Broadcasting
Policy
Monitoring
Report
2006

Radio
Television
Broadcasting distribution
Diversity and social issues
New media

For additional copies of the report, please contact:

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Telecommunications Commission (CRTC)

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This publication can be made available in alternative format upon request.

Ce document est également disponible en français.

ISBN # BC9-1/2006E
0-662-43325-4

30 June 2006

Introduction

This is the seventh edition of the CRTC's Broadcasting Policy Monitoring Report, which provides an on-going assessment of the impact of CRTC regulations, policies and decisions¹ on the achievement of the objectives of the Broadcasting Act. The 2006 version continues to measure the performance of the Canadian broadcasting system. As in the past, we hope that this report will help to foster a more open and better-informed public discussion of broadcasting policy in Canada. The Commission invites parties to use the report to enrich their participation in our regulatory policy and licensing proceedings.

The 2006 edition updates the performance indicators and continues the trends outlined in previous reports. In addition, this year's report outlines the Commission's initiatives to streamline the decision making process and new service standards for processing certain types of broadcasting applications. The television section in the 2006 report provides an expanded review of the Commission's digital television policies and data on the availability of high definition services. The new media section in this year's report introduces data on the usage by Canadians of new technologies and devices.

The data and information used as the basis of the CRTC's policy monitoring is drawn from many sources. These sources include (1) information filed by participants in the normal course of the Commission's hearings and public proceedings; (2) information obtained from Statistics Canada; (3) audience measures from BBM and Nielsen Media Research; (4) the annual financial returns filed by licensees of the CRTC; (5) program-ming information filed as part of licensees' television program logs; (6) the Commission's ownership records and radio compliance monitoring results; (7) publicly available information, such as annual reports from publicly traded companies, CRTC decisions and public notices; and (8) research undertaken by the CRTC and CyberTRENDS, ComQUEST.

The report is sub-divided in to six sections: Overview, Radio, Television, Broadcasting distribution, Diversity and social issues and New media.

Interested parties are welcome to provide comments for improvements or additions to future editions of the report and can do so by forwarding them to the attention of the Secretary General, CRTC, Ottawa, K1A 0N2 or by using our Complaints and Inquiries form which is located on our website at www.crtc.gc.ca.

The Broadcasting Policy Monitoring Report is also available electronically at www.crtc.gc.ca/eng/publications.htm.

Table of contents

I. Overview

    A. The CRTC
    B. Diversity of programming in the Canadian broadcasting system
    C. Streamlining activities
        1. Streamlining the decision-making process
        2. Issuance of letters of approval for applications that do not require a public process
        3. 2006/07 Streamlining initiatives
        4. New service standards for processing certain types of broadcasting applications
    D. Competitive disputes
        1. Number and type of disputes
        2. Time taken to resolve disputes
    E. Adversiting revenue by media

II. Radio

    A. Radio tuning trends
    B. Ownership
        1. Total hours tuned to the largest private commercial radio operators
        2. Revenues of the top private commercial radio ownership groups
    C. Financial performance - Promoting a financially sound sector
        1. Commercial radio revenues
        2. Profits before interest and taxes (PBIT)
    D. Licensing of over-the-air radio stations
        1. Competitive licensing
    E. Canadian talent development
        1. Over-the-air radio stations
        2. Other commercial audio services
    F. Promoting the airplay of Canadian and French-language vocal music
    G. Popularity of formats
    H. Transitional digital radio
    I. Over-the-air ethnic radio
    J. Religious radio
    K. Native radio
    L. Community radio
    M. Campus radio
    N. Low-power radio
    O. Audio services delivered by broadcasting distribution undertakings
        1. Specialty audio services
        2. Pay audio programming services
    P. Multi-channel subscription radio services
    Q. The national public broadcaster
        1. Over-the-air radio stations
        2. Pay audio service
        3. Satellite subscription radio undertaking
    R. Commercial Radio Policy Review

III. Television

    A. Audience
        1. Average weekly hours by age group
        2. Average minute audience (AMA)
        3. Viewing share by Canadian and non-Canadian services by language and type of service
        4. Distribution of viewing by program genre
            a) English-language Canadian services
            b) French-language Canadian services
    B. Canadian television programming
        1. Canadian priority programming
        2. Incentives for original Canadian television drama
            a) Incentives for original French-language Canadian television drama
            b) Canadian English-language drama
    C. Financial performance
        1. English-language private services
        2. French-language private services
        3. Ethnic & third-language pay and specialty services
        4. CBC conventional television stations
    D. Eligible expenditures on Canadian programming (CPE)
        1. English-language commercial conventional television
        2. French-language commercial conventional television
        3. Pay, PPV and specialty services
    E. Tangible benefits resulting from the transfers of ownership or control of television broadcasting undertakings
    F. Canadian digital television services
        1. Over-the-air digital television services
        2. Digital pay and specialty services
        3. Migration of pay and specialty services from analog to digital distribution
        4. Licensing and distribution framework for Canadian pay and specialty services in high definition (HD) format
    G. Specialty, pay, PPV and VOD services
        1. Financial results for pay, PPV and specialty analog and digital services
        2. Companies with significant ownership interests in specialty, pay, PPV and VOD analog and digital services
    H. Ethnic programming services
        1. Over-the-air Ethnic television stations
            a) Montréal
            b) Toronto
            c) Vancouver
        2. Ethnic pay & specialty services
            a) Analog ethnic specialty services
            b) Category 2 digital ethnic pay & specialty services
        3. Non-Canadian third-language programming services eligible for distribution in Canada
    I. Native television services
    J. Religious television stations
        1. Over-the-air religious television stations
    K. The national public broadcaster
        1. Over-the-air conventional television stations
        2. Specialty services
    L. Community-based television
    M. Non-Canadian satellite services authorized in Canada

IV. Broadcasting distribution

    A. Promoting effective competition
        1. Subscriber levels of incumbent and alternative BDU delivery systems
    B. Ensuring a financially strong sector
        1. Revenues
        2. Profit before interest and taxes (PBIT) margins, Class 1 undertakings
        3. Return on investment - Class 1 undertakings
    C. Top Canadian distributors
    D. Promoting digital technology
    E. Ensuring contributions to Canadian programming and local expression
        1. Contributions to programming funds
        2. Total community channel expenses
        3. Number of systems maintaining a community channel

V. Diversity and social issues

    A. Official languages
    B. Diversity
        1. Services targeted to specific communities
        2. Private television broadcasters
        3. The Canadian Broadcasting Corporation (CBC)
        4. Private radio broadcasters
    C. Accessibility
        1. Access for persons who are deaf or hard of hearing
        2. Access for persons who are blind or whose vision is impaired
        3. National reading services
    D. Programming standards
        1. Complaints and enquiries
        2. Canadian Broadcast Standards Council (CBSC)
        3. Advertising Standards Canada (ASC)
        4. Cable Television Standards Council (CTSC)

