ARCHIVED -  Transcript - Winnipeg, Manitoba - 2002-02-05

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Please note that the Official Languages Act requires that government publications be available in both official languages.

In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.

However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.

            TRANSCRIPT OF PROCEEDINGS

  FOR THE CANADIAN RADIO‑TELEVISION AND

       TELECOMMUNICATIONS COMMISSION

 

 

 

 

        TRANSCRIPTION DES AUDIENCES DU

           CONSEIL DE LA RADIODIFFUSION

ET DES TÉLÉCOMMUNICATIONS CANADIENNES

 

 

 

 

 

                       SUBJECT / SUJET:

 

 

Multiple broadcasting applications & BROADCASTING applications further to Public Notice 2001-79 "Call for applications for a broadcasting licence TO CARRY ON A RADIO PROGRAMMING UNDERTAKING TO SERVE WINNIPEG, MANITOBA".

 

MULTIPLES DEMANDES EN RADIODIFFUSION ET DEMANDES EN radiodiffusion suite à l'avis public CRTC 2001-79 "APPEL DE DEMANDES DE LICENCE DE RADIODIFFUSION VISANT L'EXPLOITATION D'UNE ENTREPRISE DE PROGRAMMATION DE RADIO POUR DESSERVIR WINNIPEG (MANITOBA)".

 

 

 

 

HELD AT:                                            TENUE À:

 

Winnipeg Convention Centre                  WinnipegConvention Centre

PanAm Room                                      Salle PanAm

375 York Avenue                                  375, avenue York

Winnipeg, Manitoba                              Winnipeg (Manitoba)

 

 

5 February, 2002                                  le 5 février 2002

 

 

 

                                               Volume 2


 

Transcripts

 

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

Contents.

 

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.

 

 

 

 

Transcription

 

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

             Telecommunications Commission

 

             Conseil de la radiodiffusion et des

             télécommunications canadiennes

 

 

                   Transcript / Transcription

 

 

Multiple broadcasting applications & BROADCASTING applications further to Public Notice 2001-79 "Call for applications for a broadcasting licence TO CARRY ON A RADIO PROGRAMMING UNDERTAKING TO SERVE WINNIPEG, MANITOBA".

 

MULTIPLES DEMANDES EN RADIODIFFUSION ET DEMANDES EN radiodiffusion suite à l'avis public CRTC 2001-79 "APPEL DE DEMANDES DE LICENCE DE RADIODIFFUSION VISANT L'EXPLOITATION D'UNE ENTREPRISE DE PROGRAMMATION DE RADIO POUR DESSERVIR WINNIPEG (MANITOBA)".

 

 

 

BEFORE / DEVANT:

 

Barbara Cram                           Regional Commissioner for Manitoba and Saskatchewan /

Conseillère régionale pour le Manitoba et le Saskatchewan

Ronald Williams                       Commissioner / Conseiller

Andrew Cardozo                       Commissioner / Conseiller

 

 

ALSO PRESENT / AUSSI PRÉSENTS:

 

Joe Aguiar                               Hearing Manager / Gérant de

                                               l'audience

Gary Krushen                           Secretary / secrétaire

Peter McCallum                       Legal Counsel /

                                               conseiller juridique

 

HELD AT:                                TENUE À:

 

Winnipeg Convention Centre      Winnipeg Convention Centre

PanAm Room                          Salle PanAm

375 York Avenue                      375, avenue York

Winnipeg, Manitoba                  Winnipeg (Manitoba)

 

 

5 February, 2002                      le 5 février 2002

 

 

                              Volume 2


                                    

 

TABLE OF CONTENTS / TABLE DES MATIÈRES

 

                                                                                            PARA NO.

 

PHASE I

 

 

APPLICATION BY / APPLICATION PAR

 

by N.I.B. Cable FM Inc. /                                                                 1002

par N.I.B. Cable FM Inc.

 

by CKVN Radiolink System Inc. /                                                     1344

par CKVN Radiolink System Inc.                                                           

 

by HIS Broadcasting Inc. /                                                               1624

par HIS Broadcasting Inc.

 

by Red River College Radio /                                                            1852

par Red River College Radio

 

 


                           Winnipeg, Manitoba /

                           Winnipeg, Manitoba

 --- Upon resuming on Tuesday, February 5, 2002 at 0830 / L'audience reprend le mardi 5 février 2002 à 0830

 

999           THE CHAIRPERSON:  We will recommence our hearing.  I have just one matter to deal with.  We will be adjourning today at noon at approximately 12:15 because the panel members have a teleconference.  So just for your information, when it comes to be an appropriate time for the break around 12:15, we will be breaking.  Mr. Secretary, you have some housekeeping matters.

 

1000       THE SECRETARY:  Yes, thank you Madam Chair.  The Commission has received a copy of a letter to Mr. W.E. Evans, who is the Engineering Consultant for Red River College.  The letter will be placed onto the public record and -- the panel has agreed to place the letter onto the public record and a copy of it has been provided to representatives of the Red River College application.

 

1001       At this point, I would like to call the first applicant this morning.  The first application we will be hearing today is by N.I.B. Cable FM Inc. for licence to operate an English language FM radio station in Winnipeg.  The new station would operate on frequency 107.9 Mhz.  That's an effective radiated power of 200 Watts.

 

APPLICATION / APPLICATION

 

1002       MR. McCREA:  Good morning, Madam Chair, Members of the Commission.  I'm Paul McCrea, President and CEO of N.I.B. 95.5 Cable FM Inc.  I would like to introduce the members of the Cool 107.9 FM team.

 

1003       Our financial consultant is Jeff Martin of Deloitte & Touche.  Peter Young is our news director.  For 18 years Peter was an internationally known broadcaster and producer for CTV covering events across Canada and the United States, as well as overseas.

 

1004       Dan Donahue, a Winnipeg producer, arranger, composer and musician.  Dan is a Juno winner.  He has been a finalist for this prestigious award for a total of six times.  He has won the Prix award for distinguished services to the arts in Manitoba.  Dan is a board member of the Manitoba Audio Recording Industry Association and the Manitoba Chamber Orchestra.  Dan will work with us to produce various station-initiated projects on an ongoing basis.

 

1005       Madam Chair and members of the Commission, we are pleased to present our application for a commercial broadcast undertaking by N.I.B. 95.5 Cable FM Inc., Cool 107.9 FM.  Our new service will provide a wide diversity of programming to the Winnipeg community and will contribute to the strength of the Canadian broadcast system. 

 

1006       The applicant of a new service needs to demonstrate clearly to the Commission that there is a demand and market for the proposed service, as set out in the Broadcast Act and the commercial radio policy 1998-41.  Our application meets all of these criteria as we will outline in this presentation.

 

1007       The history of this station is worth review.  Its primary purpose has been to develop talent.

 

1008       N.I.B. 95.5 Cable FM Inc. was founded in 1993 to provided practical experience for broadcast and production students of N.I.B., the National Institute of Broadcasting.  This station was first distributed by Videon Cable TV and broadcast 24 hours per day, year round from 1993 until 1998, when it began broadcasting at 92.9 FM.

 

1009       At its inception, it was associated with the N.I.B., a school founded in Winnipeg some 40 years ago.  Names associated with the school through its founder, Ed McCrea, include Lorned Greene, Andrew Allen, John Drainie and Fletcher Markle, huge names in Canadian broadcast history.  In total, approximately 2,000 grads went on to work in the broadcast and communications field.  The contribution N.I.B. made to the broadcast industry is considerable.

 

1010       On a personal level, I began teaching broadcast arts for N.I.B. 20 years ago.  Many of the alumni enjoyed distinguished careers.  I am proud of the number of successful graduates our school produced.  The McCrea family has been involved in broadcasting in this province for the past 60 years.  By approving this application, you will assure that we remain involved in many years to come.

 

1011       The station already has a history of public and community service.  Over the years, we have worked with the United Way, The Canadian Cancer Society, the Canadian Diabetes Society, the Canadian National Institute of the Blind, and the Manitoba Marathon.

 

1012       We have also promoted several cultural organizations, for instance, the Millennium Library project, the Manitoba Chamber Orchestra, the Museum of Man and Nature and the Manitoba Theatre for Young People.  We have promoted arts groups and music festivals and activities.  They include the Winnipeg Folk Festival, CoreFest and the Manitoba Jazz Festival.

 

1013       Is there a demand for our service?  This application has had the benefit of developing much of the proposed programming and identifying an audience on the campus instructional station.  Simply put, we know who our audience will be because our audience already exists and they have responded to the existing program elements already aired.

 

1014       The station has conducted on air promotions that call on listeners to register on the Internet using alphanumeric codes given out over the air.  They have provided demographic information.  From this information, we have determined that 80 percent of the people who have registered are 33 to 55 plus years of age.  They are 60 percent male and 40 percent female.  Therefore, rather than forecasting who might listen, we can tell you who is, in fact, listening.  We have already heard from Corus during this hearing that this is the most under-served radio audience.

 

1015       We can further identify the demand for the proposed service and the resulting support that the community has shown for it.  For 14 days, December 28th, 2001, to January 10th, 2002, we broadcast a call to our audience asking them to show their support.  We received 410 letters of support, a significant number considering the demographic and the short time period. Secondly, the continued increase in the BBM "other" category since our sign-on, and thirdly, the large database built on the Internet through on-air promotion.

 

1016       We also received hundreds of phone calls and emails from listeners asking us to "keep up the good work" and to increase our power, enabling our signal to be heard throughout Winnipeg.  The comments have specifically indicated that our audience appreciates the alternative music and information programming we provide.

 

1017       On Canadian Talent Development, since the time of our application submission we have, in fact, launched "A Week of Good Sax," an annual event promoting dozens of local musicians at over a dozen venues in Winnipeg, held over a one-week period in November.  We have showcased regional and local artists on weekly features and in regular rotation.  We have conducted interviews and promoted their performances within our community. 

 

1018       The station produced two seasons, some 40, one-hour episodes of a program called "Cue-tape," with live performance and interviews with local and national artists.  We have launched a new program in association with the Manitoba Theatre for Young People, a nationally renowned theatre for children.  "Radio Heads" and "Radio Waves" weekly programs written and produced by MTYP students aged 11 through 19, that include interviews, current events, radio dramas, music and poetry.  Each show contains themes determined by the students, including popular culture, life choices and human rights.  These programs will also serve to promote the theatre company's programs on an ongoing basis.

 

1019       We have expanded our education associations to include Anokiiwin College, a college delivering courses to students of Aboriginal descent.  Once trained, journalism students of this college will be assigned news stories to file for the station.

 

1020       We will further provide opportunities for CTD through contributions to the Canadian Talent Development fund and through station-initiated events and activities.

 

1021       We commit to contributing further capital based on a minimum of five percent of net revenue on an annual basis throughout the term of our licence.  The intent is to generate $500,000 towards this during the first term of the licence.  These funds will go to arts associations and station-initiated events and activities.  We consider this approach to be innovative and financially responsible.

 

1022       I would like to call on Dan Donahue to further outline some Canadian Talent Development issues.

 

1023       MR. DONAHUE: I've worked in this region for close to 20 years as a producer -- multimedia, I would say ‑‑ lived and worked in a lot of different situations, actually.  I've never experienced a place that has demonstrated such a wealth of variety in terms of its musical culture.  I think in the past what's tended to happen is that we've honoured that in a somewhat non-commercial vein, meaning with certain festivals et cetera, but we've never really approached the potential in terms of what a city like this has to offer in terms of music that comes at it from so many different directions.

 

1024       We certainly are the festival capital of Canada when it comes to musical festivals.  And what most impressed me about this application is that it really took into serious consideration the fact that the city had so much to offer in that regard and it wasn't going to take a local contribution lightly.  It wasn't paying lip service to it.

 

1025       I've been involved with many other initiatives which have been Canadian Talent Development oriented, which in fact did pay lip service.  Projects were produced and they were more or less passed off because it was part of their obligation to their licence. 

 

1026       I see so much potential in really delving into what our musical culture can certainly assert, and being that I work in multi-genres, that being classical, pop, jazz, choral, what have you, I think I'm well experienced to be able to say that, and that we have tended to ignore just the broad variety of choices that we in fact have to offer. 

 

1027       And I mean, there are the usual ideas that are tossed around, such as compilation albums and what have you, but I'd like to think outside the box somewhat.

 

1028       We have funding agencies that can assist in producing recorded work through FACTOR, Manitoba Film and Sound.  I'd like to see those enhanced so that we can in fact produce even better quality albums because at this stage of the game I think that's one of the serious problems we really have.  We just don't have a capital to produce the albums that are, in fact, that competitive.

 

1029       Any assistance that we can receive in regards to the contributions made to the CAB, I believe, would be more than welcome and certainly essential in terms of where we're coming from.

 

1030       Having sat on these organizations and these various boards, I'm more than committed to what is happening here, and it's something that you cannot focus on the lowest common denominator and hope that that's going to appeal to an awful lot of people because it does preclude somewhat that we do ignore all these groups that might have been seen as being somewhat peripheral.

 

1031       I don't see them that way at all and I think the cultural make-up of this town and the response to the multi-genre festivals we do have here, is ample proof of that.

 

1032       MR. McCREA:  In addition to these initiatives, our senior staff will continue to mentor recent graduates.  Our station will provide employment for broadcast, communications and marketing graduate students, enabling a career entry point that is increasingly limited under industry conditions.  With seasoned broadcast professionals working and directing recent graduate employees, we will assist in developing these careers.

 

1033       We expect that some of our staff will, from time to time, move to new opportunities and therefore we expect to have ongoing openings.  We will also create summer job opportunities for students of training institutions.  Eighty percent of the station's music will come from Category 21, Pop, Rock and Dance.  This music will primarily include soft rock, rock and roll, rhythm and blues, jazz rock and folk rock.  We currently play lots of album tracks that are highly recognizable to our listeners but are not typically played on commercial radio.  Forty percent of this content will be Canadian artists and we will use as much local music as possible to reach this.

 

1034       The remaining 20 percent of the station's music will come from Category 34, Jazz and Blues.  The station currently plays many of the classic jazz artists, Duke Ellington, Lena Horne, Ella Fitzgerald, Dizzy Gillespie, Oscar Peterson, Lenny Breau to name a few.  We combine these artists with current jazz artists like Diana Krall and John Pizzarelli and we'll seek out Canadian and particularly local artists for spotlight features. 

 

1035       We believe with the number of new artists in this music category we can eventually maintain the 40 percent Canadian content we have committed to in this category.

 

1036       The station will provide daily newscasts delivered in peak listening periods, national, regional and local stories from a local perspective.

 

1037       In addition, we will continue to produce approximately six hours a week of special spoken word programs outlined in our application.  This will provide further diversity of programming and at the same time will provide significant profile to important community events.

 

1038       I would like to cite an example of a recent episode of Smart Winnipeg.  Shortly after the September 11th crisis in the U.S., we had Rob Reimer, national leader of Information Security Services with PriceWaterhouseCoopers, as a guest.  Also on that show, the director of the National Research Council, talking about the virology lab, safety and test procedures for such things as anthrax.  We received several comments.  People were concerned about anthrax as a result of recent events in the U.S.

 

1039       I'd like to call on Peter Young at this time to describe the focus of our news coverage.

 

1040       MR. YOUNG:  Thank you, Paul.  It's the intention of Cool 107.9 FM news department to focus on local news coverage in a more comprehensive and extensive manner than is evident in our city's FM market today.  It is also our mandate to reinforce that news coverage with field reporters and live coverage broadcasters, which is something also that is very rare in any FM market across the country today.

 

1041       Cool 107 FM news would also continue to provide ongoing mentoring possibilities, as we do now, for graduate journalism or broadcast students to work as field reporters or as newscasters within our actual newsroom.  Our Cool 107 FM news staff would continue, as we already are doing, to act as instructors at MTYP and Anokiiwin College.

 

1042       MR. McCREA:  There's been continued growth in advertising revenue in the Manitoba marketplace.  Continued growth is predicted by the industry for the next several years.  Approximately 28 percent of the ad revenue in the province is national.  Our station is projecting only six percent of revenue to come from this source. 

 

1043       We are expecting much of our revenue to come from new initiatives rather than simply competing with other stations in a market.  We will create advertising and promotional opportunities.  An example of this is Smart Winnipeg, a technology show the station currently produces.  We have secured sponsorship for this show with a telecom company to the tune of approximately $100,000 in cash and services.  This capital was in addition to their existing advertising rather than deferred from another station.  It also provides us with an opportunity to create some innovative multimedia content for the Internet and to stream our signal.

 

1044       The station will also provide cost effective opportunities for advertising to smaller companies that might find commercial radio advertising rates restrictive.

 

1045       I will now call on Jeff Martin to comment further on the approach to forecasting revenue.

 

1046       MR. MARTIN:  Good morning.  I just wanted to quickly go through some of the financial highlights for the station.  The revenue forecasts in year one are based on a growing ability to sell spots into the local market at $25 per spot and conservatively start at just two spots per hour in the first year, growing to seven spots per hour for about 12 hours a day.

