ARCHIVED -  Public Notice CRTC 1996-116

Public Notice

Ottawa, 23 August 1996

Public Notice CRTC 1996-116

Amendments to the Radio Regulations, 1986 -- Simulcasting, Canadian Content, Ownership, Definitions of a "Commercial Message" and an "Associate"

The Commission has adopted amendments to the Radio Regulations, 1986 (the regulations) which are attached to this Public Notice. Draft versions of these amendments were issued for public comment in Public Notice CRTC 1996-27 which, in turn, was the result of a policy review, initiated by Public Notice CRTC 1995-60, under which public comments were also received.

Description of the Changes

1. Simulcasting

The amended regulations permit radio broadcasters to simulcast up to 42 hours of programming per broadcast week on commonly owned AM and FM stations in the same market. This is in addition to the simulcasting already permitted under the regulations during the midnight to 6:00 a.m. period. Changes have also been made to the logging provisions of the regulations, so that periods of simulcasting must now be identified.

2.  Canadian Content for Stations Programming High Levels of Instrumental Selections

The amended regulations make provision for variations in Canadian content levels for stations programming high levels of instrumental selections. In the past, such variations have been authorized by condition of licence.

The amended regulations now require that licensees broadcasting an instrumental level of less than 35% in any broadcast week ensure that at least 30% of popular music selections broadcast during that broadcast week are Canadian. For licensees whose instrumental level is between 35% and 49%, the minimum Canadian content level is 20%. Licensees broadcasting an instrumental level of 50% or more in a particular broadcast week must ensure that at least 15% of the popular musical selections broadcast that week are Canadian.

Now that this flexibility for instrumental-based stations has been incorporated into the regulations, applicants will no longer be required to make commitments to provide a minimum level of instrumentals in their applications for new licences or for licence renewal. Instead, they will have the flexibility to vary their vocal/instrumental ratios without the Commission's approval, provided the corresponding levels of Canadian content set out in the regulations are respected.

Any licensee that wishes to take advantage of this flexibility before its next licence renewal may apply to amend its current Promise of Performance, so that the level of instrumental selections it programs and the corresponding level of Canadian content are governed solely by the regulations and not by current conditions of licence.

3. Definitions

The Commission has changed the definition of a "commercial message" to make it consistent with that used in other regulations issued by the Commission, and has corrected an error in the English-language version of the definition of an "associate."

4. Ownership

Under terms of the amended regulations, prior approval by the Commission is necessary for any transaction that would result in a licensee, or an associate of that licensee, acquiring a voting interest in the ownership of a second AM or a second FM undertaking operating in the same language and in the same market when the licensee of the second undertaking is not a corporation whose voting securities are publicly traded on a stock exchange.

The old regulation had allowed any eligible party (including one already owning an AM and an FM station in a market) to acquire any percentage less than 30% of the shares of another station without Commission approval.

PUBLIC COMMENTS RECEIVED

A total of five submissions were received in response to Public Notice CRTC 1996-27. These were from the Canadian Association of Broadcasters (CAB) and licensees of certain commercial radio stations. None of the submissions expressed concern with the amendments relating to simulcasting, Canadian content for instrumental-based stations, or the definitions of a "commercial message", and an "associate."

Three submissions, however, opposed the amendment related to radio ownership. These parties were generally of the view that the old ownership regulations did not require amendment. They argued that the requirement for prior Commission approval for any change of control of a broadcasting undertaking, as contained in both the amended and unamended versions of the ownership regulations, gives the Commission sufficient latitude to act if it considers any individual or corporation with a minority interest in a station to be actually taking control of its operations. Furthermore, these parties suggested that the Commission should not take any action that might discourage investment in radio stations from any source. The CAB indicated that it would approach the Commission, at some time in the near future, with a proposal to relax the current ownership restrictions.

The Commission considers that the arguments opposing any changes in the ownership regulation generally parallel those submitted in the comments presented in response to Public Notice CRTC 1995-60, and is satisfied that they were given due and proper consideration by the Commission in developing the amended regulation.

It is important to note that the purpose of amending the ownership regulations is
not to change the Commission's approach to radio ownership, but simply to ensure that the regulations more accurately reflect the spirit of the Commission's ownership guideline reiterated in Public Notice CRTC 1995-60. Under this ownership guideline, a person is limited to holding a controlling position in a maximum of one AM and one FM station operating in the same language in the same market, other than in exceptional circumstances.

The Commission also notes that the amendment does not prohibit a broadcaster already owning a station in one market from taking a minority ownership position in the licensee of another radio station of the same class operating in the same language and in the same community. It only requires that an application be submitted to the Commission when the shares of the second station are not publicly traded on a stock exchange. This permits the Commission and members of the public to examine the matter beforehand to determine whether or not the transaction contravenes the spirit of the ownership policy. This is particularly important now that the Commission, with the support of the private broadcasting industry, has amended its radio policies and regulations to rely more heavily on market forces to guarantee the presence of a diversity of editorial voices and dynamic competition.

The Commission has therefore decided to enact the proposed amendment to the regulations relating to ownership.

The amendments attached to this notice were registered with the Clerk of the Privy Council on 26 June 1996 SOR/96-324) and are effective as of that date. They were published in the Canada Gazette Part II on 10 July 1996.

Allan J. Darling
Secretary General

Whereas, pursuant to subsection 10(3) of the Broadcasting Acta, a copy of the proposed amendments to the Radio Regulations, 1986b, substantially in the form set out in the schedule hereto, was published in the Canada Gazette Part I on March 2, 1996 and a reasonable opportunity was thereby given to licensees and other interested persons to make representations to the Canadian Radio-television and Telecommunications Commission with respect thereto;

Therefore, the Canadian Radio-television and Telecommunications Commission, pursuant to subsection 10(1) of the Broadcasting Act*, hereby makes the annexed Regulations Amending the Radio Regulations, 1986, made on September 18, 1986**.

Hull, Quebec, June 26, 1996.

REGULATIONS AMENDING THE RADIO REGULATIONS, 1986

Amendments

1. The definition "commercial message" in section 2 of the Radio Regulations, 1986 is replaced by the following:

"commercial message" means an advertisement intended to sell or promote goods, services, natural resources or activities and includes an advertisement that mentions or displays in a list of prizes the name of the person selling or promoting those goods, services, natural resources or activities; (message publicitaire)

2. (1) Subsection 2.2(3)1 of the Regulations is replaced by the following:

(3) Subject to subsection (6) and except as otherwise provided pursuant to a condition of its licence, an A.M. or F.M. licensee shall, each broadcast week, devote 30 per cent or more of the licensee's musical selections from content category 2 and 10 per cent or more of the licensee's musical selections from content category 3 to Canadian selections and schedule those selections in a reasonable manner throughout each broadcast day.

(2) Section 2.2 of the Regulations is amended by adding the following after subsection (5):

(6) An A.M. or F.M. licensee may, in any broadcast week, reduce the proportion of its Canadian musical selections from content category 2 to

(a) not less than 20 per cent, where, in that broadcast week, the licensee devotes not less than 35 per cent and not more than 49 per cent of all its musical selections to instrumental selections; and

(b) not less than 15 per cent, where, in that broadcast week, the licensee devotes 50 per cent or more of all its musical selections to instrumental selections.

3. (1) Paragraphs (e) and (f)2 of the definition "associate" in subsection 11(1) of the English version of the Regulations are replaced by the following:

(e) a corporation of which the person alone, or a person together with one or more associates as described in this definition, has, directly or indirectly, control of 50 per cent or more of the voting interests,

(f) a corporation of which an associate, as described in this definition, of the person has, directly or indirectly, control of 50 per cent or more of the voting interests, and

(2) Section 11 of the Regulations is amended by adding the following after subsection (3):

(3.1) For the purposes of paragraph (4)(d), "market" means

(a) in the case of an A.M. station, the A.M. daytime 15mV/m contour or the central area as defined by the Bureau of Broadcast Measurement (BBM), whichever is smaller; or

(b) in the case of an F.M. station, the F.M. 3mV/m contour or the central area as defined by the Bureau of Broadcast Measurement (BBM), whichever is smaller.

(3) Subsection 11(4) of the Regulations is amended by striking out the word "or" at the end of paragraph (b), by adding the word "or" at the end of paragraph (c) and by adding the following after paragraph (c):

(d) the licensee or an associate of the licensee acquiring a voting interest in a second A.M. or F.M. licensee or in the associate of a second A.M. or F.M. licensee, where the second A.M. or F.M. licensee or its associate broadcasts in the same market and in the same language as the acquiring licensee or associate and is not a corporation with shares publicly traded on a stock exchange.

4. Section 14 of the Regulations is amended by adding the following after subsection (2):

(3) Notwithstanding subsection (1), a licensee may broadcast simultaneously for a maximum of 42 hours during any broadcast week.

5. Item 4 of Part A of the schedule to the Regulations is replaced by the following:

Column I Column II
Item Code Description
4. Simulcast Programming simulcast pursuant to  subsection 14(3) of these Regulations

5. Other Programming other than local  programming, network programming, rebroadcasts from another station or simulcasts

EXPLANATORY NOTE

(This note is not part of the Regulations.)

The purpose of these amendments is

(a)  to make the definition "commercial message" compatible with other regulations of the Canadian Radio-television and Telecommunications Commission;

(b)  to allow for a reduction of Canadian musical selections where the level of instrumental selections is increased;

(c)  to require prior Commission approval before a licensee acquires a voting interest in a second station in the same market; and

(d)  to allow licensees to broadcast simultaneously for a maximum of 42 hours during any broadcast week.