VI. New media

    A. New media broadcasting undertakings
    B. Internet
        1. Computer ownership by Canadian households
        2. Internet access by Canadians
    C. Effect of Internet use and other new technologies on broadcast media

Glossary

I. Overview

A. The CRTC

• The Canadian Radio-television and Telecommunications Commission (CRTC) is an independent public authority in charge of regulating and supervising Canadian broadcasting and telecommunications. It serves the public interest and is empowered and governed by the Broadcasting Act, 1991 (the Act) and the Telecommunications Act. The CRTC also reports to Parliament through the Minister of Canadian Heritage. The Governor in Council may issue to the Commission directions of general application on matters with respect to the objectives of the broadcasting or regulatory policy.
• The Commission strives to strike a balance between its cultural, social and economic objectives, with the wants and needs of Canadian citizens, industry and various interest groups.
• One of the CRTC's mandates is to ensure that programming in the Canadian broadcasting system reflects Canadian creativity and talent, Canada's linguistic duality, multicultural diversity, the special place of Aboriginal people within our society and our social values.
• The CRTC also seeks to ensure that its policy directions for the Canadian broadcasting industry are keeping pace with emerging technologies.
• The Commission fulfils its broadcasting regulatory responsibilities by means of a number of inter-related activities, which include:
  • issuing, renewing and amending licences for broadcasting undertakings;
  • making determinations on mergers, acquisitions and changes of ownership in the broadcasting industry;
  • collaborating with the industry to resolve competitive disputes;
  • developing and implementing regulatory policies with a view to meeting the objectives of the Act;
  • monitoring, assessing and reviewing, where appropriate, regulatory frameworks to meet its policy objectives; and
  • monitoring the programming and financial obligations of broadcasting undertakings to ensure compliance with regulations and conditions of licence.

• A summary of the Commission's activities relating to the Canadian broadcasting industry during the 2005-2006 fiscal year is provided in CRTC Accomplishments 2005-2006¹.

B. Diversity of programming in the Canadian broadcasting system

• Section 3(1)(i) of the Act states, in part, that the programming provided by the Canadian broadcasting system should:

1. be varied and comprehensive, providing a balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes,
2. be drawn from local, regional, national and international sources, and
3. include educational programs and community programs.

• To implement this policy, the Commission endeavours to ensure that Canadians have access to a diversity of programming drawn from a variety of sources.
• The Canadian broadcasting system is comprised of private and public services that provide specialty and general interest Canadian and non-Canadian programming in English and French as well as Aboriginal, multicultural and third-languages. It also makes available a significant number of foreign services.
• The following tables provide a summary of the number of various types of television, radio and audio services that are available in the Canadian broadcasting system. A table summarizing the number of various types of Canadian broadcasting distribution undertakings is also provided.

Table 1.1: Diversity of television services available in Canada

Excludes rebroadcasters and exempt television services.
Also excludes network licences.
* Includes bilingual (English and French) and native services.
(1) Includes satellite to cable services.
(2) Includes only category 1 & 2 services launched prior to 3 May 2006.
(3) Number of services licensed as of 3 May 2006.
(4) Excludes Class 2 and 3 exempted BDU's.
(5) Carriage of authorized services is at the discretion of the broadcast distribution undertaking.
(6) Number of over-the-air transitional digital television approved as of 3 May 2006.
(7) Excludes private commercial religious stations.
Sources: CRTC APP1205 report dated 3 May 2006, CRTC decisions and CRTC Financial database system as of 31 August 2005

Table 1.2: Canadian radio and audio services

(1) Includes bilingual (English and French) and native services.
(2) Includes French-native services.
(3) Includes network licences.
(4) Authorized not yet licensed.
Excludes rebroadcasters and exempt radio services.
Sources: CRTC APP 1205 report (3 May 2006), CRTC Decisions

Table 1.3: Number of Canadian broadcasting distribution undertakings (BDUs)

Sources: Class 2 and 3 cable systems - September 2005, Mediastats; Class 1 cable, DTH, STV and MDS systems - CRTC APP1205 report dated 3 May 2006

• Most class 2 and 3 cable undertakings are eligible for exemption from licensing requirements.²

C. Streamlining activities

1. Streamlining the decision-making process

• In Streamlined processes for certain broadcasting applications, Broadcasting Circular CRTC 2006-1, 27 March 2006 (Circular 2006-1), the Commission announced measures to streamline and expedite the treatment of applications that are normally processed by either public notice or the administrative approach that do not entail a public process.
• The Commission recognized the need for a more timely disposition of priority applications given the rapid pace of innovation and increasing competition in the broadcasting industry. Circular 2006-1 indicated that, commencing 1 April 2006, the Commission's objective is to ensure that, within 15 working days of receiving an application for either a licence amendment that will be dealt with by public notice or an authorization that does not generally entail a public process, one of the following will be issued:

• a public notice announcing the application;
• a letter approving the application;
• a letter requesting clarification; or
• a letter returning an application that is deemed incomplete.

• The Commission is currently reviewing all of its application forms to ensure that they are consistant with its new streamlined approach and reflect current policy. Circular 2006-1 noted that the onus will be on applicants to submit a clear application that provides all of the relevant information, as requested in the application form. The Commission estimated that, in the absence of any significant or unresolved issues surrounding an application for a licence amendment processed by public notice or an application that does not require a public process, the expedited process established in Circular 2006-1 will reduce the current average processing time by approximately half.

2. Issuance of letters of approval for applications that do not require a public process

• The Commission announced in Circular 2006-1 that it will issue letters of approval, provided the applications do not raise any policy concerns and are consistent with previous decisions, for the following types of applications :

• extension of deadlines for the implementation of an authority;
• extension of deadlines for responding to a requirement made by the Commission in a decision for the filing of documentation or other information;
• changes to the authorized contours of over-the-air programming undertakings;
• changes to the authorized areas of licensed broadcasting distribution undertakings;
• changes to the programming services that licensed broadcasting distribution undertakings are authorized to carry; and
• changes to the broadcast day of television and specialty service undertakings.

• The Commission stated that, consistent with the process set out in Ownership applications granted approval, Broadcasting Public Notice CRTC 2003-50, 19 September 2003, it will announce the applications approved in this manner by issuing a public notice every two months.

3. 2006/07 Streamlining initiatives

• In Circular 2006-1, the Commission stated that it intends to examine streamlining initiatives relative to the public hearing process in the 2006/07 fiscal year. It indicated that these initiatives include the policy concerning the issuance of calls for radio applications and the processing of Category 2 applications.

