TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
BROADCASTING APPLICATIONS AND LICENCES/
DEMANDES ET LICENCES EN RADIODIFFUSION
HELD AT: TENUE À:
Triumph Howard Johnson Triumph Howard Johnson
MacDonald-Cartier Salle de bal
2737 Keele Street 2737, rue Keele
Toronto, Ontario Toronto (Ontario)
February 3, 2000 le 3 février 2000
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio-television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Public Hearing / Audience publique
Broadcasting Applications and Licences/
Demandes et licences en radiodiffusion
BEFORE / DEVANT:
A. Wylie Chairperson/Présidente
M. Wilson Commissioner/Conseillère
J. Pennefather Commissioner/Conseillère
A. Cardozo Commissioner/Conseiller
R. Williams Commissioner/Conseiller
C. Grauer Commissioner/Conseillère
A. Noël Commissioner/Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
P. Cussons Hearing Manager and Secretary / Gérant de l'audience et Secrétaire
D. Rhéaume Legal Counsel /
HELD AT: TENUE À:
Triumph Howard Johnson Triumph Howard Johnson
MacDonald-Cartier Salle de bal
2737 Keele Street 2737, rue Keele
Toronto, Ontario Toronto (Ontario)
February 3, 2000 le 3 février 2000
TABLE OF CONTENTS / TABLE DES MATIÈRES
Preliminary matters 829
Questions by the Commission 848
Fairchild Radio (Toronto) Ltd. 902
Questions by the Commission 910
Questions by Commission Counsel 941
Toronto, Ontario / Toronto (Ontario)
--- Upon resuming on Thursday, February 3, 2000
at 0903 / L'audience reprend le jeudi
3 février 2000 à 0903
4009 THE CHAIRPERSON: Order please.
4010 Mr. Secretary, please.
4011 MR. CUSSONS: Thank you, Madam Chairperson.
4012 Before I introduce our first applicant, I thought perhaps there were a couple of matters of business I would just review for everyone's benefit.
4013 Today our plan is to hear applications by Arnold Auguste, Fairchild Radio and St. Sava's Radio.
4014 Tomorrow we will hear applications by 914258 Ontario Limited and Radio 1540 Limited. That is the extent of our business for tomorrow.
4015 Phase II, where applicants intervene to one another's proposals, will start on Monday morning at nine o'clock.
4016 One other matter I would just like to mention. If we could ask people to switch on their own microphones when they are speaking and, very important, to please switch them off when you are not speaking. Thank you.
4017 It is now my pleasure to introduce our first application today by Arnold A. Auguste on behalf of a company to be incorporated for a broadcasting licence to carry on an English-language FM radio programming undertaking at Toronto.
4018 The new station would operate on frequency 93.5 MHz, channel 228A, with an effective radiated power of 240 watts, and with a transmitter at Toronto/Hornby that would operate on frequency 740 kHz with a transmitter power of 50,000 watts.
4019 The applicant is proposing a rhythm and blues/black urban dance music format.
4020 The Commission notes that this application is technically mutually exclusive with other applications scheduled at this hearing for the use of the 93.5 MHz and 740 kHz frequencies.
4021 We have Mr. Auguste and his colleagues.
4022 Mr. Auguste.
4023 THE CHAIRPERSON: Good morning.
4024 MR. AUGUSTE: Thank you very much.
PRESENTATION / PRÉSENTATION
4025 MR. AUGUSTE: Good morning, Madam Chair, Members of the Commission, members of the staff, ladies and gentlemen in the audience.
4026 Madam Chair, this morning I am really proud of the team I have with me and I would like to introduce them at this time.
4027 On my right is Mrs. June Veecock. Mrs. Veecock is one of my nominations to the board of directors. She is the Director of Human Rights and Anti-Racism Initiatives for the Ontario Federation of Labour. I'm really pleased to have her as part of my team.
4028 Sitting on my left is Mr. J. Robert Wood. He is one of my partners. I am very pleased to have him on my team also, a gentleman that brings a lot of talent. Hopefully, we will have a chance to have him use that talent.
4029 Next to him is Daniel Caudeiron. Daniel has been a friend of mine and a colleague for more than 22 years. He will serve as the director of Canadian talent development if we are licensed. He also brings a wealth of experience in the field of music.
4030 In the back row we have Mrs. Cheryl Haughton. Cheryl has been my Director of Marking and Administration and the person who continues to play a key role in the running of my newspaper SHARE. I am pleased to have her also on my team.
4031 The woman whose spirited public relations effort helped to acquaint the visible minority communities with our proposed station, and a woman who has spent the past ten years training, developing and promoting emerging black Canadian musical talent, Mrs. Denise Jones.
4032 Next to Denise we have Bob Templeton. He is a representative of NewCap, our investors. I'm pleased to have Bob join me on the team.
4033 Last but not least here I have behind me Mr. Harry Steele. He is the President and CEO of NewCap, our financial partners. He is also a friend. He has become a friend in the last little while since I got to meet this gentleman. I am really proud to know him, I'm really proud to have him as part of my team, and I'm very happy that he is here standing with me this morning.
4034 On the side table we have Peter Doering, whose firm I commissioned to carry out audience research for this proposed station; John Matthews, the President of Promethean Electronics, the engineering firm that prepared the technical brief for our application; KPMG partner, Robert Correll, who developed the financial side of our application; Bob Inkpen, who is the Vice-President of Finance of Newfoundland Capital; and, our legal counsel, Mr. Stephen Stohn.
4035 Madam Chair, we are now ready to begin.
4036 We are here today to apply to you for a new radio station to be called SHARE-FM to provide a rhythm and blues/black urban dance format for Toronto. A mouthful of a name for a format, but one that describes the music we propose to a T. This station is intended to reach out to the new face of Toronto, to do on radio what Citytv has done in television, that is, recognize the new face of our city and to reflect it in every aspect of our operations. In the words of the Broadcasting Act, it will "reflect ... the multicultural and multiracial nature of Canadian society" here in Canada's largest city.
4037 This morning I want to present our vision for the kind of radio station Toronto needs at this point of history, how we will meet that need in our spoken-word and music programming and in our employment practices, and how the ownership team I have assembled can do this.
4038 MS HAUGHTON: Madam Chair, and Members of the Commission, I would like to share our vision of the new face of Toronto. The Greater Toronto Area, the GTA, is now recognized as the most diverse city in North America, if not the whole world, with a visible minority population of about two million. Our total population of five million will grow by one million over the next decade, largely through immigration by visible minorities.
4039 Over the past 25 to 30 years, the face of Toronto has changed dramatically. It is now younger, a rainbow of colours and a diversity of lifestyles.
4040 Dealing with diversity is a challenge today in Canada, and one that will increase in the years ahead. Toronto is the leading edge of that change. This challenge will also provide great opportunities and enrich our society by developing new partnerships, new approaches and new responsibilities. By respecting diversity, we will maintain the cohesive harmonious society we have today, thereby creating a dynamic model for Canada.
4041 To do this, we need to be more responsive to the concerns for diverse communities. We comprise nearly half of our population, but are underrepresented in important positions of influence and on issues and policies that have an impact on our lives. In particular, visible minorities feel excluded. Nowhere else is this more evident than in radio. The youth of these communities feel particularly frustrated.
4042 We believe, Members of the Commission, that Toronto needs a radio station that reflects its new reality in its incredible diversity. SHARE-FM represents such a vision, a vision for a radio station that will reflect the diversity of communities in the GTA, a radio station that it lacks, with an emphasis on visible minorities, and fuelled, Members of the Commission, by an important contribution from the black community. This is the reality of this great and vibrant region.
4043 This inclusive approach will make people from around the world, whether long-established or newly arrived here, feel included. It will also provide a positive portrait of the new face of Toronto to the older mainstream.
4044 MR. CAUDEIRON: Madam Chair, Members of the Commission, I would like to tell you a little bit about how our proposed station will reflect the diversity of communities in the GTA.
4045 The value of visible minority experience is the basic assumption underlining the very existence of our station. Our approach is to use music to reach out to the diverse communities. We also will ensure a fresh new perspective in our spoken-word programming, one coming from the visible minority communities.
4046 SHARE-FM will be dedicated to serving a broad spectrum of people, focused first and foremost on the black and other visible minority communities, and including young people, regardless of race, particularly those in the 18 to 34 age group, who have a passion for this music.
4047 Musically, SHARE-FM will provide a rhythm and blues/black urban dance format -- which, in the interests of time, I will refer to as urban dance -- that is eminently enjoyable to the multiplicity of people that make up the GTA.
4048 Large numbers of these residents of all ethnic backgrounds, male and female, gay and straight, newly arrived and longer established, have a passion for this musical format. It is a music that speaks to hundreds of thousands of the young and not-so-young while dissolving barriers of language, class, race, gender and ethnicity.
4049 Merging global cultures are resulting in a fusion and blending of diverse musical forms. The introduction of our unique blend of urban dance music will fill the void on the city's airwaves. Listeners now have to dial around to a variety of Toronto stations and out-of-market stations like WBLK in Buffalo to get even a sampling of what we will provide. No Toronto station provides the unique blend of music that we will offer. In fact, about 80 per cent of the music featured on SHARE-FM is not available on existing commercial stations in Toronto, and out-of-market stations do not provide the news, weather, sports, entertainment notes and exposure of local artists that we will feature.
4050 If licensed, SHARE-FM will significantly increase air play and access to radio for Canadian urban dance music artists. The significance of Toronto, due to its size, market potential, and influence as the centre of the Canadian music industry, greatly enhances the impact that such support will provide in terms of increasing the diversity of talent across the entire Canadian broadcasting spectrum.
4051 We will celebrate the music of our own artists in a variety of ways.
4052 First, the fact that there is a station playing a minimum of 35 per cent Canadian content and focusing on urban dance music will give the existing artists a home for their music.
4053 Secondly, one half of all Canadian music played will be devoted to new music released within the past 24 months.
4054 Third, I will host a weekly one-hour new releases show focused on new works by local and other Canadian artists in this genre.
4055 Fourth, an initiative providing free promotion announcements for Canadian recordings and appearances by Canadian acts.
4056 Of course our announcers will be intimately involved in the urban dance music scene. They will talk about what local artists are doing and what is going on in the clubs as a matter of course.
4057 MR. AUGUSTE: Our news and spoken-word programming will be inclusive, balanced and reflective of the racially diverse residents of the GTA, particularly its visible minority population and young people.
4058 SHARE-FM will feature a comprehensive news and information service with not less than 49 major newscasts per week, plus news updates in other hours depending on the news and the time of day. Major new packages at 9:00 a.m., noon, 5:00 p.m. and 6:00 p.m. will feature special reports that will address the interests and concerns of the GTA's diverse communities. A minimum of 50 per cent of our news coverage will be devoted to local news and comment, which will be presented with sensitivity, and offer a different perspective on the news of the day. Our news coverage will be complemented by two public affairs programs.
4059 Here is how we provide this new perspective.
4060 Journalists invariably bring with them -- bring their own backgrounds and knowledge to the reporting of a story. In recruiting new staff, we will search out the highly-trained and professional minority talent from the existing broadcasting talent pool, supplemented by the best from the region's broadcast and journalism schools. They will find a home for their talents that not only is sensitive to them but one that encourages them to bring a new, fresh perspective to the news.
4061 We plan an outreach initiative to bring new experts into the mix. Rather than consult the same people as everyone else does, we will reach out to qualified experts in a wide range of fields from the visible minority communities.
4062 At SHARE newspaper, we have been providing a different news perspective for almost 22 years. Of course SHARE-FM will have a separate newsroom and editorial staff, but we will benefit from the contacts, sensitivity and experience of the newspaper, and I might add, my own personal experience of being a journalist in this community for 27 years. Furthermore, we will reach out to the other visible minority media to benefit from their experience.
4063 We will also adopt ways of innovative and responsive consultative and feedback mechanisms.
4064 Our contact with our audience will not be limited to news and public affairs. Frankly, for many of them, the entertainment aspects of our station will be much more important. We will place a strong emphasis on the cultural and the entertainment happenings of interest to our audience. A calendar of events promoting local concerts, club dates, festivals and other happenings will be featured prominently throughout the day. And perhaps, most important and symbolic, SHARE will be a place where people with accents are not shut out of radio but instead a place where they will feel welcome.
4065 MS JONES: Madam Chair, Commissioners, in terms of Canadian talent development, over the seven-year term of licence we will contribute $3,150,000 in benefits to the Canadian broadcasting system. SHARE-FM will provide a unique window of opportunity for the hundreds of urban dance music artists, particularly but not limited to those of black and Caribbean origin. Their music has had a profound influence and has played a major contribution in Canadian popular music, yet they have had little or no opportunity for exposure of their music in Canada's broadcast system.
4066 SHARE-FM will provide $1,150,000 for the development of Canadian rhythm and blues/black urban dance music. These monies will be used to support FACTOR, provide seed money, to record new music, and retain the services of Daniel Caudeiron as our director of Canadian talent development.
4067 Daniel's passionate support of Canadian talent, encyclopedic knowledge of urban dance music, and multicultural background makes him ideally suited for his position as director of Canadian talent development for this station.
4068 MR. TEMPLETON: When the three partners sat down together to develop this application, we recognized that we needed to develop a group of initiatives that are unique, innovative, commensurate with the size of the market, and that meet the objectives of the Broadcast Act. The idea of working with the aboriginal community emerged and resulted in the SHARE proposal. SHARE-FM will provide $2 million to Aboriginal Voices Radio, who have committed to use this money for the training of aboriginal broadcasters and the production of programming at their Toronto radio station.
4069 At NewCap, our discussions with Gary Farmer and the AVR team really captured our imagination and we decided to further develop our relationship. We recognize that the applications to extend our support are not before you today.
4070 MS VEECOCK: SHARE-FM will have a unique opportunity from day one, both to introduce and maintain representation of the groups targeted for employment equity. We will not only program to the new face of Toronto, we will reflect the new face of Toronto.
