ARCHIVED -  Public Notice CRTC 1993-38

Public Notice

Ottawa, 19 April 1993

Public Notice CRTC 1993-38

POLICIES FOR LOCAL PROGRAMMING ON COMMERCIAL RADIO STATIONS AND ADVERTISING ON CAMPUS STATIONS

In Public Notice CRTC 1992-72, the Commission called for comments on four items flowing from its 90-day review of regulations, policies and procedures for radio. These items were:

 - a proposal to delete the present requirements relating to levels of news and spoken word on FM stations;

 - a proposal to introduce, in place of the above-noted requirements, a new local programming requirement for licensees of commercial radio stations, both AM and FM, should they intend to solicit or accept local advertising;

 - a proposal to allow campus radio stations to broadcast limited amounts of conventional advertising; and

 - a general review of CRTC policies with respect to Canadian talent development.

The Commission also indicated that limits on the amount of advertising broadcast by commercial FM stations could be eliminated, but that it would withhold its final determination on the matter until issues related to the development of a local programming policy were resolved. Subsequently, in Public Notice CRTC 1993-16, an extension was granted to 14 May 1993 for comments related to Canadian talent development. Canadian talent development will therefore be addressed in a later public notice.

LOCAL PROGRAMMING AND SPOKEN WORD

The Commission's Proposal

In Public Notice CRTC 1992-72, the Commission called for comments on a proposal to delete the current regulation requiring commercial FM stations to devote at least 15% of programming to spoken word and the policy requirement that commercial FM stations must broadcast at least three hours of news per week. The Commission proposed to replace these requirements with a single condition of licence, applicable to all commercial AM and FM licensees serving competitive markets and who propose to solicit or accept local advertising, requiring each to devote at least one-third of the broadcast week to local programming.

A definition of local programming was also proposed for comment.

Comments Received

The Commission received 17 submissions representing a variety of positions on the local programming proposal.

Several parties, including Quebec's Department of Communications (MCQ), the Canadian Union of Public Employees - Quebec (CUPE-Quebec), and the Association des radiodiffuseurs communautaires du Québec (ARCQ) considered that the Commission should continue to ensure that minimum levels of news and spoken word programming are broadcast. They expressed concern that the proposed changes could lead to a reduction in spoken word on FM radio. MCQ suggested that, instead of removing all requirements, the level of spoken word on FM stations should, for a two-year period, be reduced by 5% (from 15% to 10%) to take into account the economic difficulties currently faced by the radio industry.

L'Union des Artistes (UdA) expressed general concerns about the policy changes proposed, arguing that they could lead to more uniformity in radio programming and increased use of networking in smaller markets, thereby diminishing radio's role in providing a strong local service.

The Commission's proposal was generally supported by several parties, including the Ontario Ministry of Culture and Communications (MCC-Ontario) and three broadcasters. MCC-Ontario considered that the Commission's proposal would allow the objectives of the Broadcasting Act to be fulfilled and, at the same time, provide more flexibility for broadcasters. Nevertheless, MCC-Ontario suggested that the Commission continue to monitor both spoken word and local programming to ensure that the quality of programming not be diluted. The three broadcasters supporting the Commission's position considered that a system based on local programming would be more flexible and workable than the current system, which is based on spoken word. One broadcaster, however, considered it unnecessary to link the authority to solicit or sell local advertising to the provision of local programming.

Although generally supportive of the Commission's proposal to replace spoken word and news requirements with a one-third local programming requirement for FM radio, another two broadcasters strongly objected to the introduction of a new local programming requirement for AM stations. It was noted that, over the past decade, the Commission has moved to lighten the regulatory load that AM stations carry. One party observed that no local programming requirement had been imposed on AM stations in the past and could see no reason why one would be necessary now. Concern was expressed that to prohibit those AM licensees not providing a one-third level of local programming from soliciting or selling local advertising would be too severe a measure, given the dependence of radio stations on local advertising dollars.

A further concern was that the introduction of a new local programming requirement for AM stations would prevent licensees from adopting new approaches to enhance their program services and their competitiveness in local markets. It was believed that some financially-strapped AM licensees might wish to concentrate on producing high quality local programming in morning drive periods and use network or syndicated services in other time periods. One broadcaster argued that such a strategy could strengthen AM radio as a whole and should not be prevented through the blanket imposition of a one-third local programming requirement.