4. New service standards for processing certain types of broadcasting applications

• In Introduction of service standards for certain broadcasting applications, Broadcasting Circular CRTC 2006-2, 5 April 2006, the Commission announced new service standards for applications for licence amendments and licence renewals currently processed by public notice, as well as applications processed using an administrative approach that does not entail a public process.
• The Commission will post quarterly and annual statistics on its website to disclose to the public its performance in meeting these service standards.
• The following table summarizes the new service standards, effective 1 April 2006, for the 2006-07 fiscal year. These standards apply only to applications received after 31 March 2006.

Table 1.4: Summary of services standards, effective 1 April 2006

(1) From the date of their receipt in the Commission

D. Competitive disputes

• The Broadcasting Directorate's competitive disputes team was created in 2000 to more effectively process and resolve disputes in an increasingly competitive broadcasting industry. The process and procedures used for resolving competitive and access disputes are outlined in Practices and procedures for resolving competitive and access disputes, Public Notice CRTC 2000-65, 12 May 2000.
• Disputes can generally be classified as follows: (1) disputes between broadcasting distributors and programming services concerning the terms of distribution, including wholesale rates; (2) disputes between competing broadcasting distributors over access to buildings and to the end-user; and (3) disputes between programmers regarding programming rights and markets served.
• The Commission employs alternative dispute resolution (ADR) techniques, including fact-finding meetings, mediation and staff opinions, to attempt to break deadlocks and assist parties to resolve their disputes. When these techniques are insufficient, the Commission may, where appropriate, render determinations on disputes by way of "final offer" or by way of an expedited written process.
• "Final offer" arbitration processes are typically conducted on a confidential basis, both to encourage candour on the part of the parties and to take into account that the matters in dispute often involve commercially sensitive information, the disclosure of which could cause harm that would outweigh any public interest benefit.
• In certain disputes that come before the Commission as allegations of undue preference or disadvantage, the complainant seeks a ruling by the Commission that the preference or disadvantage has material and serious consequences for the complainant and/or the Canadian broadcasting system, and that are contrary to the public interest. Cases involving such public issues are usually immediately placed on a public file.
• As a further means to hasten the resolution of broadcasting disputes, the Commission ha adopted procedures for the conduct of expedited public hearings. In Expedited procedure for resolving issues arising under the Broadcasting Act, Broadcasting Circular CRTC 2005-463, 18 April 2005, the Commission announced that, in order to expedite decisions on certain issues arising under the Broadcasting Act, panels of Commissioners will be struck to conduct public hearings to deal with such issues on an accelerated basis. These hearings complement the Commission's existing dispute resolution guidelines and tools and are similar to its procedures for resolving disputes arising under the Telecommunications Act.³
• On 23 March 2005, the Commission received a complaint by 6166954 Canada Inc. (6166954) against Shaw Cable (Shaw) pursuant to sections 9, 20 and 40 of the Broadcasting Distribution Regulations. On 5 May 2005, the Commission decided to conduct its second expedited hearing which was scheduled for 8 July 2005. On 5 July 2005, the Commission received a written confirmation from 6166954 indicating that it had withdrawn its complaint. Although the Commission was not privy to the agreement, it learned that a settlement had been reached following several rounds of discussions between the parties only a few days before the scheduled hearing.
• In recent years, the Commission has also increased the number of informal ADR interventions. Informal interventions are intended to assist in early detection and removal of obstacles to resolution between the disputing parties. Typically, these interventions take place prior to the filing of formal complaints or requests for dispute resolution and prior to the provision of any related documentation. Most of these interventions can be effectively conducted by telephone. The Commission started tracking this type of ADR activity in January 2005.

1. Number and type of disputes

Table 1.5: Number of dispute files received in 2005/06⁽¹⁾

(1) 1 April 2005 to 31 March 2006
(2) Section 9 of the Broadcasting Distribution Regulations
(3) Sections 12 to 15 of the Broadcasting Distribution Regulations

• Between 1 April 2005 and 31 March 2006, the Commission opened six new dispute files and closed nine.⁴ Of the four dispute files outstanding, one file has been suspended at the request of the parties, and the remaining three were received in or after December 2005.
• During the same period, the Commission also resolved five of the ten informal dispute interventions undertaken⁵. The remaining five informal dispute files have been suspended - three before March 31 and two were in early April 2006.

2. Time taken to resolve disputes

• The following table compares the average time taken to resolve disputes over each of the last four years. In arriving at these averages, it should be noted that some of the disputes were suspended, at the request of the parties, for various periods of time in order to permit the parties to negotiate. Time while suspended is not included in calculating time to closure.

Table 1.6: Fiscal year comparisons of the average number of
days to resolve disputes

Notes: Excludes informal interventions. Files commenced in one year but concluded in another are included in the calculation for the year of closure.
* The increase in the average times to resolution in this category was due to a number of complex "final offer" determination disputes that involved one or more CRTC staff mediation meetings and a subsequent written final offer stage.

• The majority of the new disputes, whether alleging undue preference or disadvantage or seeking staff assistance or Commission determinations on other matters, raised multiple issues and involved complex fact situations. Overall, the complexity of disputes submitted to the Commission continues to increase and most now include "policy" components. Neither factor is conducive to expedited processing by way of alternative dispute resolution techniques.

E. Advertising revenue by media

• The following table and pie chart outline the trends in advertising revenues by the different media.

Table 1.7: Advertising revenue by media ($ millions)

Source: Carat Expert, May 2006

• Radio advertising revenues increased 54% from 1997 to 2005 exceeding the total media advertising revenue increase of 49%. Television advertising revenues increased by 43% over the same period.

Chart 1.1: Share of advertising revenue by media, 2005

• The relative levels of advertising revenue earned by the different media have remained generally constant since 1997. For example, television advertising achieved a 35% share of the pie in 1997, as compared to 34% in 2005. Radio's levels have also remained constant achieving a 14% share in 1997 and 15% in 2005.

II. Radio

A. Radio tuning trends

Table 2.1: Per capita listening hours by age group

* In average hours
Source: MicroBBM surveys Fall 1999 to Fall 2005

• Overall weekly listening levels have decreased by roughly one hour and twenty-five minutes from 1999 to 2005. This decrease is most notable in the teen demographics and for adults aged from 18 to 34.
• The following table sets out the percentage of hours tuned to radio in an average week during the BBM Fall surveys from 1997 to 2005.

Table 2.2: Radio tuning share in an average week

Note: "Other" is principally over-the-air tuning to U.S. border stations. "Other" also includes tuning to Internet radio that is not attributed to Canadian over-the-air radio stations (0.3 tuning share, in 2005 - see table 6.7).