4071 We will introduce an employment equity policy and program to guarantee that staff at all levels reflects the diversity of Toronto. This policy and other staffing initiatives will ensure that our on-air, off-air and management staff will be a more realistic representation of the GTA demographics than any mainstream radio station in Toronto or, for that matter, elsewhere in Canada.
4072 Arnold Auguste will be the Chairman and CEO of this station. Mr. Auguste is an astute businessman, an immigrant from the Caribbean who has demonstrated an unwavering commitment to the black and Caribbean community, as well as to other visible minority communities in Toronto.
4073 He holds 30 per cent of the common shares of the proposed company and controls the company through a voting trust which gives him the power to vote 60 per cent of the common shares.
4074 Twenty-two years ago, in the living room of his humble apartment, he started a small community newspaper, SHARE, catering to the black and Caribbean Canadian community. Despite a number of setbacks, and there were many, including a fire that destroyed the newspaper, Arnold persisted and succeeded in contrast to others who have failed. Today, SHARE continues to be the largest weekly ethnic newspaper in Canada, in a highly competitive market.
4075 His success, Members of the Panel, undoubtedly is due to the unwavering commitment that SHARE has demonstrated over the years in promoting respect and acceptance for this city's visible minority population. Mr. Auguste has demonstrated his business and journalistic capabilities. Part of respect SHARE has garnered has been from its commitment to telling the truth about our community -- at times condemning the bad, but always, always, celebrating the good. SHARE has an excellent track record for vigorously defending our community when it is being wronged.
4076 Madam Chair and Members of the Commission, I want to talk a little bit about why I agreed to serve as a member of this proposed station, and this is very important to me. I agreed to serve as a member of the board of directors of the proposed station for basically two reasons: One, I share his vision of a station that reflects, both in terms of programming and staffing, the diversity of communities in Toronto; but, more importantly, this station will be owned and controlled by Mr. Auguste, and I am confident Mr. Auguste will ensure that the vision articulated in this application is implemented.
4077 Mr. Auguste's financial partner is NewCap Broadcasting, a division of Newfoundland Capital. NCC holds 40 per cent of the common shares. It is a publicly-traded Canadian corporation based in Halifax with interests in radio in Atlantic Canada, Ontario, and Alberta.
4078 NCC is a financially sound, experienced and a responsible broadcaster. Their presence on our board will enhance our ability to meet our goals by bringing financial stability, added broadcasting experience, and overall business expertise.
4079 Robert Wood, Mr. Auguste's other partner, holds 30 per cent of the shares, and is an experience Toronto-based broadcaster. Fifteen years ago, he was a pioneer in identifying the need for a conventional urban dance music station to reflect the ethnic and racial diversity in Toronto.
4080 MR. WOOD: In terms of signal, we have applied for a licence to carry on a radio undertaking that will either operate on 93.5 FM and 740 AM simultaneously, or on an expanded 93.5 FM frequency on its own.
4081 Of these two options, we prefer to operate on an expanded FM frequency on its own. If the Commission approves this option, SHARE-FM will increase its commitment to Canadian talent development by $500,000.
4082 When the Commission licensed Rawlco on 92.5 FM in Toronto some ten years ago, it indicated that it had no concerns about the potential interference to CHAY-FM, Barrie. With a similar indication, SHARE-FM will reach out to all of Toronto with a stereo FM service leaving 740 AM open for other purposes -- a win-win for all.
4083 MR. CAUDEIRON: Madam Chair, Members of the Commission, I want to present you with the five fundamental reasons why our proposal should be approved.
4084 First, SHARE radio is a unique new partnership between Arnold Auguste, NewCap and Bob Wood. They bring to this enterprise a passion for and experience in serving the visible minority communities, extensive experience in broadcasting both here in Toronto and elsewhere and the financial stability and commitment to make a success of this endeavour while meeting and exceeding our commitments. We will provide diversity and media ownership in Toronto by introducing a new licensee to Toronto radio.
4085 Second, SHARE-FM is founded on a sound business plan featuring SHARE capital of $6 million, a bank line of credit of $2 million, and conservative revenue projections. These factors, coupled with a format that will achieve an estimated audience share of 8 to 12 per cent among persons aged 18 to 54, will increase prospects of financial viability of our proposed station.
4086 Third, our innovative solution for expansion of the 93.5 signal will enable us to optimize spectrum use, further enhance our ability to achieve financial viability, and provide effective signal coverage for members of the black and other visible minorities, regardless of where they live in the GTA.
4087 Fourth, SHARE-FM will reflect the new face of our city, particularly the black, but also the other visible minority communities who make up almost half of our population, while also attracting a wider audience by providing the music they prefer.
4088 And fifth, our $1.15 million to promote the development of Canadian rhythm and blues/ black urban dance music, and our $2 million to facilitate the development of aboriginal radio will increase the diversity of talent across the Canadian broadcasting system while helping to meet a fundamental national and Toronto need.
4089 MR. AUGUSTE: Madam Chair, in closing, for over fifteen years I have followed the efforts to bring an urban dance station to Toronto. The first efforts came from Mr. Wood, and I supported this vision that he brought at that time.
4090 SHARE newspaper has a long history of accomplishment. For 22 years we have stood up for our community, but there are limits to SHARE's ability to reach out to the wider community.
4091 We must reach out to our youth. Unfortunately, they do not read newspapers to anywhere the extent that the older generation does. A radio station featuring the music that they love is a positive message to them.
4092 SHARE's readership is largely black and Caribbean readership. I believe that we need to extend our message of inclusion to a wider community and to reflect this startling demographic change and the challenges this poses for Toronto. An urban dance radio station, properly focused, can reach to the large visible minority community.
4093 SHARE newspaper is now at a stage where I feel comfortable taking on another initiative, another challenge, and I am looking forward to this one. I believe that this station will be viable and profitable. We can actually do good while doing well.
4094 Thank you for your attention and our team is ready for your questions.
4095 THE CHAIRPERSON: Thank you, Mr. Auguste, and your team.
4096 Commissioner Grauer, please.
4097 COMMISSIONER GRAUER: Thank you. Welcome.
4098 In my questions today I'm going to cover the areas of technical programming, Canadian talent and marketing. I don't have any questions on ownership and finance, so what I would like to do is start in the technical area, and you touched on it in your opening remarks as well.
4099 You have applied for the use of both the 740 AM and 93.5, or, alternatively, your alternative technical solution, which would be expanded coverage of 93.5. You have admitted that this proposal would require what you referred to as a waiver from us, and I will get to that later, but also additional engineering to protect stations other than CHAY-FM, and you feel that we should be able to grant your request.
4100 I guess my principle question is that we -- how do I put this -- we have not received from you an actual application or detailed engineering brief with respect to your option two, and I am wondering if you have talked about this to Industry Canada. Have you discussed it with Industry Canada? Did you consider discussing it with Industry Canada?
4101 MR. AUGUSTE: This question I would like to refer to Robert Wood. He is better prepared, I think, to answer this question and will make a little more sense than I would.
4102 MR. WOOD: Commissioner, that's correct, we did not file an actual technical brief for that part of the proposal. That's correct, we didn't.
4103 COMMISSIONER GRAUER: I beg your pardon? Sorry?
4104 MR. WOOD: That's correct, we didn't.
4105 COMMISSIONER GRAUER: Have you had any discussions with Industry Canada?
4106 MR. WOOD: No, we haven't. But we are aware that the consent that we are asking you to provide from CHAY-FM in Barrie involves an area of interference in Toronto that is a very small area, similar to what was provided or what occurred in 1990 with the Rawlco station against CHAY-FM in Barrie -- in other words, the two situations are virtually identical.
4107 Therefore, in asking for your waiver, we in fact are not asking for something that is new. A precedent has already been set. It was outlined in the CRTC Decision 90-693 in which the Commission said it has no concern with respect to the technical aspects of the Rawlco proposal.
4108 COMMISSIONER GRAUER: But are you aware that in 1990 Rawlco filed with us a technical application for the expanded coverage and that in that application they outlined the areas of interference? They had received permission from Industry Canada -- I mean, they had gone through quite an extensive procedure, and we in fact were satisfied, in reviewing all of that, and conditional of course on the Industry Canada approval, that there wouldn't be interference.
4109 MR. WOOD: Yes, I am aware of that, but I think that what we are saying is that it would not be any kind of a precedent for the Commission to grant us the same kind of consent and simply say that it would be conditional on Industry Canada approval.
4110 In our proposal we have outlined the general broad parameters that we would require on the signal so that in the event that we are able to sit down with Industry Canada and discuss with them what we require -- we have a range of between 10,000 and 15,000 watts that, once we have subjected that to testing, we will be able to determine the ideal contour for the station.
4111 COMMISSIONER GRAUER: Thank you.
4112 You will understand there is quite a difference from our perspective from having had a detailed technical application filed with us as opposed to we don't have one in this case from you for the expanded coverage?
4113 MR. WOOD: Yes.
4114 COMMISSIONER GRAUER: Have you had any discussions with Chorus, just out of curiosity?
4115 MR. WOOD: Yes, we have, and Chorus indicated that they were not prepared to provide the waiver required. They indicated that they had also heard from one or two other parties and they had told them the same thing.
4116 COMMISSIONER GRAUER: Thank you.
4117 You have presented to us alternatives, which is a combined 740 AM and 93.5, as it exists, or your option two. Would you be prepared to accept a licence for the 93.5 alone as it has been filed with us by you?
4118 MR. WOOD: We have had a discussion about that matter this morning, in fact in the last couple of days, and it is the view of Mr. Auguste that we indeed would be prepared to accept a licence from the Commission if so granted on the lower power, but that would be on the clear understanding that we would be back within a couple of months with an application reflecting the full technical proposal that you have alluded to earlier here.
4119 MR. AUGUSTE: Madam Commissioner, our concern here is that we want to be able to serve our community properly, effectively and efficiently. A large segment of our community is out of reach, as far as we understand it, with this signal as it stands now.
4120 We have waited as a community for a long time to get to this point. There is a great need, and it has been expressed here, and by others, for a serious -- for a station, for a frequency that will serve our community. We have real concerns about the signal as it is now, and that is why we are asking for this enhancement. We want to do the best we can, and we want your help to do that.
4121 You know, in terms of this variance that we are asking for, I have been advised by our team that it's something that could easily be done. I believe you have the will to do this, and I'm hoping I am right. You know, I will tell you, if what we are saying is true, this is important not just for us but for everybody who is applying for this signal. You know, I think it is something we need to consider very, very carefully.
4122 Anyway, let me leave at that. I'm sure we are going to come back to this.
4123 COMMISSIONER GRAUER: And I want to assure you, our discussions around the issue of the signal are not related to the merits of the application. This is really a technical issue and I think what is really important is this is an Industry Canada issue. It is for them to do this. This is why I'm wondering if this is fully understood.
4124 Perhaps your technical consultants could address that if he is here.
4125 MR. WOOD: Perhaps I could just respond to that question, Commissioner.
4126 The Commission has tremendous discretionary powers, virtually unlimited discretionary power. The Commission simply has to say in its decision that subject to a satisfactory conclusion of testing with the applicant and Industry Canada it will grant this licence.
4127 COMMISSIONER GRAUER: That is what you are requesting that we do. I will let our legal counsel follow up with that later. I'm sure they will want to do that.
4128 Okay. If I could, then, just ask a couple of other questions.
4129 If we were to grant you the 93.5, as it has been filed with us, which is for the restricted coverage area, and you were to later -- I know you have made an additional Canadian talent development commitment if you were granted the expanded the option, if you were to make arrangements and you were to later secure this, would you then meet those increased CTD commitments?
4130 MR. AUGUSTE: Yes.
4131 COMMISSIONER GRAUER: Thank you.
4132 Other than the 93.5 frequency that you have requested, are you aware of the availability of any other FM frequency that could be used to establish this service in Toronto?
4133 MR. AUGUSTE: Could you repeat the question, please?
4134 COMMISSIONER GRAUER: Yes, certainly.
4135 Are you aware of any other FM frequency, other than the one for which you have applied, that could be used to offer your service?
4136 MR. AUGUSTE: Well, there is the 106.5, which has been applied for by the Aboriginal Voices Radio, but the frequency that we are applying for I believe is closest to what want. If we get the permission -- it will be exactly what we want, just what the doctor ordered.
4137 COMMISSIONER GRAUER: Thank you.
4138 What I would now like to do is ask you a question on programming.
4139 You are proposing a one hour open-line program on Sundays to be known as Straight Talk, addressed to young people. As I am sure you are aware, we have, in Public Notice 1998-213, expressed concern about -- that we had a policy regarding open-line programming, and we are concerned that licensees who carry open-line programs be aware of and adhere to requirements with respect to abusive content, balance, and high standard.
4140 I'm wondering if you have any internal guidelines, policies or other mechanisms that you have developed to put in place to ensure that -- with respect to the conduct of open-line programs?
4141 MR. AUGUSTE: Well, from my experience running the show over the years, I think I have been very responsible -- I have been quite responsible.
4142 You know, the thing is, as far as our young people are concerned -- and I think that is what you are talking about, an open-line talk show for the youth -- this is something that has been resting very heavily on my heart for a long time.
4143 As I said earlier, we have been able to reach the older members of our communities through SHARE, but we have not been able to reach our young people to that extent. You know, we are looking at a generation that we need to reach them, we need to get to them. I saw this as an opportunity to have them talk.
4144 I mean, sometimes, you know, you listen to young people, and they are saying, "Nobody listens to us. Nobody wants to hear what we say. You guys, you know, you tell us what you think we want to here." This is designed for them to speak to us or for them to speak to each other. The people who are going to run this, the people who are going to be in charge of it are professionals and they will understand, you know, what we need. I mean, we have set our policies up so that everything will be done in good taste. But where young people are concerned, you know, when they start talking they are going to talk, and we want them to be open, we want them to be honest. We don't want to control what they do.
