CHAPTER XVIII

BROADCASTING^*

RADIO BROADCASTING

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OUR Terms of Reference instruct us to consider the principles upon which the policies of radio and television broadcasting in Canada should be based. In Part I we have spoken in some detail of the the [sic] development of national radio in Canada and of the views both of the public and of the expert on the nature and quality of programmes from national networks and from local stations. We must now consider and recommend a public policy on radio broadcasting designed to ensure for Canadian listeners the best and most appropriate programmes from every point of view.

2. Radio broadcasting is akin to a monopoly. Any man who has the impulse and the means may produce a book, may publish a newspaper or may operate a motion picture theatre, but he may not in the same way operate a radio station. The air-channels are limited in number and normal competition in any air-channel is impossible. Throughout the world these channels are recognized as part of the public domain; and radio stations may operate only with the permission of the state.

3. The state, having the right and the duty of issuing licences, must impose certain conditions on radio broadcasting. There are, it seems to us, two alternative views between which every country must choose. First, radio may be regarded primarily as a means of entertainment, a by-product of the advertising business. Such a view does not imply that it may not be used for education, for enlightenment and for the cultivation of taste; all these bring entertainment to many people. On the other hand, radio, as one of the most powerful means of education, may be regarded as a social influence too potent and too perilous to be ignored by the state which, in modern times, increasingly has assumed responsibility for the welfare of its citizens. This second view of radio operation assumes that this medium of communication is a public trust to be used for the benefit

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of society, in the education and the enlightenment as well as for the entertainment of its members.

4. The experience of other nations in the western world in choosing between these views, or in attempting to reconcile them, may be helpful; although the peculiarities of our radio problem, as explained in Part I, seem to preclude any ready-made solution for Canada.

5. The United States has accepted the first view mentioned above and has treated radio primarily as a means of entertainment open to commercial exploitation, limited by the public controls found necessary in all countries. Radio broadcasting in the United States is carried on entirely by private stations. More than half of these are allied with one or other of the four principal national networks. Radio broadcasting, maintained almost entirely by advertising revenue, has become an important industry supporting in 1950 more than three thousand stations and receiving more than $445 million in gross revenues from the sale of advertising time.

6. The Government of the United States, accepting the general principle that radio frequencies are within the public domain, in 1934 created the Federal Communications Commission, (F.C.C.), appointed by the President and responsible to Congress. The F.C.C. exercises control through its power to license which must be exercised with a view to the "public interest, convenience or necessity". It is specifically prevented from exercising any powers of censorship. A number of policies of the F.C.C. has provoked discussion and opposition in the United States. One consists of regulations designed to control network monopolies. These regulations were upheld by the United States Supreme Court in 1943. Another, at present a subject of controversy, lies in an effort to secure better programmes through the admonitions of the F.C.C. Bluebook. The Bluebook states in effect that the maintenance of balance through sustaining programmes, the use of local live talent, the discussion of public issues, and the elimination of advertising excesses are important factors in the public service, and that these will be considered when a licence to broadcast is to be issued or renewed. Stations and networks oppose this advice as a form of indirect programme control. The issue has yet to be decided by the Supreme Court of the United States, but it is reported that the Bluebook has had a salutary effect on certain radio programmes.

7. Broadcasting in Great Britain is not an advertising industry but a service provided by the British Broadcasting Corporation, a corporation of the state. "The purpose of the B.B.C. is to give the listener a great deal of what he wants and to give him a chance to want other things as well".¹ This Public corporation operates under a licence from the Postmaster-General and is supported by licence fees which in 1949 yielded well over £12 million. Its publications provide an additional revenue of over £1 million. In practice there is no ministerial or governmental

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interference with programmes. The Charter of the Corporation is reviewed by a Special Committee appointed for this purpose, and is granted for five year periods; the present Charter comes up for revision in 1951. As this Report goes to press, we have been interested to note that the Broadcasting Committee appointed by the British House of Commons in June of 1949 has in its Report which was made public in January of 1951 recommended in general a continuance of the existing system of broadcasting in Great Britain.

8. France, like Great Britain, has a state system of radio broadcasting. This system, however, is not conducted by a corporation but is directed by a General Manager under the authority of the Premier's office. The private stations in existence before the second world war were requisitioned after the liberation. The ultimate aim, apparantly [sic] not yet entirely practicable, is to provide alternative programmes over the whole of France, and an additional programme in Paris. There is no advertising over the French broadcasting system, and listeners pay licence fees, as in Great Britain.

9. The Australian system bears some resemblance to the Canadian in that there are both public and private stations. The Australian radio broadcasting system was initiated about 1924 when two types of stations were licensed, "B" stations which were purely commercial, and "A" stations which permitted only limited advertising but received support from licence fees. Since then the Postmaster General's Department has taken over all "A" stations. These do not now accept advertising, and broadcast programmes are prepared under the Australian Broadcasting Commission, a board of seven members appointed by the Governor-General. The Commission is supported by a parliamentary grant which is partially recovered through licence fees. Technical services are provided by the Postmaster-General's Department.

10. In 1948 there were in Australia thirty-nine public and one hundred and two private stations. The public stations have adequate service in the well-populated areas, but achieve only a partial coverage inland. In 1948 legislation was passed setting up the Australian Broadcasting Control Board which began its work in the following year. Operating within the Postmaster-General's Department the Board controls, under the Minister, all broadcasting, both programmes and technical matters. Its intended function appears to be to ensure adequate coverage and better programmes throughout the country. It may even, subject to the approval of the Minister, offer financial assistance to commercial stations for the improvement of their programmes. One of the methods by which this is to be done, it seems, is to arrange for programmes of the Australian Broadcasting Commission to be carried by private stations. So far as we have been able to determine, the Australian Broadcasting Control Board

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has not yet found it possible to exercise that measure of control over radio programmes in Australia for which it was originally established. It seems correct to say that the present Australian system is still in an experimental stage.