Source: BBM Fall 1997 to Fall 2005

• The total average weekly hours tuned to radio have remained relatively stable since 1997.
• AM radio continues to decline in total average hours tuned, while FM recuperates these hours.
• The following pie chart is based on Table 2.2 and demonstrates the dominance of FM radio in both the English- and French-language markets.

Chart 2.1: Radio tuning share in an average week,
5 a.m. to 1 a.m., BBM Fall 2005

• According to BBM (5 a.m. to 1 a.m., Monday to Sunday):
  • 92.1% of Canadians aged 12 and over listened to the radio for at least 15 minutes per week in Fall 2005, as compared to 94% in 1998.
  • In Fall 2005, the average hours tuned per listener was 20.7 hours per week, roughly the same number as in the previous year.
  • In Fall 2005, the average hours tuned per capita decreased by roughly 25 minutes to 19.1 hours per week.

B. Ownership

• In revising its ownership policy in Commercial Radio Policy 1998, Public Notice CRTC 1998-41, 30 April 1998 (the Commercial Radio Policy), the Commission focussed on developing a model that would allow for some consolidation, while taking into account the Commission's general concerns for preserving a diversity of news voices and maintaining competition.
• Tables 2.3 through 2.8 monitor ownership consolidation in the radio industry, providing revenue and tuning information for the largest radio operators.

1. Total hours tuned to the largest private commercial radio operators

Table 2.3: Tuning to the largest radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" following Table 2.8.
(2) Listening hours includes tuning to private commercial, multilingual and native stations.
(3) Listening hours includes tuning to public and private Canadian and U.S. stations.
Sources: BBM Fall 2003 to 2005 surveys, 5 a.m. to 1 a.m., all persons 12+; and CRTC financial database

• Although the tuning share by the largest radio groups has risen considerably from 54% in 1997 to 63% in 2005, their tuning share has remained about the same for the last three years.
• The five largest radio groups attracted 53% of Canadian audiences in 2005. In 1997, the ten largest radio groups attracted approximately the same audience.

Table 2.4: Tuning to the largest French-language radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" following Table 2.8.
(2) Listening hours include tuning to public and private Canadian French-language stations.
Sources: BBM Fall 2003 to 2005 surveys, 5 a.m. to 1 a.m., all persons 12+; and CRTC financial database

• Astral Media Inc. garnered 32% of the hours tuned to French-language radio in 2005 and 49% of French-language radio revenues.

Table 2.5: Tuning to the largest English-language radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" following Table 2.8.
(2) Listening hours include tuning to public and private Canadian English-language stations.
Sources: BBM Fall 2003 to 2005 surveys, 5 a.m. to 1a.m., all persons 12+; and CRTC financial database

2. Revenues of the top private commercial radio ownership groups

Table 2.6: Radio revenues of the largest radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" following Table 2.8.
(2) Includes private commercial networks and commercial ethnic radio stations.
Source: CRTC financial database

• The number of programming undertakings owned and controlled by the largest radio operators and their share of national revenue increased from 148 and 61% respectively in 1998, to 331 and 79% in 2005.

Table 2.7: Radio revenues of the largest French-language
radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" following Table 2.8.
(2) Includes network radio revenues.
Source: CRTC financial database

Table 2.8: Radio revenues of the largest English-language
radio operators⁽¹⁾

(1) Refer to "Notes to tables 2.3 to 2.8" below.
(2) Includes private commercial network revenues.
Source: CRTC financial database

Notes to tables 2.3 to 2.8:

• The ownership structure reflects transactions authorised by the Commission during the broadcast year, not the closing date of the transaction.
• An undertaking's entire annual revenue is attributed to the organization that was deemed to be its owner as of 31 August.
• In some instances, the 2003 and 2004 results have been restated to reflect current data on file.
• Corus' 2005 results reflect the sale of CIZZ-FM and CKGY-FM Red Deer to Newcap.
• CHUM's 2005 results include the new Edmonton station as well as CFAX Victoria and CHBE-FM acquired from Seacoast Communications Group Inc.
• The 2005 results for Elmer Hildebrand include CHVN-FM Winnipeg. Golden West Broadcasting acquired effective control of this station from Christian Radio Manitoba Ltd.
• The 2005 results for Jim Pattison Industries include a new FM station in Red Deer.
• Newcap's 2005 results reflect the new CKWY-FM Wainwright station as well as the following five stations that were acquired through the transfer of ownership or control: CIZZ-FM and CKGY-FM Red Deer from Corus, CJUK-FM Thunder Bay from Big Pond Communications 2000 Inc. and CILR-FM and CKSA-FM Lloydminster from Sask-Alta Broadcasters Limited.
• Astral's results for 2003 reflect the transaction that was approved in Transfer of control of 3903206 Canada Inc., of Telemedia Radio Atlantic Inc. and of 50% of Radiomedia Inc. to Astral Radio Inc., Broadcasting Decision CRTC 2002-90, 19 April 2002, the acquisition of assets from Télémédia; but it should be noted that nine Astral stations were held in trust pending their sale: CKRS, CJRC, CHLN, CHLT, CKSM, CKTS, CKAC, CHRC and CFOM-FM as required by the Competition Bureau (Acquisition of radio assets in Quebec, Broadcasting Decision CRTC 2003-205, 2 July 2003).
• Astral's and Corus' results for 2005 reflect the transaction that was approved pursuant to Exchange of radio assets in Quebec between Astral Media Radio inc. and Corus Entertainment Inc., Broadcasting Decision CRTC 2005-15, 21 January 2005, in which Astral acquired five stations from Corus and Corus acquired eight stations from Astral.

C. Financial performance - Promoting a financially sound sector

• One of the Commission's objectives in developing the Commercial Radio Policy was to ensure a strong, well-financed radio industry that is able to achieve its obligations under the Act.

1. Commercial radio revenues

Table 2.9: Revenues - commercial radio - 1997 to 2005

Note: Includes network results; 1997 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

• For the nine-year period from 1997 to 2005, the number of FM radio stations reporting financial results has increased by 85%, or by 175 stations, while the number of AM stations has decreased by 35%, or by 95 stations.
• Over this same period, total revenues have increased by 53%. AM revenues have decreased by 4.5% while FM revenues have increased by 88.3%.

Chart 2.2: Revenues - English-language commercial radio stations

Note: Includes network results; 1997 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

• English-language FM radio revenues increased by 11.4% from 2004 to 2005. FM revenues have increased by an average of 8.0% per year over the past four years.
• English-language AM radio revenues increased by 2.0% from 2004 to 2005 and achieved 2001 revenue levels.
• Combined English-language AM and FM radio revenues increased by 9.0% from 2004 to 2005. This represents an average annual increase of 5.8% over the past four years.
• The number of English-language radio stations continues to increase annually. Roughly 55% of the new English-language FM stations reporting in 2005 were by licensees who had converted their AM frequencies to FM frequencies.