 

1047       The company has, as Paul mentioned, secured a significant sponsor for a current show produced by the station for approximately $100,000.  Year two revenues estimates include growing the broadcast period to 18 hours per day and growing the spots from seven per hour to 12 per hour, or six minutes per hour on average, still at the $25 per spot rate.

 

1048       That sales effort will be supplemented by a third salesperson being brought on in year two, and the remainder of the revenue growth throughout the forecast period is based on a combination of growth in the number of spots sold per hour, a potential increase in the rate per hour and the pursuit of additional revenue sources -- program sponsors, production revenues et cetera.

 

1049       On the expenditures side, again as mentioned, the company is committed to spending $500,000 on Canadian Talent Development over the next seven years and a minimum of five percent of the gross revenues of the station.  The station has budgeted for a significant launch campaign and annual advertising and promotion campaigns thereafter. 

 

1050       Staffing costs are described in the submission.  We expect to employ 11 full time staff in year one, growing to 16 staff in year two.  The station would, again, provide employment opportunities for broadcast, communications and marketing graduate students who would work with seasoned broadcast professionals.

 

1051       The growth in the discretionary costs will be managed to ensure that those costs are in line with the growth in revenue and the cash flows.  The other administration and broadcasting costs are reasonable based on the experience of the station operating for several years.

 

1052       Cash flows will be supplemented by an initial cash injection, which are expected to cover pre-operating expenses and initial capital expenditures and the year one cash flow deficit.  Thereafter, we expect that the station will produce positive cash flows.

 

1053       Again, cash flows will be carefully monitored by management and discretionary expenditures will only be made if cash flows allow it.  Ongoing support from shareholders and other financial partners are available.

 

1054       MR. McCREA:  And the last item I'd like to raise is Red River's application for the frequency 92.9 MHz, which we're currently operating on.  I'd ask that regardless of the outcome of this hearing ‑‑

 

1055       THE CHAIRPERSON:  Mr. McCrea, is this an intervention against Red River?

 

1056       MR. McCREA:  No, it's not.  We are unprotected at 92.9 and we didn't intervene on Red River's application, but we did write a letter, for the record, just to say that this is going to be an issue and we'd ask that the Commission, regardless of the outcome, consider our technical brief for the other frequency.  So I just wanted to table that.

 

1057       THE CHAIRPERSON:  Thank you.  It is I who will be asking you questions, Mr. McCrea, Mr. Young, Mr. Martin and Mr. Donahue.  And I will be going through programming, CTD, Cancon, the economics and then the frequency issues.

 

1058       In your application ‑‑ and when I say, Mr. McCrea, I mean everybody.  It's easier to say Mr. McCrea rather than "panel" or something like that.  In the application you referred to 90 percent of your programming being locally produced.  That of course leads up to wonder about the other 10 percent and where it would come from.

 

1059       MR. McCREA:  Well, in fact, I would say that we had left some margin for programming, primarily thinking about Canadian content and whether there were any packaged programs that we might air.  But it's more likely that 100 percent of what we'd be doing would be local.

 

1060       THE CHAIRPERSON:  So you're really talking syndication of some sort?

 

1061       MR. McCREA:  Perhaps.  Showcase Canadian talent, and we left some margin for that if there was an appropriate syndicated feature that we might run.

 

1062       THE CHAIRPERSON:  Mr. Young, did you have your hand up?

 

1063       MR. YOUNG: I'm sorry.

 

1064       THE CHAIRPERSON:  Did you have your hand up to say something?  No?  Okay.

 

1065       And I guess after hearing you this morning, when I read your application, I thought that you were going to be going 24 hours a day, seven days a week and yet, when I heard you, Mr. Martin, growing the broadcast period to 18 hours per day, are you talking a graduated -- year one is going to be 12 hours a day or something, year two --

 

1066       MR. McCREA:  I think we were referring to ‑‑ we are broadcasting 24 hours a day.  This was reference to financial forecasting.

 

1067       THE CHAIRPERSON:  So this is only that advertising would only be sold --

 

1068       MR. MARTIN:  That's right.  We would expect to sell spots into at least 12 hours a day in the first year.

 

1069       THE CHAIRPERSON:  Initially? 

 

1070       MR. MARTIN:  That's right.

 

1071       THE CHAIRPERSON:  So it is going to be a 24/7 broadcast?

 

1072       MR. McCREA:  Yes.

 

1073       THE CHAIRPERSON:  In terms of the spoken word and news, I thought your application said you were going to be doing eight hours, but I heard Mr. Young say you're going to be doing six hours?

 

1074       MR. YOUNG:  No, excuse me, I don't think anywhere I said that six was the number of hours.  We intend to do eight hours of news coverage between the hours of 6:00 and noon and then afternoon drive and into early evening, to a total of at least eight hours of news coverage.

 

1075       MR. McCREA:  The six hours was probably the additional spoken word special programming that we're doing that was outlined in the application, Manitoba Theatre for Young People and Smart Winnipeg, et cetera.

 

1076       THE CHAIRPERSON:  So eight hours will be news, information, surveillance, that sort of thing.  And when you talk about concentrating on local, can you give us a percentage of the total of news, of the eight hours anyway?  Give us a percentage of the eight hours that would be local?

 

1077       MR. YOUNG:  Well, currently in the format that we have established now, we are doing almost 95 percent local and our intention would be that we would continue somewhat in that same vein in the 90 percent to 100 percent range.  In fact, sometimes now it is almost 100 percent that is local news coverage.  It would involve the young reporters covering local functions, city hall, leg(islature), things that are related to Manitobans only.

 

1078       MR. McCREA:  If we have covered a national issue, we've also put a local aspect to the story.

 

1079       THE CHAIRPERSON:  Context.  Will there be news on weekends?

 

1080       MR. McCREA:  Yes.

 

1081       THE CHAIRPERSON:  So in the weekdays, Mr. Young, you said it would be sort of morning drive, afternoon drive?

 

1082       MR. YOUNG:  The intention would be the concentration on morning drive and afternoon drive.  However, there would still be newscasts at the top of the hour throughout the day, with bottom of the hour as well during morning and afternoon drive.

 

1083       THE CHAIRPERSON:  So can you give me numbers?  How much in morning drive?  How much in the afternoon?

 

1084       MR. YOUNG:  The intent was that there be six minutes per top and bottom of the hour of news coverage, in addition to sports, traffic and weather, which would not be counted in that six minutes per top and bottom of each hour.  So during drive, 12 minutes of news coverage per hour and then five minutes through the rest of the day at the top of the hour.  So 48 minutes in the morning of news coverage and an additional 25 throughout noon to 5:00 and then another bottom of the clock at 5:30, six minutes, and six minutes at the top of the clock at 6:00.  So about an hour and twenty minutes per day of news coverage during the weekdays.

 

1085       Then on the weekends, from noon until 5:00 on both Saturdays and Sundays, with a six o'clock major newscast on Sundays, as well.

 

1086       THE CHAIRPERSON:  And so weekdays, before six o'clock, how much, when you say on the top of the hour?

 

1087       MR. YOUNG:  Before 6:00 a.m.?

 

1088       THE CHAIRPERSON:  No, before 6:00 p.m.  You said there would be a major one at 6:00 p.m.

 

1089       MR. YOUNG:  Oh, before 6:00 p.m., I'm sorry, yes, ma'am.  Five minutes per hour from 1:00 through to 5:00, xix minutes at least at noon, and once again a major newscast, six to eight minutes at six o'clock.

 

1090       THE CHAIRPERSON:  And than I want to move into your CTD -- let me first talk about how understood your application when I read it and then you can tell me where, because I think I've misread it.

 

1091       If I understood, during the seven years, you are going to be giving the CAB the $8,000 a year, the amount that is for Winnipeg, and in addition, I thought up to $500,000 over the seven years, you would be giving the remainder, which is $444,000 to MARIA?  Have I got that correct?

 

1092       MR. McCREA:  Well, we did -- we outlined MARIA as one of the beneficiaries of this fund.  We also said that there were some station-initiated projects that we'd be undertaking as well.

 

1093       THE CHAIRPERSON:  Okay.

 

1094       MR. McCREA:  And so there would be a combination.

 

1095       THE CHAIRPERSON:  Because I understood that the additional ones -- Winnipeg Jazz, Week of Good Sax and Manitoba Theatre and those -- were going to be in addition to the $500,000, to a minimum of 5 percent of gross.

 

1096       MR. McCREA:  Actually, they were ‑‑ the Week of Good Sax was an expense.  We've launched the first one, but there were expenses to that that we considered to be Canadian Talent Development, part of that.  The other things you've mentioned, Manitoba Theatre for Young People is in addition.  So there are some ‑‑ like in terms of regular programming, which MTYP is part of, that is not considered in the Canadian Talent Development fund that we're talking about.

 

1097       THE CHAIRPERSON:  So is it $500,000 over the seven years plus a minimum of 5 percent of gross?

 

1098       MR. McCREA:  Well, no.  What we had outlined was that we anticipated that the 5 percent would equal, based on our projections, $500,000.

 

1099       THE CHAIRPERSON:  So it is either $500,000 or 5 percent of gross, whichever is greater, over the seven years?

 

1100       MR. McCREA:  Yes.

 

1101       THE CHAIRPERSON:  Okay.  And then, initially consisting of $8,000 per year to the CAB over the seven years?

 

1102       MR. McCREA:  Yes.

 

1103       THE CHAIRPERSON:  And that's acceptable as a condition of licence?

 

1104       MR. McCREA:  Yes.

 

1105       THE CHAIRPERSON:  And then the remainder, the $444,000 over seven years, you are going to provide to MARIA --

 

1106       MR. McCREA:  Mm-hmm.

 

1107       THE CHAIRPERSON:  -- and do you have a specific annual amount for that?

 

1108       MR. McCREA:  We hadn't at this point broken out the portion that would go to MARIA versus station-initiated, but a significant amount of that fund would go towards MARIA.

 

1109       THE CHAIRPERSON:  We don't usually allow people the discretion in terms of -- we allow you the discretion to propose and if it's an acceptable, CTD, then we say yes and this specific money shall go to.  So in Phase II, can you come back with a specific amount of money on MARIA?

 

1110       MR. McCREA:  Yes, yes.

 

1111       THE CHAIRPERSON:  And then you talked about the additional CTD, and I have to go through all of them.  Excuse me Mr. Donahue, we're regulators so we get into very detailed stuff that isn't necessarily following your creative wishes, but that's the necessity of the job.

 

1112       You talked about your website.  Is this website for your own station that these CTDs would go to?

 

1113       MR. McCREA:  Yes, it's a website that is branded as the station and we would be directing traffic on air and in other ways, promotional ways, to that website.  So the banner on it is the radio station, but we'd be using that site for the promotion of talent, events and things of that nature.

 

1114       THE CHAIRPERSON:  And do I understand it that the website is somehow tied in with the agreement with this telecom company?

 

1115       MR. McCREA:  Yes.

 

1116       THE CHAIRPERSON:  And are --

 

1117       MR. McCREA:  There are services to that that are being provided that are part of this --

 

1118       THE CHAIRPERSON:  Part of the $100,000.

 

1119       MR. McCREA:  Yes.

 

1120       THE CHAIRPERSON:  And the $100,000 that you talked about, Mr. Martin, significant sponsor.  That's one and same as the telecom company?

 

1121       MR. McCREA:  Yes.

 

1122       THE CHAIRPERSON:  And so the $100,000 is made up of cash and services?

 

1123       MR. McCREA:  Cash and services.  Heavy component on services related to streaming, et cetera.

 

1124       THE CHAIRPERSON:  So can you break that down for me?  Cash.

 

1125       MR. McCREA:  Pardon me?

 

1126       THE CHAIRPERSON:  Cash versus services.

 

1127       MR. McCREA:  Cash is in fact a minimal.  There's about $5,000 worth of cash and about $95,000 in services.

 

1128       THE CHAIRPERSON:  Okay.  And the agreement with this telecom company is with the new FM station?

 

1129       MR. McCREA:  It exists now and would carry over.

 

1130       THE CHAIRPERSON:  So there's an agreement that it would continue with the new FM if it were licensed.

 

1131       MR. McCREA:  Yes.

 

1132       THE CHAIRPERSON:  And then you give a list of the website costs, and a couple of questions about that.  There was set-up and design at $7,500 dollars.  That's a one-time cost?

 

1133       MR. McCREA:  Yes, it is.

 

1134       THE CHAIRPERSON:  And who would be paying that?

 

1135       MR. McCREA:  Again, this is ‑‑ I mean, there are design services and other things connected with that agreement with the telecom.  So this is part of that agreement.

 

1136       THE CHAIRPERSON:  So the telecom company would be paying the set-up, the design?

 

1137       MR. McCREA:  Yes.

 

1138       THE CHAIRPERSON:  Okay.  And then there is hosting, and who would be doing that?

 

1139       MR. McCREA:  The telecom.

 

1140       THE CHAIRPERSON:  And then the streaming?

 

1141       MR. McCREA:  Telecom.

 

1142       THE CHAIRPERSON:  So the first-year cost would be that total of $20,700?

 

1143       MR. McCREA:  Yes.

 

1144       THE CHAIRPERSON:  And then thereafter, it would be just the cost of hosting and streaming annually for the next six years?

 

1145       MR. McCREA:  Yes.

 

1146       THE CHAIRPERSON:  And you said in your application that labour, including updating, maintaining and creating content would be in your general personnel budget?

 

1147       MR. McCREA:  Well, it's absorbed in our salaries.

 

1148       THE CHAIRPERSON:  I don't know here (inaudible -- off microphone) our decision about a Barrie radio station a couple of years ago, and it was the view of the panel at that time that a website that promoted the station per se, sort of self-promotion, was not qualified.  Can you distinguish that particular decision from your use of a website so that it would qualify for CTD?

 

1149       MR. McCREA:  Well, what we had envisioned was the opportunity that with the profile connected to the station, we would be able to direct a significant amount of traffic to that website.  Primarily, again, the website would involve promoting Canadian talent, particularly local.  We've had a dozen plus artists with their CDs and information on getting their CDs on that site, and so the intent was drive traffic to it using the radio station.

 

1150       It has had the station's logo on it but I would have to review the decision you're referring to.  I'm not totally up on that, so I would have to review it and we would be prepared to make amendments to that to stay within the decision.

 

1151       THE CHAIRPERSON:  It's decision CRTC 2000-143, and then there was another one, 2000-203.  If we should find that the website does not qualify as direct CTD, would you be prepared to redirect that money to another CTD project?

 

1152       MR. McCREA:  Well, we'd certainly consider doing that, but I would think that if what we've presented is outside of a decision now that we'd probably be inclined to stay within that decision and utilized the website.

 

1153       THE CHAIRPERSON:  Well, the decision said if it had anything to do with the radio station, essentially.

 

1154       MR. McCREA:  Okay.  I'd have to review it, but yes, we'd be prepared to do something that ‑‑

 

1155       THE CHAIRPERSON:  There are some qualifications and I don't want to --

 

1156       On the Week of Good Sax ‑‑ now, did I hear you correctly, are you intending that what you did last year would be part of the benefits for the new FM?

 

1157       MR. McCREA:  No.

 

1158       THE CHAIRPERSON:  No?

 

1159       MR. McCREA:  No.

 

1160       THE CHAIRPERSON:  You again listed costs and they included a total of $5,600 per year -- I'm right on that?

 

1161       MR. McCREA:  Yes, that's a forecasted cost.

 

1162       THE CHAIRPERSON:  And you have advertising at $3,600 a year.  Can you confirm with me that that's all to third parties?

 

1163       MR. McCREA:  Yes.

 

1164       THE CHAIRPERSON:  And then there is a cost of a reception.  What would be the out-of-pocket costs for that?

 

1165       MR. McCREA:  We held a reception for media.  We sponsored a reception for this event for Winnipeg media, which drew television from a couple of stations, print media, and the announcement for the event was done at that time.  The artists were there and did interviews.  Most of them conducted interviews with print and television.  So we sponsored that opening reception.

 

1166       THE CHAIRPERSON:  And your out-of-pocket costs, third-party costs were about $1,000?

 

1167       MR. McCREA:  Yes.

 

1168       THE CHAIRPERSON:  Same with the remote?

 

1169       MR. McCREA:  Yes, in fact, the remote was more production costs.  We produced a program and ran it several times during and around the event and promoted the event on air, in regular programming.

 

1170       THE CHAIRPERSON:  So the remote was a third-party cost?  You paid a third party?

 

1171       MR. McCREA:  Actually, the remote cost, in this event, it wasn't so much a remote cost but a produced feature that was aired during the event with live broadcast promoting the event and interviews with some artists.  So in fact, that one -- a remote would have been third-party and a remote next year would be a third-party cost.  In this case, this year, it wasn't.  But in the application, it would be.