The Canadian Association of broadcasters (CAB) agreed with the deletion of requirements relating to the level of news and spoken word on FM stations but considered that no new local programming requirement should be imposed on either AM or FM stations. Instead, it suggested that each station be expected to indicate how it would provide information of particular relevance to its local community at the time of licence renewal. The CAB also objected strongly to linking the provision of a one-third level of local programming to a station's ability to sell local advertising.

The Commission's Decision

During the Commission's 90-day review of its regulations and policies for radio, the broadcasting industry requested that the Commission no longer regulate the level of spoken word and news broadcast by FM stations. The industry considered that such flexibility would allow stations to provide a mix of music and spoken word programming that would be appropriate for their individual formats. The Commission acknowledges the concerns expressed by certain parties about deleting these requirements; it notes, however, that many AM stations, although not regulated in these areas, program higher levels of spoken word and news than the minimum levels required of FM stations. This can only be due to the fact that licensees find these higher levels to be appropriate for the formats they have chosen.

With respect to local programming, the Commission is of the view that radio stations must continue to provide programming that addresses the needs of the communities they serve. Subparagraph 3(1)(i)(ii) of the Broadcasting Act states that programming provided by the Canadian broadcasting system should "be drawn from local, regional, national and international sources" (emphasis added). The radio industry has historically been the sector of the broadcasting system that has provided the lion's share of programming addressing local issues and concerns. As well, in many commu- nities not served by local daily newspapers or television stations, local radio stations are the only daily source of local news, information, and emergency messages.

FM stations already make minimum commitments with respect to "Station Production" in their Promises of Performance. Station Production is generally considered by the Commission to be anything other than network or syndicated programming -- a definition that is virtually the same as that proposed for local programming. Most, if not all, FM stations in competitive markets currently broadcast levels of local programming well above the one-third level, and would therefore have no adjustment to make under the proposed policy.

In the Commission's view, AM stations must continue to provide programming of relevance to the communities they serve. However, it acknowledges concerns expressed in the comments received about the financial difficulties faced by many AM licensees and the opposition expressed regarding any requirement for a minimum level of local programming on AM stations. The Commission also notes the opportunities represented by new radio networks to supplement local programming periods while still allowing the insertion of information for local communities. While encouraging local programming on AM stations, the Commission has therefore decided not to tie these stations to any minimum level.

In light of the above, the Commission adopts the following policies with respect to news, spoken word and local programming on commercial FM and AM stations.

- All policy requirements respecting levels of news and spoken word are eliminated for commercial FM stations. Licensees of such stations may now apply to delete their commitments in these areas from their Promises of Performance.

-  Commercial FM stations in markets served by more than one private commercial station must devote at least one-third of the broadcast week to Local Programming. Radio licensees in competitive markets wishing to reduce their level of local programming below the one-third level will generally be expected to assume a condition of licence stipulating that they not solicit or accept local advertising. Applications for exceptions to this policy will be considered on a case-by-case basis. Commitments for "Station Production" in current Promises of Performance will be taken as commitments for Local Programming for purposes of this policy. -  At the time of licence renewal, AM licensees will be asked to indicate the level of local programming they will provide and how they will ensure that spoken word of direct and particular relevance to the communities they serve is included in their programming. The Commission will retain the option of imposing on AM licensees conditions of licence with respect to local programming on a case-by-case basis, where necessary.

In a separate notice issued today (Public Notice CRTC 1993-39), the Commission has published a proposed amendment to the Radio Regulations, 1986 that would delete the requirement for a minimum level of spoken word.

The Commission, in a later notice, intends to call for public comment on a proposed amendment to the existing logging requirements, the effect of which would be to provide licensees the opportunity to indicate periods of local programming on their logs.

DEFINITION OF LOCAL PROGRAMMING

One broadcaster raised concerns regarding the definition of local programming proposed by the Commission. It considered that the definition should make it clear that programming originated by stations that are heads of networks is counted as local programming for the originating station even though the programming is also fed to the network. It also suggested that the definition be enlarged to take into account interactive programs (such as open line programs), regional contributions to network programming, and efforts to regionalize programming.

The Commission agrees that the definition of local programming should permit originating stations to claim as local, programming they produce and feed to a network. It considers, however, that further changes to the definition to include interactive programs would make the definition too complex and difficult to monitor. It also considers that its decision not to apply a local programming requirement to AM stations should alleviate most concerns in this regard.

Accordingly, for purposes of this policy, local programming is defined as follows:

Local programming includes programming that originates with the station or is produced separately and exclusively for the station. It does not include programming received from another station and rebroadcast either simultaneously or at a later time; nor does it include network or syndicated programming that is five minutes or longer unless it is produced either by the station or in the local community by arrangement with the station.

