ARCHIVED -  Transcript / Transcription - Halifax - Nova Scotia / (Nouvelle-Écosse) - 2004-03-02

HELD AT: TENUE À:

World Trade and World Trade and

Convention Centre Convention Centre

1800 Argyle Street 1800, rue Argyle

Halifax, Nova Scotia Halifax (Nouvelle-Écosse)

2 March 2004 2 mars 2004

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.

BEFORE / DEVANT:

David Colville Chairperson

Vice-Chair of

Telecommunications

Barbara Cram Regional Commissioner for

Manitoba and Saskatchewan

Ron Williams Regional Commissioner for

Alberta and the Northwest

Territories

Jean-Marc Demers National Commissioner

Stuart Langford National Commissioner

ALSO PRESENT / AUSSI PRÉSENTS:

Pierre LeBel Hearing Secretary / Secrétaire

d'audience

Peter McCallum Senior Legal Counsel /

Conseiller juridique

principal

Sylvie Jones Conseillère / Counsel

HELD AT: TENUE À:

World Trade and World Trade and

Convention Centre Convention Centre

1800 Argyle Street 1800, rue Argyle

Halifax, Nova Scotia Halifax (Nouvelle-Écosse)

2 March 2004 2 mars 2004

PAGE / PARA NO.

PHASE I (cont'd)

PRESENTATION BY / PRÉSENTATION PAR

Maritime Broadcasting System Ltd. 228 / 1059

Global Communications Ltd. 300 / 1418

East Coast Broadcasting Inc. 384 / 1940

International Harvesters for Christ 449 / 2323

Evangelistic Association Inc.

Halifax, Nova Scotia / Halifax (Nouvelle-Écosse)

--- Upon resuming on Tuesday, March 2, 2004

at 0858 0900 / L'audience reprend le mardi

2 mars 2004 à 0858

1053 THE CHAIRPERSON: Order, please, ladies and gentlemen. Welcome to day two of our public hearing into radio applications for Halifax, Saint John, Moncton and Fredericton.

1054 We will proceed with the applications for Halifax. I will call Mr. Secretary to call the next applicant.

1055 MR. LEBEL: Thank you, Mr. Chairman. I would like to take this opportunity to wish you a happy birthday.

--- Applause / Applaudissements

1056 MR. LEBEL: We will now hear Item 5 on the Agenda, which is an application by Maritime Broadcasting System Limited for a licence to operate an English-language FM commercial radio programming undertaking in Halifax.

1057 The new station would operate on frequency 105.1 MHz on channel 285C with an effective radiated power of 30,000 watts.

1058 Mr. Robert Pace will introduce his colleagues. You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

1059 MR. BARNHILL: Mr. Chairman, perhaps before my partner Robert gets going here, it might be a bit presumptuous but maybe we could classify ourselves as the host broadcasters of this gathering. I noticed with interest yesterday that you never received an official welcome from the two applicants, so we welcome the Commission to Halifax and welcome back home, Mr. Colville and Members of the Commission.

1060 As you were told yesterday, there is lots of fine entertainment and lost of fine arts here. It is a wonderful city, great hospitality and we are clearing up the snow so we hope you will get a chance to have a look at it and enjoy it.

1061 Perhaps if Mr. Colville is throwing a birthday party tonight, he knows where the lobsters are.

1062 Robert.

1063 MR. PACE: Good Morning, Mr. Chairman, Commissioners and Commission staff. My name is Robert Pace and I am the majority shareholder and Chairman of Maritime Broadcasting System Limited.

1064 I am pleased to appear before you today to discuss an exciting new proposal for radio in Halifax and a tremendous growth opportunity for our Maritime-owned regional company.

1065 Let me begin by introducing our panel. All three shareholders of our company are here today.

1066 First, to my left is Dale Godsoe, Secretary Treasurer of MBS. Dale is a life-long resident and Vice-President External of Dalhousie University here in Halifax. A community leader, Dale serves on a variety of boards and organizations, including the Chairwoman of the Canadian Centre for Philanthropy. Dale was recently named to the Prime Minister's Advisory Committee on Cities and Communities and is also a Member of the Order of Canada.

1067 To my right is Merv Russell, President and CEO of MBS. Merv, the former Chairman of the Halifax Port Authority and the Art Gallery of Nova Scotia, currently sits on the Board of Governors of the University of King's College, a university known for its journalism program. Merv has been in the broadcast business for over 40 years, with majority of his career spent in Atlantic Canada and the last 20 years in Halifax. I have to say a lot of our success is due to his vision and dream to build a regional voice for the Maritimes.

1068 To Merv's right is Nancy Hilchie, General Manager of Country 101 and Oldies 960 CHNS based here in Halifax. Oldies 960 I note is the oldest radio station in the market, having served Halifax for the past 77 years. Nancy began her career in radio as a promotions assistant and was promoted up through the ranks to eventually become General Manager. An accomplished member of our team, Nancy was awarded the Progress Club Woman of Excellence Award in 2002, and recently celebrated her 20th anniversary with MBS.

1069 Next to Nancy is Dan Barton, our Chief Programmer. Dan is a long-time Maritimer and has 15 years experience in the radio business, from morning show host to news director to programming director. He was the perfect choice to lead our "in market" research.

1070 Seated in the back row, beginning from my left, are Mike Maxwell, our Director of Technical Services and Owen Barnhill, our Director of Finance. Next to Owen is Debra McLaughlin, of Strategic Inc. and the author of our Consumer Demand Research Report. Next to Debra is our legal counsel, Rob Malcolmson, a partner at Goodmans.

1071 This is a very important hearing for our company. Our Maritime-owned, regionally based radio company needs to grow in key Maritime markets. Critical mass in Halifax, the Maritimes' strongest radio market, will create a sustainable future for our company and strengthen our ability to provide local radio service throughout the Maritimes.

1072 For the reasons that we will outline today, we believe we offer the right format, experienced local ownership, a creative and impactful Canadian Talent package, and much needed programming diversity to a market that is well-positioned to support a new station.

1073 Licensing MBS' proposal for a mainstream AC format will greatly improve radio service in the market by providing a higher frequency of news and information and by introducing a format that is both popular and of great interest to many Haligonians. Further, these benefits can be achieved with minimal impact on existing licences.

1074 I would like to now ask Dale to give you an overview of MBS, our presence in the Maritimes and our regional mandate.

1075 MS GODSOE: Originally established in 1969 as Eastern Broadcasting Limited, our Maritime-owned company is built on a 35 year tradition of community service and, as local owners, we have consistently provided broadcast services in Nova Scotia, New Brunswick and Prince Edward Island.

1076 From its beginnings in Campbellton, New Brunswick, MBS has evolved into a truly regional broadcaster, proudly serving the area we know best, the Maritimes. MBS currently owns 23 stations across the region, some in markets as large as here in Halifax with a population of over 300,000, and some as small as Digby, Nova Scotia, with a total population of just over 2000 people.

1077 At MBS we pride ourselves on our commitment to the communities we are privileged to serve. This dedication can be best demonstrated by relating the role our Halifax stations played in restoring to this city one of its highly valued and unique venues, the Halifax Public Gardens. In the wake of the devastation of Hurricane Juan, MBS came to the rescue with a radiothon that raised over a million dollars in a single day to pay for the restoration of the Public Gardens. Our company and this team hosted the most successful one-day radiothon in Canadian history and, in so doing, made an enormous contribution to the people of Halifax.

1078 Merv.

1079 MR. RUSSELL: While Halifax has enjoyed growth in recent years, many other Maritime radio markets continue to be challenged by the current economic realities of Atlantic Canada. Because of the many different markets we serve, MBS also faces unique challenges. Small markets are facing diminishing revenues, and MBS, as an operator in these markets, is at a competitive disadvantage to those larger players with interests in more lucrative markets elsewhere in the country.

1080 Rather than abandon these smaller markets and focus all of our resources in larger centres, MBS has continued to find new and creative ways to attract audiences and generate revenues in communities of all sizes, while still providing the highest quality service. To continue to do so, MBS must remain a strong regional broadcaster throughout the Maritimes. A solid foundation in Halifax, the region's largest radio market, is absolutely essential to fulfil our mandate.

