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ARCHIVED -  Decision CRTC 95-676

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Decision

Ottawa, 7 September 1995
Decision CRTC 95-676
Portage-Delta Broadcasting Co. Ltd.
Portage La Prairie, Manitoba, - 950226100
Application for authority to add an FM transmitter to rebroadcast the programming of CFRY - Approved
Following a Public Hearing in Winnipeg beginning on 5 June 1995, the Commission, by majority vote, approves the application by Portage-Delta Broadcasting Co. Ltd. (Portage-Delta) to amend its broadcasting licence to carry on the programming undertaking CFRY Portage La Prairie by adding an FM transmitter at Portage La Prairie, operating on the frequency of 93.1 MHz (channel 226B) with an effective radiated power of 27,000 watts. The proposed transmitter will broadcast all of the programming of CFRY.
This approval is subject to the requirement that construction of the proposed transmitter be completed and that it be in operation within twelve 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 construction and commence operations before the expiry of this period and that an extension is in the public interest, within such further periods of time as are approved in writing by the Commission.
Should construction not be completed within the period stipulated in this decision or, should the Commission refuse to approve an extension of time requested by the applicant, the authority granted shall lapse and become null and void upon expiry of the period of time granted herein or upon the termination of the last approved extension period.
The Department of Industry 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 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 amendment, and the authority granted herein may only be implemented, at such time as written notification is received from the Department of Industry that its technical requirements have been met, and that a Broadcasting Certificate will be issued.
Approval of this application by Portage-Delta marks the first occasion that the Commission has authorized a private broadcaster to construct a transmitter within the coverage area served by its existing station for purposes other than correcting technical deficiencies in the signal coverage of the existing station. The Commission notes in this regard that the 0.5 mv/m contour of the proposed FM transmitter will be almost fully enclosed by the existing 5 mv/m daytime coverage of CFRY, and that more than half of that FM contour will be enclosed by CFRY's current night-time coverage pattern. While there will be improved night-time coverage to the south of Portage La Prairie, the area concerned is very sparsely populated.
This approval also represents a departure from the Commission's historical approach, which has generally been to restrict the amount of simulcasting permitted by a licensee on AM and FM transmitters serving the same community. Although elements of its approach to simulcasting are currently under review (see Public Notice CRTC 1995-60 dated 21 April 1995), the Commission's objective, to ensure the most efficient use of the radio spectrum, remains unchanged.
Because of the exceptional nature of this application, the Commission discussed at some length with Portage-Delta the reasons put forward by the licensee in support of its plans. The Commission also sought an explanation as to why the applicant has chosen not to follow the course of action taken by approximately 30 other AM broadcasters in recent years who, often in the face of declining audiences and revenues, and with the Commission's approval, have simply switched over from use of an AM frequency to use of a full-power FM facility.
At the hearing, the licensee stated that, in constant dollars, CFRY revenues in 1994 stood at slightly more than half the level of revenues earned in 1980. The licensee attributed this erosion to a number of factors, including the economic difficulties that have challenged many players in the radio industry over the last decade, the closure of CFB Portage La Prairie (a major employer in the community), the impact of out-of-market tuning and a shift by listeners away from AM to FM, as well as the competitive presence in the market, since 1986, of CHMI-TV Portage La Prairie.
The Commission agrees that the high level of out-of-market tuning by radio audiences in Portage La Prairie has had the effect of reducing the amount of advertising revenue that CFRY is able to capture in that community. Based on the available evidence, the Commission is of the further view that a trend of losses has been established in the case of this station, and may continue unless competitive conditions change or some other action is taken to redress the situation.
According to the applicant, the proposed stereo FM transmitter will capture additional tuning in CFRY's central market area largely because of its appeal to an increased number of listeners who prefer the superior fidelity of FM; this, in turn, will bring about an increase in advertising revenues. When asked why it did not believe these same objectives could be obtained through a switch to a full-power FM frequency, the applicant replied that, due to the quality of its signal, CFRY attracts an audience and generates some sales activity outside what would be the coverage area of a full-power FM station. The applicant further claimed that, notwithstanding the continuing tendency toward FM tuning, there are still a number of people who prefer the AM sound. The applicant added that, if this application is approved, and AM continues to lose audience to FM, "...perhaps early in the twenty-first Century we will be asking to sign-off the AM, and go to full-power FM."
The Commission is satisfied that there a number of factors, the cumulative presence of which effectively serve to remove concerns regarding approval of the proposal to establish an FM transmitter of CFRY. Specifically, the Commission notes that CFRY is currently a stand-alone AM station, and is the sole radio station serving the Portage La Prairie market. As such, it is the only station that relies on the radio advertising potential of that market for a significant portion of its revenues. Moreover, while the technical parameters of the proposed FM transmitter are such that the applicant's potential audience will increase slightly, principally during night-time hours, the FM signal will not be strong enough to reach a significant number of listeners in markets served by other stations.
Further, the Commission notes that, in the case of Portage La Prairie, there are two FM frequency allotments that will remain available for use following this approval, including one Class C frequency. Given the depressed economic condition of the radio broadcasting industry, it is doubtful that there will be interest in making use of either of those frequencies for a new FM station at Portage La Prairie for some time. The Commission considers that given these factors, it is very unlikely that a shortage of FM frequencies will develop in Portage La Prairie in the foreseeable future. Thus, the application does not raise the serious concerns that would arise in other, more populated regions of Canada, where there is a shortage of available FM frequencies.
In resolving, by majority decision, to allow creation of this precedent, the Commission has been persuaded by the unique circumstances present in the Portage La Prairie market, and by the evidence that this exception to Commission policy will have no immediate or long term negative impact on other broadcasters or other markets. The Commission notes in this regard that there were no opposing interventions filed with respect to this application. In fact, the only intervention submitted was by Westcom Radio Group Ltd., licensee of CJOB and CJKR-FM Winnipeg. It is the intervener's own conclusion, like the Commission's, that approval "...will not interfere in any way with audience or revenue potential for the Winnipeg stations."
In light of the foregoing, the Commission is satisfied that Portage-Delta should be given the opportunity to implement the proposed FM transmitter, a measure the applicant believes will improve its financial outlook and enable CFRY to provide a continuing service to listeners in the Portage La Prairie area.
Allan J. Darling
Secretary General