The Canadian Radio-television and Telecommunications Commission (CRTC), Canada’s telecom regulator, approved license applications June 16 from Canadian Satellite Radio Inc. (CSR) and Sirius Canada Inc. to offer subscription-based satellite radio services in the country. The CRTC also approved an application from Chum Ltd. for subscription radio services broadcast through terrestrial techno-logy exclusively.

In approving the applications, the CRTC laid out a series of requirements the satellite radio operators must meet before being granted the licenses, including providing a minimum number of channels produced in Canada, a minimum percentage of Canadian-specific content and a minimum percentage of French language broadcasts (see p. 4). Initial reaction from Wall Street on these restrictions was not favorable (see p. 7).

Canadian Satellite Radio

CSR, owned and controlled by Canadian fast food tycoon John Bitove, plans to offer the services of Washington-based XM Satellite Radio. XM would make available four of its 101 audio channels to CSR, enabling the Canadian company to provide two all-Canadian music channels (one in English and one in French), an English-language comedy channel and a French-language news/talk channel.

According to the CRTC public notice, CSR committed in a public hearing to launch its service with a fifth Canadian-produced channel offering multicultural, multilingual programming and to add three more Canadian-produced channels by the end of its fifth year of operation if additional bandwidth is available from XM. CSR noted that since it applied for the license, XM had increased the number of non-Canadian programming channels it distributes to 122.

In addition to its Canadian-produced programming, CSR also made a commitment to offer 36 hours per week of what it called lateral programming, which the company defined as Canadian-produced programs featuring Canadian artists that would be broadcast on XM. CSR added that Canadian selections currently represent about 2.5 percent of the content broadcast by XM. CRS said it would ensure that 7 percent of all new weekly additions to XM’s overall playlist would be Canadian selections.

“Through our strong partnership with CSR, XM will have an opportunity to expand the XM service beyond the United States and serve millions of Canadians with compelling Canadian and American programming,” XM President and CEO Hugh Panero said in a statement. “XM currently features a wide range of Canadian artists and our partnership with CSR offers a unique opportunity to expand the reach of Canadian music and culture in Canada and the United States.”

Sirius Canada

Sirius Canada, upon licensing, would be owned by three companies–the Canadian Broadcasting Corp. (CBC) and Standard Radio Inc. would each own 40 percent, while New York-based Sirius Satellite Radio would hold the remaining 20 percent.

In Sirius Canada’s original application, the company committed to distri-bute CBC’s existing Radio One and La Premiere Chaine radio services along with two new channels–one in English and one in French, which would be produced by CBC. The bulletin notes that following its original application filing, Sirius Canada proposed adding a fifth channel produced by Standard Radio and said in a hearing that it would add three more Canadian-produced channels when it reaches 300,000 subscribers or if additional capacity becomes available.

Sirius Canada noted there would be 120 channels originating from the United States.

Controlling Decency

One significant difference between the content broadcast to U.S. subscribers and their Canadian counterparts is that Canadian content fall under government decency regulations. According to a fact sheet distributed by the CRTC, “programming on all channels — Canadian and non-Canadian — must adhere to regulations and industry codes regarding abusive comment and offensive language. Licensees committed to taking all steps necessary to adhere to standards — including the removal of channels.”

The U.S. Federal Communications Commission currently does not exercise decency oversight over satellite radio content and has in the past rejected requests to initiate such oversight.

These restrictions could put certain programming in jeopardy with regards to access by Canadian subscribers, including the controversial duo Opie and Anthony, currently on XM, and Howard Stern, who will make his Sirius debut in January.

The bulletin noted that CSR said it would exercise control of the conditional access system to ensure Canadian subscribers “only receive programming services that are authorized for distribution in Canada.” Sirius Canada made similar commitments. The bulletin noted that “Sirius Canada stated that its subscribers would only receive signals that have been selected for distribution by the board of directors of Sirius Canada, which will have the sole responsibility for authorizing and de-authorizing the Canadian receivers.”

The companies have 150 days to decide whether to accept the licenses.

CRTC Requirements For Satellite Radio In Canada

At least eight channels must be produced in Canada. A maximum of nine foreign channels may be offered for each Canadian channel.

At least 85 percent of the musical selections and spoken word programming broadcast on the Canadian channels must be Canadian.

At least 25 percent of the Canadian channels must be in French.

At least 25 percent of the musical selections on the Canadian channels must be new Canadian musical selections.

A further 25 percent of the selections must be by emerging Canadian artists.

Licensees must contribute at least 5 percent of their gross revenues to initiatives for the development of Canadian talent.

Source: CRTC

–Gregory Twachtman