1081 As an operator of an AM and an FM station in Halifax, we bring experience, understanding and proven competence in this market. We have a solid track record and our loyal country and oldies audiences are a testament to our ability to reflect the needs of the local community.

1082 Debra.

1083 MS McLAUGHLIN: Our initial investigation of the BBM audience data revealed declines in per capita tuning and pointed to two clear gaps in the market: an under-served 25-54 demographic and, secondly, an under-served youth population. When the relative size of each of these demographics are considered, 25-54 at 56.6 per cent of Halifax and 12-24 at 19.6 per cent, it is clear that of the two the most critical to fill is that of the 25-54 population.

1084 Tuning among 25-54 year olds has dropped consistently in the past four BBM surveys, representing a decline of 11 per cent over two years. When we break this larger demo down to its component parts, we find that the highest level of tune out is happening among the 35-44 and 45-54 year old demos. Given that the decline is taking place among the group that is arguably the generation that grew radio tuning, one is left to conclude that this population cannot be satisfied with the formats available on Halifax radio.

1085 Having identified the demo, it was then a case of understanding what formats were available in the market and determining which of the non-carried formats would best serve this group. Our review of data from both the US and Canada showed us that the number one music format among adults 25-54 regardless of region or market size is by far and away adult contemporary.

1086 This point is further emphasized when markets outside of Halifax are examined. Consider Barrie, a market just over one-third the size of Halifax: they have two hot AC and one mainstream AC. Regina, again a smaller market but they have both a hot AC and an AC format, as does Ottawa, Saint John, Kelowna and Kitchener.

1087 The critical element of this examination however, is in understanding the demographic that each of these stations serve in a market. In all of the examples I have given, and in fact in markets with more than one AC format, there is a clear division of the audience. One or two skew young and the other or others skew older.

1088 The fact is that in this aging country there is at least one AC station with a clear focus on the 35-54 year old population in every major market, with one notable exception, Halifax.

1089 Our research demonstrated that this missing piece in Halifax radio is not due to lack of audience demand. Over two thirds of 35-44 year olds and 45-54 year olds surveyed, stated they would "definitely or probably listen" to a mainstream AC station.

1090 Two additional key elements were identified as being part of a successful format for Halifax listeners. In addition to a strong entertainment component, respondents stated that news and weather coverage were very important. When the programming elements were tested individually the interest scores for weather, news and a large variety of music were quite high and similar in degree. This suggests that a critical element in meeting the needs of this under-served demographic is playing the right mix of music with a high frequency of weather coverage and a strong local and regional news package.

1091 MR. BARTON: Our mainstream AC format will fill the need for greater variety in Halifax radio by introducing new music from adult contemporary artists such as the Eagles, John Mayer, Norah Jones and Gino Vanelli, and, on the regional front, Terry Kelly, the Ennis Sisters, Bruce Guthro and Jimmy Rankin, artists who are known and enjoyed but not heard sufficiently on Halifax radio.

1092 Our analysis of BDS data shows that in markets with multiple AC stations on average 30 per cent of the AC chart does not get airplay. Contrast this to Halifax, where an astounding 70 per cent of the AC chart does not get played in an average week.

1093 Furthermore, our examination showed that a great number of Canadian artists get left out when the older focus in AC is ignored. In the week of February 13, 2004, for example, we found that of the top 50 songs from the AC chart not being played in Halifax, almost 25 per cent were from Canadian artists, including selections from Shaye, Roch Voisine and Appleton. Our commitment of 40 per cent Canadian content will ensure that these artists, and those yet to be discovered, get exposure in Halifax.

1094 We intend to give listeners a broader selection from across the chart, as well as delving more deeply into artists' repertoires. 50 per cent of our playlist will be composed of songs released in the past two years.

1095 This much-needed added variety is designed to resolve the dissatisfaction expressed by the 25-54 year old listeners and to bring this group back to radio, a medium they say they want to spend more time with.

1096 A majority of 25-54 year olds surveyed reported, and I quote:

"There is little on the radio that I like to listen to."

1097 Furthermore, over half of the participants responded they would listen more, that is increase their tuning to radio, if the programming they preferred to listen to was available. These findings, combined with the interest expressed in an mainstream AC format, suggest the MBS proposal will be a welcome addition to the radio spectrum and is well positioned to build a core audience very quickly.

1098 MR. RUSSELL: As our research also indicated that news and weather information within the context of a music format is a key programming element for this demo, we will combine our music programming package with comprehensive coverage of local Halifax and regional Maritime news. This coverage is something not currently available in the Halifax market.

1099 We will be able to achieve this by virtue of our connection to the MBS Radio News Network. This will result in previously unavailable, in-depth, comprehensive Maritime news coverage. Our hourly regional newscasts will also be made available free to non-MBS radio stations who may wish to augment their news coverage.

1100 Given recent weather-related events, particularly here in Halifax, and the impact of Hurricane Juan last September, it turns out our plan to staff our proposed station with a full-time meteorologist was made with great foresight. While a staff meteorologist is a rare position at an FM music station, recent experience confirms our view that this kind of commitment is essential if we are to offer timely and accurate weather and travel safety information to our Halifax listeners.

1101 With a new licence in Halifax, MBS will be able to continue its proud history of launching the careers of some of Canada's leading broadcast journalists, including CTV's Mike Duffy and the CBC's Ian Hanomansing, by initiating a formal internship program for broadcast journalism students enrolled at local institutions. This program will offer practical, invaluable experience to students in the areas of news-gathering, production and reporting. In addition to our news initiatives, MBS also intends to offer meaningful, entertaining and relevant spoken word programming.

1102 MS HILCHIE: Not only is there audience demand for our proposal, but there is also identifiable and enthusiastic advertiser support. MBS surveyed advertisers and the consistent messages received were that there is a demand for more efficient radio inventory and there is a demand for a commercial adult station.

1103 This proposal will help to rebalance the current state of the market, such that control over inventory enjoyed by NewCap and CHUM will be lessened. With effective delivery of the 25-54 demographic, and a new broader appeal format, MBS will be able to offer advertisers a flexible and affordable means to reach the market. No longer will newspaper or billboard be the only way to reach managers, owners and professionals.

1104 We will attract both new listeners and new advertisers. The opportunity of a new AC format will heighten the interest from our current clients and go a long way to revitalize radio sales in a market that has been all but smothered by the dominance of one group. Our proposal represents a long-term business opportunity that provides value on two levels: a new sound for the market and a commercial outlet for advertisers to reach an affluent and adult audience.

1105 Merv.

1106 MR. RUSSELL: In addition to assuring our ongoing service to smaller markets, and improving Halifax radio by adding diversity, licensing Maritime Broadcasting System will also serve to partially rectify the current competitive imbalance in Halifax.

1107 As the Commission knows, the Halifax PBIT margin averaged just under 34 per cent in 2002, more than double the Canadian average and well above the 21 per cent PBIT margin for the Atlantic region overall.

1108 However, appearances can be deceiving and nowhere is this more true than Halifax. While the radio market is very profitable when considered as a whole, the level of profitability is not proportionate among different operators. In 2002, CHUM and NewCap enjoyed a combined PBIT of 38 per cent, while MBS' combined PBIT was less than 10 per cent. Accordingly, MBS' AM/FM combo in Halifax performed well below market levels, below the Atlantic Canadian PBIT level, and well below the Canadian average.

1109 Thus, while Halifax's radio market may be thriving, only those players who enjoy a dominant position in the marketplace are reaping the commensurate benefits.

1110 The current situation in Halifax can be likened to my hometown of Saint John, New Brunswick before the licensing of a new entrant in 2000. In that decision the Commission wrote, and may I quote:

"The audience share statistics noted above are one indication of a possible competitive imbalance between the applicant and the intervener in the Saint John radio market. A comparison of the advertising revenues and profits ... earned by CHSJ-FM, relative to those earned by Maritime Broadcasting's three stations, provides further evidence of an imbalance, one that, in the Commission's view, can be corrected by the approval of NBB's application."

