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ARCHIVED -  Decision CRTC 86-1185

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Decision

Ottawa, 10 December 1986
Decision CRTC 86-1185
Radio Beauce Inc. Saint-Georges (Beauce), Quebec - 853240000
Radio Communautaire de la Frontière Lac-Etchemin, Quebec - 853135200Alain Poirier, representing a company to be incorporated (FM-03 Inc.) Saint-Georges (Beauce), Quebec - 860556000Clival Inc. Sainte-Marie (Beauce), Quebec - 861070100
Introduction
At a Public Hearing in Quebec City on 9 September 1986, the Commission examined proposals presented by the four applicants noted above for a broadcasting licence for a new French-language FM radio service. With the exception of the application by Radio Communautaire de la Frontière to operate a community radio station to serve the regional municipality of Les Etchemins, the applicants each proposed to operate a private, commercial, regional station to serve the Beauce and the surrounding area. The Commission had issued a call for applications on 14 February 1986 (Public Notice CRTC 1986-36) after receiving applications to serve Lac-Etchemin and St-Georges. These are competing applications with respect to the market to be served because the technical parameters of these four FM proposals overlap.
The market
The combined population of the counties of Beauce and Bellechasse, which constitute the market to be served, is approximately 120,000. Economically, Saint-Georges and Sainte-Marie are the two major centres of commercial activity in the Beauce. Currently, three private AM stations serve the region: CJVL Sainte-Marie of which the licensee, Clival Inc., is a party to this proceeding; and CKRB Saint-Georges and CIRB LacEtchemin, of which the licensee, Radio Beauce Inc., is also a party to this proceeding. Radio Beauce Inc. has proposed to operate a new FM station in Saint-Georges jointly with CKRB. In addition, the CBC operates an FM station in the region, CBV-7-FM Saint-Georges, which rebroadcasts the programs of CBV Quebec City. No local, private FM station serves this region.
In its deliberations, the Commission considered whether the market could support new radio stations and whether the proposed services respond to a demand.
Between 1980 and 1985, the local AM stations experienced a decline in their advertising revenues in actual terms; nevertheless they generally succeeded in maintaining their margins of profit. Moreover, in 1984/85, their financial position improved. The economy of the Beauce may generally be described as relatively good, with a market index close to the national average.
At the hearing, all of the applicants agreed that a considerable portion of listening hours in the Beauce is devoted to outside stations, especially those in Quebec City, rather than to local stations. According to the figures available to the Commission, local stations have reached a saturation point of about 40% of the ratings over the past three years, whereas Quebec City stations attract 50% of the listeners, of whom more than 30% tune to FM stations. It seems, however, that only a small amount of advertising revenue is drawn from the Beauce by the Quebec City stations.
Taking into account all of the foregoing and on the basis of the evidence at its disposal, the Commission has concluded that it is desireable at this time to introduce a new FM station to the Beauce market. The Commission considers that there is a real need for new radio services in the region and that the establishment of a new FM station could help to increase the local and regional audience share. Considering the costs associated with establishing a new FM service, the Commission is of the view that the operation of a new FM station on a joint basis with an AM station that is already established in the market offers the best chance of success in this situation and that this approach would have the least economic impact on existing stations.
The decision
In arriving at its decision, the Commission has taken into consideration all of the interventions received regarding the applications referred to above. In particular, it has noted the many interventions submitted in support of the application by Radio communautaire de la Frontière for a community station at Lac-Etchemin, which demonstrate the pressing need to improve communications within the communities covered by this application.
The Commission, however, has had to take into account the general state of the economy in this applicant's target market and serious shortfalls in its application including uncertain financing, its optimistic programming commitments in light of the available human resources, a significant decline in its membership which, according to statements made at the hearing, decreased by almost half between 1983 and 1986, and the significant displacement of the last Class B channel presently allocated to Thetford Mines.