4145 So from my own experience and from my track record, this is going to be tasteful, it's going to be well done, but I want it to be honest. I want the young people to speak out, for them to, you know, air their views, air their concerns, air their gripes. Also, their ambitions, their hopes, their dreams, you know. We want to hear from them so that we can help address their issues.
4146 So, like I say, I mean we are going to try to ensure that it is handled tastefully and so on. It will be done properly. We won't exert too much control over them, but it will be done tastefully.
4147 MR. WOOD: Commissioner, if I could just add to that.
4148 For the talk portion of that program, part of it will be telephone talk, but part of it will be interview talk, young people talking amongst themselves. So it won't all be telephone talk.
4149 To the extent that it is telephone, there will be a tape delay in which if anything inappropriate is said on the air we will be able to stop it before it gets to air.
4150 Third, the people in charge of the programming on the station in the news and public affairs department will be professional journalists. They will monitor it carefully. I think it has been our experience that young people are very responsible. They are not going to want to do something that is inappropriate.
4151 COMMISSIONER GRAUER: No. I certainly don't want, (a), to suggest that we are singling out young people. I think it has been, you know, our experience that for open-line shows in particular it has been very helpful for broadcasters to develop their own set of guidelines with respect to this, not to censor, not to restrict. Again, not that young people are any great offenders of this, it's really just something that has been useful. And I appreciate your comments with respect to tape delay. Thank you.
4152 How did you determine that Sunday evenings at 9:00 was a good time for this?
4153 MR. AUGUSTE: Well, we figured that Friday nights our young people are out partying, Saturdays night they are out partying. You know --
4154 COMMISSIONER GRAUER: Sunday nights they were recovering, so they would be home.
--- Laughter / Rires
4155 MR. AUGUSTE: Sunday they are recovering, then there is school the next day. So, yes, you know --
4156 COMMISSIONER GRAUER: Thank you.
4157 What I would like to do now is talk about your Canadian talent development commitments.
4158 You will adhere to the CAB plan, which is $27,000 a year, and over and above that you are proposing direct contributions of $2,961,000 over seven years among four initiatives: seed money, to record new music, the hiring of a director of Canadian talent development, the establishment of an aboriginal radio station proposed by Gary Farmer.
4159 Now, what I would like to do first of all is talk about your proposal to hire Daniel Caudeiron as the director of CTD, and you would like us to qualify this as a direct contribution or you won't create the position. What I would like you to tell me is why you would abandon the proposal altogether rather than pursuing it as an indirect contribution to Canadian talent.
4160 As you know, I think we have had an exchange through the deficiency process in which we have suggested that these types of contributions are not normally considered direct CTD contributions. So perhaps you could elaborate for me a bit on that.
4161 MR. AUGUSTE: If you know Daniel Caudeiron as well as I do, he is Canadian talent development. I mean, his life has been devoted to developing talent, to promoting -- I mean, this guy is passionate about this. This is his life, this seems to be all he does. I don't know if he does anything else. I have never heard him talk about anything else. He is always walking around with somebody's record or somebody's CD, trying to promote and whatever.
4162 I feel pleased and honoured to have him agree to participate with me, agree to be involved with this. You know what? He would have done this -- I'm sure he would have done this for free if we had asked him. You know --
--- Laughter / Rires
4163 MR. AUGUSTE: No. But, you know, he is so passionate about this, I think that you have to understand where he is coming from. This is his baby. I mean, he is not going to be working in the station. He is not going to be part of our staff. You know, I feel very, very confident that what he is going to bring to this position will be so valuable that, you know, I don't see, you know, that we could look at it any way else. I mean, if you want to suggest another option to me, I am willing to listen.
4164 COMMISSIONER GRAUER: Well, again, I think that there is no question -- we are not questioning, in any respect, Mr. Caudeiron's talents or skills or the asset that he will be to you and to Canadian talent. What we are saying is that only in the most unusual circumstances have we counted salary paid as Canadian talent development direct contribution, and those cases have been when there are vast sums of money and that person has been involved in ensuring, in complex allocations, that things are done accordingly.
4165 The Canadian talent development direct contributions are really designed to be direct to the artist.
4166 Now, you can certainly -- the association of the station with Mr. Caudeiron can be indirect Canadian talent development, it can take a number of other forms. What we are talking about is having it qualify as a direct contribution. So that is really what we are talking about. It can be considered an indirect contribution and, if so, then we would say: Well, would you maintain that $50,000 per year and direct it elsewhere as a direct contribution? That is really the question.
4167 MR. AUGUSTE: Okay. Now, you say there has to be unusual circumstances, or whatever. Again, if you know Daniel, he is unusual.
4168 But anyway, I would like it to be considered as part of our CTD, but I would be prepared to look at it as an indirect contribution. The fact is that -- I mean, he is in regardless of how we go with it. I mean, I wanted -- you know, Danny has been involved.
4169 MR. WOOD: Commissioner, if I could add to that.
4170 We are not suggesting that we wouldn't devote that contribution to some aspect of Canadian talent development. If Mr. Caudeiron is not acceptable as a direct expenditure, whether he qualifies as direct or indirect, somehow he is going to be involved in our operation to make sure that this program runs properly.
4171 Secondly, in the event that you don't qualify it as direct expenditure, that money will go to something that will involve a direct expenditure.
4172 COMMISSIONER GRAUER: Thank you.
4173 With respect to the miscellaneous expenses that you referred to in your additional contribution to CTD -- I think it's $7,000 and something -- could you please confirm that you will ensure they will all qualify as direct contributions to the development of Canadian talent?
4174 MR. AUGUSTE: Yes.
4175 COMMISSIONER GRAUER: Thank you.
4176 Now, I would like to just talk briefly about your contributions to help launch the proposed new aboriginal radio station.
4177 You specified that if Gary Farmer's application was not successful the contributions would be redirected to the Aboriginal Peoples' Broadcast, Production and Training Centre, which is also based here in Toronto.
4178 As you know, funding of a new radio station would not ordinarily be considered as a direct contribution to Canadian talent. I wonder if you could elaborate for us on why this contribution should be considered by the Commission as a Canadian talent development or a valuable contribution to the Toronto community or Canada as a whole.
4179 MR. AUGUSTE: Okay. First, I don't see this as a contribution to the development of the radio station as such. What this money is earmarked for is to develop programs, to develop artists, to develop talent in the community.
4180 You know, when I first starting discussing this initiative, I was taken aback by the fact that there was not a station for the aboriginal people -- I mean, I never thought about it before, but all of a sudden I'm -- you know, it's like, how come? Why not? When they started talking about the type of things that it needs to be able to do, as far as I understand it they are going put their radio station together, if they are licensed, with or without our help, but this contribution will help them do more than they are financially able to do now in terms of developing artists, developing talent, programming, and so on.
4181 Now if, God forbid, they are not licensed, we will still make this contribution, and this money, from our discussions, will go to do the same kind of things, have them develop programming, have them develop artists, have them develop talent in their community, you know, and hopefully get involved in other ventures. But we want to help them get to the point where, you know, they have young people who are qualified and prepared professionally to exhibit their skills or market their skills.
4182 COMMISSIONER GRAUER: Thank you.
4183 If we were to decide that we wouldn't accept it, the $2 million, as a direct Canadian talent development initiative, would you elect to redirect the $2 million over seven years to a qualifiable CTD direct initiative, and if that's the case could you maybe tell us where you would direct the funds?
4184 MR. AUGUSTE: I feel that the contribution we have already made to CTD was quite attractive, you know. It's something I have to look at.
4185 Let me pass this off to my partner, Mr. Wood, and let him take this.
4186 MR. WOOD: Commissioner, one little noticed aspect of the Act says that programming that reflects the aboriginal cultures of Canada should be provided within the Canada broadcasting system as resources become available for the purpose. There can be nothing more Canadian than what we are doing in light of what the Act is saying.
4187 And in light of the specific uses of that money, it will be used for seminars, scholarships and grants. The seminars will be for the aboriginal literary and music communities, for topics such as recording their works or preparation for recording, payment for guest speakers, facility costs, materials for artists.
4188 A significant part of the money would be for scholarships and grants -- and again that would be for literary and music communities; $1,000 to $2,500 for members of the community to participate economically -- this would be for music performers, for playwrights, for poets, for actors, for storytellers, including focus on elders, youth, women, and persons with disabilities.
4189 It would be used for program production. The monies would be used to support production of station-produced spoken word and music programming, and this would include poetry, music, drama, storytelling, focus on youth and elders. The payment would be for production fees and other media materials.
4190 It would also be for the development of concerts, a series of concert events leading to music video production, and the payment would be for the events, the studio costs, the production and CD distribution. It would also be for concert presentations, payment for musicians and event staff and for facility costs.
4191 I think that we realize that this initiative does not fit the normal definition, but we also believe passionately that nothing speaks to the development of Canadian talent more than this initiative.
4192 COMMISSIONER GRAUER: Well, Mr. Wood, I don't disagree with you at all. I think that what we are not doing is having a discussion about the merits of supporting these initiatives. What I am doing is trying to explore some of these areas so we have a record that is efficient when we come to, in our deliberations: Well, what if, what if, what if?
4193 So my question would be: If, for whatever reasons, notwithstanding the merits of the proposal, we were to conclude that it didn't meet, what would you do with this money? Would you redirect it to something that we would consider eligible? I am not saying we will or we won't.
4194 MR. WOOD: Our response to that would be that we ask, then, that you simply not qualify it as Canadian talent development. We are still going to direct the money to the aboriginal community for the initiative, regardless of how you qualify it.
4195 COMMISSIONER GRAUER: That was my next question. Thank you.
4196 With respect to your proposal to assist Gary Farmer in carrying out day-to-day operations should they be successful in their licence application, you have proposed to assist through a contribution of $210,000, and I would like -- can you confirm that this additional initiative is in fact an indirect initiative under CTD and is a one-time only contribution?
4197 MR. WOOD: Are you talking about the indirect -- the $210,000 in help in terms of the station?
4198 COMMISSIONER GRAUER: Indirect, yes.
4199 MR. WOOD: Yes. I think we view that as an indirect, but we certainly would be prepared to accept that as a condition of licence. We think and they think that that part of our program is as important as the financial contribution that we will make to them.
4200 COMMISSIONER GRAUER: Thank you.
4201 Would there be any other help that you might provide after year one with respect to their ongoing operation should they be successful?
4202 MR. WOOD: I'm not sure that I understand your question other than to say that we expect that the two stations will operate out of the same building. They will be one side of the hall, we will be on the other. There will be an ongoing exchange of information creating a supportive environment. We plan to provide mentoring help. And of course they have a lot of areas where they can help us in terms of the sensitivities that we want to generate in our programming.
4203 But in terms of the day-to-day operation, we plan to help them, for example, prepare their daily logs. That would save them probably twenty, $30,000 a year in hiring a salary person. The switchboard will be a joint switchboard staffed by someone from our station, but answering Aboriginal Voices Radio if the person calls the number of the switchboard that we are handling for them, and so on and so on.
4204 So that amount at $210,000 a year or nearly $1.5 million over the term of licence I think is very crucial to help stabilize their service and operate at a high level.
4205 COMMISSIONER GRAUER: Thank you.
4206 Now, I just have some marketing questions.
4207 You expect the proposed station to achieve a minimum share of 8 per cent in each year of your initial seven-year licence term, and this would make it one of the top-ranked stations in Toronto. I am wondering, this is obviously based on the expanded frequency or the combined 740 AM and the 93.5. This seems optimistic in year one in particular, and I am wondering if you could elaborate a bit on that projection, and also what the 93.5 as filed, which is a more restricted area -- how that would affect that share number.
4208 MR. AUGUSTE: Okay. The format that we are proposing is an exciting format. It's a fun format, it's -- I mean, you know, we believe -- we have a lot of confidence in this format and we believe that in a short period of time it is going to be the format in the city.
4209 You know, in terms of marketing, in terms of some of the questions, other questions you want to ask, I think I will ask Bob Templeton to answer this question.
4211 MR. TEMPLETON: Thank you, Arnold.
4212 It may seem optimistic. We are relying quite heavily on younger demographics, and I'm sure you have heard this at other hearings repeatedly, that getting 18 to 24 year olds and 18 to 34 year olds, particularly males, to report in a diary form is a very difficult task. It's an ongoing problem that BBM has been facing and (technical difficulties / problèmes techniques) has been in the United States for a number of years. Although we expect to reach somewhere in the 8 to 12 per cent range, 18 to 54, the reality reflected in BBM would probably be more in the five to six share range.
4213 But I think I would like to ask Mr. Doering, who did our research, to support that, if that is what he --
4214 MR. DOERING: Yes. We explored the format with a broad audience, 18 to 54, in CMA Toronto, and based on the historic line of question that we have used over the past 30 years, not only in the area of interest in radio stations but also a number of products and services including automobiles, cellular phones, food products and others, we found that if you ask people how likely they are to do a certain thing, you know, you take a look at the very likely response, and we had a very likely response of about 23 to 24 per cent who had said they would listen to this particular station. We found that over time you would take about a third of that as actually what is going to happen.
4215 So we are confident that the station will achieve somewhere in the area of an 8 per cent market.
4216 COMMISSIONER GRAUER: In year one?
4217 MR. DOERING: Yes, that's correct.
4218 COMMISSIONER GRAUER: Thank you.
4219 MR. DOERING: I might add that what can happen is the initial appeal of a product or service is usually about a third, so that would be about 8 per cent. That can grow over time to 45 or 50 per cent, so it possibly could get to 10 or 12 over time, but we have been conservative in our estimates and kept it at 8.
4220 COMMISSIONER GRAUER: Now, this is based on a combined existing 93.5 and 740 AM. Is that right?
4221 MR. DOERING: That is correct.
4222 COMMISSIONER GRAUER: Can you tell me how that would be affected if we were to grant a licence with the restricted frequency?