In their local programming, licensees must include spoken word material of direct and particular relevance to the community served, such as local news, weather and sports, and the promotion of local events and activities.

For the purpose of clarification, a list of examples of programs that would qualify as local programming under this definition, as well as a list of others that would not so qualify, are included as Appendix A.

ADVERTISING LEVELS ON COMMERCIAL STATIONS

All broadcasters who submitted comments on the matter of advertising levels supported the removal of limits on the amount of advertising on FM stations. According to these parties, competitive forces and the tendency of audiences to tune away from stations broadcasting too much advertising would ensure that the number of commercials broadcast remains at acceptable levels. However, two individuals opposed any move that could lead to a possibile increase in the amount of advertising broadcast.

The Commission notes that, when the limits on advertising on AM stations were removed in 1986, the amount of advertising did not increase to unacceptable levels. The Commission considers that competition within the radio industry, audience sensitivity to the amount of advertising, and the reluctance of advertisers to have their message lost in a cluster of other commercial messages, will combine to limit the amount of advertising aired on FM stations as well. It therefore views the level of advertising broadcast as being another area in which flexibility can be extended to commercial FM stations.

The Commission will therefore no longer impose limits on the level of advertising broadcast by commercial FM stations. Licensees of such stations may now apply to delete their commitments in this area from their Promises of Performance.

ADVERTISING ON CAMPUS RADIO

The Commission's Proposal

In Public Notice CRTC 1992-72, the Commission requested comments regarding its proposal to amend the policy on advertising for campus radio stations to allow them to broadcast up to 504 minutes of advertising per broadcast week, with a maximum of four minutes in any one hour. Of the weekly total of 504 minutes, a maximum of 126 minutes of conventional advertising would be permitted. All remaining advertising would have to conform to the definition of restricted advertising.

Comments Received

The Commission received 17 submissions in response to this proposal. Eleven parties (National Campus/ Community Radio Association [NCRA] and 10 campus stations) supported the proposal. The remaining six parties either opposed all amendments to the policy on campus radio advertising (MCC-Ontario, the CAB, CUPE-Quebec, and one private commercial broadcaster), or recommended that the policy be applied on a case-by-case basis (MCQ and ARCQ).

Those who supported the proposal pointed out that, if the policy allowed more flexibility, campus stations could attract more advertising revenue, thereby improving programming without compromising their mandate or drawing advertising dollars away from commercial stations. In their view, the 4-minute maximum imposed by the Commission and their own advertising policies are sufficient to ensure no departure from their mandate as alternative radio services.

Certain parties opposed to the amendment were concerned about its potential impact on the broadcasting industry. The CAB indicated that a more flexible policy could very well result in a loss of advertising revenue for commercial radio operators and exacerbate the precarious situation of this industry sector, already in serious difficulty due to the recession. Consequently, it strongly opposed any amendment to the policy on advertising for campus radio stations.

MCQ and ARCQ were of the view that the Commission's proposal does not take account of the unique nature of the broadcasting industry in Quebec, where community radio is more highly developed than in other areas of Canada. Based on their concerns regarding the possible encroachment by campus radio stations operating in the same market as community stations, as in Montreal, they were opposed in principle to the Commission's proposal. However, they acknowledged that it may be appropriate to allow more flexibility in some cases. Accordingly, they recommended that the Commission evaluate applications for greater latitude in advertising on a case-by-case basis, and grant it only for campus stations that are not in competition with community stations.

The Commission's Decision

The comments received indicate clearly that support for the proposal is not unanimous. The Commission appreciates the position of the CAB, which is concerned that a more flexible policy would diminish commercial station revenues and adversely affect the financial health of the broadcasting industry as a whole. The Commission is also aware of the unique situation in markets where campus radio stations co-exist with community stations, and is thus sensitive to the concerns of ARCQ and MCQ regarding the proposed policy amendment. However, following an analysis of all relevant factors, the Commission considers that NCRA's requests are reasonable and justifiable. It is confident that the amendment will enable campus stations to somewhat increase their revenues without having a negative impact on commercial radio revenues. The Commission does not accept the suggestion of ARCQ and MCQ that access to conventional advertising be granted only to campus stations not in competition with community stations. It should be borne in mind that community radio stations have significant advantages over campus stations with respect to programming and advertising because the regulations governing their operations are more flexible than those applicable to campus stations. Therefore, community stations should be able to withstand any impact this policy amendment may have on their advertising revenues.