1111 We submit that the same is true of the Halifax market and that this competitive imbalance can be largely rectified by licensing MBS.

1112 It is important to recognize that neither NewCap nor CHUM have intervened in opposition to our application. In fact, in its submission, CHUM stated that the Halifax market can support at least one or perhaps two new licenses, stating, that, quote:

"CHUM accepts that licensing Maritime's proposal would put it in a better competitive position...".

1113 It seems, therefore, that CHUM acknowledges the health of the market and, at the same time, recognizes there is some degree of competitive imbalance as between current operators.

1114 MS HILCHIE: Through our ownership of 23 radio stations, Maritime Broadcasting System passionately promotes local talent with countless endeavours, including music festivals and in-house talent showcases. These undertakings keep us firmly rooted in the local culture and make a credible difference in the development and promotion of local music in all of the communities we serve.

1115 In that same spirit, we are pleased to propose a contribution of over $1 million to a number of Canadian Talent Development initiatives in conjunction with this application. The elements of our CTD commitment were carefully crafted to ensure that we made a real difference and we did so right here in Halifax.

1116 These initiatives include:

1117 $301,000 to the Multicultural Association of Nova Scotia to fund the annual Nova Scotia multicultural festival;

1118 $70,000 to the African Nova Scotian Music Association;

1119 $140,000 to musicians within the Halifax Regional Municipality through the Music Industry Association of Nova Scotia;

1120 $143,500 to the East Coast Music Association for a live showcase of artists from the greater Halifax listening area who will appear at the ECMAs;

1121 $140,000 toward after school music programs in Halifax regional schools;

1122 $105,000 in scholarships for students pursuing studies at any one of the six degree-granting institutions in Halifax; and

1123 A total of $105,000 in scholarships for students entering the Radio Broadcasting program at the Nova Scotia Community College, Kingstec School of Broadcasting.

1124 We are particularly pleased to provide funding to the African Nova Scotia Music Association and the Nova Scotia Multicultural Festival. These contributions, which are exclusive to Maritime Broadcasting, are made to organizations that reflect and support the rich diversity in the region, as well as offering support to local and Canadian artists.

1125 MR. PACE: Mr. Chairman, Commissioners, approval of our application to serve Halifax is fundamentally important to the future of our company. Simply put, we must be strong in Halifax, the Maritimes' largest radio market, to fulfil our mandate as a locally owned Maritime regional broadcaster.

1126 Halifax is the only major Canadian market without an AC format. Licensing MBS will resolve this highly unusual situation and bring to Halifax the top ranked music format and create some enthusiasm for radio among the largest under-served demographic.

1127 Approval of our application will also largely rectify a competitive imbalance in the market.

1128 We hope you share our vision of a locally-owned, Maritime regional broadcast voice. Today, we provide an alternative that offers a true Maritime perspective in an industry increasingly dominated by non-Maritime conglomerates. With your approval, we will continue to fulfil our Maritime mandate in both small and large markets alike.

1129 In closing, we believe that our proposal meets all of the Commission's criteria. The granting of a licence to MBS will serve to strengthen a regional player and help us to continue to offer the high level of service we provide in the challenging small-town markets we serve across the Maritimes. And it is clear that all of these benefits can be achieved with minimal impact on existing licences.

1130 Thank you for your attention. We would be pleased to answer any of your questions.

1131 THE CHAIRPERSON: Thank you, Mr. Pace and the members of your team. I must say -- and I am probably not alone in the room in this respect -- I am turning 59 today and all this talk about demographics is depressing to know you don't show up on anybody's demographic.

--- Laughter / Rires

1132 THE CHAIRPERSON: With that, I will turn the questioning to Commissioner Williams.

1133 COMMISSIONER WILLIAMS: Good morning, MBS panellists. Mr. Pace, thank you for that presentation this morning. For convenience sake I plan on directing my questions to your group's President and CEO, Mr. Russell, and he can either answer or direct the question to the most appropriate MBS representative, because you are the operations fellow I presume.

1134 The first area of questioning that I am going to get into will be to try to get a better understanding of your proposed format and how it differs from other formats being proposed and currently in place in Halifax.

1135 You have described your format as mainstream adult contemporary that will target the 25 to 54 age demographic and they have identified that there is an under-served youth portion in the marketplace.

1136 Several of the other applicants are seeking to serve the same demographic group as yourselves and would seem to contain many of the same music elements. As an applicant in the competitive process I assume you have looked at the other competing applications.

1137 Could you please tell us how you think your format differs from the others and can you provide any examples to demonstrate this difference, please?

1138 MR. RUSSELL: Thank you, Mr. Commissioner. Before I turn that over to Dan Barton our programming specialist and the individual who led the thrust and developed the format that we are presenting to you today, I want you to know that we looked at this as a very important application and, as a consequence, we invested very heavily in the research. We went unusually deep in our research to reach 1,600 individuals, just to make certain that we were going to be right on this.

1139 So we have a fair amount of confidence in it and that confidence is going to rest with Dan Barton.

1140 MR. BARTON: Thank you, Merv.

1141 Mr. Commissioner, I think I would like to start by talking about existing stations in the market as they rank currently.

1142 The number one radio station in the market currently 12-plus is C100 which describes itself as an adult CHR.

1143 Second in the marketplace would be CFRQ, Q104, which describes itself as a rock station.

1144 Third in the market, CIEZ, which launched 14 years ago as an easy listening and recently changed itself to a classic hits format.

1145 Fourth in the marketplace, our very own CHFX, a country FM.

1146 Then we move to the AMs, commercial AMs in the marketplace:

1147 CHNS, which is an oldies radio station. The final two would be KIXX radio, which is an AM classic country; and CJCH, which describes itself as yesterday's favourites.

1148 In listening to these formats it is very clear that there is no mainstream adult contemporary in the market currently, despite the fact that other 12 markets of the top 13 do have at least one adult contemporary radio station.

1149 That was our first sign that that was an existing hole in the market.

1150 Then our extensive research piece showed that mainstream adult contemporary was the hole, with over 56 per cent of the population Halifax 25 to 54, comparing that with the fact that mainstream adult contemporary is the most popular music format of 25-54, and again that our research showed there was a demand for that forum. That was why we decided to select mainstream adult contemporary.

1151 COMMISSIONER WILLIAMS: How specifically would your mainstream adult contemporary differ from some of the other proposals that are before us? Can you maybe provide a couple of specific examples?

1152 MR. BARTON: Specifically the youth format which are targeting 18 to 34, some say 15 to 34, I tend to be looking more towards rock. We have some that are looking at urban top 40. They are looking at a greater degree of current music that is segregated to charts, to CHR, rock charts for example, that don't really reflect the adult contemporary chart at all.

1153 The only other example, outside of the news/talk, of an older music station would be the easy listening proposal from Global, which is really a 45-plus radio station as opposed to a 25-54.

1154 MR. RUSSELL: Mr. Commissioner, it is worthy to point out that there is bound to be some bleed in that demographic it is so large because it represents nearly 60 per cent of the population of Halifax.

1155 COMMISSIONER WILLIAMS: Okay. Thank you. We note that in your application for a new country FM in Fredericton you have committed to devoting by condition of licence a minimum of 15 per cent of the regulatory minimum of 35 per cent Category 2 music, Category 2 Canadian content requirement to Atlantic Canadian music selections broadcast in their entirety.

1156 We were surprised to see that a similar approach was not taken with your Halifax application, especially in the light that Halifax is the hub of Maritime music and home to such music associations as the East Coast Music Association and the Music Industry Association of Nova Scotia.

1157 Would you care to elaborate and tell us a bit about your thinking on this topic?

1158 MR. RUSSELL: That thinking is that in both cases Dan played a major role in our positioning of our country proposal to you that we will hear later next week and our application and its finite points programming here in Halifax.

