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ARCHIVED -  Decision CRTC 92-569

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Decision

Ottawa, 17 August 1992
Decision CRTC 92-569
Radio de Lanaudière Inc.
Joliette, Québec - 920109600Jean-Pierre Coallier, on behalf of a company to be incorporatedJoliette, Québec - 920142700
Conversion of CJLM Joliette to FM
Following a Public Hearing in Quebec City beginning on 19 May 1992, the Commission approves the application by Radio de Lanaudière Inc. for a broadcasting licence for a French-language FM radio programming undertaking at Joliette on the frequency 103.5 MHz, channel 278, with an effective radiated power of 3,000 watts.
The Commission will issue a licence to Radio de Lanaudière Inc. expiring 31 August 1998, subject to the conditions specified in this decision and in the licence to be issued, upon surrender of the licence for CJLM Joliette.
The new FM licence will only be issued when the Commission is satisfied that Jean-Pierre Coallier, on behalf of a company to be incorporated, is proceeding with the transaction relating to his application to acquire the assets of the new FM station.
Radio de Lanaudière Inc. currently operates an AM radio station at Joliette (CJLM) and has submitted this application to convert CJLM to an FM operation. According to the applicant, this conversion to an FM station will enable it to resolve technical problems it has experienced over a number of years in connection with the CJLM signal quality and night-time reception within its central market area. The applicant also claimed that the conversion to FM should enable the station to increase its listening hours, and to counter competition from Montréal stations by repatriating Joliette listeners who currently tune to those stations. These benefits would, according to the applicant, improve the station's financial situation and consequently ensure the survival of Joliette's only local station.
At the hearing, the licensee stated that it had to close the station on two occasions because of various problems, including Radio de Lanaudière Inc.'s limited financial resources and technical difficulties that had stifled its development. It added that, if this FM licence application is denied, it would be forced to [TRANSLATION] "shut down its AM operation". The Commission considers that approval of this application will give the applicant the opportunity to resolve its technical problems, improve its financial situation, and continue to serve its audience.
The Commission notes that the station will be operated in the "Group I" music format.
In its Promise of Performance, the applicant proposed to broadcast 126 hours of local programming weekly. Of the total 9 hours of newscasts broadcast each week, 6 hours 45 minutes will consist of local and regional content.
The applicant has allocated an annual budget of $2,000 as direct expenditures for the development of Canadian talent. This commitment represents the amount to be awarded to the winner of a music competition, "Les Joies de la musique Scott", presented by the Jeunesses musicales de Joliette.
The Department of Communications (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 transmitter's proposed technical parameters will not create any unacceptable interference with aeronautical NAV/COM services.
In accordance with subsection 22(1) 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.
Acquisition of the assets of the new FM station
The Commission also approves the application by Jean-Pierre Coallier, on behalf of a company to be incorporated (the purchaser), for authority to acquire the assets of the new FM station approved in this decision, owned by Radio de Lanaudière Inc. (the vendor) and for a broadcasting licence to continue the operation of this undertaking, under the same terms and conditions as the licence to be issued to Radio de Lanaudière Inc.
The Commission will issue a licence, expiring 31 August 1998, to Jean-Pierre Coallier, on behalf of a company to be incorporated, upon surrender of the licence to be issued to Radio de Lanaudière Inc. The licence will be subject to the same conditions as those specified in the licence to be issued to Radio de Lanaudière Inc. as well as any other conditions specified in this decision and in the licence to be issued to the purchaser.
This authority will only be effective and the licence will only be issued at such time as the Commission receives documentation establishing that the company has been incorporated in accordance with the application in all material respects. The purchase price relating to this transaction is $760,000, which is the total of the outstanding debts of the current licensee, Radio de Lanaudière Inc., and which includes the cost of converting the AM station to FM. Based on the evidence filed with the application, the Commission has no concerns with respect to the availability or the adequacy of the required financing.
In response to the Commission's concerns regarding the rapid sale of the assets of a station that is still in the planning stage, the vendor stated at the hearing that [TRANSLATION] "this is not a case of FM licence trafficking, and the FM licence was not assigned a higher value under our agreement". As well, the vendor added that Mr. Coallier's offer [TRANSLATION] "will enable Radio de Lanaudière Inc. to profit from the experience, reputation and resources of the Coallier group".
Because the Commission does not solicit competing applications for authority to transfer effective control of broadcasting undertakings, the onus is on the applicant to demonstrate to the Commission that the application filed is the best possible proposal under the circumstances, taking into account the Commission's general concerns with respect to transactions of this nature. As a first test, the applicant must demonstrate that the proposed transfer will yield significant and unequivocal benefits to the community served by the broadcasting undertaking and to the Canadian broadcasting system as a whole, and that it is in the public interest.
In particular, the Commission must be satisfied that the benefits, both those that can be quantified in monetary terms and others that may not easily be measured in terms of dollar value, are commensurate with the size of the transaction and take into account the responsibilities to be assumed, the characteristics and viability of the broadcasting undertakings in question, and the scale of the programming, management, financial and technical resources available to the purchaser. The Commission has assessed the benefits package identified by the applicant as flowing from this transaction and, in general, is satisfied that it is significant and unequivocal, and that approval of the transaction is in the public interest.
Among the proposed tangible benefits, the Commission noted in particular that the purchaser made a commitment to contribute $1,000 to MusicAction in each year of the licence term, in addition to the $2,000 in direct annual expenditures already proposed by Radio de Lanaudière Inc. for Canadian talent development.
According to the purchaser, the intangible benefits to result from this application include the on-air promotion of performers, recordings, festivals and concerts, representing an annual indirect contribution of $25,000. The purchaser also indicated that he proposed to purchase the assets of the new FM station because he wanted to change the station's direction and profit from the experience he had gained with CIME-FM Sainte-Adèle and CIEL-FM Longueuil. He added that new blood and new capital would be desirable, even essential.
The Commission expects the purchaser to ensure that all proposed expenditures included in the benefits package are made in accordance with the schedule outlined in the application and at the hearing.
At the hearing, the purchaser stated that it would assume responsibility for all of the commitments outlined in the Promise of Performance submitted with the vendor's application to convert its AM station to FM.
In response to questioning regarding the amount of weekly programming proposed for the new FM station, the purchaser stated that, in addition to the 126 hours proposed by the vendor, the station will broadcast 42 hours of NTR network programming at night, supplemented by musical programming from CIEL-FM.
The Commission notes that, at the hearing the purchaser made a commitment not to solicit advertising in Sorel. It is a condition of licence that construction of this undertaking be completed and that it be in operation within six months of the date of this decision 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.
The Commission acknowledges the intervention submitted by Radio Nord-Joli Inc., licensee of CFNJ-FM Saint-Gabriel-de-Brandon, opposing these applications. At the hearing, the intervener claimed that two FM stations could not survive in this regional market, and that the [TRANSLATION] "formation of a network with the FM stations that Mr. Coallier now controls" would adversely affect local programming and the content of regional news programming. The Commission is satisfied with the replies by Radio de Lanaudière and Jean-Pierre Coallier to this intervention to the effect that the new FM station will not unduly harm the operations of CFNJ-FM.
The Commission also acknowledges the many interventions submitted by various parties in support of these applications.
Allan J. Darling
Secretary General