dance areas. At the same time, the Commission considers that regulation is required to maintain the presence of diverse station formats beyond the pop, rock and dance areas. For these reasons, the Commission has decided to eliminate the differentiation between pop and rock subcategories. The popular music subcategories will be reduced to the following (definitions are included in Appendix II):
Subcategory 21 - Pop, Rock and Dance
Subcategory 22 - Country and Country-oriented
Subcategory 23 - Folk-oriented
Subcategory 24 - Jazz-oriented.
The removal of the distinction between the old music Subcategories 51 - Pop and Rock - Softer and 52 - Pop and Rock - Harder also renders the old format groups I, II and IV irrelevant. The revised new format system will be as follows:
Group I - Pop, Rock and Dance:
 The language of broadcast of the station is English or French, at least 50% of the broadcast week (period 6 a.m. to midnight Sunday to Saturday) is devoted to music, and at least 70% of the music broadcast is from Subcategory 21 (Pop, Rock and Dance).
Group II - Country:
 The language of broadcast of the station is English or French, at least 50% of the broadcast week is devoted to music and at least 70% of the music broadcast is from Subcategory 22 (Country).
Group III - Specialty:
 Any station other than one operating in Group I or II.
Stations proposing to broadcast in Group III - Specialty may be those specializing in Ethnic programming, News or Talk programming, Traditional and Special Interest musical programming or a combination of a number of kinds of special programming.
As discussed in greater detail later in this notice, licensees will be expected to make minimum commitments in their Promises of Performance to the language of broadcast, News, Spoken Word - Other and, where applicable in the case of Group III stations, to Traditional and Special Interest programming. Stations wishing to operate in Group III will be expected to outline their music proposals in a schedule to be appended to the Promise of Performance.
D) MUSIC USAGE INDICATORS
The Commission relies on Music Usage Indicators to ensure that music programming styles are differentiated and to provide a minimum amount of protection to music-oriented AM stations.
1.Hits
The FM policy currently requires FM stations to restrict their use of hits to less than 50% of all popular music selections broadcast each week, and stipulates that non-Canadian selections may not be repeated more than 18 times per week.
In response to requests, the Commission had proposed to exclude all Canadian selections from the calculation of the hit factor. Since this change could result in the airplay of a greater number of old Canadian hits to the neglect of newer Canadian music, the Commission suggested the inclusion of a "new music" indicator in the Promise of Performance.
The Commission had also proposed that hits be measured on a daily, rather than on a weekly basis.
Comments at the hearing were mixed with regard to the Commission's proposals. Several groups suggested the total elimination of any restriction on hits. Other groups suggested that Canadian selections be included in the calculation, but be treated as non-hits. Another group favoured the retention of the hit factor, with all Canadian content removed from the calculation.
Most of those presenting submissions at the hearing were opposed to the introduction of a daily measurement of hits. The most common argument was that a daily count would reduce flexibility. Many licensees felt that it would be difficult to broadcast special programs that might have a higher hit content than the daily average. The CAB suggested that specialty music (currently Category 6) also be included in the calculation of hits, and that a higher maximum level for hits be permitted. The suggestion was viewed by the CAB as offering a potential incentive to broadcasters to use more specialty music.
The Commission, having considered these views, has determined that the level of hits allowed on FM should continue to be regulated. This will ensure a differentiation between the sound of FM and that of AM, and provide a measure of protection for AM radio. It has decided, however, to redefine "hits" so as to exclude Canadian selections for the 12-month period after they first appear on a Top 40 hit chart. The Commission will limit the use of hits on FM stations to less than 50% of all music broadcast.
This new approach will allow FM broadcasters to maintain their current level of foreign hits, while encouraging them to increase the use of current Canadian hits and removing disincentives to the programming of new Canadian hits.
The Commission considers that the inclusion of Traditional and Special Interest music in the hit factor calculation may be an incentive for broadcasters to program such music. Therefore, all musical selections broadcast (Category 2 as well as Category 3) will be included in the calculation of hits. The Commission accepts the argument that the calculation of hits on a daily basis would remove broadcasters' current flexibility to average hit material over the week. The Commission also notes that a daily measurement would be inconsistent with other FM policy requirements. Accordingly, the Commission will continue to assess compliance in this respect on a weekly basis.
The Commission has also decided that an exemption from the hit restrictions will be granted to French-language stations. In Circular No. 332, dated 15 May 1987, the Commission announced that it was suspending its evaluation of the use of French-language hits by FM radio stations for a period of two years, in view of the inadequacy of the available French-language hit charts as a measuring tool, the limited availability of French-language music, and the requirement that 65% of vocal music be in the French-language. The Commission considers that imposition of restrictions on the use of hits under these circumstances would represent an undue burden for French-language broadcasters.
2.Vocal-to-Instrumental Ratio
The Commission had proposed to retain the Easy Listening format for those stations broadcasting more instrumental than vocal selections.
At the hearing several groups, including the CAB, supported the retention of the Easy Listening format, but suggested that the minimum percentage of instrumentals be lowered to between 20% and 25% to accommodate changes in the musical tastes of the traditional Easy Listening audience. Others recommended the elimination of the format distinction.
As with the hit factor calculation, the CAB and several others proposed that Category 6 music be included in the calculation of the vocal-to-instrumental ratio to encourage the use of specialty music.
The Commission agrees that tastes of the Easy Listening audiences have changed, and that today's audiences generally expect a more contemporary, more vocal sound. The Commission is of the view, however, that a level of at least 35% instrumentals is necessary to ensure that the Easy Listening format remain unique.
The Commission has therefore decided that there will be three levels of instrumental music (less than 35%; 35% up to, but not including, 50%; and 50% and over), each tied to a specific level of Canadian content. Stations programming less than 35% instrumentals will be required to program at least 30% Canadian content; stations programming 35% up to, but not including, 50% instrumentals will be required to program at least 20% Canadian content; stations programming 50% or more instrumentals will be required to program at least 15% Canadian content.