Chart 2.3: Revenues - French-language commercial radio stations

Note: Includes network results; 1997 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

• Revenues for French-language FM radio increased by 10.8% from 2004 to 2005. FM revenues have increased by an average of 7% per year over the past four years.
• Revenues for French-language AM radio decreased by 21.5% from 2004 to 2005. Over the last four years, revenues decreased by an average of 8.1% per year.
• Overall, total revenues for French-language radio increased by 7% from 2004 to 2005. French-language radio has experienced an average annual increase of 5.1% over the past four years.

Chart 2.4: Revenues - Ethnic commercial radio stations

Note: Includes network results; 1997 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

• Ethnic radio stations derive approximately 95% of their advertising revenues from local sources, compared to 77% for English-language and 66% for French-language stations.
• Total revenues for ethnic radio increased 11.5% from 2004 to 2005. A significant portion of this increase is due to two new FM radio stations (CJSA-FM Toronto and CKDG-FM Montréal) reporting for the first time in 2005. Total revenues achieved by ethnic radio stations have increased by an average of 5.4% per year over the past four years.

2. Profits before interest and taxes (PBIT)

Table 2.10: Commercial radio PBIT in Canada - 1997 to 2005

Note: Includes network results; 1997 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

Chart 2.5: PBIT margins - Commercial AM & FM radio stations

Note: Includes network results; 1998 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

Chart 2.6: PBIT margins - Commercial AM radio stations

Note: Includes network results; 1998 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

Chart 2.7: PBIT margins - Commercial FM radio stations

Note: Includes network results; 1998 to 2004 figures have been updated to reflect current aggregate results.
Source: CRTC financial database

D. Licensing of over-the-air radio stations

• The following table sets out the number of radio applications that have been approved by the Commission during the past three years by language and type of station.

Table 2.11: Number of new over-the-air radio stations approved from
1 January 2003 to 31 December 2005

Notes: Includes AM to FM conversions (often referred to as FM flip).
Excludes digital transitional radio.
"Other" includes not for profit, CBC/SRC, tourist, environment Canada, etc. radio stations
Source: CRTC APP1100 system and CRTC decisions

1. Competitive licensing

• In the 1998 Commercial Radio Policy,¹ the Commission determined that in order to encourage competition and choice it would no longer apply the criteria² outlined in the Radio Market Policy, Public Notice CRTC 1991-74, 23 July 1991 (the Radio Market Policy). The elimination of the Radio Market Policy combined with the revised common ownership policy has resulted in numerous competitive processes for new stations in markets across Canada.
• In Introductory statement - Licensing new radio stations, Decision CRTC 99-480, 28 October 1999 (Decision 99-480), the Commission outlined the factors that will generally be among those relevant to the evaluation of competitive applications. For Decision 99-480 the Commission also noted that the relative weight and significance of the factors would vary depending on the specific circumstances of the market concerned.
• The Commission also examines applications in terms of their furtherance of the objectives of the Act, particularly with respect to the production of local and regional programming.
• The following table reveals the factors that were noted in the Commission's decisions as contributing to the success of competitive applications decisions issued from 1 January 2003 to the 31 March 2006.

Table 2.12: Factors contributing to successful applications for radio
licences considered in competitive processes from
1 January 2003 to 31 March 2006

Legend: PN = Public Notice; PH = Public Hearing; Languages: e = English-language, f = French-language, e/n = English & Aboriginal, f/n = French & Aboriginal, m = 3^rd languages (other than English, French & Aboriginal); Type: C = Commercial, NC = Non-Commercial, N = Native, CO = Community, CC = Community based Campus, CI = Campus Instructional, MF = Musical format, SpMF = Specialty music format, Flip = Conversion of existing AM radio station to FM frequency, CBC1 = English-language CBC "Radio One" format, CBC2 = English-language CBC "Radio Two" format, SRC1 = French-language CBC "La première chaîne" format, SRC2 = French-language CBC "Espace musique" format.
(1) "Canadian content" refers to applications that proposed to exceed the minimum regulatory requirement for Canadian content.
Source: CRTC Broadcasting Public Notices (PN) and Decisions (noted in table)

E. Canadian talent development

• One of the methods the Commission uses to increase the amount of Canadian content is to require Canadian broadcasters to make financial contributions to Canadian talent development (CTD).

1. Over-the-air radio stations

• The Commission reviews contributions by radio licensees to CTD in the context of:

1. applications for new radio stations
2. renewal of radio licences
3. transfers of control or ownership (benefits)

a) Applications for new radio stations

• Between 1 January 2003 and 31 March 2006, the Commission licensed 46 new radio stations through competitive processes in markets across Canada. The successful applicants have committed over $29.8 million to CTD initiatives over their initial licence terms.
• In addition, there were 138 new radio licences or AM to FM flips granted without a competitive process between 1 January 2003 and 31 March 2006. These licensees committed a combined $1.9 million towards CTD initiatives.

b) Renewal of radio licences

• As part of their licence renewal applications, all licensees of private commercial radio stations are asked to make an annual financial commitment to CTD.
• In Contributions by radio stations to Canadian talent development - A new approach, Public Notice CRTC 1995-196, 17 November 1995, the Commission, in conjunction with the industry, established an approach that would ensure a minimum annual payment of $1.8 million to eligible third parties associated with CTD. In 2004-05, radio stations contributed $2.8 million towards CTD initiatives.

c) Transfers of control or ownership (benefits)

• As outlined in the Commercial Radio Policy, applicants for the transfer of ownership or control of commercial radio stations must make commitments that represent a minimum direct financial contribution to CTD of 6% of the value of the transaction. The Commission generally expects that three percent be allocated to the Radio StarMaker Fund/Fonds Radiostar³ music marketing and promotion fund, two percent to either FACTOR⁴ or MUSICACTION⁵ and one percent at the discretion of the purchaser to other eligible CTD initiatives.
• From the adoption of the Commercial Radio Policy to 31 March 2006, the Commission has approved 100 changes in ownership or control involving 377 radio stations.
• CTD commitments (benefits) from these transactions have totalled $95.2 million.

Table 2.13: Value of radio transactions and corresponding transfer benefits
for the period 1 May 1998 to 31 March 2006

* Value determined by the Commission for the purpose of calculating transfer benefits.
Source: CRTC Decisions and Administrative approvals

d) Annual CTD contributions reported by radio licensees

• The following table indicates the annual amounts contributed to CTD initiatives by radio licensees. Contributions are based on annual disbursements reported by licensees for the period 1 September to 31 August.