Accordingly, the Commission adopts the proposed amendment to the policy on advertising for campus radio stations as follows:

- Campus stations will be permitted to broadcast up to 504 minutes of advertising per broadcast week, with a maximum of four minutes in any one hour.

- Of the weekly total of 504 minutes, a maximum of 126 minutes of conventional advertising will be permitted.

- All other advertising broadcast must conform to the following definition:

The Commission will permit simple statements of sponsorship that identify the sponsors of a program or of the station. Such statements may incorporate the names of the sponsor, the business address, hours of business, and a brief general description of services or products that the sponsor provides, including the price, name and brand name of the product. Such statements must not contain references to convenience, durability and desirability or contain other comparative or competitive references.

Campus stations will be expected to identify in their program logs which advertising messages are exempted from the content restrictions and which conform to the definition of restricted advertising set out above.

Licensees of campus stations may now apply for amendments to their conditions of licence respecting advertising.

OTHER MATTERS

Easy Listening Stations

The CAB has expressed concern to the Commission about the policy set out in Public Notice CRTC 1992-72 stipulating that instrumental selections on easy listening stations (those with commitments to broadcast a level of instrumental selections of 35% or higher) must be reasonably distributed throughout the broadcast day. While acknowledging the CAB's concerns, the Commission considers that such reasonable distribution is necessary to ensure that Easy Listening stations provide a distinct service to their communities, and therefore reaffirms its policy in this area.

Implementation of Changes to Conditions of Licence and Promises of Performance

In order to implement certain of the changes set out in this document, licensees will be required to submit applications to amend their Promises of Performance or conditions of licence. These changes include deletion of commitments with respect to levels of news, spoken word and advertising for commercial FM stations and changes to the conditions of licence relating to advertising on campus stations.

To facilitate this process, the Commission has attached to this notice a form indicating the various changes set out above. All licensees wishing to apply to amend their licences to take advantage of the changes are asked to complete the attached form and return it to the Commission by 19 May 1993.

This will allow the Commission to gazette all completed applications together and thus expedite the process of dealing with the amendments.

Licensees are reminded that they must fulfill all commitments set out in their Promises of Performance until changes to these conditions are approved.

Allan J. Darling
Secretary General

Appendix A

EXAMPLES OF PROGRAMMING THAT QUALIFIES AS "LOCAL PROGRAMMING"

EXAMPLES OF PROGRAMMING THAT DOES NOT QUALIFY AS "LOCAL PROGRAMMING

APPLICATION FOR AMENDMENTS CONCERNING

A (RADIO) PROGRAMMING UNDERTAKING

LICENSEE'S NAME
__________________________

LICENSEE'S ADDRESS _______________________

CALL LETTERS _____________
LOCATION OF STATION _________________

NAME OF THE PERSON TO WHOM THE COMMISSION MAY DIRECT ANY QUESTIONS

REGARDING THIS APPLICATION
_______________________________

ADDRESS ______________________

POSTAL CODE ________

TELEPHONE ( ) ________________ 

TELECOPIER ( ) ________________

LOCATION WHERE THE APPLICATION MAY BE INSPECTED BY THE GENERAL PUBLIC

ADDRESS ___________________

POSTAL CODE ________

TELEPHONE ( ) _______________ 

TELECOPIER ( ) _________________

AUTHORIZED SIGNATURE AND OFFICE HELD
_____________________________

DATE _______________________

Part 1 - Commercial FM radio stations

Application to delete requirements contained in the Promise of Performance, Part II, with respect to the following:

Section C - Spoken Word

C.1 - Spoken Word - News

The minimum level of Subcategory 11 - News

C.2 - Total Spoken Word

The minimum levels of Subcategories 11 - News and 12 - Spoken Word-Other

Section D - Advertising

The maximum level of Category 5 - Advertising

Part II -- Campus Radio Stations

An application to amend the current condition of licence with respect to advertising to read as follows:

The licensee may broadcast a maximum 504 minutes of advertising per broadcast week with a maximum of 4 minutes of advertising in any hour.

Of the 504 minutes, a maximum of 126 minutes of conventional advertising per broadcast week may be broadcast.

The remainder of advertising broadcast must conform to the following definition of restricted advertising:

Restricted advertising means simple statements of sponsorship that identify the sponsors of a program or of the station. Such statements may incorporate the names of the sponsor, the business address, hours of business and a brief general description of services or products that the sponsor provides including the price, name and brand name of the product. Such statements must not contain references to convenience, durability and desirability or contain other comparative or competitive references.