4223 MR. DOERING: Just the FM restricted?
4224 COMMISSIONER GRAUER: Yes.
4225 MR. DOERING: We believe that, in conversations with our technical expert, that would give us -- cut the coverage down to about 60 or 70 per cent, so we might be in the 5 per cent range.
4226 COMMISSIONER GRAUER: Minimum 5?
4227 MR. DOERING: That's correct.
4228 COMMISSIONER GRAUER: Thank you.
4229 You have projected revenues in year one of $2.6 million rising to 5.4 in year five. Those I take it are based on -- they are based on an 8 per cent share with a combined 740 AM and 93.5 frequency. Is that correct?
4230 MR. AUGUSTE: Yes.
4231 COMMISSIONER GRAUER: Those strike me as -- since the average revenue per FM station you calculate to be almost $14 million, and given the attractiveness of this demographic to advertisers, which is certainly what we have been hearing throughout this process, this seems rather conservative. I wonder if you could help me with that.
4232 MR. AUGUSTE: Well, as the Commission noted yesterday, everybody seems to be coming here very conservative at these hearings.
4233 Yes, they might be conservative, but, you know, it's a new format. This has never been done in this country before. You know, I would rather come to you with a figure that I feel comfortable with than to come to you with all these rosy projections, and so on and, you know, to go the other way.
4234 But I would like maybe to ask Bob Templeton to address this also.
4235 MR. TEMPLETON: Thank you, Arnold.
4236 We are very hopeful this will not happen in Toronto, but formats similar, and I say similar to this format we are proposing, are discounted very heavily in the United States. We think there might be an opportunity to actually get the reverse effect, but it is unproven at this point. So we wanted, as Arnold mentioned, to bring very conservative numbers. When you work for a public company you learn very quickly to underpromise and overdeliver. These are numbers we feel we can take to the bank.
4237 COMMISSIONER GRAUER: Why are they discounted in the United States? This format, why is it discounted?
4238 MR. TEMPLETON: It tends to be pigeonholed as an urban format with a lower income level. That is the experience in the States. We don't believe that will hold true in Canada because we have a -- in Toronto, because we have a very unique make-up of our multiracial community. But, again, it is unproven
4239 Sometimes when new formats are introduced, the advertising community is reluctant to jump on the bandwagon despite what the numbers may say, so there could be a lag time before we receive the fair market share of revenue versus the BBM results we are anticipating.
4240 COMMISSIONER GRAUER: Just so I understand it, you -- I don't want to say you envision a scenario -- it is possible in your mind or this is what you -- from the U.S. example, where you are getting an 8 per cent share perhaps, if you have a combined or expanded frequency, which you can demonstrate -- your market research seems to indicate that 8 is on the conservative end, 8 to 12 -- and notwithstanding that, with a demographic that is attractive to advertisers, which it is, the younger age group, you may not be able to sell it to advertisers at least through year five.
4241 MR. TEMPLETON: In response to that I wanted to repeat and remind you that we believe that although we may be reaching 8 per cent, BBM will probably reflect a lower number, more in the 5 per cent range, and due to the uniqueness of this format there could be some buyer reluctance. But you mentioned year five and I have to plead that we are very conservative in our estimates.
4242 COMMISSIONER GRAUER: I know. I just want to make sure --
4243 MR. TEMPLETON: I believe they will be much stronger, but we really wanted to bring you a number that we knew we could deliver.
4244 COMMISSIONER GRAUER: No, I just want to make sure I really understand sort of how you put all these pieces together.
4245 MR. WOOD: Commissioner, if I could add one comment.
4246 They are quite apart from the discounting of the audience that goes on. Really what Mr. Templeton is saying is if you get an 8 per cent share of audience you might get only a 5 per cent share of the sales. But quite apart from that, if you are a radio station that performs in the middle of the pack, that is to say if you are not in the top five, then if you generate an 8 per cent share of audience you don't receive an 8 per cent share of sales, you receive a disproportionately lower level of share of sales. That applies regardless of your format; it goes on all the time.
4247 On the other hand, if you are in that top five you receive a disproportionately higher portion.
4248 COMMISSIONER GRAUER: Yes. Yes. But these numbers just liked quite conservative.
4249 One final question on that is: How would these revenues be affected if we were to be talking about the restricted 93.5 frequency only, not the combined?
4250 MR. AUGUSTE: Could you repeat that, please?
4251 COMMISSIONER GRAUER: Well, we talked earlier about the possibility of -- the 93.5, as it has been filed with us, the technical brief that has been filed, if we were to award a licence based on that, how would your revenues be affected? Your revenues I believe are based on the combined frequencies or an expanded 93.5.
4252 MR. AUGUSTE: Yes, okay. So you are asking if the frequency is awarded as is?
4253 COMMISSIONER GRAUER: Yes.
4254 MR. AUGUSTE: As opposed to the expanded frequency?
4255 COMMISSIONER GRAUER: Correct.
4256 MR. AUGUSTE: I didn't think about that, but, Bob, could you --
4257 MR. WOOD: Yes. I will ask Mr. Templeton to take that question.
4258 COMMISSIONER GRAUER: Thank you.
4259 MR. TEMPLETON: I want to make sure I understand the question. Could I ask you to repeat it?
4260 COMMISSIONER GRAUER: Yes.
4261 MR. TEMPLETON: Thank you.
4262 COMMISSIONER GRAUER: We discussed earlier the possibility of us awarding a licence on the 93.5 as it is, not expanded and not with 740 AM. All of the revenue figures filed with us were based on a combined AM/FM or an expanded 93.5. What I want to understand is what is the revenue impact -- how is the revenue impacted if we were to grant you 93.5 as is?
4263 MR. TEMPLETON: First the AM inclusion or the nesting solution will not add dramatically to that revenue target, number one. Number two, we anticipated that this would -- could be a possibility. So, again, another reason to support our very conservative approach to revenue projection. So we believe we can deliver those numbers with the unextended FM.
4264 COMMISSIONER GRAUER: Thank you.
4265 MR. WOOD: But that being said, Commissioner, it will be hard to go to advertisers to say that we reach the visible minority communities in Toronto with a signal that doesn't reach where they live.
4266 COMMISSIONER GRAUER: I understand that. I mean, what I'm trying to do is, you know, make sure we have a record. As we go through all of the applications after this, you know, we want to compare apples to apples and not apples to oranges.
4267 Thank you.
4268 According to the Doering report, WBLK Buffalo and -- well, the two Buffalo stations in Niagara Falls attract a combined 7 per cent share, total hours tuned, among people between 18 to 54 in Toronto CMA. This seems high given that the BBM reports the total 12 plus share held by these stations is about 1.5 per cent.
4269 I wonder if perhaps you could explain this.
4270 MR. DOERING: Yes.
4271 The BBM is looking at a 12 plus market and we are looking at 18 to 54, so we are more focused, we have a smaller market.
4272 As well, as Mr. Templeton indicated, it's very difficult for a mailout survey such as BBM and Armitron to get returns from the younger people 18 to 24. In the telephone sampling you are able to quote a sample to ensure you get those represented to the proportion that they should be, and that also accounts for differences in share between the two methodologies.
4273 COMMISSIONER GRAUER: So you think yours is more accurate given your methods?
4274 That's not a fair question. I hear you. Thank you very much.
--- Laughter / Rires
4275 COMMISSIONER GRAUER: You are proposing that your new station will attract advertising dollars away from other media based on your ability to deliver a high proportion of visible minority listeners. I am wondering what other media you might be referring to. We wouldn't want your newspaper to --
--- Laughter / Rires
4276 MR. AUGUSTE: Well, I hope not, although somebody said it will be in one pocket or the other.
4277 You know, one of the things that keeps coming back to me when we think about this is that when I started SHARE I created a market. There were other publications around at the time, but I created a unique market. For one thing, SHARE started out -- the principle with SHARE was based that we were going to provide positive news. I mean, that was unthinkable. People told me I was nuts, you know. Bad news says -- you have to get some headlines that attract readers. So this was new, this was different. You know, over the years we have proven, well, that good news sells.
4278 But, you know, like I said, we created a unique market, and out of that group, a very strong publication. As a matter of fact, it is the strongest publication in our community and it is the largest, as we said earlier, weekly publication, weekly ethnic publication in the country.
4279 I think one of the things I look at in terms of this station, because of its uniqueness, is that we are going to create a new market. We are going to draw people to radio who right now might not be listening to radio. We are going to draw listeners who are not served by existing markets, by existing stations.
4280 You know, when we look at some of the other stations, obviously there will be some draw from some of the stations, but my sense is that it is going to be minimal. My feeling is that we are going to create an entirely new market. We are going to bring a lot of people into this real wonderful world of radio that right now don't feel included. So that is my take on it.
4281 But let me throw this back to Bob Templeton and hear what he has to say about it.
4282 MR. TEMPLETON: Madam Commissioner, I think if I heard you correctly you were trying to delve into other media where that revenue would come from. Primarily print media. This is a very difficult demographic and profile to advertise to using electronic media in Toronto or in any major market in the country for that matter. So there are a number of advertisers that are relying on music publications, newspapers, magazines, NOW newspaper, as an example. We think approximately 25 per cent of our revenue will come from those sources.
4283 If you want me to expand, I can talk about the other sources of revenues from --
4284 COMMISSIONER GRAUER: Yes, I would actually, if you could.
4285 MR. TEMPLETON: Sure.
4286 As I think we mentioned earlier, out-of-market stations, primarily WLBK out of Buffalo --
4287 COMMISSIONER GRAUER: I wonder if you could even expand for me a bit on that, on sort of repatriating some of those advertisers, presumably, if you are going to attract advertisers from out-of-market stations.
4288 BOB TEMPLETON: How we will repatriate some of those?
4289 Well, we think we will be tremendously successful. We are absolutely convinced that this group, this target audience we are targeting or going after, will stampede to your station. It will become very evident that we are now the place to go for that demographic. We think it will be fairly quick, repatriating the listener and the advertising dollars.
4290 It is I guess somewhat of a sad statement that the advertisers who need to target here have to go to Buffalo to effectively address their advertising needs. So I don't know if I have answered your question.
4291 There is another point too I should bring out and that is, if we go to air on this, their signal will be dramatically restricted in the Toronto area. I'm not the engineering expert, but I'm led to believe it won't be reliable much beyond Hamilton, so we will probably exclude it from the Toronto market.
4292 Of course, with all the local initiatives and the local focus, we are very convinced that --
4293 COMMISSIONER GRAUER: I guess it was more -- and I don't think I was very clear -- I think you said 30 per cent. How did you come up with these numbers and sort of how you would do it. It's not whether they would come, but where do you get the 30 per cent figure and --
4294 MR. WOOD: I think those numbers came together, Commissioner, partly because of professional experience, and partly because of our knowledge of what other stations are generating in the market. For example, we assumed that WBLK in Buffalo generated about $1 million in the Toronto market when we put the application together, but then we later learned that their revenue line for Toronto is close to $2 million. Given that their signal will be drowned out totally on the day that this station goes to air, and given that those are all Toronto advertisers, we have very high expectations that a significant portion of our revenue will come from them.
4295 Secondly, the other stations in the market from Buffalo, such as WKSE-FM and B93-FM, also generate probably close to a million dollars in additional revenue between them from Toronto. Toronto advertisers place their money on those stations because they can't reach the unique audience coalition that we will bring. So we have high expectations that the 30 per cent of our revenue that we said would come from Buffalo will indeed be much higher than that.
4296 COMMISSIONER GRAUER: Those conservative projections are starting to look more conservative by the minute, aren't they?
--- Laughter / Rires
4297 MR. TEMPLETON: How long have you got here today?
4298 COMMISSIONER GRAUER: I think we have pretty much covered -- you expect that a number of your potential listeners will spend more time listening to radio than they do now, and I take it from the discussions we have had that those are people who aren't tuning in because there isn't anything that is there for them.
4299 A new dance format station would be expected to capture an audience currently listening to CISS-FM, CIDC and CING. I'm wondering if you could just elaborate a little further on why Doering Consultants didn't identify those stations as likely competitors who would experience some decline, and tell me how your station would differ so much that -- I mean, it seems you don't see these as direct competitors.
4300 MR. AUGUSTE: Okay. I might add, that is a good question. I'm glad you asked that question, because we have all kinds of good stuff here for you on that.
4301 First, I will let Bob take it and then I would like Daniel to talk to that too.
4302 MR. WOOD: Quite simply, it is a different format. It is a rhythm and blues/black urban dance format as opposed to a contemporary hit radio or top 40 format, so the advertiser base, to a large extent, is different, the target demographic is different, and the two stations musically are completely different. I think that is what Mr. Auguste -- it was the reason that motivated him to suggest Mr. Caudeiron.
4303 MR. CAUDEIRON: Thank you very much, Bob.
4304 There is no urban dance format in Toronto, there is no urban dance music format in Ontario, there is no urban dance format in Canada in the commercial conventional mainstream. So we are totally fresh, we are totally new, where we are playing all of the music anytime as opposed to some of the music some of the time. We will be bringing what I call mega-rhythms to the mega-city, a new sound to the new city. And, in practical terms, we will be adding distinctiveness, we will be adding diversity. Eighty per cent of the music not currently heard on commercial radio will be played by us, it may be more.
4305 This music, we know, appeals to the most diverse population that is underserved and is pent up and waiting for it. We also will be playing a distinctive programming and presentation, a music presented in a unique fashion. This format will be diverse, reflecting and respecting and representing the diversity of the population and the creators of the music. It will be giving exposure to a wide range of Canadian talent from diverse communities, and it will be totally inclusive. It will become a uniquely Canadian format for commercial radio.
4306 When we compare with CISS, CING and CIDC, what we have are rhythmic CHR stations that are playing a high rotation of hits repeatedly, in which some of the urban contemporary sounds from the hit charts are played and they may correspond but they are not playing the full broad spectrum of the music that comes from the international sources and from the domestic sources which include reggae and ska and bangra, and African music and salsa and beyond, all the various styles that make up the components of our four elements of music and urban dance.