Although the Commission will no longer define Easy Listening as a specific station format, commitments to a vocal-to-instrumental ratio will be maintained in the Promise of Performance as the means of measuring compliance by licensees. Since Canadian content levels are tied to the vocal-to-instrumental ratio, retention of this indicator as a regulating tool is essential.
The calculation of the vocal-to-instrumental ratio will include all musical selections broadcast, i.e., music from both Categories 2 and 3. The Commission considers that this will encourage the broadcast of more Traditional and Special Interest Music.
3.Maximum Repeat Factor and Weekly Music List Size
The Commission had made no specific proposals to alter its policy with regard to these indicators. At the hearing, the CAB and several broadcasters favoured the retention of the Maximum Repeat Factor only. It was suggested that the Music List Size limits radio's capacity to maximize the exposure of Canadian music and create real hits. It was also noted that, even without a commitment to a minimum music list, FM stations would still broadcast more distinct selections than, and would continue to differ from, AM stations.
It was also suggested, as with the hit factor and vocal-to-instrumental calculations, that Traditional and Special Interest music be included in the calculation, thereby providing an incentive to program a greater amount of such music.
Rawlco favoured the retention of both the MRF and the Music List Size, stating that both added to diversity by further distinguishing between stations within the same group. Several groups preferred to see elimination of any need for commitments with respect to either indicator, arguing that market forces would ensure musical diversity, and that the two indicators complicate the process of programming.
Télémédia, however, suggested that English-language stations in both Montréal and Ottawa-Hull should have a distinct selection commitment as a Condition of Licence as a means to protect French-language stations. Télémédia also proposed that, while the Maximum Repeat Factor should appear in the Promise of Performance, the distinct selection commitment should be moved to the Description of Programming, because the distinct count has no significant effect on AM.
The Commission considers that the Maximum Repeat Factor and the Music List Size remain important measures of musical diversity on FM. The elimination of these indicators, combined with the changes in the hit definition, could result in a Top 40 sound on FM radio, a reduction in diversity, and an increased threat to AM radio.
The Commission has therefore decided to retain both the Maximum Repeat Factor and the Music List Size as commitments in the Promise of Performance. The Maximum Repeat Factor will remain at 18 and the minimum weekly Music List Size will be 850 distinct selections per week.
French-language stations will be exempt from the application of these two indicators. Due to the limited supply of French-language music, their application could result in an increased similarity of music programming among stations in any given area.
4. New Canadian Music
The Commission had proposed to exclude Canadian selections from the hit count. Since this change could lead stations to broadcast a greater number of older Canadian hits and neglect newer Canadian music, the Commission had proposed to include in the Promise of Performance a new music indicator with respect to a percentage of new Canadian music. The Commission had asked for views regarding an appropriate definition of a "new Canadian selection" and the level of new Canadian music that would be appropriate.
At the hearing, most of the submissions objected to the Commission's proposal for a new Canadian Music indicator. It was generally believed that broadcasters already program a substantial amount of "new" Canadian music, and that additional measures would only add to the regulatory burden, without guaranteeing benefits for Canadian artists.
The Government of Ontario presented a proposal aimed at increasing airplay for new artists -- those "who did not have a "gold" record (Certification by the Canadian Recording Industry Association of 50,000 units sold)." Westcom suggested an incentive program for broadcasters programming "new" Canadian talent, whereby a double Canadian Content credit would be given for the use of such material.
The Commission is of the view that implementing a "new" artist requirement may be difficult to apply to all formats equally, and difficult to monitor as no measurable criteria have yet been established. The treatment of Canadian selections as non-hits for one year following their appearance in the Top 40 charts will act as an incentive favouring new Canadian music.
Accordingly, although a commitment to program new Canadian music will be introduced in Part III - Supplementary Questions, no minimum level will be imposed. Licensees will also be asked in making their commitments to Canadian Talent Development to indicate their efforts on behalf of the exposure of new Canadian talent.
5. Current:Recent:Past Indicator
The Commission had proposed to retain this indicator and move it from the Description of Programming to the Promise of Performance. At the hearing, broadcasters unanimously opposed this suggestion. The Government of Ontario and Live Entertainment Corporation of Canada also opposed it. It was argued that the proposal would result in a reduction in flexibility, an addition to the regulatory burden and interference with market forces. Similarly, Maclean Hunter favoured the total elimination of the indicator.
Standard Broadcasting proposed that the Commission apply this commitment as a Condition of Licence only for new stations licensed under competitive circumstances, as a means to ensure diversity between stations that might otherwise sound similar. CIRPA suggested that the Current: Recent:Past indicator be replaced with a New:Old ratio, where "New" would be defined as "less than one year following commercial release".
Live Entertainment Corporation of Canada argued that there should be a minimum level of current material for all stations, at least for Canadian selections, to stimulate exposure to newer Canadian artists.
The Commission, having considered these views, has decided that moving the Current:Recent:Past ratio to the Promise of Performance could well reduce broadcasters' flexibility unnecessarily. Furthermore, it would require licensees and the Commission to establish and maintain data bases to reflect release dates for all selections, adding to the complexity of the regulatory process.
The Commission has therefore decided not to require commitments with respect to a Current:Recent:Past ratio in either the Promise of Performance or the Part III - Supplementary Questions.
E) TRADITIONAL AND SPECIAL INTEREST MUSIC
The Commission had proposed a minimum guideline for "non-format" music.
The concept of requiring each station to play non-format music was opposed by most broadcasters. The CAB suggested the introduction of a category called Specialty Music, which would include classical, jazz, New Age, reggae and other lesser-played music, but argued that it should be up to individual broadcasters to decide whether or not to include specialty music in their programming. The CAB maintained that broadcasters in smaller communities, where alternative sources of specialty music are not always available, would nevertheless broadcast a variety of music to satisfy the varied tastes of their audiences.
Most broadcasters also claimed that listeners now expect consistency from radio, and that requiring stations to make radical changes in their music for a few hours per week could cause listeners to tune out rather than tune in. They believed that the imposition of a blanket requirement for non-format music would result in its being heard generally in periods of lower listening.
