ARCHIVED -  Public Notice CRTC 1995-60

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Public Notice

Ottawa, 21 April 1995
Public Notice CRTC 1995-60
A Review of Certain Matters Concerning Radio
In Public Notice CRTC 1990-111, the Commission issued An FM Policy For the Nineties. This policy was based on three objectives: increased exposure for Canadian music and Canadian talent, maintenance of programming diversity, and continued assurance that programming is of high standard.
At the same time, the 1990 policy was developed taking into account three key considerations: reliance on competitive forces wherever possible, maintenance of the ability of AM stations to provide high quality programming in the face of growing competition from FM stations and reduction of the level of regulation to that absolutely necessary to ensure that the objectives set out in the Broadcasting Act (the Act) are fulfilled.
Major elements of the 1990 FM policy included an increase in the minimum level of Canadian popular music required of FM licensees to 30%, simplification of the system for station formats and a reduction in the scope of the Promise of Performance.
The Commission reviewed its radio policies and regulations again in 1992. In Public Notice CRTC 1992-72 "A Review of the CRTC's Regulations and Policies for Radio" the Commission maintained the principles of the 1990 policy but further reduced the number of commitments FM stations were expected to make in their Promises of Performance. The Commission, however, announced that it would amend the Radio Regulations, 1986 (the regulations) to include the requirement that stations operating in the French language must ensure that at least 65% of popular vocal music selections broadcast each week be in the French language. Previously, this matter had been dealt with at the level of the Promise of Performance.
Public Notice CRTC 1992-72 also called for comments on a number of other issues including local programming on private commercial stations, advertising on campus radio stations and Canadian talent development. New policies with respect to local programming and advertising on campus stations were subsequently announced in Public Notice CRTC 1993-38. A proposal related to Canadian talent development is set out in Public Notice CRTC 1995-61, issued today.
The Commission considers that it should again review certain elements of its radio regulations and policy guidelines for three reasons. First, during informal consultations held to prepare its proposal for Canadian talent development, certain suggestions were made concerning other matters related to radio. Second, the Canadian radio industry as a whole continues to experience financial difficulties. The Commission wishes to ensure that radio stations have the flexibility necessary to make programming adjustments and to implement economies while still meeting the objectives of the Act. Third, the Commission's own decreasing resources coupled with its increased workload provide an additional impetus to review its regulations and policy guidelines to ensure that they are still necessary and effective.
This review, however, does not extend to matters related to Canadian musical content and French-language vocal music. As outlined above, the Commission considers that these requirements and guidelines form the cornerstone of its regulatory structure for radio and sees no reason to review them at this time.
In 1991 the Commission issued its Radio Market Policy (Public Notice CRTC 1991-74). This policy set out a number of basic tests and a procedure designed to ensure that the introduction of additional commercial AM or FM stations in a market will not affect the ability of existing commercial AM or FM stations to discharge their programming responsibilities as required under the Act and the regulations. In that document, the Commission stated that it would review this procedure and criteria in three years. After due consideration of three years of experience and informal comments, none of which have been negative, the Commission considers that the results have been satisfactory and sees no need to change the policy.
1. Formats
Current Approach
Commercial FM stations make commitments to operate within one of three formats, defined as follows, and are required, by condition of licence, to remain within format.
Group I Pop, Rock and Dance -- 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 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 and Country Oriented).
Group III Specialty -- Any station other than one operating in Groups I or II. (Examples include stations specializing in Ethnic programming, News or Talk programming, Traditional and Special Interest music programming or a combination of a number of kinds of special programming.) Group III stations are expected to outline their music proposals in a schedule to be appended to their Promises of Performance.
The Commission's format system is designed to promote diversity within the music programming offered by FM stations licensed to serve a particular community.
The Canadian Association of Broadcasters (CAB) indicated that a significant majority of its membership supported eliminating the distinction between the "Pop, Rock and Dance" format and the "Country" format.
The format system, as noted above, was established to ensure a measure of diversity in music programming. However, the Commission considers that the increase in popularity of country music will ensure that the country format continues to be viable, and hence available, in most markets where country music stations now operate, even if FM stations were allowed to move freely between Groups I and II.
On the other hand, the Commission considers that a separate format for specialty stations remains a useful tool for ensuring a measure of diversity among existing stations and to encourage the introduction of new stations that would increase the diversity of programming available to listeners. It therefore considers that a separate specialty format should be retained.