4307 So we will be totally different. We will be presenting an alternative that is fresher.
4308 MR. WOOD: Commissioner, just to underline what Mr. Caudeiron said, we filed the application on the 20th of September, 1999. Then we obtained a monitor of the music played on CISS-FM, Hits 103 in Orangeville, and Energy 108 in Burlington, to determine the level of duplication that existed between our music list that we filed with you and what they played in the week following. In the entire week of music played on their three stations, only 1.5 per cent of the music is duplicated between the three stations and what we play.
4309 So even though we have said 80 per cent of our music will be different, it was actually 98.5 per cent.
4310 COMMISSIONER GRAUER: Thank you very much.
4311 That concludes all of my questions except the last one which we have asked all of the applicants. I will tell you what it is before I turn it over to legal counsel who may have some questions.
4312 As you know, your application is technically competitive with several others, and what we would really like, we are soliciting the views of all of the competitors to assist us by telling us why they think theirs is the best application and the best use of these very coveted frequencies. It is also your opportunity to answer any questions that we didn't ask you. So if you want to think about that for a minute, you can take five minutes to answer, but first I think legal counsel may have some questions.
4313 Or maybe the Chair.
4314 THE CHAIRPERSON: Thank you.
4315 Mr. Wood, I don't know if you have followed this hearing up to date, but we love applicants who suggest we have great powers, and yours is that somehow we have the power to relax or waive the existing technical regulations concerning protection interference of established FM stations and FM allotments.
4316 I must tell you right off that you don't come anywhere near what we have heard, because Mr. Evanov's colleagues of CKMW suggested we could turn Toronto around.
--- Laughter / Rires
4317 MR. WOOD: Or upside down.
4318 THE CHAIRPERSON: So that Orangeville and Brampton would beam into Toronto from the bottom rather than being beamed into by Toronto, and he is apparently discussing this with Mr. Lastman at the moment.
--- Laughter / Rires
4319 THE CHAIRPERSON: Which leads me to say that Mr. Lastman may have, under the law, something to say about it, just like Industry Canada has something to say about whether regulations that concern the relaxation of their regulation, whether that is their power or ours.
4320 But, for the record, you have mentioned that we have waived before, and I have the 1990 decision here before me, and there is a sentence that says:
"The Commission notes Rawlco's response to the intervention received from CHAY and has no concern that the new station will cause undue technical harm to the signal provided by CHAY-FM." (As read)
4321 Is that what you consider is our waiver?
4322 MR. AUGUSTE: Yes.
4323 MR. WOOD: Yes.
4324 THE CHAIRPERSON: Despite the fact that our information is that there was a technical brief in that regard, and we were responding to the intervention in light of what Industry Canada has to say about it?
4325 But that is the waiver that you feel has been given by us with regard to interference with CHAY?
4326 MR. WOOD: Yes, that's correct.
4327 THE CHAIRPERSON: Mr. Wood, how would that coverage be expanded? We have six, I think, applications for 93.5, ranging from 205 watts to 1,430 watts. I may not have them all, but at least that is what I quickly put together.
4328 So how would the expanded coverage be achieved by transmitting at higher effective power?
4329 MR. WOOD: There is no way that the radio station can effectively cover the Greater Toronto Area unless the waiver from Chorus or Shaw, if you want to call them that, can be achieved. It would be achieved, in part, by higher power, so while some of the applicants are proposing up to 1,000 watts, what we require to effectively cover the GTA is 10,000 to 15,000 watts.
4330 THE CHAIRPERSON: And nowhere do we have an engineering study discussing what that range of radiation would do. I think I heard you say you didn't discuss this with Industry Canada either.
4331 MR. WOOD: We didn't discuss that with Industry Canada, but we do have maps that we would be prepared to show the Commission that will show you the effective impact to CHAY-FM in Barrie.
4332 THE CHAIRPERSON: But you understand that this is not our realm. The technical brief and technical acceptance is given by Industry Canada.
4333 You have experience in the broadcasting sector, that one way is Industry Canada says no there won't be therefore there is no problem, another is CHAY agrees, under whatever terms, to say, "I don't need the protection." Is that the case?
4334 MR. WOOD: Yes. I guess if we were given the lower power frequency only, we would of course accept whatever the Commission is prepared to award. We would do so in the knowledge, first of all, that we wouldn't be able to reach the full GTA, but at the same time we would indeed talk to the people at Chorus at that time again to ask if they would reconsider.
4335 Secondly, we would talk to Industry Canada, and we would be optimistic that Industry Canada would permit the consent that we are looking for, not only because of the precedent but because the area of interference that we will cause to CHAY-FM from Barrie in Toronto proper -- it's only a small pocket of Toronto that we will impact on them, it's not part of their natural trading zone -- that Industry Canada, recognizing that the impact is no greater than what it was in 1990, would allow us at that point to expand the signal. In effect, we would be back to you within months with a proposal to expand the frequency with Industry Canada.
4336 THE CHAIRPERSON: But none of the documentation that you would file to get expanded coverage is with us now.
4337 MR. WOOD: That's correct.
4338 THE CHAIRPERSON: And you acknowledge that you would need a new application with new documentation --
4339 MR. WOOD: Yes.
4340 THE CHAIRPERSON: -- from Industry Canada and/or Chorus depending on what the predicted interference would be. I don't know whether testing would be possible, but normally it would be mathematically constructed as to whether there is, and, as I say, there are two possibilities: Industry Canada could say, no, there won't be; and/or there will be, might be, and Chorus agrees.
4341 I just wanted to clarify that, that there wasn't a part of the decision I was missing, that your waiver was read in that sentence in the context at the time and under a different frequency.
4342 Thank you.
4344 MR. RHÉAUME: I don't have any questions at this time, Madam Chairman. Thank you.
4345 THE CHAIRPERSON: Thank you.
4346 Commissioner Grauer.
4347 COMMISSIONER GRAUER: So if you would like to answer any questions we haven't asked and tell us why your application would be the best use of these frequencies, we would be pleased to hear from you.
4348 MR. AUGUSTE: We have a plan that we have put together that will be inclusive of the diverse visible minority communities in this city that have so far been excluded from the airwaves, or so far felt excluded, rightly or wrongly.
4349 We believe it is important -- I mean, you are talking about 50 per cent, thereabouts, of the city. I mean, things have changed so rapidly in the last 20 or 25 years, but there is that need, and we have a plan to meet that need. It is a badly underserved segment of the market and our plan fits that bill. We are the only applicant with a plan to serve this wider community. You are talking about a couple of million people that presently are not reflected in the mainstream of other radio service.
4350 We will provide a diverse and unique programming service that will meet the needs of this community with a blend of music that will appeal to a wide cross-section, again, not just of this community but also the wider community. So we are talking a reach that, for all intents and purposes, will reflect Toronto, the present, current face of Toronto.
4351 We will provide an opportunity for our young artists especially, but, for our artists who, until now, have not had an opportunity to have their work exposed in an open -- or have easy access to the kind of exposure that they need to grow and develop.
4352 We have artists here who have to leave Toronto to go to the States to be recognized. And they are recognized. It means that they are that good. They can go down there where the market is so saturated and still do well. Could you imagine what will happen if they had that opportunity here, and could you imagine with all the other young artists out there who don't have the wherewithal to go to the States and develop down there? So this is a wonderful opportunity for them as well.
4353 We also are looking at, as I said earlier, our young people and a way to reach our young people. I mean this is something that has been really heavy on my mind and something that is going to be a key focus of this station, reaching our young people with a positive message, getting them back on track those who are off track, and those who are on track, celebrating their achievements, celebrating them, and sharing their successes with the wider community.
4354 One of the things I have looked at in the last while is that we -- you know, in our society, the window we have on the world is the media. Most of our opinions are formed by what we read and see in the media. Right now there is one window. A lot of panes, but one window. When people look into that window at our community, they have basically one perspective. We will provide another perspective, another window, so at least there is a balanced perspective. We are going to speak with our voice. We are going to express our concerns, our hopes, our dreams, and we are going to provide an opportunity for the wider society to see us as we really are.
4355 We have a solid business plan. We have good partners. Like I say, I'm very, very proud to have Bob Wood on this team. He brings a wealth of experience, he brings all kinds of talent. This is a guy who -- that is his life. Having worked with me -- I was going to say "for me", but with me, you know, it brings a new dimension, a special dimension to this theme.
4356 Also having the NewCap Corporation involved with Mr. Steele, they are respected broadcasters, they are a respected corporation in this country. Mr. Steele himself, I know he might not be happy with me saying this, but this gentlemen is member of the Order of Canada. He is a respected businessman. He is somebody who is -- you know, when I started this process, I know they were checking me out. I was checking them out too. Everything I heard about this gentleman and about his company was so amazing, so good. That has been borne out, you know, in the last few months since we have been meeting.
4357 We have a good team. We have a solid financial plan. We have I think more money than we are going to need, and if what you are saying here about our projections being low, you know -- I mean, that is, you are saying that for us, if our projections are -- if the reality is better than our projections, we probably wouldn't even need all that money, but at least it's there in case we ever need it.
4358 So in terms of what we are proposing, I don't see how this can't work. In terms of the -- as we talked about that signal, I leave this up to you. We want to serve our community well. We feel we can do that with what we have asked for.
4359 I don't want you to have any problems with me and my last one, what I'm going to ask you. I'm going to leave this with you; I am going to trust your good judgment. One last thing I would say is that whoever gets the signal I think they are going to have problems. We have two applicants from our community. We need this station in our community. If you feel that my application doesn't meet your requirements, I urge you to licence my application, but one of us. We need this in a swift time.
4360 Thank you.
4361 COMMISSIONER GRAUER: Thank you very much, Mr. Auguste.
4362 THE CHAIRPERSON: Thank you, Mr. Auguste and your team.
4363 MR. AUGUSTE: Madam Commissioner, before I finish, could I ask Mr. Caudeiron to add his few cents to this, if you don't mind?
4364 THE CHAIRPERSON: Of course.
4365 MR. CAUDEIRON: Just to let the Commissioners leave on a --
4366 THE CHAIRPERSON: It's not of the --
4367 MR. CAUDEIRON: No. It's not about anything other than sharing with you the SHARE sound and leaving you in a higher state of mind than you came in this morning, I hope.
4368 On behalf of all the artists who would be heard for the first time and all of the time on this new radio station, the SHARE sound: the sound, the sound, the SHARE sound is bounce and prance and bounce and dance, the SHARE sound is fad joints, bamba sounds, soul grooves, club moves, Latin loops, reggae boops, roots manoeuvres and future flavours, olé, olé, olé, olé, uptown, downtown, all around, and I'm a three-piece suit dancing, that sound, that sound, a super sound, a passionate sound.
--- Applause / Applaudissements
4369 THE CHAIRPERSON: Now, Mr. Evanov will really be worried.
--- Laughter / Rires
4370 THE CHAIRPERSON: Thank you. We will see you late in the process.
4371 We will take a fifteen-minute break, but Mr. Secretary has an announcement first.
4372 MR. CUSSONS: Thank you, Madam Chairperson. I would just like to make an announcement.
4373 I have just been advised that, with great regret, St. Sava's Radio has withdrawn its application from this hearing. Notwithstanding this withdrawal, we will still stay with our plan and hear the applications by 914258 Ontario and Radio 1540 tomorrow, and Phase II Monday morning.
4374 Thank you very much.
--- Recess at 1047 / Suspension à 1047
--- Upon resuming at 1105 / Reprise à 1105
4375 THE CHAIRPERSON: Order, please. À l'ordre, s'il vous plaît.
4376 Mr. Secretary.
4377 MR. CUSSONS: Thank you, Madam Chairperson.
4378 We now actually have two applications, first of all, by Fairchild Radio (Toronto) Ltd. for a broadcasting licence to carry on a specialty FM ethnic radio programming undertaking at Toronto.
4379 The new station would operate on frequency 93.5 MHz, channel 228B, with an effective radiated power of 1,430 watts upon surrender of the current licence issued to CHKT Toronto. The new FM station would replace AM station CHKT. The applicant proposes to continue to offer an ethnic radio service.
4380 By condition of licence, the applicant will direct programming to a minimum of 14 cultural groups in a minimum of 15 different languages per broadcast week.
4381 The applicant is also requesting permission to broadcast simultaneously on the AM and FM bands for a period of three months before surrendering the current licence issued to CHKT.
4382 The Commission notes that this application is technically mutually exclusive with other applications scheduled at this hearing for the use of the 93.5 MHz frequency.
4383 The Commission also notes that this application is mutually exclusive with an application filed by the same applicant to amend the broadcasting licence of the radio programming undertaking CHKT Toronto. The applicant proposes to change the frequency from 1430 kHz to 740 kHz, and to relocate the transmitter to a new site at Hornby, Ontario as an alternative to the proposed new FM station at Toronto.
4384 The applicant will continue to operate this station as an ethnic radio service.
4385 The Commission notes that this application is technically mutually exclusive with other applications scheduled at this hearing for the use of the 740 kHz frequency.
4386 I would now like welcome Mr. Chan and his team.
4387 Mr. Chan, whenever you are ready.
PRESENTATION / PRÉSENTATION
4388 MR. CHAN: Madam Chair, Members of the Commission, we are pleased to have this opportunity to discuss our applications to move our Toronto ethnic radio service, CHKT, to the 93.5 FM frequency, or alternatively, to 740 AM.
4389 First, I would like to introduce our panel. My name is Joe Chan, and I am the General Manager of Fairchild Media Group. On my left is Calvin Wong, General Manager of Fairchild Radio; and on my right is our regulatory counsel, Tracey Pearce of Goodman Phillips & Vineberg. Behind me on the left is Gary Nobody, Station Manager of CHKT 1430; beside Gary is Gordon Elder of Elder Engineering Inc.; and beside Gordon is Donnie Tong, Operations Manager of Fairchild Radio.