It was also pointed out that alternative music is already available in many communities from the CBC and campus and community stations. On the other hand, the National Campus and Community Radio Association (NCCRA) argued that the presence of alternative music on their stations did not relieve commercial radio of an obligation to broadcast it, particularly since most campus and community stations operate at relatively low transmitter power. The NCCRA suggested that airplay on commercial stations would whet listeners' appetites for alternative music and cause them to tune to campus and community stations to hear more. With respect to definitions, The Canadian League of Composers and The Canadian Music Centre suggested that the various subcategories related to classical music be designated as concert music -- terminology that it considered more appropriate. On the other hand, there was resistance to the development of formal definitions for new types of specialty or non-format music.
After considering the submissions, the Commission has decided to allow broadcasters to determine whether or not to program Traditional and Special Interest Music. Consequently, no minimum commitment for non-format music will be introduced. Private commercial broadcasters will have the ability to determine the type and level of Traditional and Special Interest Music most appropriate to their stations' format.
While the Commission appreciates the several suggestions received for broadening the definitions of Traditional and Special Interest Music, there will be no need to expand the definition since discretion in this area will rest with individual broadcasters.
Therefore, the definitions of the various subcategories of Traditional and Special Interest Music will remain essentially the same, except that the current subcategories for classical, opera, and operetta and musical will be combined into one subcategory known as Concert Music. (See Appendix II, Content Categories and Subcategories).
F) SPOKEN WORD
The Commission had proposed to replace the requirements for foreground and mosaic programming with enrichment guidelines.
Several parties, including the NCCRA, supported the Commission's proposal, while some broadcasters advocated the retention of requirements for foreground and mosaic programming.
At the hearing the CAB and most of the broadcasters proposed that the current requirements for foreground and mosaic format programs be replaced with an overall commitment to spoken word. "Spoken Word" would be defined as everything except music and commercial messages. The CAB argued that, in the absence of detailed guidelines regarding spoken word, audiences would demand a certain quality in spoken word programming. Moreover, it was argued that an overall commitment to spoken word would allow each station to broadcast programming that meets the specific needs of its audience.
Various levels were suggested for minimum spoken word requirements. The CAB proposed a guideline of 10% of the broadcast week, a figure that would vary depending upon the station's orientation. Stations would continue to make individual commitments to news.
The Commission is of the view that a requirement for spoken word content will give broadcasters flexibility in programming and facilitate the measurement of compliance. A requirement for spoken word, however, must be sufficient to ensure that programming is of high quality and is distinct in style from that found on AM radio.
An examination of the Promises of Performance of a large number of different types of FM stations indicated that the average commitment to Spoken Word content was 19.7%, with the lowest being 11.7%.
Accordingly, the Commission will replace requirements for the broadcast of foreground and mosaic programs with a regulatory requirement that spoken word content constitute a minimum of 15% of the broadcast week. The Commission will consider spoken word to include all programming except music, musical production and advertising.
The Commission emphasizes that the fundamental responsibility of radio broadcasters is to provide original programming of direct relevance to the communities they serve. In this regard, the Commission will expect that the local component of news continue to be an integral part of FM broadcasters' programming. Accordingly, the Commission will require FM broadcasters to continue to make commitments regarding the amount of news they will broadcast as part of their overall Spoken Word commitment. Three hours of news per week will be the minimum level acceptable to the Commission. The definition of News will be expanded to include backgrounding of current news events (currently included in subcategory 3A). Commitments to news will continue to be part of a broadcaster's Promise of Performance.
G) COMMERCIAL CONTENT
The current regulations restrict joint and independent FM stations to a maximum of 150 commercial minutes each broadcast day.
In its proposed policy statement, the Commission noted that some broadcasters had urged that this regulation be removed on the grounds that competitive forces would ensure that advertising on commercial FM stations not reach an unacceptable level.
At the hearing, while several broadcasters reiterated this view, the majority of broadcasters considered that the Commission should continue to regulate the amount of advertising on FM as a protection for AM stations. Concern was also expressed that an increase in FM's commercial inventory might depress its value.
Most broadcasters and the CAB suggested that advertising limits be imposed on a weekly rather than a daily basis to give FM broadcasters the flexibility to carry more advertising on certain days. Most of the broadcasters supported an increase in allowable commercial content from the amount permitted by current regulation (1050 minutes per week) to an amount constituting 15% of the broadcast week (maximum 1134 minutes per week). The CAB also submitted that Subcategory 82 (Promotional Contests) and Subcategory 83 (Promotion with Sponsor Mention) do not constitute commercial activity and should not be included in the Commission's definition of advertising content.
The Commission is of the view that the removal of advertising limits on FM radio may have an adverse effect on the financial situation of AM stations. The Commission, however, considers that a weekly limit on advertising will give FM broadcasters the flexibility to adjust their commercial content to local advertising patterns, which tend to be higher on certain days of the week. This would be particularly beneficial to small market stations.
The Commission, therefore, has decided to limit the amount of advertising broadcast by commercial FM broadcasters to no more than 15% (maximum 1134 minutes) of the broadcast week. Such a limit will give FM stations some latitude to increase their advertising from that currently permitted while limiting any adverse effects on AM radio.
Furthermore, the Commission will amend the definition of advertising to exclude Promotional Contests (currently Subcategory 82), which do not contain mention of a sponsor. Promotion with Sponsor Mention, which by definition contains mention of a sponsor, will continue to be treated as commercial activity.
H) ACQUIRED PROGRAMMING
In its proposed policy, the Commission invited comments on the three incentives recommended by the Consultative Committee on Acquired Audio Programming for the purpose of encouraging the use of Canadian acquired programming, as outlined in Public Notice CRTC 1989-135.
At the hearing, it was generally felt that a discussion of the Committee's recommendations should take place after the completion of the FM policy review as the recommendations may be affected by changes to the policy. The CAB, however, expressed agreement with the thrust of the recommendations. The CAB, Standard Broadcasting and the Government of Ontario considered that the most useful of the incentives recommended by the Committee was that proposing dispensation for commercial content broadcast during a Canadian acquired program.
