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Ottawa, 14 December 1993
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Decision CRTC 93-745
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431881 B.C. Ltd.
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Vancouver, British Columbia - 930214200
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Acquisition of Assets
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Following a Public Hearing in Vancouver beginning on 4 October 1993, the Commission approves the application for authority to acquire the assets of CHQM Vancouver from CHUM Limited (CHUM), and for a broadcasting licence to continue the operation of this undertaking.
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The Commission will issue a licence to 431881 B.C. Ltd. (431881), expiring 31 August 1999, upon surrender of the current licence. This term will enable the Commission to consider the renewal of this licence at the same time as those of other radio stations in the area. The licence will be subject to the conditions specified in this decision and in the licence to be issued.
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The vendor, CHUM, is a public company controlled by Allan F. Waters of Toronto. CHUM is one of Canada's largest broadcasters, and owns many radio and television stations serving both large and small markets across the country. It is also involved in the ownership of two national specialty programming undertakings.
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CHUM acquired the assets of Q Broadcasting Ltd., comprising radio stations CHQM and CHQM-FM Vancouver, in 1990 (Decision CRTC 90-1069 dated 17 October 1990). At the time, it already owned and operated CFUN Vancouver. In line with the Commission's longstanding policy that two undertakings of the same class serving the same market in the same language should not fall under common ownership, the Commission directed CHUM to ensure that an application be filed with the Commission for authority to transfer ownership of CHQM to a third party, together with a suitable package of benefits. This application complies with the Commission's direction.
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The purchaser is wholly-owned by a numbered holding company (438080 B.C. Limited), which company is, in turn, owned 80% by James Ho. The other minority shareholders in this holding company are Chinese Commercial Radio (Canada) Ltd., popularly known as Overseas Chinese Voice or OVC (10%), Wayne Lee (5%) and George Feng (5%). The Commission notes that, under the terms of an agreement between the holding company's shareholders, control of the licensee rests with its board of directors.
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The purchase price relating to this transaction is $1.8 million. 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.
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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.
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The Commission has assessed the various projects and initiatives put forward by the applicant as the benefits associated with this transaction. In general, the Commission is satisfied that the benefits package is clear and unequivocal, and that approval of this application is in the public interest.
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Although the Commission notes the benefit claimed in respect of the applicant's plans to spend $56,000 over seven years for a Summer Internship Program for broadcasting students, the Commission considers this proposal to fall within the categories of proposed benefits that have been generally rejected as such for reasons outlined in Public Notice CRTC 1989-109 dated 28 September 1989.
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Nevertheless, the Commission expects the applicant to ensure that all of the $371,000 in expenditures over seven years proposed in the benefits package are made in accordance with the schedule outlined in the application.
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Conversion of CHQM to an Ethnic Radio Station
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431881 also asked the Commission to add conditions to CHQM's licence, the effect of which would be to convert the station to an ethnic radio undertaking as described in Public Notice CRTC 1985-139 entitled "A Broadcasting Policy Reflecting Canada's Linguistic and Cultural Diversity". The applicant proposed conditions that would require the station to devote a minimum of 124 hours weekly to ethnic programs of Type A and B, and to provide programming directed to at least seven ethno-cultural groups in a minimum of seven different languages. Specifically, the applicant proposed to broadcast programming directed to seven different ethnic groups in the following seven languages: Mandarin, Cantonese, Italian, Japanese, Portuguese, Vietnamese and Farsi. 431881 also stated that it would broadcast a two-hour program each week directed to native people.
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Having considered all the evidence before it, the Commission is satisfied that the Vancouver radio market can support two ethnic radio stations. The Commission therefore approves 431881's request to convert CHQM to an ethnic radio programming undertaking, and requires the applicant, by condition of licence, to devote the full broadcast week (126 hours) to ethnic programming of Types A and B and to programming directed to native people.
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The Commission, however, has noted the concerns expressed in opposing interventions submitted by Y.B.C. Holdings Limited (Y.B.C)., licensee of CJVB, the only ethnic AM or FM radio station currently serving Vancouver, and by the Overseas Chinese Association. Y.B.C. noted that its station CJVB is required to serve 23 cultural groups in 23 different languages, and argued that 431881's proposal to serve only seven cultural groups in seven languages does not meet the spirit and intent of the Commission's ethnic broadcasting policy. The Overseas Chinese Association also claimed that 431881's proposal does not address the needs of an adequate number of ethnic groups.
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The Commission reminds the applicant that the ethnic broadcasting policy requires each ethnic broadcaster to provide a broadly-based service to the ethnic groups within its station's coverage area, with a particular view to meeting the needs of underserved smaller ethnic communities. In light of the foregoing and as discussed with the applicant at the hearing, the Commission considers that 431881 should provide programming directed to a greater number of ethno-cultural groups within its service area.
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Accordingly, the Commission requires the applicant, by condition of licence, to provide programming directed to at least seven ethno-cultural groups in a minimum of seven different languages during the first year of the licence term; the applicant is further required, by condition of licence, to increase these amounts to a minimum of twelve during the second year and for the balance of the licence term.
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The Commission expects the applicant to ensure that the coverage it provides these additional groups represents programming that reflects the needs, in particular, of those ethnic communities that are either underserved or are without service in this market. The Commission also encourages the applicant, during the licence term, to expand beyond twelve the number of ethnocultural groups it serves and number of languages in which it operates.
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In Public Notice CRTC 1992-59, the Commission announced implementation of its employment equity policy. It advised licensees that, at the time of licence renewal or upon considering applications for authority to transfer ownership or control, it would review with applicants their practices and plans to ensure equitable employment. In keeping with the Commission's policy, it encourages the applicant to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources.
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It is a condition of licence that the applicant adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) "Sex-Role Portrayal Code for Television and Radio Programming", as amended from time to time and approved by the Commission.
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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.
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The Commission acknowledges the interventions submitted by Voice-Seniors (B.C). and Gaspar Remedios, both requesting that the Commission require the applicant to maintain the current "Memory Music" format on CHQM. The Commission notes, however, that it does not regulate the musical formats of AM stations.
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The Commission acknowledges the more than 1,000 interventions submitted in support of this application.
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Allan J. Darling
Secretary General
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