1159 Dan.

1160 MR. BARTON: Thank you, Merv.

1161 Mr. Commissioner, although we did mention 15 per cent of our Canadian content commitment in Fredericton would be focused on local and regional talent it is true we didn't specify it in this application, although we are committed to focusing on local and regional talent. In addition to our regular programming, we have outlined MBS presents which is a one hour show we intend to carry on the new FM, again focusing on local and regional talent.

1162 So although we didn't specify it as a percentage, we are still in fact committed to local and regional talent with this new FM, exposing them both as part of our regular programming and with this new one-hour feature.

1163 COMMISSIONER WILLIAMS: What percentage would this show make up of your programming.

1164 MR. BARTON: It is one hour throughout the broadcast week. I can't profess to be a math whiz, but one hour of 126.

1165 COMMISSIONER WILLIAMS: Okay. 1.26 per cent I guess.

1166 MR. BARTON: I like that.

1167 COMMISSIONER WILLIAMS: I am not a mathematician either so we will have to check the figure.

1168 You have described the means by which spoken word programming will be scheduled at your station. Recognizing the particular needs and interests of your target demographic group, what role will spoken word programming play at your station?

1169 MR. BARTON: Thank you. Spoken word programming, I would first like to give a breakdown on how our news model works because it is very unique and an important part of our spoken word programming.

1170 One thing that our research piece confirmed for us is that as a programming element local and regional news and weather placed of utmost importance, slightly above variety of music in fact. So we saw them as a combined factor in creating this format. That is why spoken word is such an important part of our format.

1171 When it came to designing our newscasts, we have placed them on the quarter hour as opposed to at five to, at the top of the hour where they seem to exist everywhere else. We wanted a unique position for our newscasts.

1172 So just to give you an example of how it would lay out through the day on a weekday, our first newscast in breakfast would be 5:45. It would air every half hour up to and including 8:45.

1173 Throughout the day it would still air on the quarter hour at quarter to, and it would air hourly, 9:45 to 2:45. Unique to Halifax. There is currently no commercial radio station in Halifax giving hourly news. We would be providing that.

1174 In afternoon drive again the frequency would increase to every half hour, starting at 3:45 through to 5:45. That is a full three-minute newscast.

1175 In addition to that, on the weekends we would be presenting hourly news in mornings from 7:45 to 12:45, again that is hourly. In the afternoon drive period at 3:45 and 5:45.

1176 On top of our news commitment, weather, because it was identified as so important, and we have certainly seen here in Halifax how important the weather forecast can be, our addition of a staff meteorologist is completely unique to Halifax, and in fact to the Maritimes in radio. Weather would be a very important part of our presentation as well, in fact we have calculated an average of 75 seconds per hour throughout the 126 hour broadcast week. That includes presentation with our newscast.

1177 That is our basic news setup there and if you would like I could go into our spoken word specialty programs and how they fit into the model as well.

1178 COMMISSIONER WILLIAMS: Sure. Please.

1179 MR. RUSSELL: I should point out there is a substantial amount of it so we should highlight it.

1180 MR. BARTON: Absolutely, yes. Actually, if you do the math on that, that is 475.5 minutes per week just in news and weather.

1181 COMMISSIONER WILLIAMS: Do you feel that the Halifax market is currently under-served in the area of news and weather?

1182 MR. BARTON: Our research shows that it is. Our research shows it is. Haligonians have spoken loud and clear in our research that they value local and regional news and they are not currently getting it in commercial radio on an hourly basis. We want to provide that.

1183 With our specialty programs we have a Sunday morning news program that will air from 9:00 until 11:00 which will be a wrap-up on the weeks news. Because of its length of two hours, it will allow us to go into more detail on the weeks news stories. That will air from 9:00 to 11:00, which accounts for two hours.

1184 We are also presenting Metro Parent Report, which will be a twice daily 90-second feature geared toward educating parents on things such as child rearing, concerns on going to school. We also intend to bring in specialty guests from local hospitals on health care tips for parents. That will air at 9:00 a.m. and 3:00 p.m. seven days a week, accounting for another 21 minutes.

1185 Finally, we have a feature called Metro Speaks. It is a 60-second feature airing twice daily Monday to Friday at 8:50 and 5:50, immediately following those quarter hours newscasts. It is a citizen-on-the-street-type feature, where we allow local people to speak on local issues. That will account for 10 minutes of our broadcast week.

1186 I said I wasn't good at math, but I can do it for you if you like, just to add all that up. We come to a total of 626.5 minutes, which is six hours and 26 minutes and change, so we kind of round it off to about 10.5 hours of our broadcast week would be spoken word programming.

1187 MR. RUSSELL: Mr. Williams, I am going to go to Debra on this, if I may, on the subject of the importance of news.

1188 When we reviewed the research, we were surprised at how important local news and weather was to the people we surveyed, the 600 deep.

1189 Perhaps, Debra, you could give us an indication of just how important that was.

1190 MS McLAUGHLIN: We tested each of the programming elements that would or could be typically part of a format individually so we could determine what, if anything, was of higher or lesser interest to the market in Halifax. One of the notable things that came out of this research was that there was a very small differential between the interest in having a large variety of music and local news and, of course, weather. In fact, the percentage points were less than 8 per cent across all of the component demographics.

1191 So my conclusion and my recommendation would be that when you are providing the news and the weather that it be in an entertainment base. There wasn't a huge difference that would suggest it on its own was of great interest, but certainly there was equal interest across all of those categories.

1192 COMMISSIONER WILLIAMS: What are some of the challenges faced in scheduling spoken word content to your target demographic group?

1193 MR. RUSSELL: Dan?

1194 MR. BARTON: Certainly it requires an in-depth knowledge of 25-54. We as a company can claim a great deal of knowledge of that target demographic because we service it daily in all of our markets. It was certainly knowledgeable that that demo wants to know -- wants to hear is a challenge in our spoken word programming.

1195 Also adequate staffing is an important part of this spoken word programming and I'm sure we will get into the MBS radio news network in depth a little later on, but it is our additional staffing that will allow us to execute that particular piece of spoken word.

1196 MR. RUSSELL: Perhaps, Commissioner Williams, it might be fair to say that when it comes to AC it is in our wheelhouse.

1197 Dan, perhaps you could tell us which stations we do have already in this format serving that demographic.

1198 MR. BARTON: Absolutely. Thank you, Merv. We have several variations of AC throughout the company and I will give you two of our largest examples in competitive markets. By "competitive markets" I mean BBM-rated markets. Certainly all of our markets are competitive.

1199 In Saint John, New Brunswick we have an adult contemporary radio station named CIOK K100 which has been trending number one with adults 25-54 for several BBM periods.

1200 A recent success story that we are proud to tout in Moncton, New Brunswick is our CFQM, Majic 104, which we retooled as a mainstream AC station and in the last BBM period went to number one with females 25-54. So this is certainly a format that we are very familiar and very comfortable with.

1201 COMMISSIONER WILLIAMS: Thank you. Should your application be approved, what operating synergies do you expect to achieve? Will the proposed service benefit from operating cost savings or a combined advertising sales force? Could you give us some examples of any possible synergistic opportunities?

1202 MR. RUSSELL: I would like to show you the welts in this marketplace that we have endured since the inception of MRG, the Metro Radio Group. I'm sure we will get a chance to get into that with the competitive imbalance that is currently in the market a little later on, Mr. Commissioner.

1203 The synergies that we see initially will be -- there will be some financial synergies naturally, but the real synergies we will have is having that additional voice and the additional clout and audience to compete favourably in a market that is stacked against us.

1204 Within the station itself of course the synergies -- I should go to our accountant who can detail those for you in fine detail where the savings would be by having a third station within the building.

1205 Owen.

1206 MR. BARNHILL: Thank you, Merv.

1207 If you look at our administrative expenses as a percentage of revenue it is about 9 per cent. The average of other applicants is approximately 26 per cent. So I think that reflects some of the synergies that we gain. That is just shared rent when we co-locate, shared heat and lights and things like that. So that is how it is reflected in our financial model.

1208 Merv.

1209 COMMISSIONER WILLIAMS: How much exactly do you estimate that that would be from your financial model, the synergistic savings portion?