The CAB and Télémédia did not agree with the Commission's intention to deny dispensation for programs broadcast on a station when the programs are produced by a company associated with the station's licensee. They believed it would be unfair to penalize a station whose parent company is in the syndication business. Alternatively, they suggested that a program that is broadcast by at least one "non-owned" station should qualify for an incentive in respect of all stations, regardless of whether the program producer is an associate of the broadcaster or broadcasters concerned.
The Commission is of the view that, while there has been a general increase in the availability of network and syndicated programming, there is a need to provide encouragement for greater use of Canadian programming, and that the implementation of incentives should not be postponed. The Commission considers that it is appropriate to introduce such incentives within the context of the policy and regulatory changes resulting from the FM policy review.
Accordingly, the Commission will adopt an incentive whereby advertising broadcast within a Canadian syndicated program will not be counted for the purpose of calculating an FM station's commercial content. Use of the incentive will be limited to a maximum of 60 minutes of commercial content per broadcast week.
The Consultative Committee had recommended that dispensation also apply to advertising broadcast outside of the acquired program that is part of a barter agreement. Because of the difficulties in monitoring that this would present, the Commission will limit the dispensation to advertising broadcast within the syndicated program.
A Canadian syndicated program will qualify for an incentive provided it meets the criteria for a Canadian audio program that are contained in Public Notice CRTC 1989-135. Moreover, a Canadian syndicated program will qualify for the incentive provided it is broadcast by at least one licensee that is not associated with the company or licensee that produced the program. The onus will be on the licensee to demonstrate, upon request by the Commission, that the program qualifies for the incentive.
With respect to logging requirements, the Commission had announced in the Radio Networks and Syndication Policy (Public Notice CRTC 1989-3) that AM and FM licensees will be required to maintain a log of acquired programs broadcast according to type and origin. This practice will enable the Commission to monitor the uses of acquired programming by individual stations and by the radio industry as a whole.
As part of the changes affecting current policies and practices, FM stations will be required to log acquired programs broadcast according to type (network or syndicated) and origin (Canadian or foreign). A section in the new Promise of Performance will ask licensees to make commitments to so identify these programs in their logs.
I) DEFINITION OF A MARKET
In its proposal, the Commission noted that some broadcasters had expressed concern about the fairness of the current definition of a joint FM station, and had invited suggestions for a revised definition of a market.
The regulations define a Joint FM station as follows:
 A Joint FM licence is an FM licence, other than a CBC FM licence, a special FM licence or an experimental licence where at the time the licence was issued or renewed, the licensee, or if the licensee is a corporation, that corporation or any corporation associated with it, was licensed to operate an AM station in the same language in all or any part of the market. Joint FM stations are currently required to broadcast higher levels of foreground format programming than independent FM stations. Holders of Joint FM licences are also prohibited from simulcasting programming on their FM and AM stations. The Commission views such simulcasting to be an inappropriate use of scarce public frequencies and considers that this prohibition should be maintained except in exceptional circumstances.
The "market" of an FM station is currently defined as:
 "the geographical area:
 a) within the 5 millivolt per metre daytime official contour of an AM station, or
 b) within the 500 microvolt per metre official contour of an FM station."
The current definition of the market of an FM station, which relies entirely on technical criteria, can lead to situations where an FM station in one community is required to fulfil the more stringent requirements of a joint station because of a slight overlap between its contours and the contours of a commonly-owned AM station situated in a community with which it has few, if any, social or economic ties.
At the hearing the CAB recommended that the current distinction between joint and independent FM stations be abolished. It pointed out that, while joint FM stations command a large share of AM and FM profits since they represent the majority of stations, these profits are often offset by the more difficult financial situation of the associated AM stations.
The Central Canada Association of Broadcasters (CCBA), among others, suggested that the technical definition of a market be replaced with the Central Area definition used by the Bureau of Broadcast Measurement (BBM). This definition would focus on the area from which stations attract most of their audiences and generate the bulk of their revenues.
The Commission no longer sees a need to differentiate between Joint and Independent stations. Hence there is no further need for a definition of a market for this purpose.
There is, however, a need for a definition for the purpose of considerations of ownership, which are germane in the awarding of licences and the transfer of control of licences.
In these respects, the Commission's policy is to grant no more than one licence of the same kind in the same language in the same market to a single operator. Consequently, the Commission has also been traditionally reluctant to authorize a transfer of control, the effect of which would run contrary to this policy.
Nonetheless, the Commission notes that the current definitions of markets, based on the 5 mv/m (AM) and the 500 uv/m (FM) signal contours, very often lead to overly stringent separation requirements. Such contours often exceed significantly the areas from which stations attract most of their audiences and generate the bulk of their revenues. In this regard, the Commission notes that licensees usually attempt to provide signals that are at least 3 mv/m in the case of FM stations, and 15 mv/m (daytime) in the case of AM stations.
On this basis, the Commission will define the market of an FM station to be any area within either the 3 mv/m signal contour or the Central Area of the community served by the station as defined by BBM whichever is smaller.
In the case of an AM station, the Commission will define a market as any area found within either the 15 mv/m (daytime) signal contour or the Central Area as defined by BBM, whichever is smaller. For purposes of issuing new licences or examining transfers of ownership, the Commission will continue to rely on a variety of factors, including the above.
J) SMALL MARKETS AND BORDER MARKETS
Although the Commission did not make specific proposals regarding FM stations in small markets and border markets, several parties discussed these topics at the hearing.
The CAB and several broadcasters suggested that the Commission, upon application, consider special regulatory treatment for stations competing with U.S. signals and stations operating in markets where audiences and revenues are limited. The CAB suggested that adjustments to policies be considered on a case-by-case basis.
The CCBA and Télémédia suggested that flexibility regarding spoken word content would be helpful to some broadcasters. Rawlco proposed that the degree of flexibility given to stations in small markets should depend on their annual revenues, and that stations with minimal revenues should be free of most programming requirements. It was generally considered that flexibility regarding Canadian content requirements is not necessary for small market and border market stations.