Table 2.14: Annual CTD contributions reported
by radio licensees ($000)

(1) Following an internal review, some of the contribution amounts have been reclassified and restated.
Source: CRTC Annual returns and financial database run 29 May 2006

2. Other commercial audio services

• Pay audio services are required to contribute a minimum of 4% of the previous year's annual gross revenues to CTD initiatives.
• Multichannel subscription radio services are required to contribute at least 5% of the gross annual revenues to CTD initiatives. This percentage rate increases to 6%, if the number of subscribers exceeds a certain level⁶. Half of these contributions must be directed to the development of Canadian French-language talent and the other half is to be directed to the development of Canadian English-language talent.

F. Promoting the airplay of Canadian and French-language vocal music

• The broadcasting of Canadian music is one of radio's vital contributions towards fulfilling the cultural goals set out in the Act.
• The Commercial Radio Policy increased the required minimum percentage of Canadian popular musical (category 2) selections broadcast each week from 30% to 35% for commercial AM and FM radio stations.
• Although the Commercial Radio Policy maintained the minimum level of French-language vocal category 2 music selections to be aired during each broadcast week at 65%, it introduced the requirement that at least 55% of vocal category 2 music broadcast Monday through Friday between 6 a.m. and 6 p.m. be in the French language.
• These requirements have since been incorporated into the Radio Regulations, 1986 (Radio Regulations), as amended from time to time.
• The Radio Regulations also requires that at least 10% of the traditional and special interest music (category 3) selections broadcast each week be Canadian. Given the limited number of category 3 commercial stations, the Commission reviews Canadian content levels for these stations on a case-by-case basis at licence renewal.
• The following table provides the percentage of radio stations that were in compliance with their Canadian content and French-language vocal music requirements in 2005. The results are based on a limited sample of stations analyzed from 1 January 2005 to 31 December 2005 and are not necessarily representative of the radio industry as a whole.

Table 2.15: Canadian content and French-language
vocal music

* Includes CBC / SRC and community AM, FM and network radio stations.
Source: CRTC, Evaluation of licence renewal applications from 1 January 2005 to 31 December 2005

• The Commission's approach to radio licensees found in non-compliance is outlined in Practices regarding radio non-compliance, Circular No. 444, 7 May 2001.

G. Popularity of formats

• Charts 2.8 and 2.9 show the percentage of tuning to Canadian English- and French-language radio stations by format. These charts also indicate the number of Canadian stations that were broadcasting in these formats. The information used is based on BBM Fall 2005 data and excludes tuning to Internet, ethnic, bilingual and U.S. stations.

Chart 2.8: English-language station formats - BBM Fall 2005⁷

Chart 2.9: French-language station formats - BBM Fall 2005⁸

H. Transitional digital radio

• The Commission issued A policy to govern the introduction of digital radio, Public Notice CRTC 1995-184, on 29 October 1995.
• As of 1 May 2006, the Commission has granted 76 licences for transitional digital radio programming undertakings. Of these licences, 57 have been issued to existing commercial radio programming undertakings, one to a stand-alone ethnic radio programming undertaking and 18 to existing CBC stations.

Table 2.16: Markets with transitional digital radio
stations in Canada⁽¹⁾

(1) Numbers of stations approved but not necessarily on air.
(2) Based on BBM Radio Markets.
(3) Includes a stand-alone ethnic digital radio station located in Toronto.
Source: CRTC APP 1205 report (1 May 2006)

I. Over-the-air ethnic radio

• The Commission revised its ethnic broadcasting policy in Ethnic broadcasting policy, Public Notice CRTC 1999-117, 16 July 1999 (Ethnic Policy). The primary goal of this policy is to ensure access by Canadians to ethnic programming to the maximum extent practicable, given resource limitations. As one way of furthering this objective, the Commission has licensed over-the-air ethnic radio broadcasters that specialize in providing ethnic programming.
• Ethnic radio stations are required to devote not less than 60% of the broadcast week to ethnic programming⁹ and at least 50% of all programming broadcast must be third-language programming¹⁰.
• The Commission is of the view that a primary responsibility of over-the-air ethnic radio stations should be to serve and reflect their local community. Licensees are expected to report on past and future local programming initiatives at the time of licence renewal.
• Ethnic stations are also required to serve a range of ethnic groups in a variety of third-languages. This approach allows for the provision of service to groups that would not otherwise be able to afford their own single-language service. However, where many distinct ethnic groups are served in the overall market, individual stations may be permitted to provide more hours of service to fewer groups.
• As of 20 April 2006, there were 21 private commercial over-the-air ethnic radio stations authorised to broadcast in Canada. The following is a listing ethnic radio stations by market. The listing also indicates the minimum number of distinct ethnic groups that each station is required to serve in each broadcast week, the minimum number of languages in which they must broadcast as well as certain unique conditions that were imposed to ensure diversity of the programming.

Vancouver

• CHKG-FM is required to broadcast a minimum of 100 hours of ethnic programming per week. It is required to provide programming directed to a minimum of 20 cultural groups in a minimum of 15 different languages. It is not authorized broadcast any programming directed to the Chinese community during weekdays between 6 a.m. and 3 p.m.
• CHMB is required to broadcast ethnic programming directed to a minimum of 12 cultural groups in a minimum of 12 different languages. The station is also required to provide programming directed to Aboriginal people.
• CJRJ is required to provide programming directed to a minimum of 11 cultural groups in a minimum of 17 different languages. All of the station's programming must be devoted to ethnic programming and at least 95% of its programming must be in third-languages. At least 73% of programming must be in the Hindustani and Punjabi languages. This station is not permitted to broadcast in a Chinese language.
• CJVB is required to provide programming directed to a minimum of 23 cultural groups in a minimum of 23 different languages.
• CKYE-FM is required to provide programming directed to a minimum of 15 cultural groups in a minimum of 15 different languages. Not less than 90% of its programming must be ethnic, all of which must be in third languages. Not less than 75% of the ethnic programming must be in the Punjabi, Hindi and Urdu languages. This station is not permitted to broadcast in a Chinese language.

Edmonton

• CKER-FM is required to broadcast ethnic programming directed towards not less than 19 distinct ethnic groups, in not less than 19 different languages.

Calgary

• CHKF-FM is required to provide ethnic programming directed to a minimum of 10 ethno-cultural groups in a minimum of 19 different languages.

Winnipeg

• CKJS is required to broadcast ethnic programming directed towards not less than 19 cultural groups, in not less than 16 different languages. The station must broadcast a minimum of 73 hours 30 minutes of ethnic programs.

