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ARCHIVED -  Decision CRTC 90-1099

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Decision

Ottawa, 5 November 1990
Decision CRTC 90-1099
Fort Communications Inc.
Fort Erie, Ontario - 900297300Wellport Broadcasting LimitedPort Colborne, Ontario - 883626400
At a Public Hearing commencing 13 June 1990 in Hamilton, the Commission considered applications by Fort Communications Inc. (Fort) and Wellport Broadcasting Ltd. (Wellport), each seeking a licence to carry on an English-language FM radio broadcasting transmitting undertaking, at Fort Erie in the case of Fort, and at Port Colborne in the case of Wellport. Wellport is the licensee of CHOW Welland, while Fort is currently the licensee of CJFT Fort Erie. Fort is controlled by Mr. K.J. Dancy who also controls CJRN 710 Inc., licensee of CJRN Niagara Falls.
The applications are predicated on the use of different frequencies, and are thus not competing on technical grounds. Because of the crowded and very competitive nature of the radio market in the Niagara Peninsula, however, the applications were considered by the Commission to be competing on marketing grounds.
The Commission, for the reasons set out below, approves the application by Fort. The application by Wellport is denied. The Commission will issue a licence to Fort for an English-language (Group I) FM radio broadcasting transmitting undertaking at Fort Erie, operating on a frequency of 101.1 MHz (channel 266) with an effective radiated power of 8,670 watts, to broadcast locally-produced programming. The licence will expire 31 August 1992, and will be subject to the conditions specified in this decision and in the licence to be issued. This term will enable the Commission to consider renewal of this licence at the same time as that of other FM stations in the area, following the review of FM policy announced in Public Notice CRTC 1990-20 dated 16 February 1990.
Both Fort and Wellport described their proposals as offering the means to overcome perceived shortcomings in the ability of their existing AM stations to provide clear and consistent signals within their respective markets, and thereby to improve the difficult financial situation each faces.
The Commission notes in this regard that Wellport proposed to maintain its Welland AM station (CHOW) in service. Its proposed Port Colborne undertaking was to have operated as a joint FM station in the Group III (country and country-oriented music) format, while the format of CHOW was to have switched from country to dance music.
In the case of Fort, upon implementation of its FM licence, the applicant proposes to simulcast all of the programming of the new FM station on its existing AM station at Fort Erie for a limited period of six months, following which it will surrender the licence for CJFT. The new undertaking will be a joint FM station as a consequence of Mr. Dancy's ownership of both Fort and CJRN 710 Inc. Although Fort identified its proposal as being for a Group IV FM station, the applicant agreed at the hearing that the musical mix described in its Promise of Performance actually reflects that of a Group I station. In fact, the musical format of the new FM station will match very closely the existing blend of big band and "oldies" music currently broadcast on CJFT.
A key issue examined by the Commission when considering the introduction of a new radio service into any market is whether the new station might siphon advertising revenues from existing stations to the extent that one or more of the stations would be unable to perform their programming responsibilities. Concerns in this regard were expressed in interventions submitted by the licensees of a number of radio stations operating in nearby St. Catharines, including Coultis Broadcasting Limited (CHSC), Standard Radio Inc. (CKTB and CHTZ-FM) and Redmond Broadcasting Inc. (CHRE-FM).
In responding to these concerns, both applicants indicated that an important element of their respective business plans would be to repatriate listeners from Buffalo radio stations rather than from Canadian stations in the Niagara region, thereby limiting any impact their proposed services might have on these Canadian stations.
The Commission has examined the arguments put forward by the applicants and the intervenors. On the evidence, the Commission is not convinced that either of the applicants could expect much success in repatriating out-of-market tuning to Buffalo radio stations; this is particularly the case, given the fact that there are already two Canadian stations in the area, CHTZ-FM and CHRE-FM, that are competing with U.S. rock stations for the 16-to-34 audience that makes up the largest segment of out-of-market tuning.
The Commission has also examined market data pertaining to economic growth trends in the area and estimates of untapped advertising revenue in the Niagara region. The Commission notes in this regard that the market has experienced radio advertising revenue growth that has been well below the provincial and national averages for the past seven years, and indications are that this trend will persist. Moreover, while there appears to be a certain amount of untapped advertising dollars available in the market, the Commission does not consider that there is sufficient revenue potential to support the introduction of an additional station, at this time, without causing undue harm for existing broadcasters.
While approval of Wellport's application would have resulted in a net increase of one new commercial radio station in this fragile radio market, Fort's application constitutes the near-transparent shift of an existing broadcast service from the AM to the FM band, with no net increase to be brought about in the number of broadcasting stations serving the area and, consequently, with no appreciable or undue economic impact on existing services. In this regard, the Commission has considered the argument put forward by Standard Radio Inc. in its intervention at the hearing that the coverage area of the FM station proposed by Fort will be greater than the coverage area of CJFT. The Commission, however, is satisfied that, while the reception quality of the FM signal within the station's primary market area should be much superior to the reception quality provided by CJFT's present signal, the official contour of the new FM station will not differ significantly from the existing "interference-free" contour of CJFT.
The Commission is also satisfied that Fort's programming proposals are realistic, and that the commitments contained in its Promise of Performance are consistent with the objectives of the Commission's FM policy. In some instances, Fort's commitments exceed the minimum regulatory requirements imposed on licensees of joint FM stations. The Commission notes, for example, the applicant's undertaking to ensure that a minimum of 20% of its programming is in the foreground format. The Commission also notes Fort's commitment to provide a minimum of 29 hours of spoken word programming each week encompassing an attractive mix of news, foreground and mosaic programming.
As discussed with Fort at the hearing, it is a condition of licence that a minimum of 30% of all musical selections broadcast each week be instrumental selections. Moreover, in order to ensure the presence of diversity within the station's musical programming, the Commission expects Fort to comply with its commitment to a maximum weekly repeat factor no greater than 12 for category 5 musical selections, and to ensure that no more than 35% of all such selections broadcast each week are hits, as that term is defined in the CRTC's Glossary of FM Terms.
As discussed at the hearing, the Commission requires the applicant to submit a revised Promise of Performance within 90 days of the date of this decision, in which it should properly identify the new station's proposed Group I format, and confirm its commitments to the weekly broadcast of 7 hours 45 minutes of enrichment and 7 hours 15 minutes of category 6 (traditional and special interest) music.
The Commission reaffirms the particular importance it attaches to the development of Canadian talent and is satisfied with the annual budgets allocated and the initiatives proposed by Fort in this respect. It encourages the applicant to pursue these and other initiatives for the support, development and on-air exposure of local and regional talent.
It is a condition of licence that the applicant adhere to the Canadian Association of Broadcasters' (CAB) self-regulatory guidelines on sex-role stereotyping, as amended from time to time and approved by the Commission.
It is also a condition of licence that the applicant adhere to the provisions of the CAB's Broadcast Code for Advertising to Children, as amended from time to time and approved by the Commission. The Commission authorizes Fort to make use of the Subsidiary Communications Multiplex Operation. The Commission expects the applicant to adhere to the guidelines set out in Appendix A to Public Notice CRTC 1989-23 entitled Services Using the Vertical Blanking Interval (Television) or Subsidiary Communications Multiplex Operation (FM). This authority may only be implemented when the Department of Communications (DOC) gives the technical approval required under the Radiocommunication Act and regulations made thereunder.
The DOC has advised the Commission that this application is conditionally technically acceptable, and that a Broadcasting Certificate will only be issued once it has been determined that the undertaking's proposed technical parameters will not create any unacceptable interference with aeronautical NAV/COM services.
In accordance with paragraph 13(1)(b) of the Broadcasting Act, the Commission will only issue the licence, and the authority granted herein may only be implemented, at such time as written notification is received from the DOC that its technical requirements have been met, and that a Broadcasting Certificate will be issued.
It is a condition of licence that construction of this undertaking be completed and that it be in operation within nine months of the date of receipt of the DOC notification referred to in the preceding paragraph or, where the applicant applies to the Commission within this period and satisfies the Commission that it cannot complete implementation before the expiry of this period and that an extension is in the public interest, within such further period of time as is approved in writing by the Commission.
As noted earlier in this decision, Fort proposes to simulcast the programming of the proposed FM station on CJFT for a transitional period of six months only. Accordingly, the Commission expects Fort to submit the CJFT licence for cancellation by the Commission six months from the date that the proposed FM station commences operation.
Allan J. Darling
Acting Secretary General