 

1172       THE CHAIRPERSON:  And you know we're getting into the distinction between direct and indirect costs, which of course only direct qualify as for the purpose of CTD.  So should we decide that a portion or portions of the disbursements for the Week of Good Sax are not direct, you would redirect the remainder of the money?

 

1173       MR. McCREA:  Yes.

 

1174       THE CHAIRPERSON:  You know, I think, about this Week of Good Sax, you talked about promotion through WestJet Magazine and distribution of CDs to the passengers.  Who is going to produce the CDs and who pays for that?

 

1175       MR. McCREA:  Well, the CDs were the artists providing copies of their CDs this year and those were made available to WestJet.  So some of them were handed out on departing passengers to Winnipeg.

 

1176       THE CHAIRPERSON:  On the Winnipeg Jazz Festival, you talked about supporting it through CTD, and your application said you were in the process of developing the budget; have you done that?

 

1177       MR. McCREA:  For promoting?

 

1178       THE CHAIRPERSON:  Of developing a budget for the CTD that you would give to the Winnipeg Jazz Festival?

 

1179       MR. McCREA:  We haven't.  We will.  We'll be working with them to produce that.

 

1180       THE CHAIRPERSON:  So you can't tell us how much per annum you would be directing to them?

 

1181       MR. McCREA:  I could in Phase II.

 

1182       THE CHAIRPERSON:  And give us a budget?

 

1183       MR. McCREA:  Yes.

 

1184       THE CHAIRPERSON:  In the event that, after you've given us your breakdown, some of it does not appear to be qualified as direct CTD, would you still pursue the initiative?

 

1185       MR. McCREA:  Yes.  It fits our programming, and yes, we would.

 

1186       THE CHAIRPERSON:  And you'd be prepared to redirect it if we said it was --

 

1187       MR. McCREA:  Yes, we would.

 

1188       THE CHAIRPERSON:  Okay.  Then you talked about the Manitoba Theatre for Young People.  And what I see throughout your application is trying to blend instructional radio, and of course the role as a training ground versus what we look for in hard, cold commercial radio -- and I don't mean that in any sense ‑‑ but we have certainly different criteria for it.  And we talk about direct and indirect CTD.

 

1189       MR. McCREA:  Yes.

 

1190       THE CHAIRPERSON:  It appears to me that the support of the Manitoba Theatre for Young People is more training ground for these children, young people, and therefore more an instructional radio role than it is direct CTD.

 

1191       MR. McCREA:  Yes.

 

1192       THE CHAIRPERSON:  So should we decide that it doesn't qualify as direct CTD, would you still pursue it?

 

1193       MR. McCREA:  Yes, we didn't really consider it to be part of the CTD.  But our ‑‑ the kids of our primary audience are attending MTYP so we consider it a worthwhile programming element and we would continue it.  We didn't consider it part of CTD.

 

1194       THE CHAIRPERSON:  Okay.  On your Canadian content on Category 2 you talked about a minimum of 40 percent?

 

1195       MR. McCREA:  Yes.

 

1196       THE CHAIRPERSON:  And are you prepared to accept a COL in that?

 

1197       MR. McCREA:  Yes.

 

1198       THE CHAIRPERSON:  And on Category 3, what you said this morning was, if I read it correctly, a commitment to 40 percent but ‑‑ yes, it's the second last page at the top, on line 4:  "We believe with the number of new artists in this music format" -- and that's category 3 you're talking about --

 

1199       MR. McCREA:  Yes.

 

1200       THE CHAIRPERSON:  -- "we can eventually maintain the 40 percent Canadian content we have committed to."  So what are you committing to?

 

1201       MR. McCREA:  We committed to 40 percent Canadian content in Category 2 .

 

1202       THE CHAIRPERSON:  Yes.

 

1203       MR. McCREA:  The commitment for Category 3 currently is 10 percent, so that is what the application was intended to commit to.  We think we can also, as we build this library and as we work with local artists, we can get to a 40 percent in that category as well.  And that's our intent.

 

1204       THE CHAIRPERSON:  But as a COL, you'd be prepared to go for 10 percent?

 

1205       MR. McCREA:  Yes.

 

1206       THE CHAIRPERSON:  Well, I'll tell you what I told people in Hamilton at the hearing in December.  The only thing we can rely on here is COLs.  Unless there is a COL, we can't enforce it with any particular broadcast licence.  So in terms of my personal views, I will be assessing your application on the basis of 10 percent, not your good intentions.  And I want to be very clear on that, just so you know because good intentions aren't enforceable.  That's the problem.

 

1207       On your economics, the last two years your annual returns showed no revenue.  What is your current source of revenue?

 

1208       MR. McCREA:  You're saying right now as a campus station?

 

1209       THE CHAIRPERSON:  Yes.

 

1210       MR. McCREA:  Well, it has been -- partly it's been underwritten by me, and we've also had associations with the College that was paying overhead.

 

1211       THE CHAIRPERSON:  And so currently you have no advertising revenue at all?

 

1212       MR. McCREA:  Well, we do have some advertising revenue, yes.

 

1213       THE CHAIRPERSON:  And in terms of the source of that advertising revenue, what is it?

 

1214       MR. McCREA:  It's local advertisers, a few different companies. 

 

1215       THE CHAIRPERSON:  So you've gotten that since August 31st?

 

1216       MR. McCREA:  There have been advertising clients since August 31st, yes.

 

1217       THE CHAIRPERSON:  And you did in your application talk about the problem of a decrease in training funds and the issue.  What would be your plans if we denied this application?

 

1218       MR. McCREA:  Well, our plans would be to continue working with MTYP and with Anokiiwin College in continuing the course of what we're doing.  So this application doesn't alter our plans to continue.

 

1219       THE CHAIRPERSON:  And I put that in the context of the problem of training funds.  So the lack of training funds and availability of training funds would not inhibit your operation?

 

1220       MR. McCREA:  No.  Regardless, we are working with Anokiiwin and there is tremendous opportunity for students of that college.

 

1221       THE CHAIRPERSON:  If we did give you a licence, how long would it take you to implement?

 

1222       MR. McCREA:  Six months.

 

1223       THE CHAIRPERSON:  And both in your application and today, in particular Mr. Martin, you talked about advertising would come from new sources.  Can you give me an idea of what these new sources are?

 

1224       MR. McCREA:  I'm sorry, I'm just ‑‑ I'm not sure where you're referring to new sources.

 

1225       THE CHAIRPERSON:  I know it was in the application but then I saw it somewhere else in terms of new sources.  Yes, the second last page of what you were -- and it wasn't Mr. Martin, it was you Mr. McCrea ‑‑ at the bottom:  "We are expecting much of our revenue to come from new initiatives rather than simply competing with other stations."

 

1226       MR. McCREA:  Well, what we are referring to there is that we expect, in terms of an impact to the market, many of the things we're doing now ‑‑ MTYP, Smart Winnipeg -- Smart Winnipeg's a great example.  Smart Winnipeg is a technology show.  It was a good fit for the telecom to be involved in.  So you know, we're expecting that some of the specialty type programming we're doing, that and the fact that from an advertising rate point of view, that we're creating advertising opportunities for new clients that haven't typically used radio. 

 

1227       So when I'm saying new, I'm suggesting that we're going to be generating income from sources that aren't typically advertising in radio or, again the telecom, the sponsorship that they've come to the table with is not coming from another station.  It's in addition to what they're already doing in the market.

 

1228       THE CHAIRPERSON:  So it's in addition to their normal advertising budget?

 

1229       MR. McCREA:  Yes.

 

1230       THE CHAIRPERSON:  And excuse me, this Smart Winnipeg, who is designing that and running it?

 

1231       MR. McCREA:  Well, we're producing it in co-operation with Smart Winnipeg.  It's an organization in Winnipeg that was originally put together to study the Exchange District.  They were very involved in the Red River Downtown project.  They are involved in a Millennium Library project.  The mayor was instrumental in that organization coming together.  They are consulting with three levels of government and industry on new initiatives to make Winnipeg a smart community.

 

1232       THE CHAIRPERSON:  And, in terms of these new sources, what percentage of your advertising revenue do you expect will come from the new sources?

 

1233       MR. McCREA:  I think that probably half.

 

1234       THE CHAIRPERSON:  And tell me, what's plan B, if your revenue estimates are too optimistic?

 

1235       MR. McCREA:  The usual business practices.  We'd keep our eye on expense items.  We would make new initiatives in sales, concentration in sales and promotions.

 

1236       THE CHAIRPERSON:  Mr. McCrea, you don't, or N.I.B. doesn't, subscribe to BBM?

 

1237       MR. McCREA:  Not now, no, we don't.

 

1238       THE CHAIRPERSON:  And so when you talk about how you've estimated your share, you're essentially going on what you believe to be your share of the "other" share?  Is that correct?

 

1239       MR. McCREA:  Well, we've outlined that we presumed because of timeframes with what has been published with the "other" category and from timeframes and what's taking place in the marketplace, the increase in "other" coinciding with our sign-on and the growth from a few months afterwards to now.  So there are some assumptions in that.

 

1240       THE CHAIRPERSON:  And if those assumptions are not correct, then would it be fair to say that your projections would be somewhat out?

 

1241       MR. McCREA:  Well, I think again, based on the response we had on our on-air call for support to the radio station, the response we received there, the phone calls, faxes, comments from being in the community and the number of people that said that they are tuning into us and listening to us, I'm very confident that our projections on the audience we have and thus the revenue we can generate is accurate.

 

1242       THE CHAIRPERSON:  In the recent renewal of CJAE, the renewal was a short-term renewal and the reason for it was that you had been only broadcasting Category 21 in the self-assessment week in 2000.  How long were you aware or did you know that CJAE was only broadcasting Category 2?

 

1243       MR. McCREA:  Well, I was aware at the time.  We were in the process of setting things up.  There were ‑‑ the college at the time that we were associated with had ceased to operate and as a result it put us in flux and we reacted to that and corrected that.

 

1244       THE CHAIRPERSON:  My question is, how long from the time you were originally licensed ‑‑ I think it was '96.  Am I right?

 

1245       MR. McCREA:  Mm-hmm.

 

1246       THE CHAIRPERSON:  How long, '96 to 2000, during that period of time, were you only or was CJAE only doing a --

 

1247       MR. McCREA:  We didn't actually go to air until 1998.  We had extensions on our sign-on.  And we were compliant with -- we weren't compliant at the time that self-assessment was done.  We were in the process again ‑‑ relating to the college we were associated with, we did have some issues to deal with and --

 

1248       THE CHAIRPERSON:  So Mr. McCrea, from '98, from sign-on until May of 2000 or April, or indeed until renewal, what length of time during this two, three years, was CJAE only broadcasting Category 2?

 

1249       MR. McCREA:  I'm going to say it was a number of months in '98.  If you wanted specific detail, I could probably come up with that.

 

1250       THE CHAIRPERSON:  So '98 and then in 2000?

 

1251       MR. McCREA:  I'm sorry, I'm referring to '99 to 2000.  From the end of '99 to a period in 2000 at the time of the self-assessment.

 

1252       THE CHAIRPERSON:  So about six, eight months?

 

1253       MR. McCREA:  Maybe six months.  Five, six months.

 

1254       THE CHAIRPERSON:  Could that impact on the listenership, the BBMs that you allude you have?   That it's essentially a different station than the one that you're proposing.

 

1255       MR. McCREA:  Well, I don't know.  It may have impact at that time.  It might have, although there'd be very few people aware that we were even on at that point.  We hadn't really promoted it.  We had a decision of non-compliance for not being on the air at all or being on the air and getting things corrected.  So we made that decision to at least be on the air and get compliant, which we did.  I don't think that we picked up -- there would have been a period in that initial point where people would just stumble on us.  But since then, and since making the corrections, we've seen that trend continue to grow.  So maybe minimal?

 

1256       THE CHAIRPERSON:  Okay.  And we say in our decision on your renewal that corrective measures have since been put in place.  Can you say today that you're in compliance?

 

1257       MR. McCREA:  Yes.

 

1258       THE CHAIRPERSON:  From a technical perspective, why is yours the best use of 107.6 -- I'm right on 107.6?

 

1259       MR. McCREA: 107.9.

 

1260       THE CHAIRPERSON:  107.9.  Why is yours, from a technical perspective, the best use?

 

1261       MR. McCREA:  Well, in fact, we had applied for 106.3 and at Industry Canada's suggestion we altered that.  From our transmitting site, we can increase our power on that frequency, whereas from our site, we have a problem with increasing power at 92.9.

 

1262       THE CHAIRPERSON:  From a public interest point of view, why is your application the best use of that frequency?

 

1263       MR. McCREA:  Well, there were a couple of low power frequencies that were open for our use.  Again, I'm not an engineer either and Doug Allen, our engineer, is attending Industry Canada meetings today.  He would be here tomorrow and I could refer to him on --

 

1264       THE CHAIRPERSON:  My question, Mr. McCrea was from a public interest point of view.  We have to worry, we three and the Commission, have to worry about the public interest.

 

1265       MR. McCREA:  Yes.

 

1266       THE CHAIRPERSON:  And so my question is why is this the best use of this frequency in the public interest.  The first question was to technical point of view --

 

1267       MR. McCREA:  Well, again, I guess then this wouldn't be so much a technical question as a question of diversity of programming, the heavy community involvement that our station has demonstrated in associating with and producing programming with groups like Manitoba Theatre for Young People, the heavy component of local talent, local music that will be heard in regular rotation on our radio station.  Those issues are why we would serve it well.

 

1268       THE CHAIRPERSON:  And would you be prepared to accept another frequency?

 

1269       MR. McCREA:  We'd certainly be open to considering another frequency.

 

1270       THE CHAIRPERSON:  And I take it that you and Mr. Allen have not talked about this in terms of how the coverage would change?

 

1271       MR. McCREA:  How the coverage would change ‑‑

 

1272       THE CHAIRPERSON:  On any other frequency.

 

1273       MR. McCREA:  -- on moving to another frequency?

 

1274       THE CHAIRPERSON:  Yes.

 

1275       MR. McCREA:  No, we haven't gone -- nobody else had indicated an interest at this point in using, at least in this hearing, at using the frequency 107.9 that Industry had suggested.  So we haven't really looked at other options although in this hearing there have been four or five low FM frequencies that are possible.

 

1276       THE CHAIRPERSON:  Perhaps, in terms of the whole issue of alternate frequencies and coverage and impact on your business plan ‑‑ Mr. Allen will be here tomorrow; have I got that correct?

 

1277       MR. McCREA:  Yes.

 

1278       THE CHAIRPERSON:  Perhaps we can cover that in Phase II and you could maybe discuss with Mr. Allen the coverage of other frequencies and if that would impact on your business plan?

 

1279       MR. McCREA:  Well, what would impact is ‑‑ the one thing that I can tell you now is that the power level would impact our business plan.  Currently, on the frequency we're at, in the location we're at, we can't really increase our power significantly.  Our intent is really just to broadcast to the Winnipeg community but to have good penetration within the city. 

 

1280       So if there's another frequency that is an option that we could have the level of power that we're asking for in this application, we'd certainly consider it.

 

1281       THE CHAIRPERSON:  So you'll discuss with Mr. Allen the document that was provided by Rogers yesterday, and you have a copy of that?

 

1282       MR. McCREA:  Sure.  Yes.

 

1283       THE CHAIRPERSON:  That's the end of my questions.  Commission Cardozo has a few.

 

1284       COMMISSIONER CARDOZO:  A couple of questions.  I wondered as you're switching from an instructional station to a commercial station will you be carrying on any instructional content.  I understand the training aspects that you've talked about that you'll be doing with the N.I.B. or with students and so forth, but will there be actual instructional programming?  Have you had that in the past?

 

1285       MR. McCREA:  Instructional programming?  you mean to the participants to the ‑‑

 

1286       COMMISSIONER CARDOZO:  In the past did you have instructional programming where you had lectures or discussions about broadcasting or any other types of issues?

 

1287       MR. McCREA:  In our newscasts with students that were involved, we did discuss issues of journalism and delivery and things of that nature.  We were also doing some instructional programming, but not per se broadcasting.

 

1288       COMMISSIONER CARDOZO:  Will that be continuing?

 

1289       MR. McCREA:  Referring to the two-hour a week commitment to educational programming?

 

1290       COMMISSIONER CARDOZO:  That would be the main part of your educational programming, is it?

 

1291       MR. McCREA:  We wouldn't be doing ‑‑  if this application is granted, it's not our intention so much to do a specific educational two-hour a week program or block programming like that.  We wouldn't be doing it in this.

 

1292       COMMISSIONER CARDOZO:  Is that because you don't feel there's a need for that any longer or have you got other means of doing that type of program?

 

1293       MR. McCREA:  Well, certainly there would be life learning aspects and to our programming.  Again, Smart Winnipeg, technology related issues, things of that nature do have an educational component to them.  But again, to do a two-hour program on broadcast training is not what's contemplated in this application.