Toronto

• CIRV-FM is required to provide programming directed to a minimum of 9 cultural groups in a minimum of 9 different languages.
• CHIN-FM is required to provide programming directed to a minimum of 23 cultural groups in a minimum of 20 different languages.
• CHIN is required to provide programming directed to a minimum of 23 cultural groups in a minimum of 17 different languages.
• CHKT is required to provide programming directed to a minimum of 14 cultural groups in a minimum of 15 different languages.
• CJSA-FM is required to provide programming directed to a minimum of 16 cultural groups in a minimum of 22 languages. The station must devote a minimum of 90% of the programming broadcast to ethnic programs. At least 48% of all ethnic programs must be in the Tamil, Hindi and Filipino languages. A minimum of 80% of the programming broadcast must be in a third language.
• CIAO is required to provide programming directed to a minimum of 12 cultural groups in a minimum of 13 different languages.
• CJMR is required to provide programming directed to a minimum of 11 cultural groups in a minimum of 15 different languages. The station must limit the broadcast of brokered ethnic programming to a maximum of 62% of the broadcast week.
• In Ethnic AM radio station in Toronto, Broadcasting Decision CRTC 2006-117, 4 April 2006, the Commission approved an application by Canadian Hellenic Toronto Radio Inc. for a new commercial ethnic AM radio station in Toronto. The new station will direct its programming primarily to the Toronto area's Greek-speaking community and will also provide ethnic programming in Armenian, Romanian, Serbian and Bulgarian, as well as in English. This station will be required to provide programming directed to a minimum of 5 cultural groups in a minimum of 6 languages. The station must also devote a minimum of 88% of the programming to third-language programs.

Montréal

• CFMB is required to provide programming directed to a minimum of 19 cultural groups in a minimum of 18 different languages.
• CJWI is a French-language ethnic station. The station must devote not less than 90% of its programming to French-language ethnic programming, targeting the Haitian, Latin-American and African communities. The remaining 10% must be in a third language.
• CKDG-FM is required to provide programming directed to a minimum of 6 cultural groups in a minimum of 8 languages. The station must devote a minimum of 70% of the programming to ethnic programs. A minimum of 60% of the programming must be in third languages.
• In Ethnic AM radio station in Montréal, Broadcasting Decision CRTC 2006-82, 15 March 2006, the Commission approved an application by 9015-2018 Québec inc. (doing business under the name of Radio Moyen Orient du Canada) for a broadcasting licence to operate a new ethnic commercial AM radio station in Montréal. The applicant proposed a service primarily intended for Arab communities in Montréal. The station is required to provide programming directed to a minimum of 10 cultural groups in a minimum of 4 languages.

Ottawa

• CJLL-FM is required to provide ethnic programming directed towards not less than 37 cultural groups, in not less than 20 different languages in each broadcast week. The station must broadcast a minimum of 94% of ethnic programs. At least 92% of programming must be in third languages.

J. Religious radio

• The Commission's policy on religious broadcasting is set out in Religious Broadcasting Policy, in Public Notice CRTC 1993-78, 3 June 1993.
• The Commission's approach to religious broadcasting is based on the following principles:
  • Recognition of alternative values: the policy recognizes the legitimate needs and interests of those who wish to receive various kinds of religious programming.
  • Importance of balance: licensees are required to provide balance on matters of public concern and the Commission considers that religion is a matter of public concern. Balance means that a reasonably consistent listener will be exposed to a spectrum of differing views on issues of public concern within a reasonable period of time.
• As of 3 May 2006, there were 67 radio stations licensed to broadcast in a religious spoken word format or in a religious music format. Of these 67 stations, 25 are French-language, 41 are English-language and one is third language.

K. Native radio

• Native radio is governed by the Native Broadcasting Policy, Public Notice CRTC 1990-89, 20 September 1990. The policy framework is designed to improve the quality and quantity of access by Aboriginal broadcasters to the Canadian broadcasting system.
• These undertakings play a distinct role in fostering the development of Aboriginal cultures and, where possible, the preservation of ancestral languages.
• The greatest concentration of activity in Aboriginal broadcasting involves community-based radio stations in small remote locations.
• There are two types of Native radio stations:
  • Type A: A Native radio station is a Type A station if, at the time the licence is issued or renewed, no other commercial AM or FM radio licence to operate a station in all or any part of the same market is in force.
    As a result of Exemption order respecting certain native radio undertakings, Public Notice CRTC 1998-62, 9 July 1998, Type A stations are no longer required to hold a broadcasting licence from the Commission.
  • Type B: A Native radio station is a Type B station if, at the time the licence is issued or renewed, at least one other commercial AM or FM radio licence to operate a station in all or any part of the same market is in force. There are currently 47 Type B Native radio stations and six native network radio licences.
• Advertising is not the principal source of revenue for Native radio stations.

Table 2.17: Revenues and PBIT margins for Type B
Native radio stations

Notes: 1998 to 2004 figures have been updated to reflect current August 31 aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

L. Community radio

• The Community radio policy, Public Notice CRTC 2000-13, 28 January 2000 (Community Radio Policy), states that the primary objective for community radio stations is to provide a local programming service that differs in style and substance from the services provided by commercial stations and the CBC. Programming provided by community radio stations should be relevant to the communities served, including official language minorities, adding diversity to the broadcasting system by increasing program choice in both music and spoken word.
• A community radio station is owned and controlled by a not-for-profit organization, the structure of which provides for membership, management, operation and programming primarily by members of the community at large. In addition to advertising revenues, community radio stations also receive revenues from fundraising, grants, and other sources.
• There are three kinds of community radio stations: Type A, Type B and Developmental. A community station is a Type A station if, at the time of licensing, no radio station other than the CBC is operating in the same language in all or part of the same market. A community station is a Type B station if, at the time of licensing, there is at least one station, other than the CBC, operating in the same language in all or part of the same market. Developmental community stations are generally licensed for three years at which time they are expected to have filed an application with the Commission for a regular community radio licence, or to cease operations.
• As of 3 May 2006, there are 45 Type A, 48 Type B and eight Developmental community stations. Of the Type A community stations, 34 are French-language, 10 are English-language and one is bilingual. Of the Type B community stations, 25 are French-language, 22 are English-language and one is multicultural. There are seven English-language and one bilingual Developmental community stations.

