ARCHIVED -  Public Notice CRTC 1995-184

Public Notice

Ottawa, 29 October 1995

Public Notice CRTC 1995-184

A POLICY TO GOVERN THE INTRODUCTION OF DIGITAL RADIO

On 14 June 1995, the Commission issued Public Notice CRTC 1995-95, which called for comments on a proposed approach to the introduction of digital radio. This notice was issued in response to a growing interest in digital radio broadcasting in the Canadian radio industry.

Digital radio makes possible the reproduction of high quality sound, and thus has the potential to provide improved and expanded services to the public. Digital radio technology has now developed to the extent that services using this technology have been, or will soon be, implemented in several countries. With the expected adoption of the Eureka-147 system as a technical standard for digital radio broadcasting in Canada, as has been proposed by the Department of Industry, and with the Department's publication, on 7 September 1995 of a draft national allotment plan for terrestrial digital radio broadcasting (DRB) in the L-band (Notice No. SMBR-004-95), there appears to be no significant technical impediment to the introduction of digital radio services in Canada in the near future. It is expected that, with time, digital radio transmission will come to replace the existing technologies of AM and FM, or analog, transmission.

Public Notice CRTC 1995-95 proposed a two-stage approach to the introduction of digital radio broadcasting in Canada, whereby the Commission would first establish a process for licensing digital radio undertakings on a transitional basis, and under certain conditions. The Commission would then begin a public process to consider all aspects of digital radio broadcasting in the longer term.

The Commission received 14 comments from interested parties in response to its notice, including submissions by representatives of the private commercial, public and community radio sectors, recording industry associations, one artists' association, one individual, and the Task Force on the Introduction of Digital Radio (the Task Force). Most of the comments were broadly supportive of the Commission's proposed approach.

Having carefully examined all of the comments submitted, the Commission has decided to proceed with the two-stage approach it proposed in Public Notice CRTC 1995-95.

1. The Transitional Period

a) "Experimental" Digital Radio Undertakings

In Public Notice CRTC 1995-95, the Commission proposed to license "Experimental" Digital Radio Undertakings that would be subject to specific terms and conditions. Several parties, however, expressed reservations about the use of the term "experimental" to describe these services. The Canadian Broadcasting Corporation (CBC), the Canadian Association of Broadcasters (CAB) and the Task Force suggested that the use of this term would imply too cautious an approach to digital radio broadcasting in Canada and could increase uncertainty about the transition. In addition, the CAB noted that "experimental" digital radio services have been operating in Canada at various times over the last two and a half years. The Commission agrees that the term "experimental" could be misleading, and has decided, instead to use the descriptive term "Transitional" Digital Radio Undertakings.

b) Applications by Existing Licensees

During the first stage, which will commence immediately, the Commission will be prepared to issue digital radio licences subject to specific terms and conditions. All AM and FM radio licensees who wish to use digital radio facilities to provide programming that would consist largely of a simulcast of their existing services will automatically qualify for these licences. These licences will remain in effect until a long-term digital radio policy is developed. Digital radio licences issued for a regular term after the establishment of a policy would be subject to any terms and conditions that emerge from that process.

In its June 1995 Notice, the Commission indicated that it would adopt a streamlined application and licensing process for AM and FM licensees who wish to simulcast their programming using digital technology. A simple application form for use by licensees of analog stations under these conditions is appended to this notice. This form reflects the terms and conditions proposed in the June 1995 notice and set out in final form below.

c) Applications for New Services

In Public Notice CRTC 1995-95, the Commission proposed that, during the transitional period, applications for digital radio licences by parties who do not operate an existing AM or FM radio service would be considered on a case-by-case basis, subject to the Radio Market Criteria contained in Public Notice CRTC 1991-74 entitled "Radio Market Policy".

Most of the comments that addressed this issue were generally in agreement with the proposal. Some parties, including the CBC, indicated that the Commission should take a "flexible approach" and consider "additional factors" in assessing applications for new digital radio services. Other interveners, such as Standard Radio Inc., expressed concern about the potential impact of new digital radio services on existing AM and FM stations.