 

1294       COMMISSIONER CARDOZO:  You're aware of our category of campus radio stations with a different regulatory stream.  I take it you looked at that and decided you'd prefer to have a commercial station which is associated with an educational institution but you didn't want to have a non-profit, campus community or campus radio station?

 

1295       MR. McCREA:  Well, we've identified programming that fits the criteria for the Broadcast Act and the new commercial radio policy that provides diversity to the market.  We want to hold on to some of the heritage involved in the training history of the organization.  The intent is to deliver a commercial station with diverse programming, but there's no reason ‑‑ there's a benefit in fact to us continuing training, but more training in terms of bringing graduate students into the programming and then there's a natural mentoring that goes on with a news director to a reporter.

 

1296       COMMISSIONER CARDOZO:  I understand that -- this is fun.  My other question was in regards to Anokiiwin College.  You've talked about providing training to Aboriginal students and as you know the Commission's identified Aboriginal broadcasting as a priority and encouraged commercial radio stations to get involved in assisting in this regard.  So I note that with interest.  Do you have an agreement with the College as to what you will be doing?

 

1297       MR. McCREA:  We have an agreement that we will be assisting and providing training for students of that college in broadcasting in general, and also journalism, but broadcasting in general as well as journalism.  So that will carry on regardless of whether this application is granted or not.

 

1298       COMMISSIONER CARDOZO:  You're doing that with CJAE at present?

 

1299       MR. McCREA:  We're just launching that.

 

1300       COMMISSIONER CARDOZO:  So the students get some journalism training at the College and then come to you for hands-on experience?

 

1301       MR. McCREA:  That's right.

 

1302       COMMISSIONER CARDOZO:  If we were to license you, would you accept something of this nature in a condition of licence?

 

1303       MR. McCREA:  Yes, we would.

 

1304       COMMISSIONER CARDOZO:  Those are my questions, thanks very much.  Thank you, Madam Chair.

 

1305       THE CHAIRPERSON:  Counsel?

 

1306       LEGAL COUNSEL:  Sorry, just for the purpose of the record, just on that last question by Commissioner Cardozo, what sort of condition of licence would you accept it being related to the instructional component? 

 

1307       In terms of a regulator, as you will understand, we have to look at either a percentage of broadcasting time or a commitment for a number of hours a week or something quantifiable that we can put into a condition of licence.  So you said that you would be willing to accept some sort of condition; I'm just wondering what kind of a condition it could be.

 

1308       MR. McCREA:  Sorry about that.  I'm just considering that suggestion.  The intent here is to train students in journalism and in broadcast and involve them in regular programming. So I don't know whether ‑‑ I mean, this is food for thought, but perhaps there's an employment condition.

 

1309       LEGAL COUNSEL:  Sorry, what's not clear to me is whether you would involve them as students, like when they are taking the instruction at a college, or whether you're employing them as either full-time or part-time persons after they've graduated.

 

1310       MR. McCREA:  Primarily, it's that we are going to be working with the College.  There are two aspects, before and after this application.  With this application, we are going to be involved with -- sorry, today, the station will be involved in doing two things, at least personnel et cetera will be involved in delivering lecture and theory training and, at an appropriate point, bringing those students into on the air.

 

1311       They will be doing assignments. They do lots of practical, but at a point when they are becoming competent in several skill sets, they will be involved in reporting and going out and delivering news and hosting programs.

 

1312       We're going to be involved in that regardless of before or after the application and we will provide employment for some of those graduates.  They'll be in the mix of graduate students that get employed.

 

1313       LEGAL COUNSEL:  Well, I think for the purpose of a condition of licence, what would be interesting for the Commission is if we could have your suggestion as to the condition of licence for the time that the students are receiving instruction as opposed to post-employment.  I don't know if you now can or during Phase II if you can provide a suggestion to the Commission for the sort of condition of licence that we could use in a quantifiable way as a commitment -- if the Commission chooses to do that -- for the purpose of this decision.

 

1314       MR. McCREA:  Perhaps I can come back to you in Phase II with some suggestions in that regard.

 

1315       LEGAL COUNSEL:  I think that would be helpful and thank you for that. 

 

1316       Could you just clarify then what is the relationship or what has been the relationship with the College?  I think you said that a relationship with the College has ceased, and can you just clarify what relationship you did have, when it ceased, and what relationship you now have?

 

1317       MR. McCREA:  Earlier, I was referring to a college, Media Arts and Education, which was a college that we were associated with a couple of years ago, and it did cease to operate.

 

1318       LEGAL COUNSEL:  Sorry, is that the N.I.B., the National Institute of Broadcasting?

 

1319       MR. McCREA:  National Institute of Broadcasting was the school that we were associated with at the time the licence was granted.  N.I.B. sold its curriculum, its assets, et cetera, to a school called Media Arts and Education.  Media Arts and Education ceased to operate.

 

1320       LEGAL COUNSEL:  So Media Arts and Education ceased to operate when?

 

1321       MR. McCREA:  Media Arts and Education ceased to operate in '98, at the time that ‑‑ yes, '98.

 

1322       LEGAL COUNSEL:  So as of '98 have you been, or are you, associated with any other college?

 

1323       MR. McCREA:  Yes, we are.  We're associated with Anokiiwin College and we are working with Manitoba Theatre for Young People, who are establishing a professional, college division.

 

1324       LEGAL COUNSEL:  And so the instructional courses that you are referring to would be with the college you just referred to for the future; is that correct?

 

1325       MR. McCREA:  Yes, we would be associated with ‑‑ we are associated with Anokiiwin.  We would also expand that to be associated with Manitoba Theatre for Young People, assisting them in establishing a professional division of the school.

 

1326       LEGAL COUNSEL:  Is the MTYP associated with the college as well?

 

1327       MR. McCREA:  No, they'd be associated with us and we're assisting them in expanding their programs.

 

1328       LEGAL COUNSEL:  When the company was incorporated, I think it was first incorporated as a company without share capital; is that right?

 

1329       MR. McCREA:  Yes.

 

1330       LEGAL COUNSEL:  And from your file, it appears that in September of 2001, you filed articles of amendment and you made it a corporation with share capital?

 

1331       MR. McCREA:  No.  We provided what the company would look like on the conversion at the point where we get an approval.  That hasn't happened.  We're still a non-share company but we provided the documentation on what would be if this application is approved.

 

1332       LEGAL COUNSEL:  So just so I understand it for the record.  There's two aspects of it.  One is a change of the frequency and the other is a change from a corporation without share capital to one with share capital; is that correct?

 

1333       MR. McCREA:  That's right.

 

1334       LEGAL COUNSEL:  If the Commission denied both aspects of it, for the sake of an example, then the company would continue to broadcast as an entity with members, without share capital; is that correct?

 

1335       MR. McCREA:  Yes.

 

1336       LEGAL COUNSEL:  If the Commission were to deny the frequency change but granted the application to become a commercial entity, then the entity would continue to broadcast but as an entity with share capital; is that correct?

 

1337       MR. McCREA:  Yes.

 

1338       LEGAL COUNSEL:  Similarly, if the Commission granted the change in frequency, the entity would still continue to broadcast whether or not we granted the change to a commercial station?

 

1339       MR. McCREA:  Yes.

 

1340       LEGAL COUNSEL:  Thank you.  Thank you, Madam Chair.

 

1341       THE CHAIRPERSON:  Thank you, gentlemen.  I think we will now take a break until, say, five after 10:00 ‑‑ well, for 15 minutes.

 

           --- Upon recessing at 0950 / Suspension à 0950

 

           --- Upon resuming at 1005 / Reprise à 1005

 

1342       THE CHAIRPERSON:  Thank you.  We'll recommence, and just a reminder that we will be breaking approximately 12:15 if we are not completed by then because we do have a teleconference.  Mr. Secretary.

 

1343       THE SECRETARY:  Thank you Madam Chair.  The next item this morning is an application by CKVN Radiolink System Inc. for a licence to carry on an English language specialty FM radio station in Winnipeg.  The new station would operate on frequency 100.7 MHz with an effective radiated power of 1,300 Watts.  Please proceed when you are ready.

 

           APPLICATION / APPLICATION

 

1344       MR. SMITH:  Madam Chair, I am delighted to describe a proposal to enhance a grown-in-Winnipeg radio service that has borne fruit from a seed planted here and nurtured by the local community.

 

1345       In a few minutes, the managerial team will provide detail on expansion of our operations from the current 25 weeks into 52 weeks of service.

 

1346       Approval of our application will further the CRTC's established aim of perceptibly increasing service diversity in the Canadian broadcast system.

 

1347       Our proposed program of Canadian Talent Development exceeds CRTC and CAB guidelines.  CKVN has introduced new Canadian easy listening music artists, with explanation of Canadian music history coupled to it ‑‑ something not previously done in Winnipeg.

 

1348       We have been operating for seven years as a low-power, special events radio station, broadcasting from on-site locations in support of such organizations as the Society for Manitobans with Disabilities, Canadian Diabetic Association, Western Canada Aviation Museum, the Stroke Recovery Association of Manitoba, Winnipeg Harvest Food Bank and many, many more organizations.

 

1349       Being the first to conduct special events radio operations in Canada attracted a great deal of attention locally and nationally.  I am proud to say the high quality of our programming prompted more positive press and TV coverage for radio broadcasting than all other Winnipeg radio stations combined in the last six years.

 

1350       The 1996 Canada Census of the Winnipeg Central Metropolitan Area indicates a population of approximately 225,745 aged 45 and older, which is equivalent to the population of Saskatoon.  As the Baby Boomer generation ages, our audience is predicted to grow well into the future.  A report prepared by Western Opinion Research indicates that 26 percent of people aged 45-plus has stopped listening to radio because of lack of appealing programming.  Another group listens for short periods and then turn their radios off.  Western Opinion Research data shows that a population base of 79,000 people will give our proposed radio station a try.  Listeners frequently mention that CKVN plays all day in their home and has become a welcome friend and household companion, especially for shut-ins.

 

1351       Market survey results, daily phone calls, letters of support and the BBM-documented demographic success of CHUM-owned easy listening station 1290 Starlight, CFST, all verify a strong pent-up demand for service.  A programming decision made in Toronto caused CFST to become part of a national network of all sports talk stations and no longer offers easy listening music in Winnipeg.

 

1352       People who have turned off their radios are lost to the entire Winnipeg radio industry.  By offering distinctive programming, we will repatriate some of these disenfranchised radio owners and will also be an alternative to those who look outside Winnipeg for radio services as indicated in the large numbers of the "others" column of BBM ratings.

 

1353       CKVN also serves Winnipeg business owners.  Many now want to increase their exposure and financial support for full-time operation of an easy listening FM station whose familiar voices and friendly spoken word reflects the community's personality and concerns.  Many of these businesses are first-time radio advertisers who previously relied on print media and have returned to CKVN on a regular basis based on positive results.  The presence of CKVN has increased the number of radio advertising dollars in the marketplace while exposing some business owners to the benefits of commercial broadcasting.

 

1354       Many thousands have signed letters written to you on our behalf.  As a further demonstration of their loyalty, approximately 1,200 families have voluntarily joined the Friends of CKVN Club, providing financial donations to show their support to establish this broadcast service.  More than 15,000 listeners have visited the CKVN website to seek information on our short duration broadcasts.

 

1355       CKVN is currently a moderately profitable small business.  It is a known entity rather than a phantom service.  It has sufficient technical equipment operated by an exceptionally well qualified staff.  It carries no debt and is led by a managerial team with considerable experience in the broadcast business.

 

1356       At CRTC hearings in Saskatoon, I noted with great interest your comments that the Commission is searching for ways to increase the appeal of radio, increase music diversity, provide additional sources of editorial comment delivered by many voices, and strengthen the Canadian broadcast system in an atmosphere of financial stability while reflecting the local community.

 

1357       Each and every one of those objectives will be achieved by approving our application for operation.  To ensure that the Commission will be granting operating authority to a company which will deliver on promises, we will operate in the specialty format by condition of licence and not flip to some variation of rock music already prevalent in Winnipeg.

 

1358       MR. SMORDIN:  Ladies and gentlemen, that was Lee Smith, the President and Chief Operating Officer of the applicant.

 

1359       Members of the Commission, I would like to introduce the other members.  My name is Lyle Smordin.  I'm general counsel and also a member of the management group.  On my far right, Ron O'Donovan, vice-president, treasurer and controller of the applicant.  And on my left is Cliff Gardner.  Mr. Gardner is vice-president of programming and a veteran of over 50 years in the broadcast and broadcast management business.

 

1360       This morning's application encompasses a unique story.  The story initially reflects the commitment, dedication and vision of primarily one individual, who has since been joined by many, many others.  We'd like to make note of the fact that as well as the management team, we have in this overwhelming audience many, many of our supporters and we welcome them here today and thank them for coming out to support our application.

 

1361       *(applause / applaudissements)

 

1362       I guess that's the spontaneity that we enjoy on our station.

 

1363       The vision of the individual, Mr. Smith, who conceived the idea seven years ago, and it's been seven long years and now we are here, conceived the idea of a good music station that would appeal to what's been described as the older generation, 45-plus.  To achieve that purpose and to celebrate the 50th anniversary of the end of World War II, the first on‑site broadcast of CKVN came into being. 

 

1364       Since that time, CKVN has remained on the air intermittently from various locations up to and including this week, as you've heard, on behalf of many charities and special events.

 

1365       The station started with a group of individuals dedicating themselves to the same purpose as Mr. Smith and the company was subsequently incorporated in February of 1999.  The ownership of the corporation is in the hands of a group of experienced broadcasters who have an extraordinary dedication to provide this type of service.  And the key to this applicant is encaptured in the word "dedication."

 

1366       MR. SMITH:  The staff have prepared a four-minute video presentation regarding their past accomplishments.  This is taken from the CTV and CBC National News, from CBC Newsworld and from segments of locally produced television shows, on air and on cable.  I'm sure that you'll find it tells the story well of how we came to be in this room.

 

1367       (VIDEO PRESENTATION)

 

1368       MR. SMITH:  And now to describe our programming aims is vice-president of programming, Clifford Gardner.

 

1369       MR. GARDNER:  Members of the Commission, on behalf of a gathering of friends, welcome to the heart of the continent.  The aims of our radio station are three-fold.  First to serve, entertain and communicate with an audience of people 45 years of age and better.  Second, to guide our staff and listeners to more awareness of and more involvement in the promotion of our community and its many attractions.  Third, to encourage, assist and even spotlight the values of our up and coming talented Canadians in the Winnipeg area.

 

1370       Our staff of veteran broadcasters will entertain with the greatest music and the finest performances from the best years of the lives of our audience.  Our experienced team will highlight the important aspects of Winnipeg and Winnipeggers as this Paris of the Prairies proudly and confidently moves into a new era of accomplishments with an assist from well informed citizens.

 

1371       Our professional air crew will inform those 45 and better of the events, the happenings and the changes that take place in their city, in their country, and in their lives.  We will be a prime awareness factor for one of the largest and still growing groups of Canadians, with whom today's governments, businesses and service industries must communicate.

 

1372       Our radio station communicators, armed with the best know-how ingredients, are ready and willing and able to provide a friendly, comfortable and familiar atmosphere in which to inform and educate all people in our age group.

 

1373       Our entertainment components take audiences from the 1920s to the present day:  the big bands, from Paul Whiteman to Winnipeg's Ron Paley Band; from Artie Shaw to this city's Memory Lane Orchestra; from the Boston Pops to our own Winnipeg Symphony; and great vocal performances from Enrico Caruso to Andrea Bocelli and his partner in classical duets, Canadian Sarah Brightman; from Al Jolson to Alberta's Tim Tamashira; the Mills Brothers to Manitoba's Neil Harris Singers; from Dinah Shore to Diana Krall.

 

1374       We are in touch with the likes and wishes, the needs and concerns of the seniors of our community, all 225,000 of them.

 

1375       Collectively, our announcers, technicians, and office personnel possess over 1,400 years of broadcast experience plus the heritage of basic broadcast facts and figures and the expertise of having witnessed and put in place many of the changes of the past, the innovations of the present, and with an awareness of the concepts of tomorrow.

 

1376       Having been the broadcast personalities when the music, the entertainers and the magic of radio were young, our veterans have honed their craft to become the ideal hosts to recall the nostalgia, the history, the headlines, and the people and places involved.  As you've heard, our audience has already applauded our authenticity with their written approval and support.

 

1377       To sum up, we offer yesteryear blended with the here and now of today and occasional glances into that new world, tomorrow.  We thank our growing audience, volunteers, and supporters for their involvement that has taken us to this step.  And yes, members of the Commission, we're very aware in Winnipeg people care.  Thank you.

 

1378       (applause / applaudissements)

 

1379       THE CHAIRPERSON:  Excuse me. 

 

1380       MR. GARDNER:  Thank you.

 

1381       (applause / applaudissements)

 

1382       THE CHAIRPERSON:  Excuse me.  This is not an entertainment.  Although we may be talking about entertainment, this is a serious hearing and I would ask people to act accordingly.  Clapping in a hearing where we are trying to decide between various applicants is not appropriate.