Table 2.18: Revenues and PBIT margins of Type A
community radio stations

Notes: 1998 to 2004 figures have been updated to reflect current August 31 aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

Table 2.19: Revenues and PBIT margins of Type B
community radio stations

Notes: 1998 to 2004 figures have been updated to reflect current August 31 aggregate results.
Minor variances are due to rounding.
Source: CRTC financial database

M. Campus radio

• As stated in Campus radio policy, Public Notice CRTC 2000-12, 28 January 2000, there are two types of campus radio stations; community-based campus and instructional. A community-based campus station's programming is primarily produced by volunteers who are either students or community members. The primary objective of an instructional campus station is the training of professional broadcasters.
• There are currently 53 campus stations licensed across Canada: 41 community-based campus stations, nine instructional and three Developmental campus stations.
• Of the community-based campus stations, five are French-language and 36 are English-language.
• The majority of campus radio revenues come from sources other than advertising, for example, revenues from the educational institution with which they are associated, grants, the local community and fundraising.

Table 2.20: Revenues for campus radio stations

Notes: 1998 to 2004 figures have been updated to reflect current August 31 aggregate results.
Minor variance are due to rounding.
Source: CRTC financial database.

N. Low-power radio

• The licensing policy for low-power radio is set out in Policy framework for community-based media, Broadcasting Public Notice CRTC 2002-61, 10 October 2002. This policy includes a definition of markets where low-power frequencies will be deemed to be scarce, circumstances where a call for competing applications may occur and a priority system for assessing competing low-power radio applications.
• The following table sets out the number of low- and very low-power radio stations in Canada by type as of 31 March 2006.

Table 2.22: Number of originating low- and very low-power
radio stations in Canada, by type

Source: CRTC Decisions

O. Audio services delivered by broadcasting distribution undertakings

1. Specialty audio services

• In New licensing framework for specialty audio programming services, Broadcasting Public Notice CRTC 2002-53, 12 September 2002, the Commission recognized the scarcity of over-the-air frequencies by offering an opportunity for a range of new discretionary specialty audio programming services distributed through other means.
• Specialty audio services are defined as audio programming services that are radio undertakings, other than licensed over-the-air services, delivered by BDUs and are specialized with respect to their content and/or target audience.
• There is no limit to the amount of advertising that may be broadcast on these services. There is also no carriage guarantee.
• As of 19 April 2006, the Commission has approved eight specialty audio services (one regional and seven national) targeting three ethnic communities and four Christian communities.

2. Pay audio programming services

• In 1995,¹¹ following a competitive process, the Commission approved two national pay audio programming services; namely Galaxie and Max Trax. These services offer 30 channels of commercial-free music. Each channel is devoted to a specific type of music, including classical, contemporary Christian, jazz, rap, rock, etc.
• Galaxie and Max Trax are carried on a discretionary basis by major distributors across Canada. Subscriber revenue is the only revenue source for these services.

P. Multi-channel subscription radio services

• In Introduction to Broadcasting Decisions CRTC 2005-246 to 2005-248: Licensing of new satellite and terrestrial subscription radio undertakings, broadcasting Public Notice CRTC 2005-61, 16 June 2005, the Commission set out the licensing framework for satellite subscription radio services and announced approval of three national subscription radio undertakings that provide a package of radio channels to subscribers for a monthly fee.
• The programming of two of the authorized services, Canadian Satellite Radio Inc. (CSR) and SIRIUS Canada Inc. (Sirius Canada), is delivered primarily by satellite with terrestrial transmitters as required to fill the gaps in coverage. Each of these North American satellite based services provides a mix of Canadian and non-Canadian produced channels. The CSR and Sirius Canada services were launched in December 2005.
• The programming of the third authorized service (an undertaking to be operated by CHUM) will be delivered entirely by terrestrial transmitters and all channels will be Canadian-produced. At the time of the writing of this report, the services had not yet been launched.

Q. The national public broadcaster

• The CBC is Canada's national public broadcaster. As such, pursuant to section 3(1)(l) of the Act, it should provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains.

1. Over-the-air radio stations

• The CBC operates four national radio network services: Radio One and Radio Two in English, and La Première Chaîne and Espace musique in French. Additionally, the CBC provides a unique radio service in Canada's North, broadcasting in English, French and eight Aboriginal languages. The CBC also operates Radio-Canada International, an international short-wave radio service.
• CBC radio services broadcast commercial-free and are funded by the federal government.

2. Pay audio service

• The CBC owns and operates the national pay audio service Galaxie. The revenues of this bilingual service are derived entirely from subscriber revenues.

3. Satellite subscription radio undertaking

• The CBC is also a partner¹² in the satellite radio service SIRIUS Canada, which was launched in December 2005.

R. Commercial Radio Policy Review

• The Commercial Radio Policy 1998, Public Notice CRTC 1998-41, 30 April 1998 (Commercial Radio Policy) had the following three major objectives:
  • to ensure a strong, well-financed radio industry that is better poised to achieve its objectives under the Act and to meet the challenges of the 21^st century;
  • to ensure pride of place for Canadian artists; and
  • to ensure that a French-language presence in radio broadcasting is maintained.
• In order to ensure the fulfillment of these objectives, the Commercial Radio Policy introduced a number of new regulatory measures. The Commission also indicated that it would review its approach to commercial radio in five years time.
• In 2003, the Commission decided to postpone this review until the subscription radio licensing process had been completed. That process was completed in June 2005.
• In Review of the Commercial Radio Policy, Broadcasting Notice of Public Hearing CRTC 2006-1, 13 January 2006, the Commission invited written comments from interested parties and announced that it would hold a public hearing beginning on 15 May 2006.
• In addition to reviewing the effectiveness of the measures implemented in the existing Commercial Radio Policy, this review provided an important opportunity for all interested parties to express their views as to what policy framework would be necessary for commercial radio stations to maintain healthy, successful business in the face of growing competition, while still meeting the objectives of the Act.
• In particular, the appropriate strategic responses to broad challenges relating to the likely impact of other audio technologies, such as satellite radio, Internet radio, podcasting, file sharing and down-loading, on commercial radio and the music industry were discussed.
• The Commission also explored the possibility of the creation of new policies that would assist the commercial radio sector in:
  • making effective contributions to Canadian artists through airplay of Canadian music, French-language vocal music, and contributions to CTD that are commensurate with the financial health of the sector;
  • providing listeners with a greater diversity of musical genres, and airplay for a greater variety of Canadian artists in both official languages;
  • reflecting the multicultural and multiracial nature of Canadian society and the special place of Aboriginal peoples within society;
  • providing listeners with an appropriate amount of locally produced news and information; and
  • assisting the transition to digital transmission, as well as exploiting new and emerging platforms in a manner that furthers the objectives of the Act.

III. Television

A. Audience

1. Average weekly hours by age group

• The following tables provide the average weekly viewing hours by age group for the 2001-02 to 2004-05 broadcast years, using BBM national metered data for all persons 2+, Monday to Sunday, 2 a.m. to 2 a.m.

Table 3.1: Per viewer¹ average weekly viewing hours by age group