The Commission is of the view that the case-by-case approach it has proposed to follow in its consideration of applications for new services provides for flexibility and the assessment of all relevant factors. At the same time, application of the Radio Market Criteria will ensure that the impact on existing services and markets is carefully considered. The Commission has therefore decided to adopt a case-by-case approach in its consideration of applications for digital radio licences to provide new services during the transitional period. The Commission notes that any digital radio licences issued in respect of new services during the short term will also be Transitional Digital Radio Licences, and will remain in effect until a long-term digital radio policy is in place.

d) Specific Terms and Conditions Applicable to Transitional Digital Radio Undertakings

Certain of the following terms and conditions will apply to the licences of all Transitional Digital Radio Undertakings, while others will apply uniquely, either to the licences of new services or to licences issued to those operating associated AM or FM undertakings.
The Commission emphasizes that requests for exceptions to its policy may be made, and will be considered on a case-by-case basis.

i) Licence term

In Public Notice CRTC 1995-95, the Commission indicated that, during the transitional period, digital radio licences would have a three-year licence term. This was to allow the Commission to establish and implement a long-term licensing regime for digital radio undertakings following completion of the public process to establish a long-term policy.

Some interveners, including the CAB, were opposed to the plan whereby licences for the transitional period would terminate after a short period, and licences having full terms would be issued at the end of the transitional period. They suggested instead that the same licence should remain in effect after the implementation of a long-term policy regime for digital radio, with allowance being made for some evolution in the terms and conditions attached to it.

The Commission's view continues to be that full-term licences should be subject to the policies that emerge from its proposed public process. Since it expects to have a long-term licensing regime in effect within three years, the Commission is not pursuaded that it should issue Transitional Digital Radio Licences for any longer than three-year terms. Nevertheless, the Commission notes that the replacement of short-term licences with full-term digital radio licences will involve a simple and streamlined process. The fact that licences issued during the transitional period are short-term should, by no means, be interpreted as a lack of commitment to digital radio broadcasting on the part of the Commission, but rather as part of an evolutonary, regulatory process.

ii) Periods of separate programming

The Commission foresees digital radio services as coming to replace existing AM and FM services over time. Accordingly, the Commission expects that, during the transitional period, the programming of most Transitional Digital Radio Undertakings will consist primarily of a simulcast of the programming on associated AM or FM services. In order to allow for some experimentation in programming, however, the Commission proposed that licensees of undertakings offering digital radio services associated with an existing AM or FM undertaking would be authorized to broadcast up to two hours per week of separate programming.

Some interveners supported the overall concept of a limit on the amount of separate programming broadcast on digital radio undertakings, but argued that the weekly limit be raised in order to allow licensees to experiment more broadly with new and innovative forms of programming. The Commission agrees that an exploration of various types of programming that are available only through the use of digital radio technology is an important element of this transitional period, and could yield information and experience that will be useful to the radio industry as a whole in the future. Accordingly, the Commission has decided to raise, to a maximum of 14 hours per week, the amount of separate programming that licensees of existing AM or FM undertakings will be authorized to broadcast on their associated Transitional Digital Radio Undertakings.

iii) Sharing of channel capacity

The Department of Industry's draft allotment plan assigns all radio undertakings in a geographic area to groups of not more than five stations for the purpose of sharing a 1.5 MHz digital radio channel. In Public Notice CRTC 1995-95, the Commission proposed the following condition for licensees of Transitional Digital Radio Undertakings:

In order to ensure that all licensees have fair and equitable access to digital channel capacity, each licensee would be restricted to the use of no more than 20% of the digital capacity of the 1.5 MHz channel specified for use by the geographic grouping of broadcasters to which the licensee belongs under the Department of Industry's allotment plan.

In its comments in response to the earlier notice, the CBC observed that the references to "licensee" in the paragraph above could be misinterpreted to suggest that licensees who operate both an AM and an FM station in the same geographic grouping would be entitled to a total of 20% of the channel capacity for both stations. The Commission agrees that these references could be so misinterpreted and will accordingly use the word "undertaking" rather than "licensee" in the condition of licence.