 

1383       MR. SMORDIN:  Madam Chair, one of the concerns of the Commission as evidenced by applications both in the past and in the current group of applications is financial concerns and I would ask our treasurer and financial vice-president, Ron O'Donovan, to make his presentation.

 

1384       MR. O'DONOVAN:  Good morning, members of the Commission.  CKVN has formulated a seven-year sales marketing procedure based on non-erosion of the local commercial radio advertising marketplace.  We will concentrate sales efforts predominately on print media advertisers.

 

1385       Our research was based on the latest dollar figures available from the 2001/2002 media digest produced by the Canadian Media Directors' Council.  This Canada-wide organisation indicated that advertisers in the Winnipeg area, in 1999 spent approximately $158 million on local print advertising.  Following an extensive, systematic investigation, we compiled a list of over 60 daily, weekly, semi-monthly and seasonal print vehicles in the local market area.

 

1386       Under Schedule 18, section 10.5, in our licence application, we have indicated that we took a very conservative approach to estimating, not only our expected first-year expenses, but also our grow revenue potential.  And we will show a modest profit of $4,000 for year one of operation.  In consultation with an experienced broadcast sales executive, he agreed that our first-year sales projection to sell slightly more than two minutes of commercial time per broadcast hour ‑‑ or to phrase it in percentages, we have budgeted for selling just 28 percent of our first year's maximum potential revenue to obtain our working budget of $680,852 ‑‑ is realistic and achievable.

 

1387       We refrained from including any national revenue in our first-year budget and added just $50,000 revenue from that source in our second year of operation.  Our financial outlook is to be able to increase the program budget by 15 percent each year from year two to year seven.  This will be obtained by an anticipated 2 percent yearly gain in sales revenue from 28 percent of maximum potential to 36 percent of sold-out status in year seven. 

 

1388       The special event broadcasts that were referred to earlier in CKVN's presentation have not only brought back and retained radio listeners but has demonstrated that we can also bring back advertisers who may have fled to the print form of advertising as they, like many listeners, tuned out radio programming.

 

1389       We have practiced efficient, prudent and successful financial capabilities over the past seven years as indicated in our application, and look forward to expanding in the near future.  Thank you.

 

1390       MR. SMORDIN:  Well, members of the Commission, you've heard our initial presentations.  We've attempted to cover many of the items that I know are a concern to the Commission and as well, of course, you have our written application and we stand ready to answer your questions.

 

1391       THE CHAIRPERSON:  Thank you, gentlemen.  Commissioner Cardozo?

 

1392       COMMISSIONER CARDOZO:  Thank you, Madam Chair, and welcome, Mr. Smordin, Mr. Smith and colleagues.

 

1393       I just want to say to people in the audience, there are more chairs around.  I notice a number of people standing.  There are still several chairs so please feel free to sit and it's still going to be another hour or two.  We'll try to keep you informed, if not entertained, but please feel free to sit comfortably, if you can.

 

1394       Thank you for your presentation; that was helpful.  As you know, the purpose of the hearing is really to address a number of issues that we want more information on, so while the basic information has been covered in your application and in the deficiency correspondence that has gone on between the Commission and yourselves the last few weeks.  So I hope you don't feel that this is an interrogation, but rather it's ‑‑ or a cross-examination, although we might sound like that sometimes.  But really, what we're trying to do is to get as much information on the record as possible in order to make our decision at the end of the day.  And I hope that the audience will bear with us sometimes when we deal with some rather picky, detailed questions, but there is a purpose to them.  And I'll just say that in order for the whole system to work, we want to make sure that everybody more or less does what they said they were going to do. 

 

1395       I am tempted to read one quote out of your application and, in a sense, it's sort of what I think you ‑‑ what you want to do and this is sort of what we want to discuss as how you are going to do this.  It's from section 8 of the supplementary brief, but you don't need to refer to that.

 

1396       It says: 

 

These days one needs to be a musicologist to note the slight variations in music style which determine if a station is AOR, Classic Rock, Dance, Hip Hop, Rap, Turntablist, Urban Music, Blues, Oldies et cetera.  All these forms of music sound basically the same to the ear of the 45-plus listener and may be summarized as being Rock, More Rock, Horrible Rock, and "Rock so hard you just can't stand to listen to it for two seconds."

 

1397       I thought of that paragraph when I was watching the gentleman on your video looking for a station to listen to, and I take it that is, not to be too hard on the others, what you're going to be doing is stuff that isn't Rock, Horrible Rock and all that kind of stuff?

 

1398       MR. SMITH:  I'm absolutely delighted that you chose that selection to represent our radio station because, from one end of the dial to the other, there is no perceptible, in the opinion of many, diversity here.  It's as if we're preparing microscope slides for the examination of music, primarily taken from the body of Rock and taking the microtome to prepare that microscope slide, and slicing it one cell layer thick for examination under the microscope.

 

1399       We provide and will provide in the future easy listening music which is immediately discernible as you tune across the band, just as you saw in that video.  That was done with off-air signals.  That wasn't staged.  That was what you hear when you get in your car and go from one end of the dial to the other.  And there is only one exception and that is the CBC Radio 2 service.  Many people perceive that as being sort of, if you will, elitist or too long hair for them.

 

1400       So we offer a very, very distinctive turn from light rock, medium rock et cetera.  And yes, we play jazz; we have for some time.  I did find it somewhat interesting to have applicants come forward and say nobody plays jazz.  But then, from our licensing status, of course, no, nobody does play jazz.  But we will play it as a component because it fits in the overall presentation of easy listening music.  Hopefully, I've expounding on that sufficiently.

 

1401       COMMISSIONER CARDOZO:  Okay.  And let me tell you the areas that we'll cover.  They're basically three areas.  The first will be programming and within that context we'll be talking about Canadian content, local programming, and your advisory council.  The second general topic area will be economic and financial issues, and the third will be technical issues.

 

1402        Despite the nature of these areas, I hope that we won't bore the audience that has come here to support you.  But just to reinforce the message earlier that in order to deal with these issues in depth, much as you do want to applaud, we have noted that, and further applause does cause distraction and also, we're in a sort of competitive area so we don't want people to be measuring applications by the degree of applause in the hall.  Although I noticed the spontaneity of what it was delivered in.

 

1403       Let me ask you then, on the matter of the categories of music, Category 2 and Category 3, what are your plans for how much Category 2 and how much 3?  You said as a minimum there would be 55 percent of Category 2; is that correct?  And then you talked about 22 percent Category 3, which leaves another 23 percent unaccounted for.

 

1404       MR. GARDNER:  Your figures are correct and the remaining part makes up the entire scope of what CKVN does, from religious to country to blues to live performances and to excerpts from Broadway and the movies.

 

1405       COMMISSIONER CARDOZO:  Okay.  So by your knowledge of our categorization of music, do you know where that would fit into Category 2 or 3?

 

1406       MR. GARDNER:  Category 2 and 3 ‑‑

 

1407       COMMISSIONER CARDOZO:  No, this other 23 percent --

 

1408       MR. GARDNER:  Oh.  Well, trying to determine what your definition of the categories were and our interpretation of it, we have pop, rock and dance at 10 percent, country music at 10 percent, or country related music.  We have folk and folk-related music at 5 percent.  We have jazz and blues at 20 percent, but that's covered in the "other" category.  Religious, 5 percent.  World international interpretation, because we have a mix in Winnipeg that is unique, from all around the world, another 5 percent.  And the live performances, at least 5 percent, should be pretty close to the full 100 percent of our involvement.

 

1409       COMMISSIONER CARDOZO:  Okay.  So focusing on the issue of Category 3, specialty music, from that calculation ‑‑ I hope that calculation comes out right ‑‑ but you'll be talking about at least 30 percent would be Ccategory 3, specialty music,

 

1410       MR. GARDNER:  Yes, yes.

 

1411       COMMISSIONER CARDOZO:  And you would expect a condition of licence to that effect, because that's an important aspect in providing the licence and ensuring that you perform in the way that you say you are going to perform?

 

1412       MR. SMITH:  Yes, we would accept a condition of licence with respect to 30 percent Category 3 music.

 

1413       COMMISSIONER CARDOZO:  With regards to the Ccategory 2 music, you said you'd do 20 percent Canadian content; is that correct?

 

1414       MR. SMITH:  Yes, and we have also -- well, I'm sure that you'll address them shortly --requested the ‑‑ first of all, we've made a commitment to 35 percent; you'll find that in the documentation.

 

1415       COMMISSIONER CARDOZO:  Sorry, the ‑‑

 

1416       MR. SMITH:  Overall 35 percent with the application of the capabilities inside the regulations for the increased percentage of instrumental music, reducing that to 25 percent, and also for the exemption of Canadian content if we wish to produce specialty programs of music composed prior to 1956, which has been granted to other radio stations, reducing Canadian content for those periods of specialty programming, to as low as 2 percent.

 

1417       COMMISSIONER CARDOZO:  Let me just go over a couple of those again.  Category 2, instrumental selections, would be, did you say, 20 or 25 percent Canadian content?

 

1418       MR. SMITH: Twenty-five percent.

 

1419       COMMISSIONER CARDOZO:  Twenty-five percent.  And you're aware that that's calculated on a weekly basis?

 

1420       MR. SMITH:  Understand that exactly.

 

1421       COMMISSIONER CARDOZO:  With regards to pre-1956, I've always wondered why it's pre-1956 apart from that date being the year ‑‑

 

1422       MR. SMITH:  It has raised considerable questions on our mind as well.

 

1423       COMMISSIONER CARDOZO:  It's the year of my birth, but that's another matter.  See, I'll be in your demographic.  I don't know if I start this year or next year in your demographic.  Is it 45 or post-45, or better than 45, as you said?

 

1424       MR. SMITH:  Forty-five on up.

 

1425       COMMISSIONER CARDOZO:  Okay, so I'm in your demographic.

 

1426       MR. SMITH:  Welcome.  So there you are.

 

1427       COMMISSIONER CARDOZO:  Now I have a special interest.  I don't know if this creates a conflict of interest for me, but I'll pursue. 

 

1428       So with regards to the pre-1956 music, if it's 90 percent of those blocks are pre-1956, you're required to play 10 percent Canadian content.  If it's 100 percent pre-1956 then you can go down to 2 percent.  You're aware of those two regulations?

 

1429       MR. SMITH: Yes, I'm aware of that situation.  And where we see that as being valuable, for example, last week when Peggy Lee died.  If we did a special production with respect to Peggy Lee, then the majority of her music was composed and performed prior to 1956, it would enable us to do that special.

 

1430       For example, Frank Sinatra died; we produced a special on Frank Sinatra.  And by employing the music written by Ruth Lowe of Toronto that was performed by Frank Sinatra, we would have exceeded the 2 percent floor very, very handily.  But that capability is in there for our specialized programming for us to be able to take advantage of that and work it very, very well to the service of the public.

 

1431       COMMISSIONER CARDOZO:  What's going to be your method of ensuring that what you think is pre-'56 is pre-'56?

 

1432       MR. SMITH:  Well, we've discussed that actually with the excellent help of Steve Parker, on your staff ‑‑ been very, very helpful to me ‑‑ and Joel Whitburn's book of hit music is considered to be, if you'll excuse the analogy, the bible associated with the differentiation there.  The dates that are in that publication, and for that matter, other music publications ‑‑ but we, immediately upon my return from a special visit to Ottawa to discuss this matter with Mr. Parker, obtained a copy of Joel Whitburn's book and it's been very, very helpful.

 

1433       COMMISSIONER CARDOZO:  It will be more than saying, I know music well and I thought this was -- if we come to check your logs you won't be assuring us that you really thought it was '56?  You've got methods of categorizing your own music to ensure that it is pre-'56?

 

1434       MR. SMITH:  We do have the research available to differentiate should it become a question of a division of something close to 1956.  We do have the way of doing that.  And our library will in fact be categorized ‑‑ well, not categorized -- there will be a code associated with the music which will tell its date of composition so that it could be very, very easily printed out.  It will come up with the file title and other information with it and it also has year in that period of time, plus or minus a couple of years, so that it's easily differentiated and logged and managed.

 

1435       COMMISSIONER CARDOZO:  I take it that the gentleman to my right has the computer skills to carry you through such a process?  He's performed admirably this morning.

 

1436       MR. SMITH:  Actually it's as simple as a bracket with a date and a close bracket.

 

1437       COMMISSIONER CARDOZO:  Okay.  With regards to the speciality FM format, you're required to broadcast a certain amount of Category 3 music with a certain level of Canadian content calculated on a weekly basis.  We just need to ask you why you feel the level that you suggested is adequate?

 

1438       MR. SMITH:  Well, as I recall, the Cancon level for Category 3 is, in fact, 10 percent.  We exceed that already and certainly meeting the regulatory requirement is dead simple.  We're already performing at that level and in excess of it.

 

1439       COMMISSIONER CARDOZO:  And does that meet the demand of your listenership?

 

1440       MR. SMITH:  More than.

 

1441       COMMISSIONER CARDOZO:  At present or over the past, how many months of the year or weeks of the year have you been on air?   On average?

 

1442       MR. SMITH:  Most recently, we've in fact been on for, round numbers, two weeks on, two weeks off.  That's a slight oversimplification because there are some time periods where our dates ‑‑ because the dates fluctuate depending on the length of the special event that we're operating in support of, and that makes it a little bit tough for me to say exactly how many weeks out of the last 52, but it would be approximately 25.

 

1443       COMMISSIONER CARDOZO:  Okay.  Can we talk about local programming?  You have a fairly impressive or maybe ambitious amount of local programming that you're planning to do.  Tell us a little about the number of full-time and part-time people you're going to be having at the station and how many volunteers, and give us a sense of some of these programs that you've mentioned such as Books on the Air, Prime Times, Ask the Doctor, et cetera.  Not necessarily each one, but in general, how many would be volunteers?

 

1444       MR. SMITH:  Well, we have an interesting combination of staff members.  In full-time operation ‑‑ well, for that matter, even in part‑time ‑‑ in our current schedule, we don't really have volunteers in an on-air staff capacity.  In fact, that's one of the reasons why I'm anticipating, if you'll forgive me, a question that would come up as to why we did not consider community-based radio stations as a way to do it. 

 

1445       The people associated with the production of these programs ‑‑ and they're taking time from their other segments in life ‑‑ certainly deserve to be compensated.  They have, for the most part, been compensated by broadcasting for the rest of their lives until they were let loose by many other radio stations locally as being too old or too expensive or what have you.

 

1446       They've found a home with us.  Our anticipated operation in full-time is eight full-time but complemented by 27 additional part-time people so that they're called in on a contract basis, they do their work and then they leave.  And we're grateful for them to have had the opportunity to walk through our doors, do the work and leave.  So eight full-time initially and the complemented by, if you will, 27 freelancers if you want to reduce it to that common language.

 

1447       COMMISSIONER CARDOZO:  And volunteers?

 

1448       MR. SMITH:  Volunteers in on-air and production capacities, the answer is none.  We do employ volunteers in peripheral areas of the radio station.  An example would be with respect to our current operations are telephone type duties, our interfacing between the operational staff and the public that phone.

 

1449       We have no plans to, if you will, ditch those people.  They've made a very valuable contribution to us along the way and we may look at some form of compensation for that, whether it be monetary, whether it be through goods, services, a slap on the back and shake the hand.  I don't know as of yet, and I must admit that we haven't looked at that aspect of how we will express our appreciation for the work done by the volunteer component in our operation.

 

1450       COMMISSIONER CARDOZO:  The Friends of CKVN that you talked about in your presentation, what is their role besides supporting and providing donations?  And that's not to undermine that; that's extremely important too.  Would you see them being involved in giving advice, feedback?

 

1451       MR. SMORDIN:  Well, we've had over the past number of years, as our presentation indicated and our brief indicated, over 1,200 families, because usually it's a family membership.  All of that was done voluntarily.  We asked, of course, and they responded.  But really, what they gain out of it is the satisfaction of supporting the station and its initiatives.  I believe we would continue to do that.  And their part, yes, we have talked in our brief about the establishment of an advisory council, and whether they come from that aspect or whether they come from the business community, the ethnic community, the religious community, that has not been decided upon.  But we certainly have in our plans the development of an advisory council to provide us with guidelines, with guidance as to what kind of programming they would like to hear.

 

1452       COMMISSIONER CARDOZO:  So the advisory council, is that the type of feedback you would get from them or is the advisory council more involved in the Friends in general?

 

1453       MR. SMORDIN:  It would be a crossover between both.  Whether the person on the advisory council is a Friend of CKVN or not, I don't think is the important issue.  The Friends of CKVN come from our listening audience, our very loyal listening audience.

 

1454       COMMISSIONER CARDOZO:  Do you have the advisory council set up yet or is that something that ‑‑

 

1455       MR. SMORDIN:  No, we don't.  We have it structured and we have a number of people who have volunteered but we haven't set that up as a structure.  Our Board consists of the officers that are indicated in the application.