11. Thus, of four leading countries in the western world, the United States alone follows the view that radio broadcasting is primarily an industry; in Great Britain and France it is a public trust; Australia has hesitated between the two views and there the matter has been the occasion of considerable controversy.

12. In Canada, we conceive, the principle that radio broadcasting is a public trust has been followed consistently for twenty years. We have mentioned in Part I the principle advocated by the Aird Report of 1929, which, starting with the proposition that "Canadian radio listeners want Canadian broadcasting", stated that although the enterprise of private broadcasters was providing free entertainment for the benefit of the public, Canadian broadcasting showed an increasing tendency to excessive advertising, importing most of its programmes from outside the country and catering mainly to urban centres. The authors of the Report stressed the importance of complete coverage, of varied programmes including information and education as well as entertainment, of an exchange of programmes between different parts of the country, and, in general, emphasized the necessity of carrying on broadcasting "in the interests of Canadian listeners, and in the national interests of Canada".

13. This analysis of the situation and this statement of principle were followed by recommendations for a broadcasting system owned and controlled by the nation. These recommendations were adopted in the main, and the principles of Canada's system, established by legislation, have been confirmed year after year by ten Special Committees of the House of Commons and by the opinion of disinterested radio listeners. The system recommended by the Aird Commission to the nation has developed into the greatest single agency for national unity, understanding and enlightenment. But, after twenty years, the time has now come for a restatement of the principles of Canadian broadcasting, tacitly accepted for so many years, and also for some account of what it has done for the country.

14. We have already spoken in Part I of the very great importance of radio broadcasting in Canada and we have pointed out that the isolated areas of the country which need it most would not enjoy its benefits except under a national system. As we have suggested in Part I, we believe that the national system has fulfilled the expectations of those who planned it. We think that, despite the inevitable limitations and deficiencies of which we shall have something to say later, it has exceeded all reasonable expectations; it has become, we have found, a source of pride and

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gratification to the groups most representative of Canadian listeners; and we can state here that we fully share their feelings.

15. In the early days of broadcasting, Canada was in real danger of cultural annexation to the United States. Action taken on radio broadcasting by governments representing all parties made it possible for her to maintain her cultural identity. Through Canadian radio, however, much more than this has been done. Radio has opened the way to a mutual knowledge and understanding which would have seemed impossible a few years before. Canadians as a people have listened to news of their own country and of the world, have heard public topics discussed by national authorities, have listened to and have participated in discussions of Canadian problems, and have, through radio, been present at great national events. All these things are so obvious today that it is easy to forget what they have meant especially to the many Canadians who live in relative isolation, lacking a daily newspaper and enjoying little contact with the outside world.

16. Canadian sectionalism is not yet a thing of the past, but it is certain that the energetic efforts of the Canadian Broadcasting Corporation in providing special regional programmes and informative talks, and in introducing a great variety of Canadians to their fellow-citizens, have done much to bring us nearer together. From Vancouver Island to Newfoundland and from the Mackenzie River to the border, Canadians have been given a new consciousness of their unity and of their diversity.

17. But national unity and knowledge of our country are not the only ends to be served. These important purposes are also a means to that "peaceful sharing of the things we cherish", in St. Augustine's phrase cited at the beginning of this volume. We are thus further concerned with radio broadcasting in that it can open to all Canadians new sources of delight in arts, letters, music and the drama. Through a fuller understanding and a heightened enjoyment of these things Canadians become better Canadians because their interests are broadened; they achieve greater unity because they enjoy in common more things, and worthier things.

18. This view of the principle or purpose of Canadian radio broadcasting, as we see it, dictates Canadian policy. Other countries may adopt the policy of licensing privately-owned radio stations which depend for revenue on advertising. That such a system may produce excellent programmes is undeniable and many of these from the United States are received and enjoyed by Canadians. But such a system may also produce many programmes which are trivial and commonplace and which debase public taste. In Canada, although not wishing to dispense with plenty of light entertainment, including American entertainment which we import freely, we have been forced by geography and by social and economic conditions to exploit deliberately the more serious possibilities of radio broadcasting

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in the interests of Canadian listeners and of the Canadian nation. For this purpose we have developed our own national system, which is different from that of the United States, or of any other country, and which this Commission believes to be admirably suited to our special needs.

19. This system has, however, a striking peculiarity in that it continues the existence within the national system of "private", "commercial" or "community" stations as they are variously styled. The C.B.C. had and still has the right to take over all private stations, and for a time these led a somewhat uneasy existence. It soon appeared, however, that these pioneers in the field of radio broadcasting had made a place for themselves in their own communities and that they could perform important national services. It seemed therefore in the national interest that the C.B.C. should recommend the continuance of their licences and that they should be regarded as an integral part of the national system.

20. We have in Part I described in detail the intricacies of the "Basic" and "Supplementary" stations and the complications of "commercial" and "sustaining" programmes. It is necessary here only to refer to the functions of the privately-owned station. In this broad country we still have inadequate radio coverage; without the supplementary outlets of the private stations many more areas would be deprived of the national programmes of the C.B.C., and could be reached only at great additional public expenditure. Apart from this direct national service, the private stations perform community services which, as they rightly point out, are important to the nation: local advertising is in itself a service of value to the community; local news, information and the promotion of worthy causes are essential services, as many individuals and groups have testified. A third proper function of the local station is the encouragement and development of local talent. As we have stated in Part I, this third function has in general been neglected.

21. Most private stations have prospered within the national system. In addition to their private business many of them have benefited from C.B.C. programmes, both commercial and sustaining. That all have not benefited equally is certainly true. But that private stations have increased greatly in numbers, size and wealth since 1932 is undeniable; and that this increase is at least partly due to their incorporation in the national broadcasting system many of them are prepared to admit.

22. It is perhaps in part the growth in numbers and prosperity of the private stations which has led to their increasing protest about their status. During three years, 1946-48, the total operating revenues of the private stations increased from nearly ten to over fourteen million dollars; during the same period C.B.C. operating revenues rose from nearly six millions to seven and a half millions, little more than half the revenues of the

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private broadcasters. The total assets of the latter at the end of 1948 were twenty-seven millions. In three years the number of private stations rose from 88 to 109, and the total capital increased by seven millions, a large part of which appears to have been fresh investment. The assets of the private investors in 1948 were three times as great as the assets of the C.B.C.

23. A similarly increased prosperity no doubt was to some degree responsible for the representations made by the Canadian Association of Broadcasters (C.A.B.) in 1943, 1944, 1946 and 1947, which asked for changes in the broadcasting regulations to recognize the position which the private broadcasters thought to be appropriate to their current role in Canadian radio broadcasting.

24. Later, in September 1949, and again in April 1950, representatives of the C.A.B., which then comprised ninety-three of the one hundred and nineteen private stations, appeared before this Commission to explain their views on Canadian radio broadcasting and on the status of the private stations. Their case briefly is as follows: seventy private stations existed before the establishment of a public system in 1932. They were not specifically abolished by that system; and many new stations have been licensed since. The representatives of the C.A.B. consider, therefore, that the Act may now fairly be interpreted as having established not one exclusive national system, but a new public system, while permitting the continued existence of the private one.

25. The C.A.B., on the basis of this interpretation, protests against the regulation of the private broadcasters by the Board of Governors of the C.B.C., a public corporation which is their commercial rival. Examples of competition were given: on one occasion cited, the C.B.C. is accused of spending $22,000 in a period of six months to secure local advertising in the district of Toronto. This aggressive competition, it is stated, is evidence at once of the existence in practice of two systems and of the injustice of allowing one of them to control and regulate the other.

26. Regulation of radio broadcasting is carried out chiefly through rules drawn up and enforced by the Board of Governors of the C.B.C. The regulations complained of include the control of network broadcasting, the right to require private station affiliates to reserve time for national programmes, the regulation of advertising practices, and limitations on the use of records and transcriptions. Exception is also taken to rules governing political broadcasts as prescribed by existing legislation. The principal complaint is that the C.B.C., ". . . is at one and the same time competitor, regulator, prosecutor, jury and judge". Even the benefits derived from C.B.C. commercial and sustaining programmes may be abruptly lost if the C.B.C. chooses to open a high power station in the vicinity.

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27. The Canadian Association of Broadcasters states that its members do not complain of unjust or inconsiderate treatment, but on the contrary acknowledges cordial relations with the Board of Governors and with the officials of the C.B.C.; but, they add, "a generous and benign master can scarcely take the place of equal or properly established right". They therefore express the wish that as the Broadcasting Act, in their view, lends itself to two conflicting interpretations (one national system of radio, as distinguished from a public system operating together with a number of privately-owned broadcasting stations) the Act should be clarified; further, that it should be re-written "to provide for the regulation of all radio broadcasting stations, whether C.B.C. owned or privately-owned, by a separate and completely impartial authority not associated in any way with the operation of the Canadian Broadcasting Corporation".

28. This general representation of ninety-three associated stations was supported by operators of twenty stations who appeared individually. Seven other private radio broadcasters supported the present system and advocated no change in principle, one of them remarking, "I am less afraid of the C.B.C. as it exists today than of an unbridled private radio--much less".

29. We wish to acknowledge here the frankness and clarity with which the private broadcasters have presented their views. It must, however, be obvious, from what has already been said, that we cannot agree with their conclusions. We believe that Canadian radio broadcasting legislation contemplates and effectively provides for one national system; that the private stations have been licensed only because they can play a useful part within that system; and that the C.B.C. control of network broadcasting, of the issue and renewal of licences, of advertising and of other matters related to radio broadcasting, is a proper expression of the power of the C.B.C. to exercise control over all radio broadcasting policies and programmes in Canada.

30. The principal grievance of the private broadcasters is based, it seems to us, on a false assumption that broadcasting in Canada is an industry. Broadcasting in Canada, in our view, is a public service directed and controlled in the public interest by a body responsible to Parliament. Private citizens are permitted to engage their capital and their energies in this service, subject to the regulations of this body. That these citizens should be assured of just and equal treatment, that they should enjoy adequate security or compensation for the actual monetary investments they are permitted to make, is apparent. We shall have recommendations to make on this matter later. But that they enjoy any vested right to engage in broadcasting as an industry, or that they have any status except as part of the national broadcasting system, is to us inadmissible.

31. Before 1919, there was in Canada no property interest in any

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aspect of radio broadcasting and no citizen's right with regard to broadcasting. From 1919 to 1932, some citizens enjoyed, under licence, the privilege of radio broadcasting. In 1932, the Parliament of Canada, with full jurisdiction over the whole legislative field of radio broadcasting communication, established a commission "to carry on the business of broadcasting" in Canada by a system which contemplated the subordination and final absorption of private stations. In 1936, the C.B.C. was constituted to "carry on a national broadcasting service within the Dominion of Canada". It was given for that purpose the very powers over private stations which are now the subject of complaint. The only status of private broadcasters is as part of the national broadcasting system. They have no civil right to broadcast or any property rights in broadcasting. They have been granted in the national interest a privilege over their fellow-citizens, and they now base their claim for equality with their "business rivals" on the abundant material rewards which they have been able to reap from this privilege. The statement that the Board of Governors of the Canadian Broadcasting Corporation is at once their judge and their business rival implies a view of the national system which has no foundation in law, and which has never been accepted by parliamentary committees or by the general public. The Board of Governors is the national authority under whose direction the private stations exercise their privileges and with whom their arrangements are made.

32. We wish to recognize fully the private stations as important elements within the framework of our national system. We shall be making recommendations designed to remove certain inconsistencies of which they have reasonably complained. But we are resolutely opposed to any compromise of the principle on which the system rests and should rest. Radio has been the greatest single factor in creating and in fostering a sense of national unity. It has enormous powers to debase and to elevate public understanding and public taste. Believing as we do that it is an essential instrument for the promotion of unity and of general education in the nation, we cannot accept any suggestions which would impair the principles on which our present national system is based.

33. This does not mean that we claim perfection for the system or that we are not impressed with the importance of taking every possible measure for the further improvement of programmes. We have had this matter in mind in framing the financial recommendations which follow, and in certain recommendations on programme production. We are, however, convinced that the policies advocated by the private stations must lead to an extension of the commercial tendencies in radio programmes which are already too strong, and which have been the subject of much complaint. We were particularly impressed by the fact that few of the representatives of private stations who appeared before us recognized any public responsibility beyond the provision of acceptable enter-

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tainment and community services. The general attitude was that the government might, if it chose, subsidize "cultural programmes" but that the private stations must be left free to pursue their business enterprise subject only to limitations imposed by decency and good taste. We offer no criticism of this frankly commercial attitude; we cite it only as evidence that those who honestly hold these views are not primarily concerned with the national function of radio. Indeed the improvement of national programmes was not urged by the Canadian Association of Broadcasters as a reason for the reorganization of the national system or for any concessions to commercial groups.

34. We have received representations on three important aspects of Canadian radio, and on each of these we have recommendations to make. The first is the manner in which broadcasting in Canada should be controlled and directed. The second is the provision of adequate funds for the operations of the Canadian Broadcasting Corporation. The third is the production of programmes in the national interest and the means by which radio may best serve its national purpose in Canada.

CONTROL AND DIRECTION OF BROADCASTING IN CANADA

A Separate Regulatory Body

35. The chief demand of private broadcasters is that in place of the present system of control exercised by the Board of Governors of the C.B.C., a new and separate body should be set up to regulate all broadcasting in Canada. There is a difference of opinion on the powers which it should exercise. Some suggest that it should have powers equivalent to those of the present Board of Governors; others have in mind something like the Federal Communications Commission of the United States. Others again think that such control might be too irksome, an opinion shared by some American broadcasters.

36. We have considered these proposals and find that they would either divide and destroy, or merely duplicate the present system of national control. Legislation to set up a separate regulatory body would alter the present national system and would result in two independent groups of radio broadcasting stations, one public and one private. The C.B.C. would no longer have the control over all clear channels considered necessary to ensure national coverage. This matter might be arranged but the C.B.C. would still lose the outlets through private stations which are equally necessary for national coverage under existing conditions. Moreover, if the two groups of stations were to be considered as on a parity it would be impossible to refuse network privileges to private broadcasters, with consequences which we shall mention later. A completely separate

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body treating public and private radio broadcasting with judicial impartiality could not fail to destroy the present system upon which we depend for national coverage with national programmes.

37. But, it may be argued, such a body would have the power to improve, but not to destroy. It could concern itself with the programmes of public and of private stations and strive for the improvement of both in the public interest. The theory may sound plausible, but we doubt whether it would be effective in practice.

38. It is true, as we have observed, that the Federal Communications Commission in the United States is trying to raise the level of programmes by promulgating principles of good broadcasting. Three facts, however, should be noticed. First, the principles themselves are fairly obvious and reflect the prevailing standards. Second, pressure is brought on stations to improve their own programmes, not by detailed instructions but by the implied threat of the non-renewal of their licence if the programmes do not reach a certain unspecified standard. Such a sanction obviously can be applied only in rather glaring cases. The present Canadian system allows and even encourages a House of Commons Committee to bring much more direct and effective pressure to bear on the C.B.C. every year or two. Third, the enforcement of minimum standards in the manner just explained, although it might improve the less desirable programmes of private stations, could do nothing for those of the C.B.C. The public quite properly requires a higher standard for public than for private programmes. But as the completely separate regulatory body contemplated must treat all alike, its activities might well have the effect of reconciling the C.B.C. to relatively low commercial standards rather than of raising the programmes of both the C.B.C. and of private stations to a higher level.

39. It is conceivable that some who might favour a separate regulatory body assume that such an authority would have the duty of securing the necessary channels and sufficient outlets for national sustaining programmes. Such an arrangement would be completely inconsistent with the notion of a separate regulatory body holding the balance between public and private stations. The regulatory power would then become merely an agent for the C.B.C. in securing coverage for national programmes. It would, in fact, parallel in power and responsibility the present Board of Governors of the C.B.C.

40. We must return then to the statement that a new regulatory body would either destroy or duplicate the present national system of control. If the national system were not to be destroyed, a separate body could do only what the present Board of Governors is supposed to do. If it did not mark the end of the national system it could not possibly be "the separate and completely impartial body not connected in any way with the C.B.C." which the C.A.B. has requested.

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41. We have no evidence that the present Board of Governors has used its powers harshly or unjustly. If it had done so, the proper remedy would be an improved Board rather than a second one. However, we are strongly of the opinion that in view of the place occupied by radio broadcasting in the life of the nation, and particularly because of the new and even disturbing possibilities of television broadcasting, no effort should be spared to make the Board of Governors of the C.B.C. as effective as possible. It should be large enough to be fully representative of the country as a whole; and it should be composed of persons fully qualified by knowledge, experience and interests not only to maintain but to advance the present standards of radio broadcasting in Canada whether national or local. We feel very strongly the importance of retaining for the Board the services of qualified persons who are free to devote the necessary time and thought to these grave responsibilities.

We therefore recommend:

Private Networks

42. We have also received from individual broadcasters, and from the British Columbia Association of Broadcasters, a request for the removal of restrictions on private networks, a request not formally made by the national body, the Canadian Association of Broadcasters. At present, private stations may receive special permission to form local networks only, and a very few are permitted to have affiliations with American networks; but the general principle is maintained that the private station be operated only for local services and as an outlet for national programmes.

43. The private stations argue that unrestricted network privileges would avoid wasteful duplication of programmes; would promote regional unity, and would make possible better programmes and more use of local talent. Their reply to any suggestion that their programmes are inadequate has usually been that the denial of network privileges reduces their revenue and consequently impairs the quality of their programmes.

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44. Obviously, the formation of networks leads to economy of operation, and therefore, in theory, to better programmes. We have observed, however, that some of the wealthiest of the private stations have the lowest standard in programmes, and show serious neglect of their obligations as parts of the national system. The representative of one station remarked that the best thing that could be done for Canadian culture would be to draw heavily on "the fastest rising culture in the world--that of the U.S.A." Although we cannot believe that this speaker represented the views of the owners of most private stations, we do believe that any networks of private stations in Canada would inevitably become small parts of American Systems.

45. There are, however, two other important factors to be considered. One is that the formation of networks would involve the withdrawal of local stations as outlets for national programmes and would therefore (as we have just stated in another connection) disrupt the present system of national coverage. The second is that the formation of private-station networks would bring them into commercial competition with the C.B.C. in the national field with the same consequences as private broadcasters have found so objectionable in the local field.

46. The general effect of private network broadcasting would, we believe, be the same as that of a separate regulatory body. It would destroy the national system.

We therefore recommend:

Procedure of the Board of Governors and a Right of Appeal

47. In the interests of the national system and of the country as a whole, we recommend rejection of the demands by private broadcasters for a separate regulatory body and for the privilege of forming private networks. At the same time we recognize the important role of the private stations, both past and present, in Canadian broadcasting; and we consider it particularly desirable that persons engaged in an essential national service should have the full assurance of justice which, is indeed, the right of every Canadian citizen. At present, when the Board of Governors contemplates the recommendation of the suspension of a licence or a change in the regulations, the private stations receive notice of the matter and are given the opportunity to be heard in person or by counsel, and at a public session if they so desire. These concessions are granted as

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privileges. Considerations of justice suggest that they be recognized fully as rights.

48. Under the present legislation there is no provision for appeal from the decisions of the Board of Governors of the C.B.C. It is true that in some matters, the final decision rests with the Minister of Transport or with the Governor in Council and that in general the C.B.C. must report to Parliament and answer for its acts to Special Committees when established. But with these exceptions, there is no right or procedure of appeal and the decisions of the Board of Governors are final.

49. We think that there should be some right of appeal. On the one hand, the right should not disturb the C.B.C.'s control of and responsibility for Canadian broadcasting. On the other, it should provide a means whereby substantial injustice could be redressed. We do not wish to limit the existing power of the C.B.C. to regulate broadcasting in Canada, but we feel that the honest and impartial administration of its regulations should be guaranteed by the right of appeal to a Federal Court by persons directly and adversely affected by final decisions of the Board of Governors under those regulations.

We therefore recommend:

Security of Tenure

50. Apart from particular grievances which may arise, and for which there should be the right of appeal, the private stations complain of a permanent hardship in the uncertain tenure of their licences. This situation is a relic of the early period of national radio when it was thought desirable for the nation to assume as soon as possible direct control and ownership of all radio stations. At one time, in accordance with this policy, private commercial broadcasting licences ran for one year only. They now run for three years, subject to the observance of regulations. Canadian broadcasting acts and the regulations based upon them are not

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clear or consistent about the cancellation of licences; but there are certain provisions designed to give wide powers to the Minister to cancel licences and to the C.B.C. to suspend them for three months. The private stations complain of what seems to them a power unnecessarily absolute and arbitrary; but we have had no evidence of any positive hardship suffered.

51. It seems to us desirable that the licences of private stations should not be subject even in theory to the possibility of sudden and arbitrary cancellation. A longer term of these licences would be in the interests of good broadcasting. A licensee should feel that the licence confers a privilege which may be enjoyed for its full term by a law-abiding citizen.

We therefore recommend:

Local Advertising

52. The private stations have also brought to our attention the policy pursued by the Board of Governors in accepting and even in soliciting local commercial business for stations under its direct control. This policy has been dictated by the financial problems of the Canadian Broadcasting Corporation. The practice does however encroach on the field normally assigned to the private stations in the national system. Although we have shown that the statement that "the C.B.C. should not regulate its competitors" involves a misunderstanding of broadcasting in Canada, we are convinced that this kind of competition within the national system is not in the public interest.

We therefore recommend:

National Advertising

53. The further suggestion has been made to us that the stations under the direct control of the C.B.C. should not accept commercial business at all. This proposal came not only from operators of private stations who feel that advertising is their business, but from listeners everywhere who

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dislike advertising and who take particular exception to certain C.B.C. commercial programmes which they think unworthy of a national broadcasting system.

54. There are, however, various reasons which make impracticable the entire elimination of advertising from the national networks. First, it would deprive the Canadian advertiser of his national audience. Second, more than two million dollars a year of advertising revenue which now helps to provide network broadcasting would be lost to the C.B.C., since it must not be forgotten that the C.B.C. is dependent in part on commercial revenue and hence sustaining programmes are partly financed from that source. To eliminate commercial programmes would necessitate additional expense to provide sustaining programmes to replace them. Third, many commercial programmes are good in themselves and are popular with Canadian audiences. Moreover, through the goodwill created by commercial relations some excellent and irreplaceable American sustaining programmes are made available to Canadian listeners through the C.B.C.

55. It is to be feared that, desirable as it may be in theory to remove commercial broadcasting from the national networks, in practice the result would be not to raise but to lower the standard of programmes and to divert many Canadian listeners from Canadian to American stations. So long as Canada's neighbour maintains a commercial radio system, Canadian radio can never be completely non-commercial.

56. But the national system must not become dependent on commercial revenue. If the Board of Governors accepts certain programmes only or even chiefly for revenue, we are selling out our national system. It is not suggested that this has yet happened, but it is clear that lack of revenue is making it difficult for the Board of Governors to exercise effective control over the content of its programmes.

We therefore recommend:

Revision of Regulations

57. We have heard many comments from the private stations on the regulations under which they operate. In order to understand clearly the method of control and direction now practised in the national system,

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we carefully investigated all existing regulations, and requested comments on them from the Board of Governors of the C.B.C., and from the organized private stations. This investigation revealed that some of the regulations are obsolete and that others are ignored with impunity by all stations, public and private.

We therefore recommend:

58. The questions of the control of radio broadcasting stations by newspapers, of multiple ownership of broadcasting stations, and of the management of a number of stations by a single group of professional managers, have been discussed before us. While we think that these monopolistic practices may be potentially dangerous, we believe that so long as the integrity of the present national system of broadcasting is maintained any possible abuse could be effectively controlled. At present forty-one stations are owned in whole or in part by newspaper interests, but we have had no evidence of any abuse of power as a result.

59. A quite different aspect of the relations between newspapers and broadcasting was brought to our attention by a delegation from the Canadian Daily Newspapers Association at our sessions in Toronto. The Newspapers Association made vigorous representations to us on the new method of newspaper production known as facsimile. This new device, as we noticed earlier in Chapter V, makes it possible for the contents of a newspaper to be broadcast from a central point and printed by a radio-electronic device within the homes of subscribers. The delegates of the Newspapers Association stated that presumably this new method would come under the laws governing radio broadcasting in Canada; this would mean that publishers of newspapers in facsimile would be automatically subject to the regulations of the Canadian Broadcasting Corporation including, for example, the regulations imposing restrictions on political broadcasts, on advertising and on "programme" content. The possibility of such a situation, we gathered, is particularly odious to newspapermen who are deeply concerned with the traditional independence of the press. It seems apparent to us, nonetheless, that some regulation governing facsimile broadcasting might become necessary so that channels would be assigned in an orderly manner to avoid interference. The problem in our view can thus be stated: how can full liberty be assured to this new form of newspaper production without doing violence to the national broadcasting system? It seems evident that since facsimile would occupy certain

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channels of the broadcasting spectrum it must necessarily come under the technical authority of the appropriate government department. Even with the limited knowledge of this new device at our disposal, we can see many grave objections to imposing upon it the limitations necessary for radio broadcasting but inapplicable to the press. It would seem to us both desirable and practicable to ensure that the potential development of facsimile take place in an orderly manner and that at the same time the traditional freedom of the press be left unimpaired.

We therefore recommend:

THE FINANCIAL PROBLEM

60. The Board of Governors of the C.B.C. have told us that they are faced with a financial crisis which threatens to disrupt the national broadcasting service. The only way to reconcile rising costs and a stationary income is to reduce expenditures through a reduction in the quantity or quality of service, or both. But the national radio broadcasting service needs expansion and improvement, as we have been informed not only by the C.B.C. but by Canadians everywhere. There is need for more adequate coverage in several parts of the country, for a second French network and for a French station in the Maritimes, for a greater use of Canadian talent, for improved programmes, and, as we have recommended, for the elimination of local advertising and a more selective policy in national advertising.

61. The C.B.C. has stated that in order to maintain services even at their present level it requires about $3,000,000 a year in addition to its current income of approximately $7,500,000. For the improvement and extension of its services, it requires another $2,200,000, making a total annual budget of about $12,700,000. If all the local and the less desirable national commercial programmes are dropped, the Corporation will require an additional $l,500,000--some $14,200,000 in all. This may seem to be a very large annual expenditure, but it represents less than a dollar a year for each Canadian, less than what is paid yearly in Canada for chewing gum. Canadians on an average spend $7 each year on moving pictures. We see no reason therefore to suppose that they will think that one dollar a year each is an excessive sum to pay for a national service which they greatly value; on the contrary, we have had many demands from listeners that the C.B.C. be granted all necessary funds to develop

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and improve its programmes and to increase their Canadian content.

62. We have received a number of specific suggestions on how this should be done. The C.B.C.'s own proposal to raise the licence fee to $5 is generally unpopular. It was claimed in our sessions that this increased fee would be a hardship to many listeners, and that it would not be readily accepted since there is a widespread impression that the present licence fee is not effectively collected.

63. Many witnesses and correspondents have suggested to us that an improved method of collecting the license fee would provide an immediate, if partial, method of financial relief. The Department of Transport considers that the present method of collection is reasonably effective and thorough. However, if the figures of the Dominion Bureau of Statistics are to be accepted, Canada's three and a half million private receiving sets which should be licensed ought to yield over eight and a half millions a year in licence fees instead of something over five million.

64. Even this sum, however, would clearly fall short of what is needed. We see no solution to the financial problem of the C.B.C. except in additional support from public funds. Some witnesses have even proposed that because all Canadians benefit from the national radio system directly or indirectly, the licence fee be abolished and the entire cost be borne by the taxpayer. This proposal we cannot accept, since we think it proper for the listener to make a direct payment for services received and we believe that he appreciates these services the more for doing so. But we have come to the conclusion that because the C.B.C. serves the nation as a whole, it is reasonable that the revenue required over and above a moderate licence fee be provided from general taxation.

65. There are, however, serious objections to an annual grant to be voted by Parliament. Although other essential government services depend on an annual vote, it is so important to keep the national radio free from the possibility of political influence that its income should not depend annually on direct action by the government of the day. A statutory grant seems to us a more satisfactory method, because it enables the C.B.C. to formulate reasonably long range plans with the confidence that its income will not be decreased over a period of years. A convenient way of providing adequate revenue for the C.B.C. might be to set the necessary revenue for the C.B.C. at a total amount equal to one dollar per head of the Canadian population as determined decennially by the census and estimated each year by the Dominion Bureau of Statistics. This amount, which could be calculated annually, would be the total revenue of the C.B.C. for the year. It would be made up first of net receipts from licence fees, and of commercial and miscellaneous revenue. The balance would be paid to the C.B.C. by the Federal Government out of public money on the authority of the statute. For example, in 1947-48 the statutory revenue

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on the basis of the population estimate would have been $13,549,000. This would have been received by the C.B.C. as follows:

We therefore recommend:

PROGRAMMES

Programmes in the National Interest

66. We have in our hearings and in our deliberations spent many hours in discussing the proper methods of governing and of financing the national broadcasting system. These methods, however, are only the administrative and material basis for one of the great forces in our country in promoting Canadian unity and Canadian cultural life. Herein lies, as we see it, our main responsibility as a Royal Commission. We have received in our public hearings many and differing opinions and views on Canadian radio. We think it a particularly successful and useful part of our work that we have been able to elicit these comments on Canadian radio from so many of our fellow citizens.

67. We cannot state too forcefully that our primary interest in broadcasting lies in the kind and quality of programmes broadcast in Canada and in their influence on Canadian life. Our study of problems of control and of finance has been guided by our desire to see maintained and improved the standards of our national programmes. We have recommended

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that the present national system be continued because of its achievements in the past and its promise for the future. We do not take it to be our duty to make detailed recommendations for the development and improvement of programmes. Nevertheless it seems to us important to say something of the view suggested in Part I that the distinguished work of the C.B.C. in music and drama does not appear to be equalled in what are known as "talks". This is not surprising. Talks are as a rule less popular than music, drama, news reports and variety entertainment. They occupy a relatively small proportion of programme time, and may easily be dismissed as comparatively unimportant. This attitude, if it exists, seems to us regrettable.

68. Our concern with the radio as a means of national unity and general education has led us to make a somewhat detailed examination of the content of radio talks. We find that a number, including those on the Wednesday Night programmes given by distinguished Canadian authorities in their fields, fufils what seems to us the proper function of the talk on a national network. Of such programmes every Canadian may be proud. Other talks, even some given during important Sunday listening hours, seem to us to fall short of this high standard. On inquiry we learn that speakers with no special knowledge or reputation in their fields may be engaged because they have a natural facility for broadcasting and also, apparently, because the popular approach of the amateur is thought to have a special appeal to the average listener.

69. We think it important to express our dissent from this policy. Through the services of the C.B.C., Canadians have been privileged to listen to speakers on the B.B.C. distinguished in many fields of thought. It is the principle of the B.B.C. that the popular talk should be in quality and authority comparable to the scholarly. In this matter Britain shares the fine tradition of France where even philosophers are expected to make themselves comprehensible to l'homme moyen raisonnable. We cannot believe that it is impossible to find in Canada authorities in every field who are capable of living up to this great tradition. It should be a set principle with the C.B.C. that all its talks, even the most popular, should if published be acceptable to the expert and enjoyed by the layman. We see no reason why there should not be ultimately a Canadian equivalent to The Listener in Great Britain.

70. We have given serious consideration to possible measures for improvement. We realize that financial stringency may be responsible for the deficiencies which we have noticed. We cannot, however, accept the assumption already mentioned that a natural facility for broadcasting is more important to a radio speaker than recognized competence in his subject. It is possible that the C.B.C. might add to its staff more officials of experience and authority in intellectual matters to assume some direct

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responsibility for the planning of talks. Also, there should be, we think, a closer contact between C.B.C. officials and leading Canadians in all fields of intellectual interest.

We therefore recommend:

Coverage and Programmes of French-Language Stations

71. It has been pointed out to us repeatedly in different parts of Canada that the French-speaking Canadian listener does not receive a broadcasting service equal to that intended for his English-speaking neighbour. Officials of the C.B.C. are aware of this fact and regret it, but they have explained that it is one of the consequences of their financial dilemma. One of the reasons prompting us to recommend greater financial resources for the C.B.C. is the desirability of removing this inequality which is inconsistent with the conception of a national service.

We therefore recommend:

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Development of Canadian Talent

72. We have already shown in Part I the important part which the national broadcasting system has played and can play in the development of Canadian talent and in the encouragement of Canadian artists. We received many appreciative comments on the consistent work of the C.B.C. in this field. We received also, however, protests against what was described as over-centralization of programme production. In 1948-49 expenditure on artists' fees for programmes produced in Toronto and Montreal amounted to $1,302,595. In all the rest of Canada it amounted to $593,236 of which $261,704 was spent in Vancouver. We are aware that this centralization may be dictated by motives of economy, and therefore, on a limited budget, of good programming. We consider, however, that a national system must keep in mind considerations other than those of convenience or even of financial economy and might well give its own interpretation to the expression "good programming". We have heard with concern the representations of smaller centres that although help may be given to their local talent by invitations to appear on the national network, this aid hardly compensates for the continuous loss of their most promising performers to the two large cities of central Canada. It is presumed that the C.B.C.'s demands for television performers will accentuate this concentration of talent.

73. We have already shown that the development of local talent, which can be undertaken only very partially by the C.B.C., lies decidedly within the responsibilities of private broadcasters who have largely neglected it.

We therefore recommend:

Publicity and Information

74. We stated in Part I that the general ignorance of the Canadian public about the control, the finances and the network outlets of the C.B.C. is as surprising as it is undesirable. We are informed by officials of the C.B.C. that they have hesitated to devote much time on the air to

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what might be regarded as self-advertisement. We understand their point of view, but we think that the public should be better informed about the operations of this important national service. The C.B.C. Times (La Semaine à Radio-Canada) is an excellent publication, but for various reasons its circulation is limited. A proper adherence in practice to the existing official policy of establishing and of working closely with regional advisory councils would serve the double purpose of keeping the public informed of the plans of the C.B.C. and of keeping the C.B.C. aware of the needs and wishes of the public.

We therefore recommend:

75. As we have said, we must confine our recommendations to major questions of principle designed to give the C.B.C. the necessary power to carry on its important work, and to those other problems on which specific and objective directives are possible. For the rest, we can state only in general terms, but with conviction, our conception of the function of our Canadian national radio, and the objectives which those responsible for programmes should keep constantly in view.

76. Radio in any democratic country has three main functions: to inform, to educate and to entertain. Information must be given not only with accuracy and impartiality; it must be adequate and interesting, that is, it must be clearly and appropriately presented. Educational programmes must be offered at many levels and for many purposes; to help those who are giving and receiving formal education; to carry on the intellectual development of those whose schooling is over; and to offer such compensation as is possible to those whose formal education was deficient or lacking. We fully believe in the educational importance of radio in a democratic state, where everything depends on the intelligent and well-informed co-operation of the ordinary citizen.

77. Entertainment also has an important place in national radio. Everyone seeks and needs pleasant relaxation; but many amusements are enervating rather than refreshing, and radio entertainment can all too easily fall within this category. It is, we think, the function of the national radio, by patient and bold experimentation, to open to the general public new and

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hitherto untried sources of enjoyment. Culture, it is true, cannot be forced on us from above, and nothing is more distasteful than prescribed and regimented amusement. But in an age when we call in the expert to advise us on everything, from the food we should eat to the person we should marry, there is surely no harm in accepting helpful suggestions about music we might enjoy and about plays we might like. And it is the function of national radio in a democratic state to offer helpful suggestions.

78. In Canada radio has a particularly important task. It must offer information, education and entertainment to a diverse and scattered population. It must also develop a sense of national unity between our two main races, and among our various ethnic groups, in spite of a strongly developed regional sense and of the attractions of our engaging and influential southern neighbour.

79. Has our national system performed this function? It has done much; much yet remains to be done. We have already spoken of its contributions to national unity and understanding. We cannot praise too highly its clear, complete and impartial news and information services. We have reported and we agree with the praise given to its school broadcasts. In music and drama and particularly in the Wednesday Night experiments, we think that it has shown what may be done in developing new tastes and interests.

80. Obviously, Canadian radio has not yet achieved all that we hope for in a national system. It is still young. It has had to struggle against poverty, inexperience, and the physical obstacles of this difficult country. But, as we have suggested in Part I and have stated here in language as clear and unambiguous as we can command, we are convinced that the existing Canadian system of broadcasting has served the country well in the past and offers the greatest hope of national unity and enlightenment in the future. We urge that the national broadcasting system be given the power and resources sufficient for its great national responsibilities.

^* From: Canada. Royal Commission on National Development in the Arts, Letters, and Sciences. Report. Ottawa : King's Printer, 1951. By permission of the Privy Council Office.