The Commission acknowledges the difficulties faced by some FM stations in border markets where tuning to U.S. stations is considerable. It also recognizes the problems encountered by some FM stations operating in small markets where advertising revenues are limited. Accordingly, the Commission, upon application, will consider granting flexibility with respect to certain programming commitments to stations operating in border markets or in small markets. Flexibility regarding Canadian content will not be considered except for stations in border markets where exceptional circumstances are present. Similarly, flexibility will generally not be considered with respect to spoken word commitments.
Flexibility regarding programming commitments will be considered by the Commission on a case-by-case basis, taking the particular circumstances of the market into account. The onus will be on the licensee, upon application to the Commission, to demonstrate why exceptions to normal programming requirements are warranted.
IV. IMPLEMENTATION -- CUTTING THE RIBBON
A. THE SCOPE OF THIS POLICY.
This policy and its associated regulations have been designed for, and will apply in its entirety to, the licensees of private commercial FM stations.
Nevertheless, certain changes to the regulations (e.g., those with respect to Canadian Content, Foreground and Spoken Word), will also have an impact on other broadcasters, such as the CBC, and the licensees of Educational, Institutional, Student, Community, Native and Experimental stations. The Commission is of the view that the increased requirement for Canadian Content, deletion of the requirement for foreground and mosaic programming, and the related imposition of a Spoken Word requirement should have little effect on non-commercial stations.
Non-commercial stations will be required to meet the levels specified by their conditions of licence with respect to Spoken Word and Traditional and Special Interest music.
The Commission intends to conduct a review of both student and community radio to consider, among other things, more fully how the principles outlined in the policy affect them.
B. THE DATE OF IMPLEMENTATION
The regulations and all other changes to the FM Policy introduced in this Public Announcement will come into effect on 1 September 1991. The Commission will announce its proposed amendments to the regulations in the near future.
The Commission stresses that its existing policies and regulations, as well as licensees' obligations set out as conditions of licence, remain in effect until then. The policies will thus continue to be applied, and the regulations and conditions will continue to be enforced.
C. OTHER ASPECTS OF IMPLEMENTATION
Except as expressly provided for in this policy, broadcasters continue to be bound by their commitments in their current Promises of Performance or as noted in their most recent licensing decision.
There are 19 stations that are still in their first licence term. The Commission licensed these stations (many in a competitive process) on the basis of specific undertakings mentioned in their licensing decisions. While adherence to some of these commitments will no longer be required upon the implementation of the revised policy and regulations, the Commission will continue to regard, as essential undertakings for their entire licence term, the commitments of these licensees as set out in their Promises of Performance and noted in their licensing decision, with respect to the following:
Canadian Content above 30%,
Spoken Word levels above 15%,
News,
Public Affairs programs,
Hit levels below 50%,
MRF levels below 18,
Music List Size above 850,
The Vocal:Instrumental ratio,
Canadian talent development,
Local Orientation, and
Special Programs.
D. RADIO MARKET CRITERIA
At the public hearing, the Commission expressed concern regarding the amount of time and expense borne by applicants in the process of applying for licenses -- for AM as well as FM -- particularly in areas where the potential viability of new broadcasting enterprises is marginal at best.
Because this matter has an implication not only for FM but for AM as well, the Commission has published today a separate document (Public Notice CRTC 1990-112) addressing this subject.
E. THE FREEZE
In Public Notice CRTC 1989-30, the Commission announced that it would not consider applications received after 14 April 1989, until completion of the policy review.
As noted, this policy and its related regulations will go into effect on 1 September 1991. At that time, many stations may be making adjustments to their programming. In the Commission's view, it would not serve the public interest to hear new applications predicated on circumstances that may not be present when the policy and regulations go into effect. For that reason the Commission will not be ready to receive applications for new private commercial radio stations until after 1 September 1991. This includes applications by AM stations to switch to an FM frequency.
The Commission will, however, continue to accept applications for non-commercial stations where such applications propose to use the lower 20 channels on the FM band or commercial frequencies in areas where there still is a relative abundance of such channels.
F. THE PROMISE OF PERFORMANCE
1. Compliance
The Commission had asked for comments on whether adherence to all or any of the parts of the Promise of Performance should be a condition of licence.
There was a general consensus among those appearing at the hearing that licensees should meet the commitments made in their Promises of Performance, especially if the number of commitments they are required to make is reduced substantially.
In the past, the Commission has allowed certain variations to commitments in assessing substantial compliance. Under the new policy, the Commission will require licensees, by condition of licence, to fulfil absolutely each of the commitments made in a new Promise of Performance. The content of the new Promise of Performance, the form for which is to be reduced in length, is described in the next section.
2. The Form
The revised Promise of Performance form will contain 7 main sections:
a. Language of Programming
  This section will include the languages of broadcast. Details of ethnic programming will be set out in a separate appendix.
b. Program Origination
  This section will include a licensee's commitment to a minimum weekly amount of local programming.
c. Spoken Word
  This section includes commitments to minimum levels of News and other Spoken Word content.
d. Station Format
  The applicant will specify Group I -- Pop, Rock and Dance, Group II -- Country, or Group III -- Specialty. Where appropriate, specific ratios of music content for Group III stations will be requested in a separate appendix.
e. Music Categories 2 and 3
  This section will include commitments in respect of the weekly Music List Size, the Maximum Repeat Factor, the level of hits, Canadian Content percentages, level of instrumental music and the language of vocal selections.
f. Station Policies
  This section will include, as a minimum, confirmation of a licensee's commitments regarding adherence to both the broadcast code for advertising to children, the industry code on sex-role stereotyping and logging requirements.
g. Canadian Talent Development
  This section will include proposed direct and indirect expenditures under Broadcasting, Promotion and Other Categories.
The Promise of Performance will be followed by the following appendices:
- Ethnic Programming
- Music Category Breakdown
Part III - Supplementary Questions - This section will not form part of the Promise of Performance, but will include questions on the following:
i. Sources of Programming
ii. Local and Regional News
iii. Canadian Talent Development
iv. Station Policies
v. Native and Community Access
V. CONCLUSION -- A NEW RADIO LANDSCAPE
The Commission wishes to thank all who participated in this review. Revision of a complex initiative such as the FM Policy is an imposing task, and the well-researched written briefs and the thoughtful comments at the hearing were of immeasurable assistance to the Commission in developing the policy outlined in this document, a summary of which is contained in Appendix III.