Coopérative radiophonique de Toronto suggested that part of the digital capacity reserved under the Department of Industry's allotment plan should be set aside for public, not-for-profit and community stations, just as is part of the Department's existing FM allotment plan. The Commission notes that the draft allotment plan released by the Department of Industry does provide allocations for all existing AM and FM stations, as well as for all vacant allotments. Moreover, the plan accommodates all classes and categories of radio undertakings, including low power and not-for-profit undertakings, with potential for future additional services.

The restriction concerning the use of digital capacity will generally be applied as one of the terms and conditions of the licences issued in respect to Transitional Digital Radio Undertakings. The Commission notes again that applications requesting exceptions to this restriction will be considered on a case-by-case basis.

iv) Ancillary services

In Public Notice CRTC 1995-95, the Commission stated that it would expect broadcasters to ensure that the main programming signal of a digital radio undertaking not be noticeably degraded by the shifting of capacity from it to ancillary services. Further, the notice indicated that, during the transitional period, digital radio services would be prohibited from using the ancillary capacity of the spectrum allotted to them to provide programming services.

In its comment, the CBC questioned whether this prohibition would apply to the possible distribution of "program-related services" on a digital radio signal, such as alphanumeric and graphic displays, printouts, "smart receiver" applications, and other interactive, text-based services. The Commission notes that alphanumeric services do not constitute programming under the Broadcasting Act. Thus, any of these services that consist purely of alphanumeric text would not be affected by the prohibition concerning the use of ancillary capacity.

The Commission continues to view any competition between licensed radio services and new programming services using the ancillary capacity of a primary digital radio signal as being inappropriate at this time. In addition, use of the ancillary capacity of digital radio signals by existing AM and FM licensees to provide new kinds of programming services, such as pay audio services, could negatively affect the ability of new players in the radio market to provide such services, now or in the future. For these reasons, the Commission will generally apply the prohibition against the use of ancillary capacity to provide programming services as a condition of licence in respect of Transitional Digital Radio Undertakings. Exceptions to this policy will be considered on a case-by-case basis.

As a separate matter, l'Alliance des radios communautaires du Canada asked whether licence applications could be made for new services that would use the ancillary capacity of a digital radio channel only. The Commission considers that such services would be inappropriate.

v) Coverage area

The Commission proposed to apply a restriction on coverage area, as set out below:

Each digital radio signal broadcast by a Transitional Digital Radio Undertaking associated with an existing AM or FM undertaking will be broadcast from a single primary digital radio transmitter that is located so as to ensure that the resulting digital radio coverage area does not exceed the lesser of (a) the licensee's corresponding FM or daytime AM coverage areas (that is, the 0.5 millivolt per metre coverage area for both AM and FM stations), or (b) the digital coverage area allotted to the licensee under the Department of Industry's spectrum allocation plan.

The notice further indicated that applicants for licences to carry on Transitional Digital Radio Undertakings would be required to indicate the location of the single primary transmitter from which the digital radio signal would be broadcast.

Many of the comments received in response to the notice addressed this aspect of the Commission's proposal. Several parties argued that the restriction on the number of primary digital radio transmitters or coverage extenders is unnecessary, given the other restrictions on coverage area proposed, and would limit the ability of digital radio undertakings to experiment with different methods of transmission in the short term. The Commission agrees that this part of the overall approach to digital radio service contours may be too restrictive and accordingly, will not restrict applicants for Transitional Digital Radio Undertakings to the use of a single primary digital transmitter to broadcast digital radio signals.

The Commission notes that, since all stations sharing one digital radio channel will have the same overall coverage area, the effect of part (b) of the proposed restrictions on a group of undertakings sharing one digital radio channel is that all of the stations in the group would be limited to a coverage area not larger than the smallest analog service contour of the stations in the group.

In general, most of those who filed comments were supportive of this part of the digital radio coverage area restrictions. However, comments by parties representing campus/community and community radio expressed concern about this limitation. They pointed out that, since some not-for-profit services use extremely low power and have very limited coverage patterns, this restriction would oblige all stations sharing a digital radio channel with one of these stations to share the same extremely limited service contour.

