ARCHIVED -  Public Notice CRTC 1995-95

Public Notice

Ottawa, 14 June 1995

Public Notice CRTC 1995-95

Call for Comments on a Proposed Approach to the Introduction of Digital Radio

Introduction

In this notice, the Commission outlines its general plans for the introduction of digital radio broadcasting in Canada and seeks public comment on a proposed short-term licensing approach.

The Canadian radio industry has been at the forefront in the development and testing of digital radio broadcasting. Accordingly, the Commission expects that many parties will be interested in establishing digital radio services in Canada in the near future. The introduction of digital radio services on an experimental basis could well provide operational and market data useful to all parties interested in examining the broad policy and regulatory issues relating to digital radio broadcasting. At the same time, the Commission does not wish to proceed on a basis that might prejudice future policy development in any way. For these reasons, it considers that a two-stage approach will ensure a timely and non-disruptive transition to digital radio which will allow Canadian radio broadcasters to retain their technological lead in this emerging environment.

Background

Digital radio broadcasting refers to the over-the-air transmission and reception of radio signals using digital technology. The technology makes possible the reproduction of sound that rivals the quality of compact disks. It has the potential of providing new kinds of broadcasting services to the public, as well as non-programming services, such as paging and datacasting, using its ancillary capacity.

In 1992, the Minister of Communications announced the formation of the Task Force on the Introduction of Digital Radio. The Task Force included public and private radio broadcasters, representatives of the Department of Communications (now the Department of Canadian Heritage and the Department of Industry), and observers from the CRTC. The Task Force was mandated to provide leadership, focus and co-ordination for the technical, policy and regulatory tasks required for the introduction of digital radio.

Working Group I was established by the Task Force to examine coverage and service area issues; Working Group II was asked to consider policy and regulatory issues. Both working groups presented final reports to the Ministers of the Department of Canadian Heritage and the Department of Industry in 1994.

Digital Radio Research Inc. (DRRI), a consortium of private broadcasters and the CBC, was established for the purpose of financing and managing facilities for digital radio research and field trials. DRRI currently operates experimental digital radio transmission facilities in Toronto and in the Montréal region, using a digital radio technology known as Eureka-147. Since its creation in 1992, DRRI has completed several other successful field trials using this technology. Canadian digital radio services using Eureka-147 will operate in a part of the radio spectrum known as the L-band (1452-1492 MHz).

The Radiocommunications Branch of the International Telecommunications Union (ITU-R), is that body of the United Nations responsible for co-ordinating the development of international standards. In December 1994, the ITU-R recommended Eureka-147 technology for use as a global technical standard for both terrestrial and satellite-delivered digital radio broadcasting. This is expected to become an official ITU recommendation later this year.

The Department of Industry is expected to release a gazette notice shortly outlining its proposed spectrum allocation plan for L-band digital radio broadcasting in Canada. This plan has been deve-
loped in accordance with the principles outlined by Working Group I of the Task Force. Under the plan, each existing AM and FM radio undertaking will be assigned spectrum in the L-band for the purposes of broadcasting a digital radio signal.

Regulatory Issues Associated with Digital Radio

The Commission fully supports the transition from conventional AM and FM radio to digital radio broadcasting in Canada, and considers that digital technology will prove an effective and efficient method of providing high quality radio service to the public. The Commission also considers that digital radio should be a replacement technology for existing AM and FM radio services. It therefore endorses the Department of Industry plan to allocate spectrum in the digital radio band to each existing AM and FM radio undertaking. The Commission notes, however, that digital radio also has the potential to increase the diversity of programming services available to the public. For this reason, it considers that existing radio services should have priority access, but not exclusive access, to the digital radio band.

Digital radio broadcasting remains in the early experimental stage in Canada. In the Commission's view, many complex and important issues relating to the development of digital radio technology and the structure of the digital radio industry in the long term have not been clearly defined, and will need to be addressed in the context of a broad public process. Based on the data currently available, these issues raise questions that, in some cases, may be difficult to resolve in the short term, thus preventing any full or meaningful public exploration of the issues at this time.

The major long-term issues with respect to digital radio can be grouped into the broad areas summarized below.

Ownership of transmitter facilities: With AM and FM broadcasting, the signal of each station is broadcast from a single transmitter, and the licensee is required by regulation to own its own transmitter. With Eureka-147 technology, groups of up to five stations will broadcast from a single transmitter. This raises issues concerning who should be permitted to own digital radio transmitters, how facilities should be shared, and how fair access to these transmitters can be ensured.

New Services: While it is expected that digital radio services will eventually replace existing AM and FM stations, the technology will also allow for the establishment of new radio services that may be delivered by either terrestrial transmitters or satellite. The Commission will need to decide how long existing AM and FM stations should be given to convert to digital technology before their digital allocations are offered to other parties. There may be a need to determine whether licensees of existing stations who choose not to move to the digital band, should be permitted to continue broadcasting on the AM or FM band indefinitely. It may also be necessary to establish what uses will be made of the AM and FM bands as they become vacated. Further, the Commission will need to determine how and under what circumstances new services will be introduced.

Technical Issues: It will be necessary to determine what technical standards should be established to ensure that each digital radio service provides high quality programming while also being ensured a reasonable amount of capacity to transmit ancillary data. Depending on how channel capacity is assigned, there may be a need to ensure that all stations sharing a digital radio channel have access to an equal share of the capacity. The use of ancillary capacity to provide programming services may also be an issue.

Regulations: The Commission will need to determine what types of regulations are appropriate for digital radio services that originate programming.