The Commission is confident that this policy will allow broadcasters the freedom to excel in a highly competitive radio environment, while ensuring that Canadians continue to receive the high quality, diverse radio programming to which they are entitled.
Allan J. Darling
Secretary General
APPENDIX I -- CANADIAN TALENT DEVELOPMENT
Initiatives Generally Accepted by the Commission
The attached is a list of initiatives generally accepted by the Commission as contributions to the development of Canadian talent. This list indicates whether the Commission usually considers these expenses to be direct or indirect.
Initiatives Generally Not Accepted By the Commission
Initiatives that are not accepted usually include program hosts and programs that are more or less part of regular programming schedules, or that do not promote Canadian artists or Canadian arts, or that make minimal use and have minimal impact on Canadian creative and other resources. While the programs can be of excellent quality and supportive of community events, they do not further the knowledge or understanding of Canadian artistic or creative issues or events, nor do they provide exposure to Canadian artists; they also have a minimal direct benefit to Canadian creators.
Similarly the Commission recognizes the training and financial benefits provided to summer students when hired by a station but considers that the station benefits as much from this type of initiative as do the students. The Commission considers that Canadian initiatives should be over and above regular station programming, should be exclusively Canadian in nature and if possible have an impact on the Canadian creative and artistic community.
Other initiatives that are generally not accepted include Music Directors' salaries, membership fees for music and other associations, staff travel costs to music and broadcasting seminars and events, and telephone lines or costs for open-line programming.

Initiatives Generally Accepted by the Commission

Type of
Initiative 		Generally Accepted -
Direct 		Generally Accepted -
Indirect
Program - Station-produced
  Concert, Drama, etc.
- Poetry, Drama 		- Interviews
-Artist features
- Historical, other 
  Canadian Features
- Canadian countdown
- Album Sweeps
Promotion   - Artists, Concerts & New
  Recordings
Talent Contest - Concert
- Record production
- Video production
- Recording Time
- Prizes 		- Promotion
- Interviews
Concerts - Musician and staff pay
- Hall rental
- Recording for airplay 		- Interviews
- Promotion
Record or Video Production - Studio time
- Musicians' fees
- Production costs
- Record pressing
- Record distribution 		- Use of Station Studio
Scholarships & Grants - Cash Donation  
Industry Talent Organizations* - Cash Donation  
* e.g. Musicaction, FACTOR, Videofact, Country Talent Development Foundation, Alberta Music Project, etc...
Grants to Local Arts Assoc. - Cash Donation - Promotion
Use of Studio Facilities - Audio tape for artist - Time in Studio
Seminars - Hall rental
- Guest Speakers 		- Promotion
APPENDIX II -- CONTENT CATEGORIES AND SUBCATEGORIES
CATEGORY 1
Spoken Word:
This category includes the following two subcategories:
Subcategory 11: News
The recounting, reporting and backgrounding of local, regional, national and international events of the day or recent days, with particular emphasis on the topicality of the events or situations selected, or on the constant updating of information, or both.
Subcategory 12: Spoken Word-Other
All programming with the exception of material falling under Subcategory 11-News and Categories 2, 3, 4 and 5 (Music General, Music Traditional and Special Interest, Musical Production and Advertising).
CATEGORY 2
Music-General:
Live or recorded entertainment music of one minute in length or more extending from the advent of mass-produced recordings to the latest hits as defined in charts of recognized trade publications, including popular songs and compositions that fall under the headings "pop", "country-and-western", "rhythm and blues"; "dance"; "rock", "easy listening", "middle-of-the-road", "beautiful music", "mood", and "mainly for dancing"; popularized arrangements of classical music, jazz or authentic folksongs, music written and performed in a folk idiom by present-day artists; songs of protest and of political and social comment, humorous and satirical songs, chansonniers and chansonnettes, English music hall and North American vaudeville; individual excerpts from works from the musical stage, non-religious Christmas songs, popular music for films and television; and popularizations of folk idioms, such as Latin American, Hawaiian and Calypso. For greater particularity the category includes the following four subcategories:
Subcategory 21: Pop, Rock and Dance:
This subcategory includes music from the entire pop, rock and dance music spectrum. This music includes styles generally described as "easy listening", "beautiful music", "pop adult", "soft rock", "dance", "rock and roll", "rhythm and blues", "jazz rock", "folk rock" and "heavy metal", as well as all other forms of music generally referred to as either MOR (middle-of-the-road) or rock. This subcategory includes musical selections listed in recognized trade publications as AC (Adult Contemporary), AOR (Album-Oriented Rock) or Dance.
Subcategory 22: Country and Country-Oriented:
This subcategory ranges from "country and western" and "bluegrass" to "Nashville" and "country-pop" styles and other music forms generally characterized as country, including musical selections listed in recognized trade publications as Country.
Subcategory 23: Folk-Oriented:
This subcategory includes music in a folk style composed by the troubadours and chansonniers of our time, popular arrangements of authentic folksongs, and popularizations of folk idioms.
Subcategory 24: Jazz-Oriented:
Music sung or played in a popular style by performers with a jazz background, including "cocktail" jazz and jazz improvisation when presented against a popularized orchestral background, but not including jazz-rock, falling under subcategory 21.
CATEGORY 3
Music-Traditional and Special Interest:
Music of one minute or more in length characterized as traditional authentic songs and dances of the people, institutionalized music of religious faiths, "classical" music, authentic improvised jazz, and extended excerpts from popular musical theatre. For greater particularity, this category includes the following four subcategories:
Subcategory 31: Concert Music:
This subcategory includes: "classical", music which embodies standards of form, structure and taste, established by artists through the centuries, as a means to communicate complex thoughts in the most coherent way, including music by a contemporary composer when it utilizes entirely or in modified form those established standards, but not including orchestrations of the entertainment music of our time, however classical in form; "opera, operetta and musical", including grand opera, comic opera, music drama, narrative musical plays, operettas and extended dramatic excerpts of popular musical theatre, when performed in a full-cast version.