The Specialty format will be defined as follows:
Specialty -- A private commercial FM station is operating in the Specialty format if it meets one or more of the following criteria:
- the language of broadcast is neither English nor French;
- more than 50% of the broadcast week is devoted to Spoken Word;
- less than 70% of the music broadcast is from subcategory 21 (Pop, Rock and Dance) and/or subcategory 22 (Country and Country-oriented).
Examples of specialty format stations include stations specializing in ethnic programming, news or talk programming, traditional and special interest music programming or a combination of a number of kinds of special programming. Licensees of stations operating in the Specialty format will be expected to outline their program proposals in a schedule to be appended to their Promises of Performance.
In light of the above, the Commission will generally be willing to approve applications by commercial FM stations to be relieved of Promise of Performance commitments to operate in Group I or Group II. Stations currently operating in Group I or Group II that wish to take advantage of this additional flexibility may apply immediately using the application form attached to this notice. Authority for these changes will be effective on 1 September 1995.
2. Simulcasting
Current Approach
The Commission has considered that extended simulcasting on two stations in the same market is not desirable because it decreases the diversity of programming available to listeners and does not make efficient use of the limited number of public frequencies that are available. Accordingly, under the terms of the regulations, simulcasting by commonly-owned AM and FM stations in the same market is limited to the hours between midnight and 6:00 a.m., except for a few special circumstances, such as the reporting of election results. Applications for limited simulcasting outside this period are considered on a case-by-case basis.
All broadcasters consulted believed that simulcasting between 6:00 p.m. and midnight should be permitted. In addition, the CAB requested that an additional 14 hours per week of simulcasting be allowed at any time during the broadcast week without application. This would allow simulcasting of such programming as news, public affairs and sports.
While continuing to believe that extended simulcasting is not in the public interest, the Commission considers that some flexibility may be beneficial to AM stations facing financial hardship, in that it would allow them to reduce expenditures through the sharing of resources and to concentrate on developing high quality programming for periods of higher listening.
The Commission therefore calls for comments on the advisability of allowing up to 42 hours of simulcasting during the broadcast week, in addition to the time period between midnight and 6:00 a.m. when simulcasting is currently permitted. In addition to general comments on the above, the Commission requests comment on whether this additional 42 hours should be restricted to time periods of lower listening, such as between 6:00 p.m. and midnight, or whether it should be free of any scheduling restrictions.
After comments have been received on this matter, a draft of any amendment proposed to the regulations will be issued for public comment.
3. Local Programming
Current Approach
The Act states that programming available in the broadcasting system should be drawn from local, regional, national and international sources. Private radio has historically been the sector that has provided the lion's share of programming addressing local issues and concerns. Local programming commitments, which become mandatory for FM licensees through conditions of licence, serve to ensure that radio continues to play this role.
Licensees of commercial FM stations in markets served by more than one private commercial radio station are generally required to devote at least one-third of the broadcast week to local programming if they wish to solicit or accept local advertising. Exceptions are considered on a case-by-case basis.
The one-third guideline for local programming does not, however, apply to licensees of commercial AM stations. They are instead asked, at the time of licence renewal, to indicate the level of local programming they will provide and to indicate how they will ensure that spoken word programming of direct and particular relevance to the community they serve is included in programming. However, no minimum level of local programming is specified within the policy.
Local Programming is defined as follows in Public Notice CRTC 1993-38:
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 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.
The Central Canada Broadcasters' Association (CCBA) suggested a more flexible approach to local programming which would allow expanded use of network programming on FM stations. It argued in support of an approach similar to that for AM, where local programming is assessed on a case-by-case basis.
The Commission is aware that a requirement that one-third of all programming during the broadcast week be local programming limits the extent to which FM stations may use those network and syndicated services that provide music format packages that include provision for the insertion of local information. The Commission notes, however, that FM licensees may apply to program a lower level of local programming. In these cases they are asked to demonstrate alternative ways to ensure provision of a strong local service. The Commission considers that the one-third guideline is useful in that it establishes a clear minimum level of local programming that FM stations should provide.
The Commission therefore has decided to retain its local programming guidelines for private commercial radio stations, including the one-third guideline for FM stations.