1210 MR. BARTON: It is on an individual basis, rent, heat, things like that. Just on average, if we take the other applicants as a ballpark and they are approximately 25 per cent, we would save 10 to 15 per cent approximately.

1211 COMMISSIONER WILLIAMS: Okay. How about in the area of programming. Will any of the programming be shared?

1212 MR. RUSSELL: Dan, would you like to touch on that?

1213 MR. BARTON: As far as the music and spoken word programming, it is all being set up specifically for this new FM. With the MBS radio news network we would have a once hourly three-minute newscast which would be made available regionally, so you could consider that shared programming.

1214 Staff-wise, we would have an independent news director hired for this radio station. We would have two news reporter hired specifically again for this radio station. A meteorologist hired specifically for this radio station.

1215 So programming-wise there is not a lot that would be shared. Most of it is specifically for the new FM.

1216 COMMISSIONER WILLIAMS: Okay. I would like to hear your thoughts and spend a bit of time talking about the local sales management, local management agreements that exist in the marketplace between some of your competitors.

1217 Maritime or MBS argues that one coordinated sales team controls over 70 per cent of the available airtime inventory. Could you perhaps discuss the potential for business arrangements between the other applicants seeking a Halifax radio licence?

1218 In your application you allude to the CHUM and NewCap sales management agreement in Halifax. Do you believe that CHUM and NewCap are able to maintain higher advertising costs than would be the case without a sales management agreement?

1219 How much lower might advertising rates be without such an agreement and how would this agreement impact upon MBS' proposed services? I guess just to open it up a bit, maybe your general thoughts and concerns about both challenges and the opportunities of local sales management agreements?

1220 MR. RUSSELL: I would note we want to hear a couple of more applications today, so --

--- Laughter / Rires

1221 MR. RUSSELL: We have come prepared for this, Commissioner.

1222 COMMISSIONER WILLIAMS: I was thinking you might be.

1223 MR. RUSSELL: Mr. Chairman and Commissioners, I have to go back to the fact that this application is vitally important to us because of the situation we find ourselves in. This situation in Halifax, the unfairness and imbalance has really -- if I could take you back chronologically to 1994, and I don't want to dwell a great deal of time on it, but I do have a submission I would like to enter into the record and we will hand it out after, if it's okay. No?

1224 THE CHAIRPERSON: What is the nature --

1225 MR. RUSSELL: The nature is just to chronologically review what has transpired, but I want to leave it with you as a document.

1226 THE CHAIRPERSON: Why don't you go through it and then we can decided whether we can accept it.

1227 MR. RUSSELL: Okay.

1228 THE CHAIRPERSON: Go ahead.

1229 MR. RUSSELL: I hope I didn't change the rules or anything there.

1230 In 1994 the original landscape of the Halifax marketplace was there were four players, there was CHUM, NewCap, an independent called SUN which had an easy listening station, and then there was MBS. At that time CHUM had a share of about 22 per cent; NewCap had 21 per cent; we were having a good run with country, we were up around 28 per cent; and the independent with the easy listening had about 10 share. You competed on a favourable basis. It was dog eat dog out there, but it was good, friendly competition.

1231 The easy listening licence that was granted, I think it was around 1990, a Mr. Hustins. There was some great fervour within the community that easy listening was it. I recall at one hearing -- perhaps Mr. Colville you were there -- there was a demonstration that had to be cooled down with people with placards, et cetera, they wanted easy listening.

1232 After five years or so easy listening didn't make it and, very wisely, NewCap came to the rescue. NewCap came to the rescue and included the management of the easy listening station into a group called MRG, the Metro Radio Group. That wasn't all that bad, although MRG changed the format from easy listening to a soft AC contemporary station. It basically remained the same. It was fair.

1233 There were three groups pounding it out on a daily basis and competition is great. CHUM had about a 21 share still; we were at about 27; and the MRG group, which was Newfoundland Capital and the independent, had about 32 per cent. That is still equitable. We can deal with that.

1234 But in 1998 the most significant thing happened. MRG became five radio stations and the format started to change. We retained our country and oldies. We had loyal audiences. We had a share of about 25 per cent. It diminished somewhat.

1235 But when the MRG giant came together it presented five radio stations and ended up with 56 share of 12-plus Monday through Sunday. The programming format started to change and all at once C100, they started to sharpen up their music edge. It was sort of like this magical thing happened. This whole big bag of jelly started to move in different directions and it started hitting us. It starting banging directly at our two formats.

1236 Then, as it turns out today, there have been further changes. We find that C100 has gone to a contemporary hits format off their AC, their mainstream AC; CJCH, the other CHUM station, has become favourites, which is a direct hit at our oldies station; classic rock on Q104 has its own identifiable strong audience; the KIXX country station within the MRG group takes the top right off our country FM; then SUN-FM recently changed to classic hits, which is a direct hit on our oldies station.

1237 It reminds me of Sunday when most of Halifax were sitting around watching another Haligonian broadcaster from Halifax by the name of Coleen Jones win the curling championship. I thought when I saw Coleen Jones take that last rock out I said "This reminds me of us taking on MRG, except they have five rocks and we have two and every time we put one in the house, they take one out. In the end, if they are having a good day, they end up with three rocks in the house and we end up with nothing, or if they are having a bad day they end up with one or two rocks in the house. It always just happens to be those two prime properties, C100 contemporary hit radio and the rock station both aimed at 25-54 and we go in with our demo and we are left off the table."

1238 Then of course there is that opportunity to position yourself you are not a consideration because they can bonus, they can do whatever they want. Perhaps you could relate to that, Nancy, you see it every day.

1239 I used to have her job when it was easy radio and there were three competitors. She is five against two.

1240 MS HILCHIE: If I may add, Merv, thank you.

1241 One of the other things that we see here in the market is we are faced with two very distinct formats, a country format and an oldies format. Lots of times an audience out there doesn't want that distinct format, they are looking for something else. So MRG embraces these advertisers and welcomes them into their fold. We have the competition, we have the numbers, but we also have distinct format. So with the group of five against us with our distinct format, it makes it even more difficult for us to generate revenue.

1242 MR. RUSSELL: This room reminds me of an incident that happened to us. A very dear friend of -- charitable events in Halifax, as Mr. Colville can attest to, in the days when government's are cutting back on budgets, et cetera, charities have to raise large sums of money. This building here is utilized to a great amount in charitable events.

1243 There was one particular event that took place in this very room that we had sponsorship on. We made a few dollars of it. One day the Chairman, a very good friend of mine, called me and he said "Merv, I have some bad news. You don't have it any more." I said "Well, we did a good job for you, didn't we?" He said "Yes, but they just offered me five stations and they are not going to charge me anything so you have lost it."

1244 That is just a small example of what we run into.

1245 COMMISSIONER WILLIAMS: Can you perhaps expand your answer a bit with a particular focus on the advertising sales impact?

1246 MR. RUSSELL: Perhaps I can turn that over to Nancy. She takes the welts every day.

1247 COMMISSIONER WILLIAMS: It is not necessarily easy radio since Nancy took over.

1248 MS HILCHIE: Thank you for that, Merv.

1249 One of the things that we are excited about the potential of this new AC radio station is it will open up new categories of advertisers, because the profile of the new station will be more upscale so we can be positioned to offer high-end advertisers more efficient airtime. We also believe that this AC station will be a nice complement to our two existing demographics, the oldies and the country, and will further strengthen our team.

1250 MR. RUSSELL: I think that it also has the opportunity of adding profitability or longer life to our AM. We have great faith in our AM station in Halifax. It is the number one AM. Sometimes that isn't enough to get you in the door, but we are the number one AM and we have been loyal with the audience we have been after with Oldies 96 for some time.

1251 We feel that a mainstream AC adding to the demographic that we could sell -- and it is not going to be easy selling it against MRG. They are formidable and they are excellent broadcasters, don't get me wrong, but it's clout -- that it will give extra life to our AM and we will be able to sell our AM in conjunction with two FMs.