Subcategory 32: Folk:
Authentic traditional folk songs and dances.
Subcategory 33: Jazz:
Authentic jazz containing a large element of improvisation, including early blues and gospel shouts, ragtime, Dixieland, authentic early swing, bebop and "cool" jazz, Modern, Avant-Garde, Contemporary Jazz Fusion, New European, Afro/New World and contemporary jazz experiments, but not including jazz-rock, falling under subcategory 21.
Subcategory 34: Non-Classic Religious:
Music of the church or of religious faiths, other than in a classical form, or occurring in the course of a ritual service or other form of public worship, or having a jazz character.
CATEGORY 4
Musical Production:
Musical matter broadcast by a station to identify itself or any of the components of its programming, including musical linking devices used to highlight elements of the broadcast service. For greater particularity, this category includes the following five subcategories:
Subcategory 41: Musical Themes, Bridges and Stingers:
Musical selections used to identify particular program segments, or to extend programming segments to the end of their allotted time as well as applause, brief musical and other sound effects intended to punctuate the presentation of other broadcast matter, where this matter is less than one minute in duration.
Subcategory 42: Technical Tests:
Broadcast matter intended to be used for the purposes of technical tests by the station or its listeners.
Subcategory 43: Musical Station Identification:
Short musical selections designed to identify the station by call letters or frequency.
Subcategory 44: Musical Identification of Announcers, Programs:
Musical material identifying and accompanying the use of specific announcers, programs or programming elements.
Subcategory 45: Musical Promotion of Announcers, Programs:
Musical material promoting increased listening to specific announcers, programs or programming elements.
CATEGORY 5:
Advertising:
Broadcast matter intended to promote services or products offered to the public by persons normally advertising in the course of their business. For greater particularity, this category includes the following three subcategories:
Subcategory 51: Commercial Announcement:
A commercial announcement for a business, product or service, presented in return for consideration.
Subcategory 52: Sponsor Identification:
Identification of the sponsor of a program or program segment other than under subcategories 51 and 53.
Subcategory 53: Promotion with Sponsor Mention:
Verbal or musical material promoting increased listening to the station or to specific announcers, programs or programming elements, when accompanied by the identification of a sponsor.
APPENDIX III -- SUMMARY OF THE MEASURES TAKEN
I. THE ISSUES
A) CANADIAN CONTENT
The Commission will increase the Canadian content requirement for popular music to 30% for all FM stations except those with commitments to a level of instrumental selections of 35% or greater (See below).
The Commission will increase the requirement for Canadian content for Traditional and Special Interest Music to 10% within the regulations.
The Canadian content requirement for Ethnic Music will remain at 7%.
The Canadian content requirements for AM and FM radio will be incorporated into the regulations.
The Commission will continue to measure compliance with Canadian content regulations on a weekly basis for FM stations.
The Commission will also measure compliance with the Canadian content regulation for AM stations on a weekly basis.
The Commission will expect that at least 25% of popular music selections broadcast by AM and FM stations between 6 a.m. and 7 p.m. Monday through Friday be Canadian. Furthermore, the Commission will expect reasonably even distribution of Canadian selections throughout these dayparts and throughout the broadcast week. The Commission will further expect a significant presence of Canadian music in high audience periods -- these traditionally being the morning and afternoon drive periods.
B) STATION FORMATS
The Commission will eliminate the differentiation between pop and rock subcategories. The popular music subcategories will be reduced to the following (definitions are included in Appendix II):
Subcategory 21 - Pop, Rock and Dance
Subcategory 22 - Country and Country-oriented
Subcategory 23 - Folk-oriented
Subcategory 24 - Jazz-oriented.
The new format system will be as follows:
Group I - Pop, Rock and Dance:
 The language of broadcast of the station is English or French, at least 50 % of the broadcast week broadcast week (period 6 a.m. to midnight Sunday to Saturday) is devoted to music, and at least 70% of the music broadcast is from Subcategory 21 (Pop, Rock and Dance).
Group II - Country:
 The language of broadcast of the station is English or French, at least 50% of the broadcast week is devoted to music and at least 70% of the music broadcast is from Subcategory 22 (Country).
Group III - Specialty:
 Any station other than one operating as a Group I or II.
Licensees will be expected to make minimum commitments in their Promises of Performance to the language of broadcast, News, Spoken Word - Other and, where applicable in the case of Group III stations, to Traditional and Special Interest programming.
Stations wishing to operate in Group III will be expected to outline their music proposals in a schedule to be appended to the Promise of Performance.
C) MUSIC USAGE INDICATORS
1.Hits
"Hits" will be redefined to exclude Canadian selections for the 12-month period after they first appear on a Top 40 hit chart. The Commission will limit the use of hits on FM stations to less than 50% of all music broadcast.
All musical selections broadcast (the new Categories 2 and 3) will be included in the calculation of hits.
The Commission will continue to assess compliance in this respect on a weekly basis.
An exemption from the hit restrictions will be granted to French-language stations.
2. Vocal-to-Instrumental Ratio
There will be three levels of instrumental music (less than 35%; 35% up to, but not including, 50%; and 50% and over), each tied to a specific level of Canadian content. Stations programming less than 35% instrumentals will be required to program at least 30% Canadian content; stations programming 35% up to, but not including, 50% instrumentals will be required to program at least 20% Canadian content; stations programming 50% or more instrumentals will be required to program at least 15% Canadian content.
Easy Listening will no longer be defined as a specific station format, but the commitments to a vocal-to-instrumental ratio will be maintained in the Promise of Performance as the means of measuring compliance by licensees.
The calculation of the vocal-to-instrumental ratio will include all musical selections broadcast, i.e., music from both new Categories 2 and 3.
3. Maximum Repeat Factor/Weekly Music List Size
Both the Maximum Repeat Factor and the Music List Size will be retained as commitments in the Promise of Performance.
The Maximum Repeat Factor will remain at 18 and the minimum weekly Music List Size will be 850 distinct selections per week.