Coverage Issues: Several digital radio stations will share a single transmitter, and all stations sharing a transmitter will have equal coverage areas. As a result, the digital service contour of some stations may be significantly different from their existing AM or FM coverage patterns. The Commission will need to decide the extent to which stations should be allowed to expand from their current coverage areas, and how to deal with any impact such expansion may have on competition between existing services.

Two-stage Approach

In light of the many unresolved issues, including those discussed above, the Commission proposes to proceed with a two-stage approach to the introduction of digital radio broadcasting. For the short term, the Commission intends to establish a process for licensing digital radio undertakings under certain terms and conditions, and on an experimental basis. At the appropriate time, the Commission also intends to undertake a public process to consider all aspects of a policy approach to govern digital radio broadcasting in the long term.

The Commission does not foresee this broad public policy process commencing prior to the fall of 1996, or until sufficient information is available to consider fully all of the questions that may arise. The Commission therefore reminds interested parties that any course of action or approach it may take regarding a licensing process for experimental digital radio undertakings in the short term shall not constrain the Commission from modifying this approach or adopting another framework for the long term. The Commission's proposals for a short-term approach are discussed below.

Short-term Approach

In order to allow for the broadcast of digital radio services on an experimental basis before the Commission initiates the broad public process discussed above, it proposes to establish a new Experimental Digital Radio Licence. The Commission, however, does not wish to create a situation that might unduly alter the circumstances of existing radio broadcasters or affect the scope of any long-term policy for digital radio. Accordingly, an experimental licence would be subject to the terms and conditions set out in the following section of this notice.

Given that existing radio undertakings have already satisfied the Commission´s concerns regarding ownership, finances, marketing and programming, the Commission considers that it would be reasonable to adopt a streamlined application and licensing process for existing AM and FM licensees who wish to simulcast their programming using digital technology. Applications for Experimental Digital Radio Licences from parties who do not currently operate an existing AM or FM radio service would be considered on a case-by-case basis, subject tothe Radio Market Criteria contained in Public Notice CRTC 1991-74 entitled "Radio Market Policy".

Conditions Governing Experimental Licences

The Commission considers that it may be necessary to place certain restrictions on undertakings operating an Experimental Digital Radio service during the short term. Specifically, it proposes to apply the following terms and conditions to Experimental Digital Radio Licences, with any exceptions to be considered on a case-by-case basis:

* In the case of an Experimental Digital Radio service operated by an existing AM or FM radio licensee, it would be a requirement that all programming on the Experimental Digital Radio service be a simulcast of the programming broadcast on the associated AM or FM radio undertaking, with the exception of up to two hours per week of separate programming. Separate programming on an Experimental Digital Radio undertaking would be subject to Part 1 of the Radio Regulations, 1986.

 The Commission considers that this requirement would be consistent with the general principle that digital radio services should eventually replace, rather than supplement, existing AM and FM radio services, while ensuring that Experimental Digital Radio undertakings have sufficient flexibility to conduct useful market trials.

* 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 addition to this restriction, the Commission would expect broadcasters to ensure that the main programming signal of the Experimental Digital Radio service is not noticeably degraded by the shifting of capacity from it to ancillary services.

 Given that digital radio receivers will be capable of receiving both the main programming signal and the signals of any ancillary services provided, the Commission is concerned that the use of ancillary capacity for programming services could result in competition between main programming services and ancillary programming services. The Commission believes that this is an issue best considered in the context of its broad public process to determine a long-term policy approach for digital radio broadcasting.

 For this reason, the Commission proposes that, during the short term, Experimental Digital Radio undertakings be prohibited from using the ancillary capacity of the spectrum allotted to them to provide a programming service. The Commission would not, however, have any objections to the use of ancillary capacity for experimental non-programming purposes.

* Each digital radio signal operated by an existing licensee would have to 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 area (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 Experimental Digital Radio Licence will specify the location of the single primary transmitter from which the digital radio signal must be broadcast. However, the use of "gap filler" transmitters to cover small unserved areas within the coverage area of the primary digital transmitter will not be restricted.

 The Commission notes that, under the Department of Industry's allotment plan, the coverage areas of some digital radio services could be considerably greater than the coverage areas of their corresponding AM or FM radio stations. It acknowledges that a restriction such as that proposed above would thus constitute a limitation on the use of transmission facilities for Experimental Digital Radio services. Nevertheless, the Commission considers that such a restriction would be a reasonable measure to ensure that new Experimental Digital Radio services do not have an undue impact on competition in the radio industry in the short term.

* Experimental Digital Radio Licences would generally be issued for a term of three years. This would allow the Commission to establish and introduce a permanent licensing regime for digital radio undertakings following completion of the public process to determine a long-term approach for digital radio broadcasting.

* Experimental Digital Radio licensees would not be required to own and operate their own transmitters. This would provide flexibility for licensees and owners of digital radio transmission facilities to experiment with different kinds of ownership arrangements and structures in the short term.

* Experimental Digital Radio undertakings would not be subject to the Commission's long-standing policy that generally prohibits the common ownership of two undertakings of the same class serving the same market in the same language. Licensees would be permitted to operate one Experimental Digital Radio service for each existing conventional radio service they currently operate.

Call for comments

The Commission seeks comments on its proposed approach to the introduction of digital radio and, in particular, on the specific terms and conditions to which its proposed Experimental Digital Radio Licence should be subject. Comments must be submitted to the Secretary General, CRTC, Ottawa, K1A 0N2 by Monday, 17 July 1995. While receipt of submissions will not be acknowledged, all submissions will be considered by the Commission and will form part of the public record of the proceeding.

Allan J. Darling
Secretary General