4390 MR. WONG: Although there are a number of proposals for 93.5 FM and 740 AM, we feel there are compelling reasons why Fairchild Radio should be awarded one of these frequencies.
4391 First, our service meets the Broadcasting Act objectives laid out in the Order in Council by reflecting the diversity of cultures in Toronto and recognizing the multicultural, multilingual nature of Canadian society.
4392 Second, CHKT is a service with a proven track record that has come to be depended on by thousands of people from a wide range of ethnic communities in Toronto. For many people, it is the only source of local news and information.
4393 Third, CHKT faces a very serious threat to its existence. The City of Toronto has indicated it will not provide Fairchild with a new lease for our transmitter site when it expires in less than two years. As we will explain in greater detail, this means that without access to an alternate frequency this valuable service will be forced off the air.
4394 MR. CHAN: As you know, the Order in Council directed the Commission to reserve the 93.5 FM and 740 AM frequencies in Toronto for services which meet the objectives set out in section 3 of the Broadcasting Act. In particular, these frequencies are to be awarded to services which contribute, both in terms of programming and employment opportunities, to Canada's diversity, including its multicultural and multiracial nature. The promotion of multiculturalism and linguistic diversity is especially important in Toronto, the most ethnically diverse city in Canada, where more than half our residents are of ethnic origins other than English or French.
4395 CHKT AM 1430 is a service which clearly reflects this diversity. It was licensed in October 1996 and has been providing ethnic radio service to Toronto residents for almost three years now. Today, 100 per cent of programming, or over 126 hours each week, is devoted to ethnic programming to 19 different cultural groups in 20 different languages, exceeding the requirements of our conditions of licence. CHKT is the sole source of third-language programming for at least five of these communities.
4396 Our schedule has been carefully designed to best meet the needs of Toronto's very diverse market, and we work closely with all of the different communities we serve to create programming that is relevant to them.
4397 In terms of employment, CHKT actively recruits members of visible minority groups, for example, by working with the Chinese Information and Community Services of Greater Toronto. We train individuals with little or no broadcasting experience, enabling them to deliver service to their communities and ensuring a growing pool of talented ethnic broadcasters. Fairchild Radio has further demonstrated its commitment to the training of young talent with the creation of $160,000 endowment in the broadcasting program at Ryerson Polytechnic University. CHKT employs more than 50 people, almost all of whom are members of a visible minority group, and we are pleased to say that 57 per cent of our announcers and reporters are women.
4398 MR. NOBODY: We are proud of the incredible range of ethnic groups served by our programming and the contribution we make to meeting the significant demand for a third-language service. Chinese programming in both Mandarin and Cantonese sustains our service, drawing close to 120,000 listeners. However, CHKT also provides programming to Tamils, Greeks, Croatians and Filipinos, to name just a few. Many of the groups we serve, such as the Cambodian and Thai communities, are relatively small and have few opportunities, if any, to have issues of concern to them addressed by local media. CHKT's programming has come to be relied on, particularly in communities with many members who are not fluent in English and those with no other media outlet in Canada's largest city.
4399 We are proud of our intensely local service. CHKT provides over 120 hours of local programming and each week, including frequent news, weather and traffic updates throughout the day in the language then being broadcast. The majority of our programming consists of talk shows on regional and local topics of concern, ranging from general issues such as health care, municipal politics or arts and culture in Toronto, to issues of specific interest to individual communities. For example, every year our Jamaican program is broadcast live from the Caribana festival. Similarly, the producer of our Punjabi program often arrange for live coverage of important events, such as the Indian New Year celebrations.
4400 In addition, in communities where there are a significant number of listens who do not speak fluent English, we provide the invaluable service of ensuring the regular broadcast of basic information on healthcare, education, tax matters and voting procedures.
4401 Finally, we are proud of our commitment to Canadian talent development. Fairchild Radio has committed more than $28,000 in direct costs and $50,000 in indirect costs each year to support the development of Canadian talent in our ethnic communities.
4402 Our Canadian talent development initiatives are directly targeted to supporting the development of ethnic artists and their music. For example, we provide funding and support to a national Chinese songwriting competition. The winners of the contest are given the opportunity to perform live in a concert sponsored by CHKT at the Canadian National Exhibition. We sponsor a similar international songwriting competition among all of the communities we serve. We are committed to continuing all of our Canadian talent development initiatives if awarded one of these frequencies. This commitment represents more than $540,000 over the seven-year licence term.
4403 MR. WONG: Unlike the other ethnic applications before you this week, we are looking for a new home for an existing service. Our preference is for the 93.5 FM frequency because it has significantly lower ongoing technical expenses than the 740 AM. However, we would be pleased to continue our service on either the AM or the FM band. If we are awarded a new frequency, CHKT will surrender its licence for AM 1430.
4404 Without a new frequency, CHKT -- a service which is a vital source of information and cultural programming to dozens of people in many different ethnic communities in Toronto -- may soon be forced off the air. You asked us in the deficiency process if the "door is closed" on any lease renewal for our transmitter site. Based on the city's response, it is clear to us that the door is closed.
4405 At the time of the last renewal, our landlord, the City of Toronto, removed any further right to renew the lease when it expires at the end of 2001. Since that time and since our purchase of the assets of CHKT, residents of the Toronto Islands were successful in having a public school built. That school is located adjacent to the transmitter site and many islanders now want to see the transmitters go. They have begun to apply pressure to the city not to negotiate a new lease.
4406 As you know, we have approached the city several times about entering into a new lease for the site, and the city has provided us with no assurance that it will even begin such negotiations. In fact, our most recent correspondence from the city clearly states that the lease will expire on December 31st, 2001, and that Fairchild has no further right of renewal.
4407 As the report from our engineer shows, there are no other suitable sites from which we can broadcast at our current frequency, and 93.5 FM and 740 AM are the only available frequencies adequate for CHKT's service. The lack off alternative transmission sites has also been confirmed by Industry Canada. If, as the city has now indicated, a new lease is not provided, CHKT will go off the air. This would be a great loss for Toronto, for the ethnic communities who rely on our service and for the Canadian broadcasting system.
4408 For your convenience, we have attached to our presentation copies of the relevant letters from the City of Toronto, our engineer, and Industry Canada. All of these materials were previously filed with the Commission.
4409 MR. CHAN: In summary, Madam Chair, Members of the Commission, CHKT is a service with a proven record of providing relevant programming to numerous ethnic communities in Toronto in a variety of different languages. It is a service which is relied upon by thousands of listeners who have no other voice in the media. It is a service of which we, and the communities we serve, are fiercely proud. Without the new frequency, the existence of that service is threatened. If CHKT is forced off the air at the end of 2001, we believe it will be a great loss, not only for Toronto but for ethnic broadcasting in Canada.
4410 We welcome any questions that you may have.
4411 THE CHAIRPERSON: Thank you, Mr. Chan, and your colleagues.
4412 Commissioner Wilson, please.
4413 COMMISSIONER WILSON: Good morning, Mr. Chan. Thank you for being with us this morning.
4414 Since this is not an application for a brand new station -- you have pointed out you are already existing in the market -- I don't have as many questions on some areas of your application that the other applicants are having to go through with us. And amazingly you have anticipated a lot of the questions that I had in your opening presentation, and, I mean, I will tell you as I go through what those questions were but you have given me some answers to some of those questions in your presentation this morning.
4415 So I do have just a couple of areas that I want to clarify with you, and then I really want to turn to the technical issue, because that is the fundamental reason for the application.
4416 MR. CHAN: Of course.
4417 COMMISSIONER WILSON: The first area that I was going to explore with you, and I will look at one aspect of it, is the new ethnic policy. And I noticed in your application, in sections 7.4 and 7.5, where it talked about local content, you have put "No change contemplated" and "Not applicable". I realize now that the "No change contemplated" is because you are doing such a high degree of local programming.
4418 MR. CHAN: That's correct.
4419 COMMISSIONER WILSON: As you stated this morning. Okay.
4420 So I don't need to ask you to clarify that because, as you know, under the new ethnic policy we are asking ethnic broadcasters to describe to us, at renewal or licensing, what kinds of things they are going to be doing to reflect their local communities. You seem to be doing that very well already.
4421 The other aspect of the ethnic policy that I just wanted to ask you about was the notion of the broad service rule, where you come in to apply for a licence and then we ask to you serve a certain number of communities in a certain number of languages.
4422 Under the new ethnic policy, as you know, we have taken a slightly different approach in markets where there are multiple broadcasting outlets for ethnic communities. I am just wondering if you had thought about that at all when you were putting your application together, if you had considered sort of focusing your programming in a little bit more.
4423 I am not suggesting that you should, I am just asking if you had considered it because this is a pretty new policy that we have. It is something that I like to have the opportunity to explore with you while you are with us.
4424 MR. WONG: Yes, Madam Commissioner. I think in our application four years ago we sort of took that into consideration, the existing ethnic broadcaster, what they were doing during that time. So we sort of set our focus on the Asian population in the GTA area, and that is what we have been doing for the last three years. That proved to be quite successful, that is why we didn't contemplate any change in our programming or the number of services we offer, the number of languages we offer in our service.
4425 MS PEARCE: If I could just add, Commissioner.
4426 CHKT fills an important niche in the community and, as Calvin has stated clearly, the focus is on programming directed to the Chinese community. That being said, as you can tell, from 19 different cultural groups and 20 different languages, they are serving an incredibly broad range of communities. I think our view, the view of Fairchild, in looking at what they provide to the community and what they would continue to provide to the community, they really saw that as CHKT's role.
4427 So while we appreciate that the policy has changed and we clearly looked at that, the decision was that CHKT is doing, we hope, a very good job, believe a very good job of what it is doing now, and was best suited to continuing to do that and serving that incredible range have a communities.
4428 COMMISSIONER WILSON: Thanks Ms Pearce.
4429 I guess, as you know -- and I believe Fairchild was at the ethnic policy consultations that we had in Toronto -- one of the comments that was made to the Commission during that whole exploration was the fact that sometimes lots of communities are getting service but they are not getting enough service, and so that was the thrust behind it. But, you, of course, know your market far better than a regulator, so I am not questioning that decision at all. I just wanted to have the opportunity to explore your view on that, as I said. So thank you for that.
4430 As part of your supplementary brief, you filed a programming schedule for the service as Appendix A. I don't know if you have that with you. I just wanted to ask you a question of clarification on that. It is a block diagram. It looks like this.
4431 MR. CHAN: Yes, we have that.
4432 COMMISSIONER WILSON: Okay.
4433 Is this program schedule representative of what you have on the air right now?
4434 MR. CHAN: Yes, that's correct.
4435 COMMISSIONER WILSON: Okay. So you carry your Cantonese programming from noon until 7:00 p.m. seven days a week?
4436 MR. CHAN: Gary, would like to respond to this question?
4437 MR. NOBODY: Yes, that's correct, Commissioner.
4438 THE CHAIRPERSON: That's correct?
4439 MR. NOBODY: Yes.
4440 COMMISSIONER WILSON: Okay.
4441 And the Mandarin you do between 6:00 a.m. and 8:00 a.m. Monday to Friday.
4442 MR. CHAN: Yes.
4443 COMMISSIONER WILSON: And also from 7:00 p.m. to 8:00 p.m.
4444 JOE CHAN: In the evening, yes.
4445 COMMISSIONER WILSON: In the evening.
4446 You are aware that you have a condition of licence which restricts the broadcast of Mandarin to between 6:00 a.m. and 8:00 a.m. Monday to Friday, and I am just curious as to why the Mandarin programming shows up at 7:00 p.m. as well.
4447 MR. WONG: If I may answer to that. It is that there is a shift in the Chinese immigrants coming into Canada. The immigrants from Hong Kong, which has been coming largely in the last ten to five years, they mainly speak Cantonese, and the recent trend is that the immigrants coming in from Hong Kong is decreasing while the immigrants coming from China is increasing. A substantial percentage of immigrants coming from China speak the dialect of Mandarin. That is why we increased the Mandarin broadcasting hour in our total Chinese language programming.
4448 COMMISSIONER WILSON: Ms Pearce, you probably wanted to say something.
4449 MS PEARCE: Yes. To the extent that the schedule is not in compliance with the condition of licence, clearly it will be changed or there will be an application submitted to the Commission.
4450 COMMISSIONER WILSON: Thank you, Ms Pearce.
4451 The next area I want to look at with you is the area of Canadian talent development. Once again you did anticipate me by going through in your presentation this morning the commitments that you have made, both direct and indirect, and as well the endowment at Ryerson, and I believe you have a scholarship at BCIT. Can you just explain for me, how does the endowment work?
4452 MR. WONG: That endowment provided to Ryerson University is to support, and then there is a scholarship that was given to those students that do have projects, audio projects, that emphasize and concentrate on the multicultural aspect of the City of Toronto. So they send in their projects and they apply for a funding scholarship from the endowment, and then each year a substantial amount of money -- at this point according to the university, they estimated about $20,000 will be granted each year to student projects that expand on the multicultural aspect of the Toronto area.
4453 COMMISSIONER WILSON: Let me just ask you this question. If you were awarded one of the frequencies as a result of your applications today, would you continue those commitments that you made?
4454 MR. WONG: Yes, we will.
4455 COMMISSIONER WILSON: Okay.
4456 You spent $28,000 a year on direct Canadian talent development. Let me just flip to my page here. So there Is $28,000 in direct costs, and $50,000 in indirect costs. Again, I am just sort of going back to the ethnic broadcasting policy review that we held, but are you member of the Canadian Association of Ethnic Broadcasters?
4457 MR. NOBODY: Yes, we are, Commissioner.
4458 COMMISSIONER WILSON: You are?
4459 MR. NOBODY: Yes, we are.
4460 COMMISSIONER WILSON: As part of the ethnic policy review, ethnic broadcasting policy review, it is actually in paragraph 36 of the ethnic policy, the Ontario arm of the CAEB committed $3,000 a year to catalogue ethnic music. I think it was agreed by a lot of parties who gave us input on that policy that that catalogue of music was very important in terms of knowing what your inventory was when you are going on the air.