1252 MR. PACE: Mr. Williams, I would like to speak on that point. Because over the last couple of years a number of people have come to Merv and I and said "Well, why don't you flip your AM to FM". When we got those suggestions I always found it was coming from competitors which made me somewhat suspect.

1253 What we have here in Halifax is, we have the oldest radio station in Halifax. We are proud of that. It is an oldies format and we have been quite successful on that AM band. We have reinvested in that AM site.

1254 As well, ever since Country 101 has been given a licence, granted a licence, that has been a country format in Halifax. One thing that Mr. Colville would understand, Maritimers, one thing that is very important to them is loyalty. It would be easy for us to flip the AM to FM to some other format, but then we would not be providing a service to that oldies format which is very loyal and we have been loyal to them for about 10 years.

1255 I don't know too much about curling, but I know a little bit about hockey so I will use the analogy. What we are faced with is, MRG has five on the ice, we have two. We are playing defence constantly. All we are looking for is Sidney Crosby to give us some hope so we are playing offence. Thank you.

1256 COMMISSIONER WILLIAMS: If your group was licensed, could you indicate whether you would enter into a business arrangement with another broadcaster in Halifax, in particular such business arrangement to include, say, a local sales agreement or a local management agreement?

1257 MR. RUSSELL: I am going to turn that over to the man who has the majority of the shares. Again, Mr. Pace.

1258 MR. PACE: That is an interesting question, because that particular opportunity arose and that was offered. We made a choice and it was incumbent upon also turning over the control, management as well, not here but in other markets. That is not of interest to us.

1259 All we are looking for is a level playing field and we think that when you look across the country -- this is a philosophical discussion that I can only imagine you people there discussed it at some point in time.

1260 I believe, and Merv believes passionately, that there is a role for independent, privately owned broadcasters in Canada. They are becoming fewer and fewer, but there are great examples. I think we are one of them. I think Golden West in the west is great. Another one would be Harvard. But I don't think the country or the people in this country want to have the radio broadcaster's licences owned by five major groups, Rogers, Astral, CHUM, Standard and Corus. I don't believe in that philosophy and I'm hoping you don't.

1261 So the answer to your question is no, we want a level playing field. We think we compete. We think we have great people but, as I said, if you are on the ice constantly playing defence it is hard to move ahead.

1262 MR. RUSSELL: I'm not going to let him away with all of that. It is fair to say that we were at that dance when this was being put together. We were asked if we had interest, but our philosophy as a regional broadcaster, I would have been compromised. Not getting into details, the price of going home with someone was too high.

1263 COMMISSIONER WILLIAMS: Would your group please comment on the possibility if the Commission would require by way of condition of licence prior approval for any business arrangements with another broadcaster?

1264 MR. PACE: Absolutely.

1265 COMMISSIONER WILLIAMS: Okay. That's pretty clear there.

1266 I'm going to move into a new area now

1267 MR. PACE: We are very independent.

1268 COMMISSIONER WILLIAMS: We note that you were one of the applicants that had originally proposed the use of the 105.1 MHz frequency and due to NAV CAN problems you had to revise your technical parameters. Although you were still proposing use of the same frequency, we understand that you have reduced your radiated power from 100,000 to 30,000.

1269 What impact will this decrease in power have on your original business plan?

1270 MR. RUSSELL: Thank you, Mr. Commissioner. Before we turn that over to Mike Maxwell our technical director, I just want to say how proud I was -- because I was away at the time -- how well our team reacted to this unfortunate circumstance that popped up that no one was aware of.

1271 Other applicants, and it is understandable, they were Toronto and Montreal and elsewhere, they were doing it by remote control. Our team got together, hunkered down and said "We can solve this problem." They went about it in a diligent way and got second opinions and third opinions and fourth opinions, because this application is so vital to our future that we wanted to be right. Then when we came to the conclusion we said "Are we that right?", because we have a lot on the line here.

1272 I will get Mike to walk you through that and give you the conclusion.

1273 Mike.

1274 MR. MAXWELL: Thank you, Merv.

1275 Mr. Commissioner, as Merv indicated, we went into extensive research on our selection of directions with respect to the interference presented by NAV CANADA and we, again like stated, decided that 30 kilowatts was acceptable to us. We determined through analyzing a reduction in population coverage that the end result was negligible and did not affect our business model.

1276 COMMISSIONER WILLIAMS: Your submission on the 17th of February 2004 related only to the technical parameters of your proposal. In light of the significant decrease in power we would ask that you refile the estimated coverage and population data under the new proposed technical parameters of the 3 millivolt -- microvolt per metre and .05 microvolt per metre contours.

1277 Would you undertake to do so?

1278 MR. MAXWELL: Yes, we would. I would actually also offer into the public record that we have subsequently learned directly from NAV CANADA that there is a possibility that the ERP of 45 kilowatts would be acceptable for this particular frequency 105.1. So if a licence was granted to Maritime Broadcasting we would certainly look to file a change of facilities to go to that power level, but we would definitely file those population changes before Phase IV.

1279 COMMISSIONER WILLIAMS: Okay. That would be fine. Thank you.

1280 Nearing the end of my part of this, I want to talk a bit about your cultural diversity initiative. What is the current practice at Maritime Broadcasting System now?

1281 You can either describe what we have presented or I can read very quickly our summary.

1282 MR. RUSSELL: Perhaps you could read the summary because then I will direct it accordingly.

1283 COMMISSIONER WILLIAMS: Okay. Under the heading of "Cultural Diversity", and assuming your application is approved:

"A senior level employee of the new station who will report to the station manager will have the responsibility of preparing a cultural diversity plan similar in nature to Maritimes Employment Equity Plan. The cultural diversity plan will be developed in consultation with the station's news director so as to ensure that the news focus and editorial policy of the station properly reflects the market's cultural diversity from the outset. It will also ensure that hiring practices are developed with regards to creating employment opportunities for persons from a range of cultural, ethnic and racial backgrounds, with particular emphasis on members of Halifax's aboriginal communities.

Similarly, the station's musical selections and promotion of Canadian artists, where possible, will also be reflective of Halifax's cultural diversity." (As read)

1284 That is basically a summary of what you have told us.

1285 So what is the current practice at MBS today?

1286 MR. RUSSELL: I am going to turn that over to our former employment equity director for the whole group of our 23 radio stations and I am going to ask her to respond to that. Then I am going to ask Dan to talk about it from a programming perspective and then back to Nancy again.

1287 MR. BARTON: Actually, if I could, Merv, I will just jump in there first.

1288 Mr. Commissioner, when it comes to our format, when we surveyed our 1,600 respondents, our survey was very well representative of the local population in terms of ethnicity as well as gender. The demand for our mainstream adult contemporary format was from a representative sample of Halifax's diverse population. Therefore, our proposal responds to the programming needs of all members of the local community.

1289 As Merv has stated, MBS has a long history of working with local cultural groups in an attempt to accurately reflect the local markets and I will ask Nancy to speak a little more on that.

1290 MS HILCHIE: Thank you, Dan.

1291 Maritime Broadcasting System has a long history of working with local cultural groups in an attempt to accurately reflect the local market.

1292 Two examples, if I may. We were approached this fall by the African Nova Scotia Music Association for support in helping them to promote their new Christmas Celebration Concert. We not only provided airtime to promote this, but we also broadcast the entire show in its entirety.

1293 The Multicultural Festival, we spotlight our diversity in the community by encouraging the various groups to voice their own spots and join our morning show for live interviews, reminding all of us the need for peace, acceptance, respect and awareness.

1294 The previous radio sponsor dropped the Multicultural Festival support a number of years ago and we were delighted to move up to the plate. We look forward to embracing this years' 20th anniversary of the Multicultural Festival, celebrating diversity with the estimated 45,000 people who will attend on our beautiful Dartmouth waterfront.

1295 To further demonstrate Maritime Broadcasting System's commitment to diversity, I would like to take a quote from Ian Hanomansing's letter of support. I quote:

"CHNS radio offered me what was a dream job for a young law student working the afternoon shift on Saturdays and Sundays, filling in on the important morning and drive shows when people were away and accommodating my travel for university debating. Incidentally, at the time when having a broadcaster with the unlikely last name of Hanomansing certainly had no cache, not once did anyone at the station ask me to follow the common practice of changing my name or otherwise hide who I was. My work at CHNS allowed me to continue to hone my broadcasting skills and I have no doubt that it was important in helping me along my career path." (As read)

1296 COMMISSIONER WILLIAMS: Thank you. Do you have representatives from other cultural ethnic communities, aboriginal people working in the MBS system now, today?

1297 MR. RUSSELL: We would have to find that out from -- I am not familiar with the exact numbers, but we report on an annual basis.

1298 Nancy is more familiar.

1299 MS HILCHIE: I am. I was the employment equity coordinator for Maritime Broadcasting System for a number of years. We have a self-identification questionnaire, that we keep confidential, when people come to join our company that is filed with our head office HR department.

1300 COMMISSIONER WILLIAMS: Would you undertake to provide us a copy of your most recent example?

1301 MR. RUSSELL: Surely. Yes, we will submit it to the -- our last report. We will gladly submit it to counsel.

1302 COMMISSIONER WILLIAMS: Thank you very much, Mr. Pace and the Maritime Broadcasting group.

1303 Mr. Chairman, I am done with my questions.

1304 THE CHAIRPERSON: Thank you, Commissioner Williams.

1305 I understand Commissioner Cram has a question or two.

1306 COMMISSIONER CRAM: Thank you.

1307 The first question is: It appears to me, based on some of your submissions, that you believe the Halifax market could have more than one additional station.

1308 Is that correct?

1309 MR. RUSSELL: Our research indicated that, yes.

1310 COMMISSIONER CRAM: I recognize your reservation on format.

1311 If you were here and we were looking at the way you have described the market, and say hypothetically, very hypothetically, we gave you a licence, what would happen to the second licensee, if we gave one? Because it appears you are saying it would be a five to three to one fight; at best it would be two and half, two and half, three for MBS, to one. So what would happen?

1312 How would a second independent single licensee survive here?

1313 MR. PACE: I think I could answer or attempt to answer this question from this background. One of the things that we found very important as to commission -- because this licence hearing is very important to us and there is no question that our piece of research here is the most extensive in the marketplace of any of the applicants.

1314 We found that there was basically two holes in this market, one in the 25-54 for mainstream AC and one less so on the youth side.

1315 Two important points here to look at. One, there is about 11 per cent decline in tuning for the 25-54 year old group. As well you are seeing that on the youth side. However, in the last BBM -- this is all new, but the last BBM survey it showed that in that younger demo there was actually between 15 and 20 per cent increased tuning. That is not good news for the people who are applying -- and they are all great broadcasters I might add -- for the youth.

1316 I think we heard yesterday that providing a youth service here is a difficult challenge. We have a youth format in Moncton and we have had our challenges. Because this is so important, we want to make sure we have this right.

1317 So I go back to the hockey analogy, five against three and one, I think we can all be more competitive.

1318 The fear would be if one of those groups that you licensed came into the market -- and you were aware of this on a national basis -- came into the market and just went for market share regardless of the financial impact on anyone. That could create a problem here.

1319 But I still think, given the extra product -- and that is what we are looking for here, that is what Nancy is trying to achieve -- we would have, in the likelihood that you grant us a licence, a very distinct AM oldies product, a very loyal country product and a mainstream AC. We think that package would put us -- it wouldn't be the be-all/end-all, but it would certainly give us an opportunity to grow this company.

1320 Not only in Halifax, because one of the things that we found -- and you would recognize this from being from western Canada -- we have 23 stations, but we represent stations in Sussex, New Brunswick, 3,900 people; Digby, Nova Scotia, 2,000 people. This is a problem in Canada that we are having, but it is more compounded in the Maritimes, where you have this rural migration to urban centres. Consequently, it is getting tougher and tougher to maintain services in those markets. We feel that it is important.

1321 One of the reasons we are attempting to develop our MBS Maritime News Network, in our focus groups that we undertook with our research, a lot of the rural people from Cape Breton Island, from Summerside or from Digby that are being forced to move to Halifax, they want to know not just what is going on in Halifax in terms of local news, they want to know what is going on in hometowns.

1322 Merv is constantly phoning his mom in Saint John, "What's new in Saint John?" But I think with our network -- and this was something that Merv has always had a passion for to develop this news network. The technology wasn't available. It was highly expensive some years ago. But because of advances, huge advances in technology, we can offer this service unlike anybody else with any of these applications.

1323 I am attempting to answer your question in a roundabout way, but if I am not answering it I will try again.

1324 COMMISSIONER CRAM: My follow-up to that is -- and certainly there will be hearings on the issue: What if the new second licensee in my hypothetical that I gave you, the first new licensee being yourself, what if the new second hypothetical licensee went into an agreement with the five so it would be six versus three?

1325 Are you better off now than you would be if it were six versus three? Which would be the better alternative for you

1326 MR. PACE: Yesterday you released the pivot numbers for Halifax. We said in our written presentation that in 2002 it was less than 10. Let me be more exact: 2002 was 9.8; I believe in 2003 we are at 6.3. So we are pretty soon going to be like the Atlantic salmon: extinct.

1327 So five against two, I am hoping that with a new product that with five, three and one, that would be a better situation.

1328 Merv, do you want to add to that?

1329 MR. RUSSELL: Caution to the one: It is going to be tough.

1330 COMMISSIONER CRAM: Precisely. That was my whole issue.

1331 Ms McLaughlin, just one quick question. Your study, I see it was done July 11th and please excuse my ignorance. That was before the hurricane and there was a huge demand for weather information?

1332 MS GODSOE: Yes.

1333 COMMISSIONER CRAM: Thank you.

1334 THE CHAIRPERSON: Thank you, Commissioner Cram.

1335 Just a couple of follow-ups on my part, I guess, on this issue. In asking this question please don't you or anybody else in the room consider that the Commission has a predisposition one way or another on these issues but it is something we are going to have to think about in weighing this, certainly because of the level of interest in new players wanting to serve this market in addition to existing ones -- existing one in your case.

1336 I guess I would like you to address this issue from the point of view of diversity. We understand the situation that you have raised in terms of the five against two situation, but I guess one of the approaches we could take when we leave here at the end of the hearing and wrestle with this issue is:

1337 If the market could sustain two players -- and I think you have suggested yourself, one, perhaps two I think in one of the interventions you submitted -- and we thought "Well, from a diversity point of view, in terms of diversity of ownership and diversity of voices in the market, if you will, an approach would be to not give you one of those stations but give it to two other individual ones or two to one other player.

1338 I guess I would like you to respond to that diversity issue from our perspective because it is also a way, it seems to me, that one could approach addressing the imbalance is to say -- and I take your point, Mr. Pace, about perhaps the best defence from your point of view is beefing up the offence and getting a Sidney Crosby, so to speak -- but I suppose from our perspective it could be one other stronger player in the market to counter the imbalance and perhaps divide up, perhaps get us back to where we were, Mr. Russell, when you were indicating before the arrangement that we had.

1339 I would like you to address it from that point of view because, as I say, it is certainly an issue we are going to have to address when we sit back and decide among all these applicants where do we go with this.

1340 MR. PACE: Mr. Chairman, I think I alluded to that earlier. I understand you have to look at the Halifax market.

1341 THE CHAIRPERSON: I am an engineer and I need it done plain. Illusions don't work sometimes.

1342 MR. PACE: On possibility is quite true, you could put another player in this market and some of the competitive imbalance could be corrected.

1343 However, I think there would be a lost opportunity here, because what we are offering is the ability if we are strong in Halifax -- and it is our base. 40 to 50 per cent of all the revenues in the Maritimes is based in Halifax. So we are providing these services to these small towns in the Maritimes. If we are not strong in Halifax, at the end of the day you become marginalized.