4. Hits
Current Approach
The level of hits broadcast by commercial English-language FM stations is generally required, through condition of licence, to be less than 50% of all musical selections broadcast each week.
For purposes of this policy, the Commission considers a "hit" to be any musical selection that has reached any one of the Top 40 positions on one or more of a number of specified charts. However, Canadian selections that enter the Top 40 are considered as non-hits for one year from the date they first enter the Top 40 in order to provide an incentive for stations to play new Canadian music.
This measure is intended to promote diversity in radio programming, provide exposure for new artists, and protect music-oriented AM stations whose program formats rely heavily on the broadcast of hits.
Standard Radio Inc. argued that the use of hits by FM stations should not be limited so that the Contemporary Hit format could be offered on FM, and thereby attract younger listeners to radio.
The CAB recommended that applications by commercial FM stations to amend their Promises of Performance so that they are not limited in their use of hits should generally be approved, provided certain requirements are met. Specifically, it suggested that applications by any FM broadcaster to eliminate any restriction on its use of hits should be approved provided that all other radio stations in its market supported such a proposal.
L'association canadienne de la radio et de la télévision de langue française (ACRTF) stated that, because guidelines related to the use of hits do not extend to French-language stations, it provides a necessary measure of protection to such stations in Montréal and Gatineau/Hull against their English-language FM competition, and that the policy should thus be retained. Debbie Drummond, a recording artist, also believes that limitations on the use of hits help provide access to radio for new artists.
The Commission considers that guidelines limiting the use of hits are important in maintaining a sufficient diversity of music that is available on radio.
It also considers that these guidelines have helped to maintain music-oriented AM radio in Canada. It notes that the majority of commercial AM stations operating in English-language markets have music-oriented formats, and considers that elimination of this policy would have a negative impact on such stations operating in markets where they compete with FM stations.
The Commission acknowledges that the CAB proposal would provide some protection to licensees of AM stations by giving them an important role in the application of these guidelines in communities they serve. It notes, however, that elimination of restrictions on the use of hits would decrease the diversity of music programming available in markets where such applications were approved. In addition, the Commission acknowledges the concerns of the ACRTF with regard to markets served by both English- and French-language stations, and notes that there is no consensus within the broadcast industry on this matter.
The Commission therefore has decided to retain its policy guidelines which generally state that the level of hits broadcast by commercial English-language FM stations should be less than 50% of all musical selections broadcast each week. It would be prepared to review the guidelines again after three years.
5. Multiple Ownership
Current Approach
A licensee will generally not be granted licences for more than one AM and one FM station in the same language in the same market, unless warranted by exceptional circumstances approved on a case-by-case basis. This policy is designed to ensure that a diversity of editorial voices is maintained within any given community and that true competition is present in various markets.
The Commission's definition of a "market" for purposes of this policy is set out in Public Notice CRTC 1990-111, which states:
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 licenses or examining transfers of ownership, the Commission will continue to rely on a variety of factors, including the above.
Broadcasters who commented on this approach to ownership consider that the current restrictions on multiple ownership of radio stations in a market should be relaxed. ACRTF argued that it is unfair to allow "triple stick" television operations in Quebec without allowing the same flexibility for radio.
Standard Radio Inc. suggested that common ownership of two AM stations in one market might be appropriate in certain circumstances, but not of two FM stations. It recommended that a case-by-case approach be adopted.
The CAB presented a proposal for processing applications by licensees to "flip" from the AM to the FM band; this could result in licensees owning two FM stations in the same language in some markets. The CAB's proposal can be summarized as follows:
AM conversions to FM would be allowed provided applications meet three criteria:
i) Spectrum is available for all AM stations in the market to convert to the FM band;
ii) There is evidence that service to the community would be improved; and
iii) All private radio licensees in the market support the application.
The Commission acknowledges that allowing licensees who already own one AM and FM station to acquire additional stations in a market would permit them to share personnel and other resources, and thus operate more efficiently. The Commission also notes that it is possible that each station could continue to provide a distinct musical service. The Commission, however, has several concerns about possible negative implications of changing its approach.
First, with one owner controlling several stations, it is far less likely that each station would provide a genuinely distinct editorial view on matters of public concern.
Second, the Commission is concerned that eliminating current restrictions could lead to a dominance by particular licensees in certain markets and thereby decrease the level of true competition available in those markets.