 

1456       COMMISSIONER CARDOZO:  You'll be aware for companies under 100, they're required to report to us on employment equity.  Is that something you're prepared to do?

 

1457       MR. SMORDIN:  Yes, certainly we are.

 

1458       COMMISSIONER CARDOZO:  Do you see your music as reflecting or catering to the diversity of the 45pplus population in terms of cultural background?  This is a very multicultural city.

 

1459       MR. GARDNER:  Yes, that's very much a part of our planning for the programming day.

 

1460       COMMISSIONER CARDOZO:  And how would you do that?  Is that genres of music?

 

1461       MR. GARDNER:  Well, I would like to base it on calendar events because when the Italian community is celebrating it's a different part of the year than when the German folks of Winnipeg celebrate.  Throughout the entire ethnic list there are different times of the year when we have the opportunity to celebrate with and for them on their special event or special occasion.

 

1462       COMMISSIONER CARDOZO:  And you feel you've got the contacts to make those connections with the community?

 

1463       MR. GARDNER:  Yes.

 

1464       COMMISSIONER CARDOZO:  Can we move to financial projections?  If you were licensed, how long would it take you to get on air?  I guess you're sort of there already but --

 

1465       MR. SMITH:  Well, the time period that we anticipate, we've been watching your decisions and the time period associated with your publications quite closely.  They vary between three months and five depending on the complexity of the issues that you've dealt with.  I'm anticipating an answer somewhere in May and we have planned on a time period of sign-on for the Labour Day long weekend.

 

1466       Already we have purchased the transmitter; we have already bought the tower and the antenna.  It's paid for and ready for erection because we're anticipating a successful decision from you, not to pre-judge, but we have facilities in place and we are in fact slowly but prudently expanding them.  So we will be ready for the September long weekend.

 

1467       COMMISSIONER CARDOZO:  Sounds like the message to us is get on with it and give you the licence.

 

1468       MR. SMITH:  We've been waiting a very, very considerable time to appear before you.

 

1469       MR. SMORDIN:  It's been seven years since this came into existence in an idea format.

 

1470       COMMISSIONER CARDOZO:  With regards to your station to date, the special events station, what's your sense of the level of audiences and what's your anticipated tuning share?

 

1471       MR. SMITH:  Well, not subscribing to BBM at this stage, we cannot quantify that.  However, we anticipate that, judging by the BBM information from 1290 Starlight CFST, which attained approximately a 5 share by operating on AM without promotional budgets, and they did a very credible job of a modern presentation of that music.  Very similar to the station that you approved in Toronto for CHWO.

 

1472       We intend to take CHWO's concept, with which you are very likely familiar, and in fact inject more local, more personality into it.  So operating on FM it is somewhat speculative on my part, but I would anticipate that we would be at a 6 to 6.5 share in the BBMs, to which we will subscribe. 

 

1473       So we have a previously documented 5 share with zero promotion and on AM, and an additional 1.5 by going to proper fidelity on FM is certainly not unreasonable to anticipate.

 

1474       COMMISSIONER CARDOZO:  I was going to ask about CHWO; maybe you can just tell me a little bit more about that now.  What have you learned in terms of how they're functioning there?  I guess they've been on air maybe close to a year, something like that?

 

1475       MR. SMITH:  Approximately so.  Well actually longer than that because it was your CHWO decision which encouraged me to actually finally put pen to paper.  The development of your criteria, before we were asked to jump a high-jump with an invisible bar, it wasn't until you published the basic guidelines of how high that high-jump bar is set that we knew whether or not we would be competitive, whether it's worth our while to even come forward when we, sort of, observe the previous lack of criteria versus today's criteria that have been very, very helpful.  It's something that I've asked for in several public forums and I was very, very heartened by the publication of those guidelines.

 

1476       Now, to move to CHWO, I have not looked at their latest BBM ratings; however, they do enjoy support.  Their financial picture in talking with their sales manager, they are on projections.  Now, mind you, as far as he is concerned, I'm just a member of the public.  I could very well be a competitor.  I could be someone down the street.  I could be Lee Smith from Winnipeg.  He has no way to tell.  So to sit here and say, here is their financial statement, I can't do that.

 

1477       COMMISSIONER CARDOZO:  No.  But is there a prospect for you to develop a co-operative relationship where you learn from each other as you go through this?

 

1478       MR. SMITH:  I would very much hope so because I used to work with a number of the people who are currently employed at CHWO, in fact, and I have a very long-term relationship, in excess of 30 years, with some of their staff members.  They do a very, very good job.  However, I think that they have taken the Top 40 world and applied that to the world of easy listening via automation.  And so really, we want to do what CHWO does as a floor and then in turn build upon that for local involvement and people for information.

 

1479       COMMISSIONER CARDOZO:  On the age level, given what you were talking about in the video and in your application, isn't it more of a sort of 55‑plus than 45-plus?   Because there are some 45‑pluses who still listen to the Rolling Stones, even though the Rolling Stones, I think, are 55-plus themselves.

 

1480       MR. SMITH:  Absolutely.  And there are some 75s that listen to Led Zeppelin and there are also some nine-year-olds that listen to Brahms.

 

1481       COMMISSIONER CARDOZO:  No, but I'm talking about your main audience.

 

1482       MR. SMITH:  Exactly.  I'll tell you where the 45 dividing line came from and that is because I witnessed and took very, very close notes at the Saskatoon hearing where the whole issue associated with differentials between coverage areas, partial use of one form of a population base combined with another became a very, very big issue associated with the hearing at that stage.

 

1483       For the sake of ease of measurement and commonality associated with our coverage area, every document that we have in here is referenced to the 1996 Canada Census and 45 is a beautiful dividing line in their documentation.  It doesn't perfectly suit the number of people that would listen to the radio station.  I have people that come to me, literally seven or eight years old, that say, oh, I think what you're doing is really cool.  And I have people who are 77-plus come to me and say, well done, kid.

 

1484       So the part that we are specifically interested in serving though is 45 on up.

 

1485       COMMISSIONER CARDOZO:  Okay.  You indicate that the new FM would attract listeners from a few other stations, namely CJOB, CKY, CFST and CBC, and these stations tend to target an older demographic.  One might say that the 45-plus audience is well served.

 

1486       MR. SMITH:  Well, our documentation based on the research from Western Opinion Research indicates that they don't feel that they are well served.  Recall that one out of every four people over that age bracket have given up on listening to radio. Specifically our question was, "Did you stop listening to radio because of lack of suitable programming?"  One out of four said yes.  So, well it may be argued that, oh yes, we serve everyone from 9 to 90, by some of the other commercial broadcasters, it is failing when it comes to people 45-plus because of lack of suitable programming.

 

1487       I could go on literally for hours giving anecdotal information that comes from people that speak with me on the telephone or that have written to you literally in their thousands describing why they feel that they have not been appropriately served by current licensees.

 

1488       COMMISSIONER CARDOZO:  So is it your view that CKY, for example, which {inaudible ‑‑ off microphone) a lot of talk doesn't cater to their interests?

 

1489       MR. SMITH:  Well, interesting that you should ask me about CKY, and I don't -- they do an excellent job.  They are technically hampered by being on AM.  It is not a conscious decision that people make when they get into their cars or when they tune at home:  oh, I want to listen to FM because the frequency response at 16 kHz is far, far better than it is on AM.  They punch that button because subliminally they know what sounds best to them.  That is an excellent format, programmed by people that know what they're doing at KY, that is hampered by being on AM.

 

1490       Not to sort of jump ahead in the proceedings until we get to the intervention portion. So yes, they serve that segment of their audience very, very well.  They super-serve that slice, just as we will super-serve our particular slice of the market as well.

 

1491       Now, 1290, for example, did a fine job; however, they don't exist any longer.  And some of our research shows that people are willing to change from the Corus station, from CJOB to us.  Our research shows that, of those 79,000 people who will try us -- that doesn't mean 79,000 people that will be glued to the radio 24 hours a day, filling out BBM cards.  That means 79,000 people will punch on that dial and say, let's see if we like it.  It's up to us after that to provide material that is sufficiently attractive for them to remain there with us or to tune more often than they have.  

 

1492       Now, our research shows that 24 percent of those people who would sample our station, in other words, 18,960, would come from CJOB to try us out.  How many we'll retain?  Frankly, that's our problem.

 

1493       COMMISSIONER CARDOZO:  Okay, as far as advertising revenues, how much do you think would come from other media and how much would be new advertisers?  You talked about people who are not advertising now because they don't feel that that is an appropriate avenue --

 

1494       MR. O'DONOVAN:  Actually, at the moment that's a very difficult question to answer.  We did our calculations, our research on the vast amount of print advertising that's going on across Canada and that share there, that $158 million, is Winnipeg's share.

 

1495       There may well be a little bit of percentage, but in our budget we took a look at that $158 million, and to require us to hit the first year budget, we only have to sell, at the local level only, 4.38 percent take out of that $158 million in order to accomplish our first-year budget.

 

1496       COMMISSIONER CARDOZO:  Okay.  With regards to the demographics that you're looking at, some might say that the demographic you're looking at, 45 and better, are hard to sell to advertisers in as much as they're not seen as the big spenders, that it's the sort of 18-to-34 or 12-to-24 who is the big spenders.  As soon as they cash, they have to spend it.  And the older demographic either tends to be not big on purchasing or fixed incomes or careful with money, et cetera.  What's your sense of that?

 

1497       MR. SMORDIN:  Well, I noted that in your questions yesterday to one of the applicants several commissioners raised that question.  I think I would not agree with that.  I don't think that they're not big spenders.  They may not be spenders on impulse but they certainly are wise spenders.  We are finding that ‑‑ remember we do have a level of commercialism with our sponsors that are supporting us, and of those sponsors that support us, the feedback that we get ‑‑ and it's documented ‑‑ the feedback that we get is that this is a very loyal audience, number one, and secondly, a very loyal spender to those people they wish to support.

 

1498       They want to support the station and then they want to support our sponsors.  So while it generally what you say is true from a general point of view, it doesn't reflect in the market that we're serving.  They are not big spenders, but they are wise spenders.

 

1499       COMMISSIONER CARDOZO:  If your revenue projections turn out to be too rosy, what do you do?

 

1500       MR. SMORDIN:  Well, we have financial support that has been demonstrated in the documentation.  As you note, there is an indication of both a gift and a loan.  As well, in our financial arrangements that we've made, we've obtained two rather large lines of credit with the financial institutions who are prepared to support us during either our first year or our second year or on an ongoing basis.

 

1501       COMMISSIONER CARDOZO:  Mr. O'Donovan did you have anything to add, I saw you trying for the ‑‑ 

 

1502       MR. O'DONOVAN:  I was making sure that the button was actually off, just in case.  No, Mr. Smordin has indicated to us where you are.

 

1503       COMMISSIONER CARDOZO:  Now, what about the financial or the economic projections?  As you're aware, the Conference Board of Canada subsequent to September of last year put out a revised downward economic projection for most parts of the country, Winnipeg included.  You look at some of the issues around, such as the possibility of MCI leaving town. What is your sense of how that affects your projections, given that I understand you would have put these projections together prior to September?

 

1504       MR. O'DONOVAN:  I think yesterday, Mr. Commissioner, that some of the applicants had come forward even with that information and they indicated that in the Winnipeg market this may not be a major factor across Canada.  It may well be in certain markets but I think there was a very positive tone set here yesterday as to what might happen locally.

 

1505       COMMISSIONER CARDOZO:  It's always nice to see agreement between the applicants on certain issues.

 

1506       MR. SMORDIN:  It was a common situation that we all looked at.

 

1507       COMMISSIONER CARDOZO:  A couple of technical questions.  You've applied for this frequency.  Just from a purely technical point of view, the kind of programming you plan, why would the use of 100.7 be a good and efficient use for your project?

 

1508       MR. SMITH:  So in other words now, confining it exclusive to technical matters of use of spectrum?

 

1509       COMMISSIONER CARDOZO:  Yes.

 

1510       MR. SMITH:  Okay.  First of all, when we started, the band was really wide open from one end to the other.  It was high-power stations only for commercial operations and we basically could sort of take our pick of anywhere which did not provide interference to licensed broadcasters, and in conjunction with the great folks at Industry Canada, we worked out initially a frequency of 101.1. 

 

1511       Then, as the band became allocated to others, we shifted to 106.3, where we have been for several years now.  The change to 100.7 reflects, first of all, something in accordance with the local band plan.  100.7 is in fact a drop in frequency from St. Anne's, Manitoba, located to the southeast of here.  It has a population which would not really ever predictably support an FM operation.  And so with the approval of Industry Canada, we imported 100.7.

 

1512       It works well with respect to the mix of the potential for interference to other frequencies.  100.7 does not have any technical issues with respect to NavCom considerations.  And even though it's designated as being a low-power channel, by virtue of the protection which is required of a U.S. operation in North Dakota, we will still do very, very well with 1 kW essentially coverage to car radios from the U.S. border to approximately 20 miles north of Gimly.

 

1513       We already enjoy a coverage of in excess of 25 miles to a car radio with an ERP of 14 Watts.  When we go to basically ten times that, then we anticipate that the coverage will do quite well from our antenna on the roof of the Richardson Building.

 

1514       I can certainly discuss the engineering aspects in far greater detail.  I do have the technical brief here and the capability of interpreting it for you.

 

1515       COMMISSIONER CARDOZO:  Okay.  No, that's fair.  If I can add an economic twist to that, if we were to license one of the other competitors, say, that you heard yesterday, as well as you, would that change your business case?  Put differently, how many commercial new FMs can the market manage?

 

1516       MR. SMITH:  Well, that's purely speculative on our part.  That's something that your support staff would, in fact, have a far greater ability to advise you with than I --

 

1517       COMMISSIONER CARDOZO:  I assure you they do, but I want to know what --

 

1518       MR. SMITH:  -- except by perception on my part.  And if I may be allowed the perception of saying that if you were to flip KY to FM, it becomes revenue neutral.  If you were to license us, much of what would be proposed by the other applicants would be served.  You would be providing diversity and you'd be ensuring financial stability in the marketplace.

 

1519        So frankly, I see it as allow them to correct their technical deficiencies, license us and we serve the market with ‑‑ perhaps not throwing around as much money initially as some of the others have come forward and proposed as if this were an auction ‑‑ then we can do it. 

 

1520       So give us the opportunity to develop on a commercial basis, and we share the same sense of Canadian values as you do.

 

1521       COMMISSIONER CARDOZO:  Okay.  Just on the matter of the auction, I want to assure you that we don't look at it as an auction, but rather what companies, given their relative size, what kind of contributions they can make to the system, is really what we're looking at.

 

1522       But if we were to license one of those two, would that change your ‑‑ you say you would be serving those needs.  Would that affect your business case?

 

1523       MR. SMITH:  It would certainly mean that we have to amend our plans but that's one that, frankly, we can't predict.  We either don't have the ability to foresee what will be the outcome of this or we could, in a sense, "what if" this to death and, frankly, waste very considerable financial effort in attempting to predict and be soothsayers.  And so really, we have to wait until we see what the fallout is from your decision.

 

1524       We have looked at some of the aspects, but it frankly has been sort of let's sit around the table and just quickly jot out some perceptions as opposed to employing a CA to say, well, these people are projecting X number of dollars of revenue, what happens if that comes off of the 25 or 26 million associated with the Winnipeg radio market et cetera.

 

1525       Frankly, we feel that we are capable and that we are able through demonstrated performance of living within a very, very limited budget, and so we just have better places to put our money.

 

1526       COMMISSIONER CARDOZO:  Okay, thanks.  With regards to the frequency, have you looked at other available frequencies that could work for you?

 

1527       MR. SMITH:  No, we haven't because we were the first to apply.  We are the ones who kicked off this entire process.

 

1528       COMMISSIONER CARDOZO:  Yes.

 

1529       MR. SMITH:  And 100.7 was identified by our engineer in the technical report as being suitable.  Everyone else are Johnny-come-latelies. They have identified additional frequencies beyond that identified by Industry Canada.  Those are still open to speculation as to whether or not they will be technically accepted. 

 

1530       You can look at a market like a Los Angeles or a New York where the technical issues are very, very different than we have in Winnipeg and they do it somehow.  I'm sure that the people at Industry Canada in conjunction with engineering consultants will come up with a workable solution.  However, as we speak, it's speculative and speculative only.

 

1531       So no, we have not looked at any additional frequencies.  We are limited by power.  We have a transmitting facility which is in a fixed location; it will not move.  Effective frequency has absolutely no coverage issues whatsoever.  In other words, 89.7 doesn't get out any better than 107.1.

 

1532       COMMISSIONER CARDOZO:  So if I asked you which other frequency you'd be willing to accept if this were not granted you, what would you answer me?