In light of the foregoing, a majority of the members of the Commission approves the application by Radio Beauce Inc. to operate a Frenchlanguage FM radio station in SaintGeorges, on the frequency 99.7 MHz (channel 259C), with an effective radiated power of 100,000 watts. The Commission will issue a licence expiring 30 September 1991, subject to the conditions specified in this decision and in the licence to be issued.
The three other competing applications noted above are denied.
Radio Beauce Inc. stated at the hearing that the FM station it was proposing would be a regional station covering the whole of the Beauce and all of Bellechasse, including Lac-Etchemin. On the basis of the technical parameters proposed in the application, the Commission considers that this applicant would indeed be the most likely to provide adequate coverage of the entire area which was the subject of its call. Moreover, the Commission notes that the applicant has made a commitment not to solicit advertising in any market other than the Beauce.
The applicant pointed out that the operation of a new FM station on a joint basis with CKRB will provide a financial base firm enough to absorb the expected initial losses and any unforeseen deficit during the startup period. Moreover, the FM station should benefit from the use of CKRB's newsroom. A full-time journalist will be hired to prepare news for the FM station, which [TRANSLATION] "will be completely rewritten in much more detail." The Commission will monitor closely the licensee's efforts in this respect, and encourages it to provide an adequate news and information service for the entire region that it is authorized to serve.
The Commission notes that the licensee undertook to devote at least 20% of the broadcast week to programs in the foreground format and emphasized that these would, for the most part, be based on music and would be locally produced. The applicant proposes to operate the station in a Group III music format and has specified that the music to be broadcast will be mainly country and countryoriented (subcategory 53). The applicant indicated that, with a level of instrumental music of 15% and with more specialized programming of the foreground format, including traditional and folk music accompanied by appropriate enrichment material, it expected to offer a wide range of programming appealing to a large audience. The applicant also argued that the proposed music format would respond to a real demand, based on the results of a market study and on the great popularity of the country music programs currently broadcast by AM stations in the Beauce.
The applicant stated in its application that as many of its music selections as possible would be produced in Quebec and that it would broadcast other Canadian and also American material. It indicated that there is an ample, and indeed growing, supply of Canadian recordings on which to base excellent country music programming, and it has made a commitment to promote such material and, on occasion, to be directly involved in its production. The applicant pointed out that in the Beauce region alone there are four country music festivals per year, and it has undertaken to organize an annual country music gala and to produce one Frenchlanguage country music album each year. The applicant has also allocated a minimum annual budget of $4,500 for the development of Canadian talent.
The Commission notes that the applicant has proposed to broadcast a level of 55% French-language vocal music and has examined this proposal in light of the applicant's commitments to the promotion of Canadian talent and its proposed Group III music format. It has also taken into account the fact that, as pointed out in Public Notice CRTC 1986-307 dated 4 November 1986 on "Canadian Content on FM Country Music Stations", the current supply of French-language country and countryoriented music recordings is limited. The Commission reminds the applicant that, in accordance with its proposed Group III music format, the minimum level of musical selections to be broadcast from subcategory 53 is 70%.
In view of the special circumstances, the Commission approves, as a condition of licence, the proposed minimum level of 55% French-language vocal music for a period ending no later than 31 March 1989. As noted in Public Notice CRTC 1986-67 dated 19 March 1986 on "French-language Popular Music", the Commission intends to review the availability of French-language recordings at the end of a two-year trial period and reminds the licensee that "the 55% level is a minimum to be surpassed if possible and that 65% remains the objective." The Commission will closely monitor the licensee's efforts to promote francophone artists in its programming.
It is a condition of licence that construction of the undertaking be completed and that it be in operation within twelve months of the date of this decision or such further period as the Commission may, upon receipt of a request for extension before the expiry of the said twelve months, deem appropriate under the circumstances.
The Commission intends to monitor closely the development of broadcasting in the Beauce region in order to assess the possibility of authorizing in future other broadcasting services as a means of diversifying the range of services offered and of ensuring more competition at the local and regional level.
Fernand Bélisle
Secretary General