4461 I don't think it is, based on the list that I have here, but do you make a contribution to that?
4462 MR. NOBODY: Commissioner, no, CHKT does not participate in the CAB plan, because the plan funds general talent development in Canada, or the general Canadian music in Canada.
4463 COMMISSIONER WILSON: Yes. I think we might be talking about two different things: one is the Canadian Association of Broadcasters, and the other is the Canadian Association of Ethnic Broadcasters. Are you a member of the Canadian Association of Ethnic Broadcasters?
4464 MR. WONG: Commissioner, if I may clarify that, at this point, we are not a member of CAEB.
4465 COMMISSIONER WILSON: You are not a member. Okay.
4466 MR. WONG: So we haven't participated in the plan in doing that catalogue.
4467 COMMISSIONER WILSON: Would that catalogue be of any use to you?
4468 MR. WONG: Well, because what we think, and from our experience, is that, at the moment, the amount of ethnic music produced in Canada is very, very minimal, so that is why we devoted our direct contribution of the CTD fund to the projects that we think really can increase and enhance the actual production of the Canadian ethnic music.
4469 COMMISSIONER WILSON: Okay. That is great. Thank you, Mr. Wong.
4470 Once again, if you were to be awarded one of the frequencies as a result of these applications, you would continue the $28,000 in direct contributions to Canadian talent development?
4471 MR. CHAN: Yes, we will.
4472 COMMISSIONER WILSON: Okay. So that brings me to the technical aspect.
4473 I want to explore essentially a couple of areas with respect to this, two or three areas, actually. One is what led you to your preference of 93.5 versus 740, because you put in two applications, one for a new FM licence and one for an amendment to your AM licence. You indicated that 93.5 was your preference, your preferred option.
4474 MR. CHAN: From the business end point of view, we prefer 93.5, basically strictly from the annual maintenance cost of the tower, strictly from that angle.
4475 If it is from the technical angle of looking at these two frequencies, I would like perhaps Donnie, who is our Operations Manager, perhaps and Mr. Gordon Elder, possibly the most experienced broadcasting engineer in town, to answer these questions.
4476 COMMISSIONER WILSON: Okay.
4477 MR. TONG: Apart from the business aspect, the contour of 93.5 FM, with the expanded contour in general, it is most comparable to our existing coverage of AM 1430. AM 740 has a very good contour and coverage. It covers basically half of Ontario, half of Southern Ontario, but the downtown core coverage is somehow not as good as our current frequencies, but AM 1430 is well known for its downtown coverage, so if you look for an alternative any one of those would be adequate, but 93.5 would be our preference.
4478 COMMISSIONER WILSON: I'm sorry. There is some kind of computerized music playing in the background here. I'm sorry.
4479 MR. CHAN: Excuse me, maybe to further add to my earlier comments is just to give you a comparison.
4480 COMMISSIONER WILSON: Sure.
4481 MR. CHAN: The annual costs for the technical maintenance costs, say, for the FM tower is roughly about $100,000 a year, and then for the AM it is about two hundred. Basically, for that reason, we would prefer -- if we have a choice, we would prefer to have the FM.
4482 COMMISSIONER WILSON: I noticed that there was a large difference in the cost. But the reason I am asking is because I know that the population distribution for the communities that you are serving are changing somewhat, the demographics are shifting northward and somewhat westward into Markham and Richmond Hill, which is where I live. I believe that is where your office is as well.
4483 It just struck me -- I mean, I know in your financial projections you showed that there would be no significant difference between the revenue streams that you would get for the AM versus the FM, but I found that, just on an intuitive basis, a little hard to understand considering that there is such a large Chinese population and it is spread over a fairly wide geographic area now that certainly, I mean according to StatsCanada, and you may have numbers that are more accurate than that, but, you know, the core of Toronto may have the largest -- Scarborough, in fact, may have the largest population, I think, if I have my numbers -- I hope I don't have them reversed.
4484 So I was just curious that 740 wouldn't be your preferred option since you might have the potential to increase your listenership fairly substantially, and potentially your advertising revenues as a result of that.
4485 MR. WONG: Yes, Commissioner. In fact our projection is based on the census figure also. According to the Census '96 figure, we know that 740 does have a larger coverage, and that the ethnic population within that coverage is a little bit bigger than the existing 1430. However, our existing 1430 is able to serve the absolute majority of this population.
4486 When you mentioned about the Chinese-speaking population in the Toronto area, our existing CHKT can reach 274,000 and, then, with the expanded 740 AM it reaches 297,000. So it is just minimal increase of about 20,000. So, to that effect, you know, we don't see that will increase significantly in our advertising revenue.
4487 COMMISSIONER WILSON: So 1430 would cover Scarborough, Toronto, North York, Markham, Mississauga, and Richmond Hill?
4488 MR. WONG: Yes.
4489 COMMISSIONER WILSON: It covers all of those areas. And that is where the most significant population will be?
4490 MR. CHAN: Yes.
4491 Also, I may add that for the 93.5 FM also, by looking at the contour map, it also covers the core of our business sources which is -- including Scarborough, Richmond Hill, and Markham.
4492 COMMISSIONER WILSON: That's true, although the strength of that signal, it gets a lot weaker as it gets towards Richmond Hill, I believe, according to the map that was filed. I mean, you have got a 3 millivolt contour right in the core and then as it goes out it gets weaker.
4493 MR. CHAN: It's weaker but it is still acceptable to us.
4494 COMMISSIONER WILSON: Okay.
4495 I believe your engineer made a comment -- sorry -- Mr. Tong, you made a comment about 93.5 with expanded coverage. What were you referring to?
4496 DONNIE TONG: I was referring to compared to other applicants. Some use a lower powered transmitter, or coincides with CBC 99.1 in which the contour would be somewhat restricted.
4497 When we first talked to Mr. Elder, we were exploring suitable alternatives for CHKT. By looking at 93.5, we need a comparable contour to our existing 1430 contour. Mr. Elder achieved that by designing a system that, with its own antenna and a different antenna array, achieved the maximum contour with all the protection transmitters and all the adjacent channels protected.
4498 Maybe Mr. Elder can explain it a bit more.
4499 MR. ELDER: Madam Chair, Commissioners and Mrs. Wilson --
4500 COMMISSIONER WILSON: Ms actually.
--- Laughter / Rires
4501 MR. ELDER: -- Ms Wilson, we optimized the use of 93.5 by putting up an antenna that was custom designed for that purpose on the only existing unoccupied short tower on the rooftop of First Canadian Place. It's a real antenna farm up there, but this one is not used any more. It was the first one used by a radio station up there many years ago.
4502 I believe that a far more important factor is the lack of sites, alternate sites, and if you wish I will address that issue in detail.
4503 COMMISSIONER WILSON: I think we will get there through some of these question, and I'm sure, Mr. Elder, that you will jump in and be able to help me with a couple of other questions that I have.
4504 Just turning now to the issue with the City of Toronto, and thank you for attaching those letters to the back of your presentation, which you had already filed.
4505 You talked in your presentation this morning -- this is all lawyer stuff. I'm not a lawyer, but -- about the fact that the City of Toronto will not renew, and that you have approached the city several times about entering into a new lease for the site, and I recognize the distinction between those two things, so they have exhausted the right to renew and you have approached them about getting a new one, and they have said that they are not prepared to do it right now. Is that what they have said?
4506 MR. WONG: Yes, and that -- if I can have a couple of minutes I would like to take you through the history of the lease at the Centre Island.
4507 COMMISSIONER WILSON: Okay. That's great.
4508 I have read the documents, I have read the original lease to Foster Hewett Broadcasting, and a little bit of Canadian history there, and I am quite familiar with Toronto Island, as well, but I would be very interested to hear.
4509 MR. WONG: Yes. Then I will do that. Thank you.
4510 The origin lease for the transmitter site on Centre Island was executed on July 14, 1970, between Foster Hewett Broadcasting and the City of Toronto. It provided an initial term of ten years, expiring on December 31st, 1980. We have a right to renew for 21 years.
4511 Then, pursuant to an agreement dated October 10, 1980, this right of renewal was exercised and the lease was extended for a further term expiring on December 31st, 2001. This 21-year renewal term was subject to the same terms and conditions established in the original lease in 1970 with certain exceptions, including the most important one, the specific elimination of any further right of renewal.
4512 Then Fairchild recently learned, through a review of Toronto City Council minutes, that the lease was renewed in 1980 despite the preference of the Commissioner of Parks and Property that it not be renewed.
4513 In 1981, the lease was assigned to Telemedia, and when Fairchild acquired the assets of the station in 1996 the lease was assigned by Telemedia to Fairchild.
4514 As provided in the lease, it will terminate on December 31st, 2001, and the lease explicitly provided that it will have no further right of renewal.
4515 So in early 1998, Fairchild approached one of the city councillors responsible for the Centre Island regarding the initiation of a negotiation for a new lease. Fairchild was eager to secure a new lease given the importance of ensuring continued service to the community. We were advised that we should speak to the appropriate city staff members, and we asked our legal counsel to do so.
4516 Our legal counsel had numerous conversations with the manager of property service at the City of Toronto explaining Fairchild's desire to secure a lease of the transmission site beyond 2001. Staff were reluctant to deal with the issue, as the expiry was then three years away, and because the city administration was in a state of flux due to an amalgamation of the mega-city. Nevertheless, our legal counsel explained the importance of a new lease to CHKT and continued to seek a resolution with the city.
4517 At the same time, a public elementary school was constructed on Centre Island adjacent to the transmitter site. The proximity of our transmission tower to the school ground raised significant public concern. In early 1999, a group of parents visited Fairchild expressing health and safety concerns and asking us to move our transmission towers. Moreover, in a newspaper article, in a Globe and Mail article, appearing in the same period, it was reported that the majority of the islanders said the towers should be moved when the lease came due in 2001 while a minority wanted them moved even before the school opened in 1999.
4518 In light of these develops, Fairchild became increasingly concerned about securing a new lease and continued to dialogue with the city about the possibility of doing so. Despite our ongoing attempt by Fairchild and our legal counsel throughout the last two years, we received no indication from the city staff that a new lease would be offered for the use of the Centre Island site.
4519 In late 1999, our regulatory counsel contacted city staff in a further attempt to obtain a definitive statement regarding the possibility of a further lease of the transmitter site. In response to that, the city provided a letter in November 1999, which was filed with the Commission as part of our application. Therein the city clearly states as follows, quote:
"...the Lease will terminate on December 31, 2001, and Fairchild Radio shall have no further right of renewal."
4520 So, in our view, that statement clearly indicates, as of January the 1st, 2002, Fairchild will no longer have access to the transmitter site on the island.
4521 COMMISSIONER WILSON: That is why I said that this is kind of lawyer stuff, because if they say that you will have no further right of renewal, they are not saying that you won't have a new lease. That is the point that I am trying to get to you in this, is that -- I mean, certainly I understand your concern, but the renewal and a new lease are two separate things, and I am just wondering if you had -- I guess what I'm saying is that this tells me that they won't renew, this letter that you have filed. This says to me the City of Toronto won't renew that lease, but it does not say to me that they will not negotiate a new lease with you.
4522 MR. WONG: For the last two years we have been asking the city to talk about it, and then up to this moment there is clearly no indication they want to talk about it. At the same time, we are aware of the increased public concern about our transmitter site. That creates a kind of political climate that prevents, or I would say that makes the city -- that they don't want to talk about renewal or starting the negotiations of a new lease.
4523 COMMISSIONER WILSON: Is it just your transmitter site? There is another broadcaster whose towers are on Toronto Island as well.
4524 MR. WONG: Yes, there is another transmitter site on the Centre Island.
4525 COMMISSIONER WILSON: Are their towers near yours?
4526 MR. WONG: Yes. In fact the school is right in the middle of the two.
4527 COMMISSIONER WILSON: The school is right in the middle of theirs and yours?
4528 MR. WONG: Yes.
4529 COMMISSIONER WILSON: Boy, I wonder who picked that site for that school. I guess they had sunglasses on or something, they didn't see the towers.
4530 Have you talked to the other broadcaster about their status with the City of Toronto and their lease on the island?
4531 MR. WONG: We have not. We know that the islanders are concerned about both towers and that we don't know about their situation and when does their lease expire.
4532 COMMISSIONER WILSON: So you don't have any information about what kind of a situation they might be in. I'm just wondering if we should anticipate another application from them.
4533 MR. ELDER: I may be able to throw some light on this, Ms Wilson.
4534 COMMISSIONER WILSON: Thank you, Mr. Elder.
4535 MR. ELDER: The other site which is occupied by CHIN is immediately southwest of CHKT's, and it is on the former water filtration plant that has been disused for a good many years. It is not parkland, it is water purification land, which comes under a different jurisdiction within the City of Toronto.
4536 COMMISSIONER WILSON: So they could be treated differently because of that?
4537 MR. ELDER: They may well be. I am trying to steer clear of leasing, so I will pass you over to others about that.
4538 COMMISSIONER WILSON: Well, it is interesting to know that.
4539 MR. WONG: Commissioner, if I may add that in the intervention by CHIN, they didn't mention anything about the issue of our concern on our transmitter site. So, in that sense, it may show that even CHIN might have this concern later on.
4540 COMMISSIONER WILSON: I'm not sure I understand.
4541 MR. CHAN: Okay. The second tower we are talking about, we believe it belongs to CHIN.
4542 COMMISSIONER WILSON: Right.
4543 MR. CHAN: We know that their lease with City Hall expires about three years after our expiry in 2001. I think their expiry is around 2004, something around that area.
4544 In the intervention against us, they didn't mention anything about our possibility of renewal, so probably they share the same concern as ours.