The Department of Industry's allotment plan provides some flexibility for undertakings to move from one group of undertakings to another. In the case of markets with a single low power station, this station is often left by itself, rather than placed in a group. Unless they are able to join another group, such stations would be prevented from realizing the cost savings available to others who can share transmitting costs with up to four other undertakings. In such situations, part (b) of the restriction cited above would be a substantial disincentive for regular, protected stations to agree to share their channel with a low power service.

The Commission ackowledges the concerns expressed by representatives of campus/community and community radio, and agrees that low power services should be exempt from part (b) of the restrictions on coverage areas.

Accordingly, the conditions governing coverage area, as described above, will generally apply to regular, protected stations only. Low power, unprotected stations will be excluded from part (b) of the restrictions. Thus, the digital coverage area of groups comprised of either regular, protected stations only, or of both regular, protected and low power, unprotected stations, will be no larger than the smallest analog service contour of the associated regular, protected stations in the group. The digital coverage area of a group consisting exclusively of low power, unprotected stations will be limited to the lesser of (a) the largest analog coverage area of the stations in the group, or (b) the digital coverage area assigned to the group under the Department of Industry's allotment plan.

Issues surrounding digital radio coverage areas will be revisited in the context of the future public policy process.

vi) Transmission facilities

In Public Notice CRTC 1995-95, the Commission indicated that, during the transitional period, digital radio licensees would not be required to own and operate their own transmitters. This would allow licensees and owners of digital radio transmission facilities to experiment with different kinds of ownership arrangements and structures in the short term.

Several parties commented on this proposal in their responses to the notice. Two principal concerns were expressed: the need to provide some assurance to potential investors in digital radio transmission facilities that they can expect to retain ownership of the transmitters in the long term; and the need to ensure fairness and equity in access to transmission facilities.

The Commission agrees that some degree of certainty is necessary in order to encourage investment and participation in the building and operation of digital radio transmission facilities in the short term. It therefore advises potential investors that, while it will wish to consider the issue of transmitter ownership in the context of a public policy process at a later date, it does not expect to prohibit the ownership of digital radio transmission facilities by any individual or entity in the long term. However, the requirements regarding Canadian ownership and control, to which all broadcasting undertakings are subject, will continue to apply to all elements of the digital radio broadcasting industry.

The Commission considers that the owners of digital radio transmitters have a clear obligation to provide fair and equitable access to their facilities. The Commission notes the following principles articulated by Working Groups I and II of the Task Force:

* An owner of a digital radio transmitter facility must provide access to the transmission facilities by another licensed entity, should capacity exist. (Working Group I, Principle 6).

* Access to a digital radio transmitter must be: fair and equitable; and non-discriminatory. (Working Group I, Principle 6).

* Equitable access to transmission facilities, at fair and equitable, and not unjustly discriminatory rates, should be guaranteed to all licensed broadcast programming undertakings. (Working Group II, Principle 7).

The Commission expects owners of digital radio transmission facilities to abide by these principles. In particular, the Commission expects the owners of such facilities to find practical ways of accommodating all elements of the radio broadcasting system, including low power stations. The Commission will wish to review any arrangement that does not conform to these principles.

In addition, the Commission will require licensees of Transitional Digital Radio Undertakings, by condition of licence, to ensure that they retain full control over their own programming in any agreement they make with other parties regarding the transmission of their digital radio signals.

vii) Common ownership

The Commission reiterates that its long-standing policy regarding common ownership, which generally prohibits the ownership of two undertakings of the same class serving the same market in the same language by a single entity, will now be modified to allow for the common ownership of an AM and an FM station and their respective digital counterparts, in the same language, in the same market.

2. Public Process to Develop a Long-term Approach

In Public Notice CRTC 1995-95, the Commission indicated that it would undertake a public policy process to consider all aspects of a policy to govern digital radio, but that such a process would not likely commence before the fall of 1996. The Commission further notes that the beginning of such a process must also await publication of the Department of Industry's final allotment plan for digital radio. As stated earlier, the Commission expects to have completed the policy process and established a long-term licensing regime for digital radio within three years.

3. Other

In their written comments, several interveners raised copyright issues. The Commission notes that its mandate under the Broadcasting Act does not make it the most appropriate body to deal with issues related to copyright.