French-language stations will be exempt from the application of these two indicators.
4. New Canadian Music
Although a commitment to program "new" Canadian music will be introduced in Part III - Supplementary Questions, no minimum level will be imposed.
The Commission will also continue, through its manner of approving Canadian talent development budgets, to encourage broadcasters to undertake initiatives for the development of "new" artists and to provide on-air exposure and support of "new" artists.
5. Current:Recent:Past Indicator
Commitments with respect to a Current:Recent:Past ratio will not be required.
D) TRADITIONAL AND SPECIAL INTEREST MUSIC
No minimum commitment for non-format music will be introduced. Private commercial broadcasters will have the ability to determine the type and level of Traditional and Special Interest Music most appropriate to their stations' format.
The definitions of the various subcategories of Traditional and Special Interest Music will remain essentially the same, except that the current subcategories for classical, opera, and operetta and musical will be combined into one subcategory known as Concert Music. (See Appendix II, Content Categories and Subcategories).
E) SPOKEN WORD
The Commission will replace requirements for the broadcast of foreground and mosaic programs with a regulatory requirement that Spoken Word content constitute a minimum of 15% of the broadcast week. The Commission will consider Spoken Word to include all programming except music, musical production and advertising.
The Commission will require FM broadcasters to continue to make commitments regarding the amount of news they will broadcast as part of their overall Spoken Word commitment. Three hours of news per week will be the minimum level acceptable to the Commission. The definition of News will be expanded to include backgrounding of current news events.
F) COMMERCIAL CONTENT
A weekly limit on advertising is being introduced to give FM broadcasters the flexibility to adjust their commercial content to local advertising patterns, which tend to be higher on certain days of the week. This would be particularly beneficial to small market stations.
The amount of advertising broadcast by commercial FM broadcasters will be limited to no more than 15% (maximum 1134 minutes) of the broadcast week.
The Commission will amend the definition of advertising to exclude Promotional Contests (the current Subcategory 82), which do not contain mention of a sponsor.
G) ACQUIRED PROGRAMMING
The Commission will adopt an incentive whereby advertising broadcast within a Canadian syndicated program will not be counted for the purposes of calculating an FM station's commercial content. Use of the incentive will be limited to a maximum of 60 minutes of commercial content per broadcast week.
The Commission will limit the dispensation to advertising broadcast within the syndicated program.
A Canadian syndicated program will qualify for an incentive provided it meets the criteria for a Canadian audio program contained in Public Notice CRTC 1989-135. Moreover, a Canadian syndicated program will qualify for the incentive provided it is broadcast by at least one licensee that is not associated with the company or licensee who produced the program. The onus will be on the licensee, upon request by the Commission, to demonstrate that the program qualifies for the incentive.
FM stations will be required to log acquired programs broadcast according to type (network or syndicated) and origin (Canadian or foreign). A section in the new Promise of Performance will ask licensees to make commitments to so identify these programs in their logs.
H) DEFINITION OF A MARKET
The Commission will define the market of an FM station to be any area within either the 3 mv/m signal contour or the Central Area of the community served by the station as defined by BBM whichever is smaller. In the case of an AM station, the Commission will define a market as any area found within either the 15 mv/m (daytime) signal contour or the Central Area as defined by BBM, whichever is smaller.
For purposes of issuing new licences or examining transfers of ownership, the Commission will rely on a variety of factors, including the above.
I) SMALL MARKETS AND BORDER MARKETS
The Commission will consider granting, upon application, flexibility with respect to certain programming commitments to stations operating in border markets or in small markets. Flexibility regarding Canadian content will not be considered except for stations in border markets where exceptional circumstances are present. Similarly, flexibility will generally not be considered with respect to spoken word commitments.
II. IMPLEMENTATION
This policy and its associated regulations have been designed for, and will apply in its entirety to, the licensees of private commercial FM stations.
However, certain changes to the regulations will also have an impact on other broadcasters.
Non-commercial stations will be required to meet the levels specified by their Conditions of Licence with respect to Spoken Word and Traditional and Special Interest Music. The Commission intends to conduct a review of both student and community radio to consider more fully how the principles outlined in the policy affect them.
The regulations and all other changes to the FM Policy introduced in this Public Announcement will come into effect on 1 September 1991. The Commission will announce its proposed amendments to the regulations in the near future.
Existing policies and regulations, as well as licensees' obligations set out as conditions of licences, remain in effect until then.
For stations that are currently in their first licence term, the Commission will continue to regard, as essential undertakings for their entire licence term, the commitments of these licensees as set out in their Promises of Performance, with respect to the following:
Canadian Content above 30%,
Spoken Word levels above 15%,
News,
Public Affairs,
Hit levels below 50%,
MRF below 18,
Music List Size above 850,
Vocal:Instrumental ratio,
Canadian talent development,
Local Orientation, and
Special Programs.
Because the matter of future applications has implications both for FM and AM, the Commission has published today a separate document (Public Notice CRTC 1990-112) addressing radio market criteria.
The Commission will not be ready to receive applications for new private commercial radio stations until after 1 September 1991. This includes applications by AM stations to switch to an FM frequency.
The Commission will continue to accept applications for non-commercial stations where such applications propose to use the lower 20 channels on the FM band, or commercial frequencies in areas where there still is a relative abundance of such channels.
THE PROMISE OF PERFORMANCE
1. Compliance
Under the new policy, licensees will be required, by condition of licence, to fulfil absolutely each of the commitments made in a new Promise of Performance form that will be reduced substantially.
2. The Form
The revised Promise of Performance form will contain 7 main sections:
a. Language of Programming
b. Program Origination
c. Spoken Word
d. Station Format
e. Music Categories 2 and 3
f. Station Policies
g. Canadian Talent Development The Promise of Performance will be followed by the following appendices:
- Ethnic Programming
- Music Category Breakdown
Part III - Supplementary Questions - This section will not form part of the Promise of Performance, but will include questions on the following:
i. Sources of Programming
ii. Local and Regional News
iii. Canadian Talent Development
iv. Station Policies
v. Native and Community Access

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