The CRTC Releases Its New Commercial Radio Policy

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Yesterday afternoon, the Canadian Radio-television and Telecommunications Commission (CRTC) released Broadcasting Regulatory Policy 2014-554, titled “A targeted review of the commercial radio sector”. This wraps up the targeted review of the CRTC’s commercial radio policy, which began in October 2013 with the issuing of 2013-572. This targeted review was motivated by a desire to see whether there were any regulatory or policy-level tweaks that could be done to ensure that it was still useful in achieving the goals of the Broadcasting Act. At that time, the Commission decided that a full, comprehensive review was necessary, arguing that the sector had remained relatively stable (tuning & revenues) since the last major review in 2006.

What is the Commercial Radio policy and why does it matter?

The Commercial Radio policy is how the CRTC ensures that the commercial radio sector supports the objectives outlined in the Broadcasting Act. Practically, this means that the Commercial Radio policy plays a determining role in the setting and enforcement of the rules surrounding Canadian Content Development (CCD), and the other ways in which the commercial broadcasting sector help and provide support to the development of Canadian content.

Part 1 of the CRTC’s Communications Monitoring Report provides some data on just how important these contributions are.

  • In the 2012-2013 broadcast year, commercial radio broadcasters operators contributed $0.032 per revenue dollar to support Canadian Content Development (CCD).
  • This translated to a $52 million contribution to CCD, which is a decrease of 4.9% over the previous period.
  • This breaks down into the following: $15 million in basic CCD contributions, $16.6 million in over-and-above CCD contributions and $20.7 million in tangible benefits.

 

Did CIMA participate in this hearing?

CIMA, on behalf of the independent music industry, participated in this targeted policy review. We submitted two interventions: one that provided recommendations, and a second that addressed the interventions provided by the other stakeholders. You can view both of these interventions by clicking here (for the initial intervention) or here (the response).

We provided a succinct summary of our requests over here, but here’s a quick refresher:

  • CIMA identified compliance issues as the most urgent issue for the Commission to address.  Our research was able to identify over $1,000,000 in recorded CCD shortfalls in 2013 license renewals of commercial radio stations. Of this, over $686,000 was left unpaid until the end of the license term. 38% of commercial radio licensees in this broadcast year had recorded issues.
  • As a result, CIMA supported the CRTC’s proposal to levy increased CCD funds for late payment of annual contributions. In order for these late payment charges to be proportionate to the amount time CCD is late, as well as the size of the outstanding amount, CIMA suggested the use of an interest rate as a mechanism for determining the value of any increased CCD. CIMA also supported a variety of ideas the Commission put forward to encourage increased CCD compliance in the commercial radio sector, including a checklist, publishing information surrounding compliant and non-compliance licencees on their website, etc.
  • With regard to HD Radio and Low-Power stations, the Commission asked if these types of radio broadcasters should be exempt from regulations. CIMA advised against this in both cases, arguing that all broadcasters should be subject to equitable regulatory responsibilities, including the obligation to contribute CCD.
  • Within our intervention, we also took the opportunity to advocate for the Commission to undertake a comprehensive radio review, where it could take the time to revisit the new media exemption order.

 

So, what did the CRTC decide?

The CRTC just issued its new policy, and most components will be effective immediately. The only exception is the provisions related to compliance – those will start to be rolled out beginning with licences expiring on August 31, 2015. While you can take a look at the full policy document by clicking here, here’s what you need to know!

On the issues surrounding calls for applications:

  • The CRTC is largely going to maintain status quo with regards to the existing exemptions and delays in place (for example, when receiving new applications in a market that is less than 2 years old).
  • It will also adopt a streamlined and simplified application process.

On issues surrounding low-power stations:

  • Here, the CRTC didn’t move to deregulate this portion of the commercial radio sector (which CIMA argued against).
  • It re-affirmed that low-power stations wishing to move to protected status will need to apply.
  • New licences will also be required for any changes to conditions of licence or their nature of service.

Implementation of HD radio:

  • Here, the Commission felt that it was still too early for intervention but will continue to monitor the situation.
  • They advised that licencees must inform the CRTC in writing if they begin to experiment with HD radio or any other digital radio technology.

Compliance mechanisms:

  • The Commission will be moving forward with the creation of a renewal application checklist, to be made a part of the renewals process.
  • Will also begin to publish annual lists of radio stations in compliance and non-compliance along with the Commission’s regulations and their conditions of licence.
  • They will introduce a measure where the non-compliant licencee will have to announce that finding on the air.
  • The Commission heeded the suggestions by CIMA, as well as others, to use additional CCD contributions as an enforcement tool. Where appropriate, the CRTC will:
    • Will require additional CCD contributions.
    • Remove the ability to make CCD contributions to discretionary initiatives.

 

So, what’s next?

CIMA is satisfied that our suggestions on compliance were largely heeded – and we are pleased with the Commission’s recognition of this problem. While we don’t yet have details on the type of situations where the CRTC will require additional CCD contributions or remove the ability for discretionary spending, any moves toward limiting the CCD shortfalls that our research uncovered is welcome.

Broadcasting policy 2014-554 also alluded to a comprehensive policy review to occur at a later date (where it would address some of the issues raised by other interveners).