Third, many licensees currently owning both an AM and an FM station in a market might choose to "flip" the AM to the FM band and thus end up with two FM stations in the market. Although, under the CAB proposal, the number of stations that might be permitted to change from AM to FM would be limited to some extent, the Commission is concerned that any policy change that could prompt a large number of licensees in a particular region to abandon the AM band might make it difficult for the remaining AM stations to survive.
For these reasons, the Commission does not consider that its radio ownership policy guidelines should be changed at this time.
The Commission, therefore, will generally continue to limit a particular licensee to ownership of a maximum of one AM and one FM station in the same language in the same market. Departures from this approach will continue to be permitted only in exceptional circumstances.
The Commission also notes that, under the current regulations, a party already owning an AM and an FM station in a market may acquire less than 30% of the shares of a third station in that market, without Commission approval. In certain circumstances such an acquisition might conflict with the objectives of the Commission's guidelines on multiple ownership.
The Commission calls for comments on a proposal whereby the regulations would be amended to specify that prior approval is necessary for any transaction that, in the case of a party who already owns or controls an AM and an FM station in a market, would result in that party acquiring any level of ownership position in a third station in that market.
Following its consideration of comments received in response to this proposal, the Commission, if it wishes to proceed with such an amendment, would issue, for further public comment, a proposed amendment to the the regulations to give effect to this change.
6. Vocal/Instrumental Ratio
Although no parties commented on this subject during consultations, the Commission wishes to clarify its approach to applications by FM licensees to change their vocal/instrumental ratio.
Licensees of FM stations make Promise of Performance commitments to one of three categories with respect to the level of instrumental selections they broadcast. These conditions must, by condition of licence, be adhered to.
Current guidelines specify that licensees with an instrumental level of less than 35% should ensure that at least 30% of popular music selections broadcast each week are Canadian. For licensees whose instrumental level is between 35% and 50%, the minimum Canadian content level is 20%. Licensees committing to an instrumental level of 50% or more should ensure that at least 15% of popular musical selections broadcast each week are Canadian. These lower levels of Canadian content are allowed because of the limited supply of Canadian instrumental music and because the Commission wishes to encourage stations who wish to contribute to the diversity of music programming available in their communities by broadcasting a significant level of instrumental selections. Applications to change from one level of instrumental to another are generally approved provided that the stations assume a condition of licence requiring them to broadcast the associated level of Canadian popular music and to distribute these Canadian selections reasonably throughout the broadcast day.
The Commission will also, at a future date, issue for comment, a proposed amendment to the regulations that would incorporate the varying levels of Canadian content that apply to instrumental-based stations. If such a revision is put in effect, interested stations will be able to apply to amend their Promises of Performance so that the levels of Canadian content and instrumental selections they program would be governed solely by the regulations. These stations will then have the flexibility to change their vocal/instrumental ratios without the Commission's approval, provided the levels of Canadian content set out in the regulations are respected.
7. Reporting Requirements Regarding Network Affiliation
Current Approach
Licensed Canadian radio networks currently submit lists of their affiliates every three months in order to keep the Commission informed about what stations are affiliated to particular networks.
During consultations, broadcasters suggested that it is not necessary for lists of affiliates to be provided to the Commission. Since the lists are not essential for the enforcement of any regulatory measure, the Commission agrees that it should no longer be necessary for network operators to provide this information.
The Commission has therefore decided that, effective today, operators of licensed networks need no longer submit lists of affiliates every three months.
Call For Comments
The Commission calls for public comments on its proposals with respect to changes affecting simulcasting, and ownership.
Comments should be submitted on or before Tuesday, 20 June 1995 and addressed to the Secretary General, CRTC, Ottawa, Ontario K1A 0N2. While receipt of comments by interested parties will not be acknowledged, they will be considered by the Commission and will form part of the public proceeding.
Allan J. Darling
Secretary General
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Application for Commercial FM Radio Programming Undertakings Currently Operating in Group I and Group II Formats
The licensee hereby applies to amend the licence for the station referred to above in order to be relieved of the obligation to broadcast exclusively within the Group I or Group II format, and to assume the following condition of licence:
It is a condition of licence that this station not be operated within the Specialty format as defined in Public Notice CRTC 1995-60, or as amended from time to time by the Commission.
Date modified: