RADIO Free Canada? Well, not quite.The rules of airwaves, set by the federal government in Ottawa, have been relaxed so that "hard" and "soft" rock music can be mixed on the same radio station. But don't play classical and country on the same station, or you could lose your license. And don't forget to have enough talk shows. The rule says 15 percent - and the radio police are listening. The new looser rules are great news for radio stations, if on-air announcements are anything to go by. Program directors - the behind the scenes people who tell disc jockeys what to play and when to play it - have popped up on the air babbling about a new "mix." Listeners were confused, but the radio people seemed pleased. "The rule changes make it easier to adjust from one format to another," says Douglas Cunningham, president and principal owner of CIDC-FM in Orangeville, Ontario, north of Toronto. He says in the old days - as far back as August - it could take six to eight months of paperwork and hearings to change a format. As of September, changes can be made right away. "It gives the FM station greater flexibility to move with changes in music tastes or with the availability of certain types of music," Mr. Cunningham says. Radio rules are dictated by the Canadian Radio Television and Telecommunications Commission (CRTC), from its headquarters in Ottawa. The body also decides how much telephone companies can charge, how many advertisements can appear in a television hour, and how much Canadian content there should be on prime-time television. But it is in the world of radio that the communications commissars are at their most Byzantine. "We have simplified the standards for FM radio and there are now three categories instead of four: Pop-Rock and Dance, Country, and Specialty," says Andre Campeau of the CRTC. "The rock used to [be] split into two categories, hard and soft." Yes, this is Canada, not North Korea. The rules have always been made by the CRTC (and before that by the Board of Broadcast Governors), government-appointed commissioners who oversee a small army of radio police, ever alert to bizarre mixtures of heavy-metal rock with classical. No music is banned; anything can be and is played on Canadian radio stations. It is just that you can't mix the "formats," radio jargon for types of music. For instance a country station has to play 70 percent country music; the other 30 percent can be anything from Beethoven to the Beatles. But don't step over the line. The man in charge of keeping an eye on this is Mike Amodeo, manager of FM operations at the CRTC. He has spent most of the past 18 years working at the CRTC and has never held a job in radio. In September he helped bring in the big change. "We were having a difficult time differentiating the sound of music, knowing which was hard rock and which was soft rock," says Mr. Amodeo. When asked to name two songs that might illustrate the difference between hard and soft rock, the chief watchdog of FM radio in Canada could not come up with a single title. STATION owners and managers are not happy about an increase in Canadian content rules: they have been raised to 30 percent from 20 or 25 percent, depending on the location of the station. Station owner Cunningham says keeping track of content has become so complex that stations need a special computer program to figure out if they're staying within the guidelines. "The Canadian content rules are difficult to adhere to," he says. "There isn't much popular Canadian music out there right now. You can ... play 'Snow Bird' by Anne Murray only so many times." And it's sometimes hard to know who is Canadian and who isn't. There was a ruling that an album by Canadian singer Bryan Adams was not "Canadian" because the songs were co-written by his British producer; and US singer Bonnie Raitt had one hit song Let's Give Em Something to Talk About" classified as Canadian because the songwriter was from Canada. Cunningham says many small stations have to employ one full-time person just to deal with federal regulations. "Only one radio station in four in Canada will make money this year," says Cunningham, who also works as securities analyst in Toronto. "If the CRTC doesn't loosen up on regulations a lot of stations will go under." For example, the CRTC doesn't allow computerized radio, especially handy for running pre-programmed music overnight. There are restrictions on small private stations linking up to do network programming. Times are considerably different from when Canadian radio pioneer Roy Thompson described the radio business as "a license to print money."