 

1533       MR. SMITH:  Well, we would remain on 106.3 in the interim certainly.  But frankly, we spent a very considerable amount of money on a technical brief.  It would require that it be redone and resubmitted and so forth, and frankly, while I have the capability in conjunction with our consulting engineer of solving that problem, I see that we should not have to.

 

1534       That said, bottom line of your answer that your require, would we examine other possibilities?  The answer is yes.

 

1535       COMMISSIONER CARDOZO:  Let me ask you one summarizing question in terms of the content of the spoken word part of your programming,  Give us a sense of the type of issues that you will be dealing with, that you will be speaking to that will be of interest to the demographic that you're focusing on.

 

1536       MR. GARDNER:  Our plans are for, certainly, news and information, and outside of newscasts, which would be spread throughout the entire broadcast day, we would have specialists who have a readiness to comply with the wishes of our audience about health, about medicine, about wealth, retirement, about a lot of the necessities of life after 45 years of age.  And they don't get it, quite as, in their terms of language, as we could make it with our understanding of what they would like to hear and hear about and hear so they understand.

 

1537       COMMISSIONER CARDOZO:  Okay, thank you.  I just wanted to make one comment on the interventions.  As you know, we certainly encourage public participation.  You've had a lot of interventions that we have, I want to assure you, especially the audience, that we've gone through those written interventions.  A number of them were hand written and we take the time that's required to read them.  But they are all read and we thank people for making those interventions and certainly coming to a hearing and being here.  That doesn't, unfortunately, guarantee you a licence, but it's certainly given full weight and full consideration, and I thank you very much for the answers you've given us so far.  Thank you, Madam Chair.

 

1538       THE CHAIRPERSON:  Mr. Smith and colleagues, I do have some questions.  From your answer, Mr. Smith about how many FMs the market can bear, it leads me to believe that you consider yourself competitive with the Global and the Corus applications.

 

1539       MR. SMITH:  Well, in some respects the answer is yes.  In other respects, on a practical, a real basis, can we come forward with a multi-million dollar budget or the promise of giving away a great amount of money?  The answer is no.  We do not have the wherewithal.

 

1540       That said, for them to come forward and say, we're going to play Diana Krall, Holly Cole and another long list as long as your arm, that is what we play.  That is what we have played.  That is what we will play in the future.  We have a demonstrated performance of that.

 

1541       So if they are licensed, would it have an impact on the potential number of people that would listen to us?  The answer is yes.  Therefore, having seen their presentation and know finally where they are in fact going, the answer is yes, I would have to consider that, to a limited basis, I do consider them to be competitive, yes, to the ultimate success of our proposed venture.

 

1542       THE CHAIRPERSON:  Yes. And so the more serious impact then on your financial projections would be if we licensed either Global or Corus or both in terms of your projections over the next seven years?

 

1543       MR. SMITH:  Well, let's ‑‑ when I gaze into that crystal ball, it does look a little hazy, but I'll do my best to discern things out of the dim images.  That would be that Global is proposing basically local radio sales, essentially sort of slicing their piece out of the current $25 million approximately marketplace.  And while we are going for different advertising dollars, we are very committed to looking for the print media as our lake to fish.

 

1544       No doubt with the great promotion that Global are capable of doing through their combination of television and print media et cetera, then they certainly would have enough visual impact to be able to potentially sway advertisers toward them as opposed to toward us.

 

1545       The Corus application is something that it appears to me that really they're only out to protect additional market share and look for an additional property to increase the value of the corporation.  It does not appear ‑- but it's difficult to tell because their proposals here with respect to their programming were frankly so hazy that I'm still left with a less than clear image of what they actually wish to do.  So I can't really appropriately comment on that but perhaps Lyle can give a little more information.

 

1546       THE CHAIRPERSON:  Let me just put it this way.  Could you survive if we, in addition to, if we licensed you and one of Global and/or Corus?

 

1547       MR. SMITH:  I would think so, yeah.  I would think that where the Global application, which is strictly based on jazz, would only cross over with respect to a lot of Canadian content or a lot of contemporary Canadian music.  There was no mention, other than very slightly, of nostalgia radio.  And we really are a nostalgia radio station.  We do have our component of playing modern, especially Canadian, but we really are capital L nostalgia. 

 

1548       In the application by Corus, there was no real mention of that.  They talked about 25 percent of spoken word.  They talked about a news magazine program that would equate to what the CBC AM does now, and they also were talking about late night call-in shows.  That's a far cry from what we do.  It's a far cry, Madam Commission, from what we intend to do.  They're A/C, adult contemporary; we're nostalgia with some of the adult contemporary mixed in, but very slightly.

 

1549       THE CHAIRPERSON:  And from our perspective, if indeed, you see a challenge, should we license yourselves and one of Corus and/or Global, I want you to comment on ‑‑ we, the Commission, has the duty to promote Canadian content, Canadian talent.  On the one side, we have Corus, who by virtue of their format is required to do 35 percent Canadian content, and Global ‑‑ who, I think, they were doing 35 percent ‑‑ versus yourselves, who are going to have a much more limited Canadian content. 

 

1550       If we look at that, given our duty under the Act and our duty to promote Canadian content, how should we balance those two?

 

1551       MR. SMITH:  Well, I would remind you that the regulations are structured as such and they have just gone through review approximately two years ago, so their position was considered to be valid then.  There have been no changes since then, no amendments.  I have to assume, first of all, that that regulatory review, if it were deemed to be insufficient, would have corrected things at that time at the same time as it was ‑‑

 

1552       THE CHAIRPERSON:  Yes, but Mr. Smith, you're competing with these people.

 

1553       MR. SMITH:  I recognize that.

 

1554       THE CHAIRPERSON:  So in the Winnipeg market we have the choice ‑‑

 

1555       MR. SMITH:  Mm-hmm.

 

1556       THE CHAIRPERSON:  -- of saying somebody who promises, by way of a condition, to offer 35 percent of their music selections as Canadian content versus somebody who is ‑‑ and as you say, you're competitive to them ‑‑ versus somebody who has a far lesser amount of Canadian content.

 

1557       How do we then rationalize a decision -- I mean, give me a reason why we would accept your application over that, providing higher Canadian content, something which we are statutorily required to do?

 

1558       MR. SMORDIN:  Well, we're not telling you not to accept it, but I can make the point that that's exactly what we're doing now.  We are mandated, our on-air people are mandated, to provide 35 percent Canadian content and lord help them if they don't.  And we would have the restrictions ‑‑

 

1559       THE CHAIRPERSON:  Mr. Smordin, though, particularly, you're asking for reductions.

 

1560       MR. SMORDIN:  I understand that.  But I'm saying right now we're doing that.

 

1561       THE CHAIRPERSON:  You're talking about 30 percent of Category 3; you're talking about the special reduction for pre-56.  So in a way, all we can say is we're authorizing more American content, and so I have to have a reason why we would do that.  And I'd really like to hear a reason why we would do that from you.

 

1562       MR. SMITH:  Well, the very first reason that I would put forth is that, number one, we've already indicated in the documentation that we will maintain the regulatory minimum of 35 percent with the application of the reductions, which are in the regulations, to be in compliance.  If you wish to exceed those minimum requirements, then frankly, that's your call and I don't presume to be able to influence that.

 

1563       However, we put together our application based on a very, very close examination of what was permitted under the regulations, thinking that that is what you deem as being acceptable, particularly so since they were revised as short a period of time as approximately three to five months prior to us putting in the application.

 

1564       And so can we come forward and say, oh yes, we'll guarantee 65 percent Canadian content and someone says, oh no, we'll give 66, in a bidding war to curry favour with you?  The answer is no.  Can we come forward and say we are in compliance with the documents that you've put forward?  The answer is yes.

 

1565       THE CHAIRPERSON:  Mr. Smith, the issue isn't currying favour with us.  The issue is promoting the objectives of the Broadcasting Act, and in a comparative analysis, that is what we do in a competitive process.

 

1566       I also wanted to talk to you about ‑‑ because you were referring to an auction and the CTD benefits.  I take it that you're aware of the value of a licence here in Winnipeg?

 

1567       MR. SMITH:  I am with respect to the full power operations.  There is a history of financial transactions.  We do not fit into that category because of lack of 100 kW frequencies, et cetera.  So yes, I am familiar with values placed on those radio stations.

 

1568       THE CHAIRPERSON:  And recent transactions have been in the range of seven to ten  million dollars?

 

1569       MR. SMITH:  That, they do not operate in a specialty category.  They could change format day after they were bought and become whatever it is they wish to become.  We cannot do that.  Therefore, I suggest that it limits the appeal to potential purchasers.  And so that when you are comfortable with making the decision to convert us from part-time to full-time operation, that I will not be selling the operation five weeks later for a quick cash grab and heading off to who knows where on the proceeds, and then you end up six months later with another rock station on the dial.

 

1570       THE CHAIRPERSON:  To be clear, though, you don't feel you're competing with any of the other low-power applicants?

 

1571       MR. SMITH:  No, we don't.  In fact, we support the concept put forward by Red River Community College.  I that think they will, from what I have seen on the document side, do something that would be beneficial to the industry and certainly to those people from Red River Community College.

 

1572       THE CHAIRPERSON:  Thank you.

 

1573       LEGAL COUNSEL:  From the information that you've provided with the application and the music category breakdown chart, I think your application stated that you would draw a minimum of 55 percent of your music from Category 2.  Is that correct?

 

1574       MR. GARDNER:  Yes, I believe that's correct.

 

1575       LEGAL COUNSEL:  If the Commission wanted to place a maximum weekly Category 2 condition of licence at 55 percent, would you be comfortable with that?

 

1576       MR. GARDNER:  I don't think so, no.

 

1577       MR. SMITH:  With respect to that, I suppose I would need some more information from the Commission as to what purpose it would serve.  You know, I understand certainly the purpose of conditions of licence as being an enforceable appendage to the licence.  However, we've put forward a proposal at 55 percent Category 2.  If I wish to move that to 57 or to slide it back to something less than that from a weekly basis because of lack of availability of new artists or a flood takes out our music library or who knows what other contingency, I would hate to see us to be in violation of a licence restriction because of that.

 

1578       So perhaps you could give us just a tiny bit more information with respect to the purpose of the minimum of 55 percent Category 2 COL. In other words, what are we protecting here or restricting? 

 

1579       LEGAL COUNSEL:  It would help, I think, to define the music format.  That would be one of the purposes of placing such a condition on.

 

1580       MR. SMITH:  Well, our music format is very well known, quite frankly.  All you've got to do is turn on a receiver and listen to it.  We have absolutely zero intention of modifying it substantially, and most certainly, to be speculative, the only reason that I could see a condition of licence being of value to the Commission is so that you get what we say at this table, comes out of your speaker, when all is said and done.

 

1581       LEGAL COUNSEL:  That's precisely the purpose, exactly.

 

1582       MR. SMITH:  Well, in that case, would we accept a 55 percent Category 2 restriction?  Most likely.  But that said, we are here to provide exactly what we provide today.  We are not changing format -- end of conversation, full stop.  If for you to believe us, you require a condition of licence limiting us to 55 percent, then the answer is yes, we will accept it rather than no licence at all.  However, we're here to deliver.  Go ahead.

 

1583       LEGAL COUNSEL:  If the Commission wished to impose a different level of Category 2 maximum amount, what level would you be most comfortable with?

 

1584       MR. SMITH:  I'm sorry, Mr. Smordin was speaking with me and I'm afraid that I missed that.  Could you repeat it, please?

 

1585       LEGAL COUNSEL:  I was just saying if the Commission ‑‑ again, this is perhaps hypothetical so we have to be understood in that context.

 

1586       MR. SMITH:  All right.  Understood.

 

1587       LEGAL COUNSEL:  And what I was going to say is if -- you've answered that 55 percent.  But if you had your preference and the Commission wanted to impose a maximum weekly amount of Category 2 music, what would be your preference for a condition of licence?

 

1588       MR. SMITH:  I believe, if my memory serves me correctly, that the specialty category can be no greater than 70 percent by regulation.  Is that correct? 

 

1589       LEGAL COUNSEL:  That's right.

 

1590       MR. SMITH:  I'm recalling so I'm after your advice here.  Then frankly, I would look at being something consistent with the regulation applied to the rest of the industry, so 70 percent would be my recommendation to be in regulatory compliance and evenness.  But you know, I've already put forward that we would accept 55, so there we go. 

 

1591       There is a regulatory framework in place.  We have made our plans based on that promulgated regulation, and zero notice to anticipate something more restrictive than that without consultation is somewhat unfair, frankly.

 

1592       LEGAL COUNSEL:  If I can go for a minute to your staffing levels that you gave a few minutes ago in response to the one of the Commission's questions, I think Commissioner Cardozo, you indicated that there would be eight full-time persons and 27 part-time persons. 

 

1593       MR. SMORDIN: That's correct.

 

1594       LEGAL COUNSEL:  Thank you.  Are those persons specific to the programming function?

 

1595       MR. SMORDIN:  Do you mean are there positions that they fill into at the moment?

 

1596       LEGAL COUNSEL:  No, what I'm trying to understand from those figures is, are those specific programming or does that have, say, technical and sales staff mixed in as well?

 

1597       MR. SMORDIN:  Total, yes, total.  Total staff including technical, news, programming, et cetera.

 

1598       LEGAL COUNSEL:  Do you have a sense of how many of those eight plus 27 would be specific to the programming function as opposed to those that are for technical and sales, et cetera?

 

1599       MR. SMITH:  We do have a breakdown based on -- observing the proceedings yesterday, we did go back to our documentation, but we haven't put them in in subtotals by job category as of yet, but we'd be certainly prepared to do the addition on that for you and provide you with that information very shortly.

 

1600       MR. SMORDIN:  Do you want that in Phase II? 

 

1601       LEGAL COUNSEL:  Sure, a number of ‑‑

 

1602       MR. SMORDIN:  We'll come back in Phase II and provide you that tomorrow.

 

1603       LEGAL COUNSEL:  That would be great.  Thank you.  The other thing I was just curious about is whether you are proposing automated programming.

 

1604       MR. SMITH:  Well, we already have an automation system in service, first of all.  It supplements our live programming.  I see us providing automated in a live-assist capacity only.  We disagree philosophically with the provision of automated programming and previous voice tracking, whether that music originates on computer or 45 RPM disc or Edison cylinder is immaterial.  What is very, very important to us as a team is that the person that is on the air is the person that's sitting in the chair at the radio station, able to respond to the community, whether it's something as simple as saying, "Baby, it's cold outside," or something as significant as a tornado moving through the city from the west side.

 

1605       We do not agree conceptually with running the radio station voice tracked a week and a half in advance as a way to very, very quickly grab some cash.

 

1606       MR. SMORDIN:  And what we do now is we have someone there so that if someone phones for a request, it is very quickly put on the air and obviously has to be responded to by the person there, so it becomes extemporaneous in that regard.  That's what we do now; that's what we intend to do for the future.

 

1607       LEGAL COUNSEL:  Thank you.  I think a number of the applicants have said in this proceeding that looking at the older demographic a lot of seniors listen to AM radio; is that correct?

 

1608       MR. SMITH:  Well, they certainly probably used to.  The concept that a senior is so addled of brain that they don't understand what the FM button is for on a receiver because it's too complicated for them, frankly, went out with the dinosaurs themselves.  Yes, these people, some of them, listen to radio on a cat's whisker with an antenna in the farmyard quite literally, and yes, tune to AM.  The concept that "seniors," quotation mark use of seniors, will not be able to find us because we're on FM or ‑‑ you know, they use computers now for crying out loud versus cat's whiskers. 

 

1609       So AM tuning trends by age bracket, I think is transparent.  That's my opinion and certainly we have information to prove that that's the case, and let's bear in mind that one out of four people, according to our research have turned the radios off to turn them on extremely infrequently because what they perceive as being something relevant to them is no longer there on the radio.

 

1610       LEGAL COUNSEL:  If for any reason, as a result of this process, 100.7 MHz was unavailable for you to use as a result of this process, would it be an option for you or for the Commission to give you a licence on an AM frequency?

 

1611       MR. SMITH:  No, we would not accept an AM frequency.  I'll tell you that now.  It's too inefficient.  It would impact on our business plan to make it non-viable ‑‑ the cost of the real estate, even something as simple as the hydro.  AM operations are notoriously inefficient.  If you manage to get even 30 percent efficiency of the use of hydro, converting it from coming in from the power transformer to RF out of the antenna array, frankly I will not head an organization which has that form of inefficiency and hamstringing built into it. 

 

1612       We would continue with low-power FM operations because of its efficiency, because of the increased fidelity.  To put a music format on AM now from a cold start is, to me, a very risky venture without plunging the operation into a very long-term debt of years before breaking even, and I'm just not prepared to do that.  So in other words would we -- I think that I've made it very clear that AM licensing for us is not an option from a square one start-out. 

 

1613       We've already purchased the FM transmitter, the frequency is available, we have the site.  We'll get excellent coverage.  The antenna is sitting on the roof ready to be bolted together.  This is not the time to be changing to AM. 

 

1614       LEGAL COUNSEL:  Isn't CHWO on an AM frequency?

 

1615       MR. SMITH:  It certainly is, and they have excellent coverage out of Toronto with a transmitter site at the Toronto island area.  But that said, their business plan from day one was to operate an AM radio station building into their business plan those inefficiencies. 

 

1616       So do we see a conversion of everything that we've done to date from FM to AM as viable?  The answer is economically no, not for us.

 

1617       LEGAL COUNSEL:  Thank you.

 

1618       MR. SMITH:  Thank you, Madam Chair.

 

1619       THE CHAIRPERSON:  Thank you, gentlemen.  I am wondering if we can possibly do the presentation of HIS ‑‑ if we could take a five- or ten-minute break and do the presentation of HIS before this afternoon. 

 

1620       Is Mr. Hiebert around?  All right.  We'll take a short break, five minutes, and hear the HIS presentation.                                          --- Upon recessing at 1143 / Suspension à 1143          --- Upon resuming at 1155 / Reprise à 1155

 

1621       THE CHAIRPERSON:  If we could have order, please.  We will recommence.  Mr. Secretary.

 

1622       THE SECRETARY:  Thank you, Madam Chair.  The next application this morning is by HIS Broadcasting Inc. to carry on an English-language specialty FM radio station in Winnipeg.

 

1623       The new station would operate on frequency 107.1 MHz with an effective radiated power of 918 watts.  Mr. Hiebert.

 

           APPLICATION / APPLICATION

 

1624       MR. HIEBERT:  Good morning.  Was it something we said?  Good morning, Madam Chair, Commission and Commission staff. 

 

1625       My name is Tom Hiebert.  I'm president of HIS Broadcasting and I have the pleasure of introducing our panel today.

 

1626       On my right is Mr. Buzz Collins, a.k.a. Dave Mills, according to the documentation there.  He is the program director of the proposed FREQ 107 radio station.  He has 14 years of experience in the radio industry with a particular specialty in youth-oriented programming, in the Rock, Top 40 and Hip Hop formats.  Before his involvement with this project, he enjoyed success as the afternoon "drive home" announcer on the number one station in the 12-17 demographic in Winnipeg.

 

1627       Mr. Dan Kern, in the back row, is the owner of Creativeland Broadcast Services and has almost 20 years of experience in radio in both Manitoba and Saskatchewan in almost every role in radio including station management and consulting.  Dan has acted as our chief consultant on this project. 

 

1628       To my left is Mr. Dan Thomas.  He's a member of the alternative punk rock group, The Undecided, who have signed a recording contract with Tooth & Nail, the largest U.S. label specializing in Christian alternative rock music.  He is here today to represent the growing number of local artists who will not receive radio airplay except on a radio station like FREQ.

 

1629       Last but not least in the back row is Mr. Jack Hoeppner, who has acted as our engineering consultant on this project and is intimately familiar with the broadcast engineering components of our application. 

 

1630       We are here to apply for an FM undertaking in Winnipeg called FREQ 107.  FREQ 107 previously existed under a different licence holder in a similar format from October 1999 until December 2000.  While the radio station existed under a different licence holder, I served as the general manager and sole financial backer of the old FREQ.  During my involvement with the station, I contributed my 20-plus years of management experience in addition to almost half a million dollars towards the development of the project.

 

1631       When the previous licence holder decided to turn in the previous licence instead of selling the licence to us, we had to decide whether it was worth pursuing an application.  The outpouring of emotion from the audience not just in numbers, but also in the value that FREQ had in positively impacting the youth in Winnipeg, convinced us that this project should not die.

 

1632       So what is FREQ and why is it a valuable part of the Winnipeg community?  Our mission statement states that our purpose is "To broadcast musically oriented programming in a style that focuses on young people and advocates a morally positive lifestyle through love and acceptance while promoting a search for the truth."

 

1633       We strongly feel that a morally positive alternative radio station for young people is needed in Winnipeg.  Witness the facts that over 40 percent of high school aged people will use a drug other than alcohol this year.  That means a stronger drug.  Secondly, the number one cause of injury and death to young people is self-infliction, and 6.4 percent of 15 to 19 year-old-girls got pregnant last year, making Winnipeg 60 percent higher than the national average.

 

1634       We talked to many parents who expressed concern about the influence mainstream popular music was having on their children.  Among their concerns is that many of the lyrics of today's most popular songs promote sexual promiscuity, drug use and negative thinking.

 

1635       During the time that the station was on the air, and especially right after it went off the air, we received many e-mails, heard first-hand stories and talked to young people who were positively affected by the music played on FREQ.  As seen from both the parents' and the young person's perspective, we believe there is indeed a substantial link between music and societal issues, especially for young people.

 

1636       We believe that young people will make their own radio music choices but they need an alternative.  FREQ wants to provide this alternative.  FREQ will present morally positive lifestyle choices exclusively through the lyrics of the music played.

 

1637       While FREQ is not affiliated with any church, we have received major support from many churches in Winnipeg.  In fact, the five largest Protestant churches and others, plus representatives from the Roman Catholic Church in the city, are all supportive and excited about the concept of morally positive, non-judgmental radio for youth.

 

1638       Now, I would like to turn it over to Buzz Collins at this point to describe the music format that FREQ will use to attract this audience. 

 

1639       MR. COLLINS:  Thank you, Tom.  In August of 2000, our GM, Tom, went to Toronto and reviewed the comments sent in to BBM as a result of the Spring 2000 book.  About half of those 2,000 people surveyed in Winnipeg included additional comments in the BBM diary.  One of the most prevalent issues was the need for positive radio especially for young people.  As program director of FREQ 107, it's a priority of mine to keep our jock talk positive and relevant without ever being preachy.

 

1640       Early in the planning for FREQ, we did a survey of the musical preferences of several hundred local high school students.  We have shaped the format of FREQ to match the stylistic tastes of our survey.

 

1641       Our targeted demographic is 12-to-24 years old.  We'll attract this audience with a unique blend of new rock, punk and rap core.  Our main target will be high school aged youth and with our particular format, the sound will certainly be oriented towards the male portion of that demographic.  Since there are many males whose tastes don't mature until later in life -- I expect we'll attract an audience even above the 12-to-24-year-old demo.

 

1642       I would add that with this particular target demographic in mind -- teens with a male slant ‑‑ FREQ is further differentiated from any other youth oriented station in Winnipeg, which when programming to young people, generally slant toward females.  The unique approach which FREQ is taking will help to fill a cultural void in radio programming and serve a much neglected segment of our community.

 

1643       Other evidence of our differentiation is that most of our artists are not played on any other radio station in Winnipeg.

 

1644       While most of our play list would consist of artists classified as "Contemporary Christian," we intend to also play other popular artists whose lyrical content has a moral and positive message.  This would include the likes of Creed, U2, Lenny Kravitz, Collective Soul and others.  However, the number of "secular" artists would not exceed the 5 percent allowance as indicated within the terms of this particular licence.

 

1645       Once again, thank you, and I will now turn it back to Tom. 

 

1646       MR. HIEBERT:  Thanks, Buzz.  When we decided to apply for this licence in December of 2000, I was faced with a difficult challenge.  I felt we had a core group of people who had a similar passion to mine and who were the nucleus of a team that could produce good radio.  Without income for these people, they would have had to move on to other employment and in fact the dream for FREQ would die.  But the reason to keep the dream alive is not based on financial gain but a passionate altruistic desire to have a positive impact on the youth culture of Winnipeg.  So the core group stayed employed by HIS Broadcasting while waiting for this licence to be approved.

 

1647       During our waiting period as a team, we have been involving ourselves in a number of activities related to the youth of our city.  These activities include producing an arena concert featuring one of the most successful groups in our genre, a group called P.O.D.  The concert was a success, attracting over 3,000 young people.  Another current activity that we're working on is the promotion and production of a "Snow-Jam" event which will include a Battle of the Bands, specifically for high school students.  This is co-sponsored by The Forks.  By the way, we expect five to ten thousand young people to be at The Forks when this occurs.  As well, we have been involved in many other smaller events and causes.

 

1648       Since July, we have been working with a number of charitable organizations and helping them promote special events through the use of special event licences and through audio streaming on the Internet.  This has allowed us to maintain an interest in the FREQ concept both with financial sponsors and with a core audience.  A beneficial by-product has been that we have been able to continue to refine our musical playlist and keep our announcers sharp in the process.

 

1649       Consequently, there is a financial, operational and promotional momentum in place for FREQ.  There are a number of companies such as Henry Armstrong's and Quark Shoes among others, who have committed to be long-term advertisers on FREQ.

 

1650       While we are working to achieve a monthly revenue base of approximately $500,000 per annum within 24 months of operation under the new licence, we feel we can build a station with a significant impact on the youth culture with a basic budget of $250,000 per annum.  It is our plan or management strategy to not spend above the base budget figure until our revenue starts to match our expenses on a monthly basis.

 

1651       The only exception to the above will be some minor capital expenses.  These costs will be balanced against capital that has been raised from some outside sources.

 

1652       Regardless of the revenues that we achieve, this station will not have a negative impact on the marketplace.  This is primarily due to the small size of the station and that we anticipate some of our advertisers will be new to radio.

 

1653       Any operational shortfall for HIS Broadcasting will come from its parent company, Kesitah Inc., which is owned by my wife and myself.  A personal statement of net worth has been confidentially supplied to the Commission and from that you will be able to see that there's enough finances available to adequately fund this station.

 

1654       I would like to now introduce Dan Thomas, who is a member of North American recording artists, The Undecided.  He will describe the value that FREQ will have in allowing his band and other local bands to gain exposure.

 

1655       MR. THOMAS:  As Tom mentioned, we are a Steinback, Manitoba, based band that has been signed to an American label, one of the largest within our genre, and that has enabled us greatly to gain exposure and travel to the United States.  But where the struggle is is in our own back yard.  The struggle for Canadian bands is to get American airplay, to receive American exposure.  Like I mentioned, that hasn't been a struggle for us.  Getting Canadian airplay and Canadian exposure has been a real challenge.  It has been a chore for us. 

 

1656       FREQ has allowed us to get radio airplay.  We've received e-mails from kids within the city asking, "Where have you guys been?  We've never heard of you before."  And we're living, you know, streets down.

 

1657       I know it's in our band's best interest and numerous friends' bands from Winnipeg that FREQ stay alive on the air.  Those small local bands that don't have the benefits we have, being on a big label like we are, that's really all they do have.  There's no other way for kids to hear the message they're trying to send out, which is a positive one, and I would encourage the Commission to take that to heart.

 

1658       MR. HIEBERT:  Thanks, Dan.  Our experience has shown that there is significant talent in our genre in the Winnipeg marketplace.  However, there are few bands that have CDs or singles that have enough quality for radio play. 

 

1659       The problem is not musical talent but production quality.  Typically, these bands do not have enough money for professional production.  Consequently, we have allocated a major portion of our Canadian Talent Development budget to producing local bands using a professional producer.  This plus some decent promotion will give significant opportunity for a number of local bands to gain success outside Winnipeg and maybe even into the U.S. like The Undecided.

 

1660       At this time, I would like to thank the over 100 people who positively intervened for FREQ.  These are people who believe in the concept of a cool radio station for youth that also promotes positive morals rather than being driven only by financial motives.

 

1661       In summary, the reasons the CRTC should award this licence to HIS Broadcasting are:

 

1662       (a) There already is momentum for the FREQ radio concept including a significant core audience.

 

1663       (b) The funding and advertising revenue are in place to ensure self-sufficiency within two years without negatively impacting the marketplace.

 

1664       (c) Tenacity.  The core group of people involved in this project have stuck through ups and downs over two years including the last 13 months, where we have been hoping for CRTC approval of this application.

 

1665       (d) No other station in the marketplace will be focused on the under-18 demographic.

 

1666       (e) The youth of Winnipeg need morally positive alternatives to the music that would otherwise be available, done in a style that young people will find attractive. 

 

1667       And (f) passion.  Speaking for the core group of people who have been involved in FREQ for over two years now, I can say that this has become a passion to us.  To date, it has involved significant sacrifice, occasional heartbreak, but we are more committed than ever to bring this concept to the youth of Winnipeg.

 

1668       Thank you for your attention and your interest in our application.

 

1669       THE CHAIRPERSON:  Thank you, Mr. Hiebert, gentlemen.  I think we will now adjourn until two o'clock this afternoon for questioning of your panel.  Thank you.                                                 -- Upon recessing at 1210 / Suspension à 1210                             -- Upon resuming at 1400 / Reprise à 1400

 

1670       THE CHAIRPERSON:  If we can come back to order.  The panel will be minus Mr. Thomas and I'll ask Commissioner Williams to ask the questions.

 

1671       COMMISSIONER WILLIAMS:  Good afternoon, Mr. Hiebert and panel members.  I'm going to begin my questions through the same general format and area that all the other applicants have gone through. 

 

1672       In Schedule 5 of your application, you describe how you will offer the relevant local spoken word programming on the station in accordance with the Commission's local programming policy of 1993‑38.  This programming includes one hour and 19 minutes of news, weather and sports, local stories and events featuring ‑‑ during DJ patter, locally produced special interest programs, locally produced comedy and special interest vignettes, and local community billboard style programming to be scheduled as needed.

 

1673       Could you describe in more detail the kind of local content that your audience can expect from these various programming segments, for example, in your special interest programs, the comedy and special interest vignettes, and your local stories and event features during live DJ segments. 

 

1674       As well, outside of your one hour and 19 minutes news, weather and sports commitment, how many hours and/or minutes would be devoted to this type of locally relevant spoken word programming on the average weekly basis?

 

1675       MR. COLLINS:  In our previous existence, we had various vignettes.  As far as the comedy vignettes and what not, we had different features which were usually left up to the discretion of the on-air personality, for example myself.  I had an ongoing feature called Buzz's Bible Headlines.  This was a daily feature which ran about three to four minutes.

 

1676       As far as forecasting any future comedy vignettes, as the program director I'm expecting that to be handled by the on-air staff and their own individual creativity with their shows.  I'm not, at this point, programming any specialty vignettes or specialty comedy programs.  We are certainly more of a music-oriented format.

 

1677       AS far as news, currently under our special event licence we have two news broadcasts in the morning that, with news, sports and weather, run about three to four minutes and it's our intention especially with the direction that we're taking with the station towards a male slant in our demographic, that we really want to give the station more of a sports kind of feel to it and focus a lot more on the sports side of things, as per se political affairs or the news segments and what not. 

 

1678       So our intention is to perhaps put together some featured programming which would centre more around sports events.  We currently run something called the Winnipeg High School Hockey Report.  That runs, in essence, three to four minutes once a week.  But at this point in time, that's as much as ‑‑ as far as programmed specialty spoken features.

 

1679       COMMISSIONER WILLIAMS:  You indicate in the deficiency dated April 18th, 2001, that newscasts would be one minute in length, to be scheduled hourly between 6:00 a.m. and 9:00 a.m. weekdays and feature 75 percent local stories.  The balance of your one hour and 19 minute news information commitment would be made up of 30-second weather updates scheduled hourly over 98 hours of live and voice track programming.  And I note your target audience is youth-oriented, 12 to 24 years.

 

1680       How many staff will you dedicate to gathering and airing local news and information stories, and will you be using outside news sources, and if so, who are these sources?

 

1681       MR. COLLINS:  At present we don't have any plans on using outside sources for news gathering.  Currently, it's the responsibility of one individual person as far as putting together our news reports.  We do a weather break.  I didn't include that as program spoken content but we do approximately a one‑minute weather break every hour that we actually have on-air people on the air.  We have straight music flow from 10:00 p.m. until 7:00 a.m., and one of the reasons we no longer have a newscast for 6:00 a.m. is we don't have anybody on the air up until 7:00 a.m. 

 

1682       COMMISSIONER WILLIAMS:  How will you ensure these stories as well as your other local-oriented spoken word will be relevant to your young audience target?

 

1683       MR. COLLINS:  Well, it's one of my ongoing tasks and one of the things I lean on our current on-air staff about is to be as relevant as possible.  Our particular demographic is somewhat of a challenge because they ‑‑ more than any other demographic I can think of, you need to prove some credibility to them, and the credibility will only come through relevance.

 

1684       From my own experience, I'd like to think that I know what matters, what is relevant to our target demographic and what isn't.  This is something that I, through air checks and what not, work on a continual basis as we exist right now. 

 

1685       COMMISSIONER WILLIAMS:  Who will be responsible for the content of your newscasts?

 

1686       MR. COLLINS:  Well, the buck stops with me as the program director, but that one person who is the morning host is responsible not only to be the morning host but they're fulfilling two duties.  They're our news director, if you want to use that title for them, but they are responsible for putting together the newscasts. 

 

1687       If I find that it's not local enough, if it's not within a 75 percent of local stories and if it's certainly not relevant, that's up to me to correct and guide that particular individual.