Allan J. Darling
Secretary General

Appendix

Application for a licence to carry on a Transitional Digital Radio Undertaking
Associated with an Existing AM or FM Station

Name of applicant:

Location of station:

Date application filed with Commission:

Call letters of associated AM or FM undertaking:

Licensee of associated AM or FM undertaking:

Location of associated AM or FM undertaking:

Location within the proposed service area where the application
may be examined by the public:

Note: The party identified as the applicant in the current application
must be the same as the licensee of the associated AM or FM undertaking.

1.0 Programming information

1.1 All programming broadcast on the Transitional Digital Radio Undertaking will be a simulcast of the programming broadcast on the associated AM or FM undertaking, with the exception of up to 14 hours per week of original programming.

( ) Yes ( ) No

1.2 Please provide an outline of your general plans for originating programming on the Transitional Digital Radio Undertaking:

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

_____________________________________________________________________

2.0 Technical Information

2.1 Information filed with the Department of Industry

2.1.1 Have all required technical documents been filed with the Department of Industry?
( ) Yes ( ) No

2.1.2 I hereby authorize the Commission to include as part of this application any documents or correspondence filed with the Department of Industry with respect to this application.
( ) Yes ( ) No

2.2 Particulars of the digital radio transmitter and network group

2.2.1 DRB Channel Number: ; Frequency: MHz

2.2.2 Number of DRB Programming Services in the Network Group:

2.2.3 Canadian DRB Allotment Plan Group (Network ID) Number:

2.2.4 Call letters of other service(s) in the Network Group:

2.2.5 Check off as appropriate:
( ) Main Transmitter ( ) Single Frequency Network
( ) Coverage Extender ( ) Gap Filler

2.3 Please provide the following technical information

PRESENT PROPOSED
ANALOG DIGITAL NOTE
OPERATION OPERATION

FREQUENCY *Hz MHz *KHz for AM
operation
MHz for FM
operation

CHANNEL & CLASS Class - Not
applicable to DRB

EFFECTIVE Horizontal Plane or
RADIATED At Beam Tilt Angle
POWER (AVERAGE)

EFFECTIVE
ANTENNA HEIGHT
(EHAAT)

ANTENNA &
TRANSMITTER SITE Lat N. Lat. N.
COORDINATES Lon: W. Lon. W.

STUDIO City, & street
LOCATION(S) address where possible

SUBSIDIARY
COMMUNICATIONS ( ) Yes ( ) No Not applicable
(SCMO)

PROGRAMMING Satellite,
FEED METHOD(S) Microwave, Fibre
Optic Cable, Other

FOR
REBROADCASTING Call Letters
STATIONS, Frequency
IDENTIFY STATION Location
REBROADCAST

2.4 Coverage and antenna/transmitter site location maps

2.4.1 Provide an ORIGINAL MAP (not a photocopy) showing the location of the ANTENNA/TRANSMITTER SITE, using a Scale of 1:50,000 NTS topographical.

2.4.2 Attach CLEAR, LEGIBLE copies of the SERVICE CONTOUR MAPS required in the TECHNICAL BRIEF submitted to the Department of Industry.

2.4.3 Provide a COMPARATIVE MAP showing the PRESENT ANALOG and PROPOSED DRB operations.

2.5 Population estimates

PRESENT PRINCIPAL PROPOSED DRB
OPERATION MARKETING AREA OPERATION
(0.5 mV/m Contour)

Population
Households
% English
% French
% Native Canadian
% Other

3.0 Other Conditions

Please indicate whether the undertaking will adhere to the following additional conditions, and sign below. If you wish to be exempted from one of these conditions, please provide your reasons for the request as a separate attachment.

3.1 The undertaking will use no more than 20% of the digital capacity of the 1.5 MHz channel specified for use by the geographic grouping of broadcasters to which the undertaking belongs.

( ) Yes ( ) No

3.2 The undertaking will not use the ancillary capacity of the digital radio signal to provide any services that constitute programming under the Broadcasting Act.

( ) Yes ( ) No

3.3 The undertaking will have full control over the transmission of its programming, regardless of the ownership of the transmission facilities it uses.

( ) Yes ( ) No

Signature of applicant:

Name of applicant:

Position of applicant:

Date: