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ARCHIVED -  Decision CRTC 85-67

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Decision

Ottawa, 30 January 1985
Decision CRTC 85-67
CKCY 920 Ltd.
Sault Ste. Marie and Wawa (Ontario) - 842046500 - 842044000 - 842045700 - 842065500 - 842066300
Following a Public Hearing in Sudbury on 1 December 1984, the Commission approves the applications for authority to acquire the assets of radio stations CKCY, CJQM-FM Sault-Ste. Marie and CJWA Wawa from Huron Broadcasting Limited (Huron), and for broadcasting licences to continue the operation of these undertakings.
The Commission will issue licences to CKCY 920 Ltd. upon surrender of the current licences. The licences will expire 30 September 1985 in respect of CJQM-FM, and 30 September 1986 in respect of CKCY and CJWA. These terms will enable the Commission to consider renewal of these licences at the same time as those of other FM and AM radio stations in the area. The licences will be subject to the conditions specified in the licences to be issued.
The ownership of CKCY 920 Ltd. is divided equally among four full-time residents of Sault Ste. Marie, all of whom have long been involved in business and community service in that city. Two of the principals, Messrs Paul Fockler and John Meadows, are present employees of Huron and have extensive experience in radio and television broadcasting. The Commission notes that they will continue to play an active role in the management and day-to-day operations of the three stations.
An earlier proposal by CKCY 920 Ltd. for approval to acquire the assets of these stations was denied in Decision CRTC 84-602 dated 19 July 1984. In its decision, the Commission noted the applicant's plans, as outlined in the projections submitted with its proposal, to reduce substantially the proportion of the stations' revenues to be devoted to programming. In the Commission's view, such a reduction would have constrained the applicant's ability to maintain or improve the quality of service provided by the three stations.
Moreover, the Commission was not convinced that the applicant's projections were realistically attainable. While CKCY 920 Ltd. had demonstrated that it had access to funds sufficient to purchase the assets of the three stations, the Commission was concerned by the applicant's failure to provide adequate evidence of its ability to meet its debt obligations in the event of an unexpected short-fall in projected revenues, without this having an impact on its overall viability and performance.
At the December 1984 public hearing, the applicant outlined various measures it had taken to restructure the financial arrangements underlying the proposed purchase of assets and to revise its projections in light of the concerns expressed in Decision CRTC 84-602.
The modified financial plan put forward by CKCY 920 Ltd. includes, among other things, the injection of additional shareholder equity and a reduction in the amount of proposed bank financing for the purchase of assets. In addressing its plans to reduce operating costs, the applicant assured the Commission that this would be achieved primarily through reductions in administrative and technical costs and not at the expense of programming. In this connection, the Commission notes that the percentage of revenue to be devoted to programming under the current proposal will remain substantially unaltered from present levels, and that the programming budgets of the three stations are now projected by the applicant to increase in size on an annual basis.
The Commission has assessed the financial plan proposed by CKCY Radio Ltd. and is satisfied that this plan, together with the applicant's revised projections, adequately respond to the concerns identified in Decision CRTC 84-602. The Commission considers that, based on the financial proposals outlined in the application, the broadcasting experience of the principals and the extent of the support expressed in interventions submitted by area residents, the applicant should be able to improve the quality of the local programming services offered by these stations.
With respect to the AM radio service provided by CJWA Wawa, the Commission approves the proposed disaffiliation of this station from the Canadian Broadcasting Corporation's English-language AM network. The CBC service is currently broadcast in the area on CBLJ-FM Wawa. The Commission notes that the applicant will continue to broadcast a total of 4 hours of locally-originated programming on CJWA each week day. At other times, the station will rebroadcast the programs of CKCY Sault Ste. Marie.
The Commission approves the applicant's proposed use of the SCMO facilities of CJQM-FM to transmit the AM programming of CKCY from Sault Ste. Marie to CJWA Wawa. The applicant is expected to adhere to the applicable guidelines specified in Public Notice CRTC 1984-117 dated 17 May 1984 entitled "Services using the Vertical Blanking Interval (Television) or Subsidiary Communications Multiplex Operation (FM).
Under the new Promise of Performance submitted by CKCY Radio Ltd. for CJQM-FM, the station's format will change from Contemporary Middle-of-the-Road to Country. The Commission notes with interest the applicant's plans to incorporate in its new FM format the broadcast of live monthly concerts featuring Canadian talent exclusively.
The applicant also proposed to decrease the amount of category 6 (Traditional and Special Interest) music broadcast on CJQM-FM from 6 hours and 5 minutes weekly to 3 hours weekly. This proposal is denied.
In the Commission's view, such a reduction would be inconsistent with its policy, stated in Public Notice CRTC 1983-43 dated 3 March 1983, that private FM broadcasters should play a role in providing ..specialized music to ensure that varied and comprehensive listening fare be available to all Canadians." Accordingly, as a condition of licence, the Commission requires the applicant to maintain the amount of category 6 music broadcast by CJQM-FM at the current level of 6 hours and 5 minutes per week and to reduce the proposed amount of music from category 5 (Music General) commensurately.
The Commission reminds CKCY 920 Ltd. of the new procedures announced in Public Notice CRTC 1984-285 dated 26 November 1984 respecting the provision of mosaic format programming by FM broadcasters. The applicant may wish to make use of these new provisions in implementing its commitments in this area.
At the hearing, the applicant made reference to discussions with the CKO news network regarding a possible arrangement for the exchange of programming. The applicant is reminded that it should advise the Commission of any changes in program content resulting from any such arrangement prior to its implementation.
Fernand Bélisle Secretary General