4545 MS PEARCE: Just to follow on that, and echo what I think Gordon was saying, you know, that this signal and contour may not give rise to the same issues which flow from the problems with the lack of availability of the Toronto Island site for CHKT for another broadcaster -- I won't go any further because that is engineering stuff, but I just wanted to clarify --
4546 COMMISSIONER WILSON: Sort of like that lawyer stuff.
4547 MS PEARCE: That's right. I wanted to clarify one point on the lawyer stuff, which was that the Commission may be experiencing some of the frustration which Fairchild had experienced in this situation in trying to get clarification, and I certainly acknowledge your point about a renewal versus a new lease.
4548 The city has not positioned their view on the possibility of a new lease as they are not prepared to talk about it right now. They have given us no indication that they are prepared to talk about it at all, that they are prepared to negotiate in any respect, that they are considering a new lease or that it is a possibility. They have been unequivocal about the right of renewal. In the context of our ongoing and significant efforts with them, and the other factors like the school and their clear statements with respect to a renewal, which at the end of the day if you don't have a renewal or you don't have a new lease it is the same result, you don't have a transmitter site, Fairchild's reasonable conclusion is that it is not going to have access to this site as of January 1, 2002.
4549 COMMISSIONER WILSON: I appreciate that clarification. It sort of helps me connect the dots a little bit.
4550 Did you look at any other frequencies on the AM band between 1605 and 1705, for example?
4551 MR. TONG: Yes, we did consider, and we have discussed with Gordon Elder, both on the expanded AM band and also 106.3 or .5 on the FM band, and, in summary, from Gordon Elder's advice and based on his studies and experience, none of these frequencies were viable to serve CHKT's existing listeners.
4552 I would ask Gordon Elder to further explain.
4553 MR. ELDER: It will be a very short explanation.
4554 AM frequencies have been extremely scarce here since the 1940s. In 1984, the Bilateral Treaty with the United States provided 640 kHz as the only new frequency for Toronto, which CHOG later obtained.
4555 The only other ones which have been available since 1992 are in the band extension from 1610 to 1700 kHz -- there are actually two of them -- at a maximum power of 10 kilowatts a day and one kilowatt a night towards the south.
4556 There is no vacant AM frequency whatsoever that could replace CHKT's 1430 kHz as a viable alternative except 740 kHz. 93.5 MHz is the only viable FM one, in my opinion.
4557 Finally -- last sentence -- experimental digital radio presently broadcasting from the CN Tower, or an FM station subsidiary channel, are not viable alternatives.
4558 COMMISSIONER WILSON: Thanks, Mr. Elder, but I guess the frequency that I want you to talk to me about is 1670.
4559 I have a couple of contour maps that were filed as part of an application that was withdrawn from this hearing for 1670, and they show that with one transmitter they could have served probably a good portion of the area that 1430 serves. I would be curious as to, Mr. Elder, your professional opinion on whether or not that is a reasonable possibility, and why not. Maybe you could explain it to me in language I can understand.
4560 MR. ELDER: I would be happy to do that in simple, non-technical language.
4561 Was that application the one that we prepared the technical brief for? I believe it probably was.
4562 COMMISSIONER WILSON: Yes, it was.
4563 MR. ELDER: The problem was the lack of suitable site. I looked very hard and very long, and I thought I had obtained one that would be acceptable to the City of Toronto. I had talked to and met many -- no, I didn't really meet them -- I talked to them, I exchanged correspondence with Bob Picket, the Director of Water Treatment, et cetera, finally, he was the one who rejected the site that I finally homed in on for the simple reason that there is a two-year study under way for water treatment and storm water treatment. Therefore, this little site I had picked for 1670 -- which we have changed to 1610 laterally -- was not acceptable administratively. Very frustrating.
4564 And I can go into greater detail regarding the 1430 dilemma for you. Is it timely to do that now or we will wait?
4565 1610, remember, has poorer coverage than 1430, and much, much broader coverage than the lower frequencies, but, yes, it was -- the coverage that my client would have received would have been a lot better than nothing but not nearly as good as 1430 currently has.
4566 COMMISSIONER WILSON: You said in the information that you put on file with us that in order to -- well, there are a couple of opinions. One is that there really is no other location for the towers, for 1430, than on Toronto Island, and that you had explored the possibility of moving the transmitter site somewhere south, the south end of Toronto on the lakeshore. You just weren't able to find any place?
4567 I understand it would be more costly. I mean, the cost of the Toronto Island lease had certainly increased quite substantially over the years. There was absolutely no other site available for 1430?
4568 MR. ELDER: That is correct, Ms Wilson.
4569 I will just summarize the problems now.
4570 CHKT's transmission site must be centrally located slightly south of Toronto's core area in order to protect other stations on or near 1430 kHz, and to provide satisfactory primary service. Based on my own experience between 1960 and last summer, searching for a suitable administratively acceptable AM transmitter site in the Toronto area is like looking for a proverbial needle in a haystack.
4571 Many engineering, environmental, aeronautical, zoning, health, safety factors, together with other Industry Canada rules and municipal ones, determine the suitability and acceptability of a proposed AM transmitting site. In addition, community opposition often arises due to visual impact and the not-in-my-backyard syndrome.
4572 As Toronto's population has grown since World War II, the islands have become increasingly important and protected due to their unique, readily accessible parks, gardens, yacht clubs, experimental farm and recreational areas for citizens' enjoyment, city airport and residential area on Wards Island.
4573 As previously noted, new AM sites on Toronto Island's parks and recreation land are prohibited by a by-law. Elsewhere on the islands, they would also conflict with aviation and other uses.
4574 Quite simply, it is clear that the political climate is such that the City of Toronto would not provide an alternative site for CHKT's transmitting system on the islands, as evidenced by their indication that the present lease will not be renewed.
4575 Site sharing CHKT and CHIN is completely impractical due to many resulting engineering complications.
4576 Secondly, a Lake Ontario site, that is, with the towers in the water, would not be technically or economically feasible or administratively acceptable. I say that because we had one way back for CKEY.
4577 Thirdly, lakeshore sites in downtown Toronto sufficiently large to accommodate CHKT's seven-acre transmission system are simply not available. The lakefront in Toronto is subject to a comprehensive redevelopment and beautification proposal by the city.
4578 The relocation of CHKT's radio transmission towers would be entirely inconsistent with these plans, not to mention various environmental constraints, zoning issues, aesthetics and community concerns which would prohibit the use of downtown lakeshore property for a transmitting site.
4579 Further afield, virtually no potential lakeshore sites between Mississauga and St. Catharines remain available, and any that do are slated for various important uses such as recreational or future development. I say that from personal experience. I have worked for many radio stations and gone meeting farmers and landowners and realtors, and so on, all along that lakeshore area. CHKT's seven-acre high-powered transmitting system would be highly incompatible with these other lakeshore uses.
4580 Moreover most of CHKT's listeners would no longer receive strong enough signals for satisfactory service from these locations. Therefore, if such changes were proposed, they would be technically unacceptable to Industry Canada for a Toronto station.
4581 COMMISSIONER WILSON: Thank you, Mr. Elder. I appreciate having someone with your breadth of experience with us to explain some of these issues.
4582 Is it fair to ask if you are looking forward to digital radio?
4583 MR. ELDER: Would you say again, please?
4584 COMMISSIONER WILSON: I said, is it fair to ask if you are looking forward to digital radio?
4585 MR. ELDER: Not in my time.
--- Laughter / Rires
4586 COMMISSIONER WILSON: I guess I just have one other question.
4587 Actually, I will just see if counsel has any questions, Madam Chair, and then I will come back to you.
4588 THE CHAIRPERSON: Counsel?
4589 MR. RHÉAUME: Thank you, Madam Chair. Very briefly.
4590 Mr. Chan, I'm sure your counsel can advise you that a breach of a condition of licence is serious lawyer stuff, so when do you expect to be in compliance with the condition you discussed with Commissioner Wilson?
4591 MR. CHAN: I think we understand what you are talking about. We are going to fix this immediately.
4592 MS PEARCE: And we will advise the Commission.
4593 M. RHÉAUME: Merci.
4594 THE CHAIRPERSON: Thank you.
4595 COMMISSIONER WILSON: I want to provide you with the opportunity to summarize why you feel that your application -- what the compelling reasons are for granting your application as opposed to the applications of other parties which are technically mutually exclusive from yours.
4596 I guess the one argument I would like to hear you address in particular is, in view of the fact that the FM is the most attractive band for music, and your station is essentially a talk station, why should we give the last remaining FM frequency, the fourth time last remaining frequency, to your station as a talk station over applicants who are applying for a music station.
4597 This is your opportunity to put forward your most compelling reasons. I realize that there are business reasons for doing that, and I am not making any decision or comment about that whatsoever. I just want to provide you with the opportunity because that is certainly a comment that people would make because the FM frequency would be so attractive for a music station as yours is more a talk station.
4598 MR. CHAN: I understand your question. Perhaps I will just address your question first and then I will come to our summary,
4599 I think you put it very right that to the mainstream radio industry FM is a very sought-after property. Then, to the ethnic radio industry, since, as you said, we are mostly a spoken-word format, to us FM or AM, you know, wouldn't make a lot of difference in terms of the ability to solicit advertising -- and I will come to that later -- but we are here as a matter of survival. We have to cling on whatever we can get from the Commission.
4600 Thank you for the opportunity for me to summarize. I know I have five minutes.
4601 COMMISSIONER WILSON: You have been paying attention to all of the other applicants, I see.
4602 MR. CHAN: Yes. Yes.
4603 I would like to summarize, first of all, the reasons why we are here today into six key points.
4604 Before I move on, perhaps I would reiterate once again the reason why we are here.
4605 We are here not to add a new licence in addition to our existing one. We are not here to flip a licence for some tangible benefit. We like the current frequency, 1430. We are proud of what we are doing now. What we want to do is to have CHKT, the ability to continue our service to the community.
4606 Reason number one is we believe that without access to one of these alternative frequencies CHKT will go off the air when the existing transmitter site lease expires by December 31st, 2001. All the evidence before us today indicates that the site lease will not be renewed. As Mr. Wong has explained clearly, in spite of all the negotiations we have had with City Hall, we had to come to a conclusion that a site lease will not be renewed. Indeed, the city recently confirmed in writing -- I will just read it, to quote:
"...the Lease will terminate on December 31, 2001 and Fairchild Radio shall have no further right of renewal."
4607 At the same time we were negotiating with City Hall we did try to go out to find an alternative site. We hired Gordon Elder, the best possible broadcasting engineer in town. As he explained earlier, his conclusion also came out to -- that no possible site is available that was available for CHKT, and that it would not continue to operate from the present site, it would have to shut down.
4608 Mr. Elder's finding was further echoed by a broadcast spectrum engineer at Industry Canada in a letter to us last year saying, to quote:
"...if CHKT is no longer permitted to use its current site, or a suitable alternate ... site [on the island], it will not be able to serve Toronto on 1430..."
4609 Mr. Elder has also helped in trying to find an alternative site or an alternative frequency other than the two frequencies we are talking about today. His finding also concluded that no other frequencies are available which could adequately serve CHKT's Toronto audience.
4610 So, in summary, transferring to either 740 AM or 93.5 FM is the only option we have to prevent CHKT from going off the air.
4611 Our reason number two is granting CHKT the use of 93.5 FM or 740 AM will satisfy the requirements of the Order in Council by contributing to the achievement of the objectives of the Canadian Broadcasting Act. CHKT meets all the requirements by contributing to the diversity in culture, as well as recognizing the multiracial heritage within the Canadian society, especially Toronto. One hundred per cent of our programming is directed to the ethnic audience.
4612 As we mentioned earlier, CHKT is currently serving 19 different cultural groups in 20 different languages, which is exceeding the original expectation of 14 and 15. Among them, five of these ethnic groups have never been served by any media before.
4613 Reason number three, CHKT is already a proven contributor to the Toronto radio market. There is a huge demand for our service. A recent AC Nielsen Chinese radio index indicated that CHKT is the most listened to radio station among all the ethnic radios.
4614 CHKT currently provides 120 hours of local programming, so over 75 per cent is spoken-word formats emphasizing on news and current affairs.
4615 Reason number four is CHKT has a significant contribution to Canadian talent development, which we discussed about it earlier. Fairchild has committed to provide, and will continue to provide, $28,000 directly each year to direct expenditures, and $50,000 in indirect expenditures to CTD initiatives, so therefore leading to over $540,000 over the seven-year term period.
4616 CHKT used particular efforts to groom and train Canadian talent and to promote and grow the amount of available ethnic music.
4617 Reason number five is Fairchild Radio operates only one station in Toronto, and as such CHKT represents an important and independent voice and contributes to the diversity of news in the community, in the City of Toronto.
4618 Last but not least, moving CHKT to 93.5 or 740 AM will have no impact whatsoever on existing broadcasters. CHKT is an existing service. We propose no change in the schedule and we project no change in our revenue. As a result, a move to 93.5 FM or 740 AM will have no impact on other radio stations in the market.
4619 So, in closing, Fairchild submits that CHKT should be awarded either one of these frequencies because without access to these two frequencies we believe the station will go off air next year. Licensing CHKT would meet all the objectives of the Broadcasting Act highlighted by the Order in Council. CHKT is the best possible use of one of these frequencies because it is a proven contributor to the Toronto radio market.
4620 Thank you.
4621 THE CHAIRPERSON: Thank you, Mr. Chan.
4622 I suspect that a slight amendment should have been made to your second last point, that you will make a change to your schedule.
4623 MR. CHAN: Of course.
4624 THE CHAIRPERSON: Thank you, Mr. Chan and colleagues. We will see you later in the week, no doubt.
4625 We will adjourn for the day today and resume tomorrow morning with the numbered company application.
4626 Thank you very much.
--- Whereupon the hearing adjourned at 1220, to resume
on Friday, February 4, 2000 at 0900 / l'audience
est adjournée à 1220, pour reprendre le vendredi
4 février 2000 à 0900