1344 I think a bigger issue is to look at it in the sense of the whole country. I alluded to that earlier. I believe that the regions in Canada want strong, unique, diversified voices in this country and I think that we would be doing a disservice if we ended up with five large players.

1345 Big is not always better. That is a personal view I have. I think there are abilities for small operators -- and, quite frankly, one of the most creative groups that we have come across -- we talked to all broadcasters -- Golden West in the west, I mean because we have to be quick on our feet, because we are smaller, it leads to more creativity. I think that is important. I think it is important in this country. That is my perspective as a Maritimer.

1346 I think yes, you could look at the ownership issue here in Halifax, but I think we have an opportunity to offer with our Maritime News Network an ability to offer service to the rest of the Maritimes if we are strong in Halifax. That is our pitch and we hope that there is some thought given to that.

1347 MR. RUSSELL: Mr. Chairman, if I may coat-tail on Mr. Pace's -- I know we are taking up time here, but his thought.

1348 I think in your deliberations on the determination of what is going to happen in Halifax, I think there is two areas of diversity that have to be important in your deliberations.

1349 One is the diversity of programming which we offer. Halifax currently does not have a mainstream AM radio station of the top 13 markets in Canada. There is a void here. The void that we are filling is in the largest demographic, which is nearly 60 per cent of the population.

1350 From a programming perspective, our strong news component adds a diversity and a hole that can be filled and create diversity in the marketplace.

1351 But from an ownership diversity perspective, the Broadcasting Act encourages the reflection of Canada's regions, as we all know, and by strengthening our presence in Halifax the Commission will strengthen us and our regional presence.

1352 Then, of course, under the Commercial Radio Policy we are permitted to own two FMs and an AM and we would like to have the opportunity of doing that.

1353 THE CHAIRPERSON: My comment about time earlier when you were answering Commissioner William's questions was just that I knew you could talk all day on this issue about the competitive imbalance.

1354 MR. RUSSELL: I am somewhat passionate about it.

1355 THE CHAIRPERSON: I know.

1356 Mr. Pace, you talked about the AM station and Mr. Russell mentioned in his presentation about the PBIT being 10 per cent -- that was based on 2002 numbers -- and now it is showing it as being about six, I guess. You mentioned about the loyalty to CHNS and certainly the oldest station here, if not one of the oldest in the country. But in fact it is the PBIT of CHNS that is really dragging you down, right? It is in excess of negative 20 per cent.

1357 Notwithstanding the loyalty issue, I guess there must be a lot of times when you wonder whether one should look at doing that.

1358 What would your reaction be if in fact you came out of this proceeding without getting a new station that you have applied for. Would that drive you to having to flip the AM? What is going to take to get that turned around

1359 MR. PACE: I think the difficulty -- we have faith, and I think we have shown it. We have faith in AMs. The problem with selling here -- and Nancy would know more about this than I would, but the difficulty with packaging the AM in a country format is that some people do not want those two packages.

1360 However, when we package a mainstream AC with a country format FM, then there is a life for the oldies. So it is more in the packaging.

1361 Our competitors here, they are excellent broadcasters -- let me no question that for one second -- but they package their three FMs and, you know, the AMs are kind of thrown in. But we are very proud of the fact that we still have about a seven share on oldies in Halifax, even with at least two other stations directed right at that format.

1362 I think with an AC accompanied with our country, I think in terms of synergies that we talked about, that we would have an opportunity.

1363 Quite frankly, if it was pure economics one could flip back. It is on a very, very valuable piece of property, the AM transmitter site in Halifax, but my belief, and Merv's -- we have been very strong about this -- is that that is a quick decision for short-term gain but long-term pain, because we again would be back on the ice with products against five.

1364 MR. RUSSELL: Mr. Chairman, I think the recent NAV CAN situation pointed out that the frequency situation is going to be more difficult even in the future. So I think we have to hunker down with oldies and live with it and see what the outcome is.

1365 THE CHAIRPERSON: I must say, with all this NAV CAN concern I get nervous every time I fly into Halifax, "Oh, is somebody interfering with the frequency we are on?"

--- Laughter / Rires

1366 THE CHAIRPERSON: I guess one final area -- I'm jumping around a little bit here I suppose.

1367 I must say, when I read your application, over Christmas I guess it was, I was a little bit surprised at the format. I take the point on the survey, the most extensive survey, and so on, but again let me pose this as something that we are going to have to consider when we go away. So let's get the answer now rather than speculate on what it might have been if we hadn't asked the question.

1368 With two stations now and getting a third station in the market, one might presume that the incumbent could afford to be a little more risky in attacking the market.

1369 I think you said yourself, Mr. Russell, at one point in answer to a question from Commissioner Williams, that there is a lot of bleeding between these formats, between these formats that sort of target this demographic from 25 to 54, or whatever, and yet we see some other parties here catering to the younger side of that, and even younger than that. Your survey showed that the 12 to 24 represented about 20 per cent, whereas the 25 to 54 was 56 per cent. But that is where the bleeding is now between sort of going after that demographic.

1370 So one might have thought, "Well, here is the incumbent perhaps getting a third station in the market. Maybe they could afford to be a bit risky, notwithstanding all the concerns we have about the five against two, and so they might take a bit of a gamble and go after that younger demographic with the more urban hip hop, rhythmic, however one wants to characterize that music.

1371 MR. RUSSELL: Mr. Chairman, we looked at that very long and hard and carefully, because we did the research and we understand how important this hearing is to us and that is why we invested accordingly.

1372 But the facts are the facts. There is not an AC radio station in Halifax and the top 13 markets has them.

1373 Dan, perhaps you could review what markets have multiple ACs, but it was clear that of the top 13 markets in Canada Halifax was the only one without. AC is in our wheelhouse. We know it. We know how to do it. We know how to do it well.

1374 THE CHAIRPERSON: I understand that. I don't dispute that. I guess my sense is that when you run through the list of artists that appear there, "Well, I hear those.", maybe not as often, but they are there.

1375 I guess my question is: Is it that different that it is going to make a difference?

1376 MR. RUSSELL: Dan.

1377 MR. BARTON: Thank you, Merv.

1378 First I would like to answer the artist question that you have, Mr. Chair.

1379 At the time we compiled this application those were all, in fact, artists which were not featured in Halifax. We have seen two things since our application.

1380 First of all, we have seen two of our competing radio stations become more efficient in 25-54, that is their audience has shifted slightly.

1381 We have also seen them start to supports artists which they did not before this application.

1382 I want to cite one specific example, being Norah Jones. Last year she came out with an album that sold over six million copies. She won Grammy for Album of the Year, but she was not heard in Halifax radio. Now, magically, she has had a new album this past month, sold a million in its first week, and now you can hear her on Halifax radio post our application.

1383 The fact, as Merv says, that among the top 13 radio markets in this country there are AC radio stations, at least one if not multiple, in every market except Halifax, continues to show that that is a hole to be filled here.

1384 I want to mention further to the fact that we now have three radio stations in this market that are efficient 25-54. Despite the fact that they have shifted their audience, in the last four BBM periods we have seen hours tuned to Halifax radio among 25-54 decrease 11 per cent. It continues to go down, which continues to suggest that this audience is not finding what they want to hear on the radio.

1385 So we combine that with our demand study showing they wanted mainstream adult contemporary -- again there is none in this market, making Halifax an anomaly in Canada, if you will -- that was clearly the hole where we wanted to go.

1386 I wanted to further comment on Robert's assessment too, that in the youth demographic, yes, we do see it is under-served in our survey. However, our survey didn't indicate any clear format for that youth demographic, what would be the proper format to put on for them.

1387 Also, as Robert mentioned, we are servicing a youth demographic now in Moncton and we don't claim to have perfected that format yet. We are still working on it.

1388 But in Halifax we wanted to go with (a) our expertise  -- and these are in no particular order -- (b) the format that was clearly in demand and the format that did not exist in the marketplace.

1389 MR. RUSSELL: Mr. Chairman, maybe I can go back at that just a little bit. I don't want this to seem like part of an intervention because this isn't the place to do it, but I think yesterday we heard from the two applicants that there is financial risk associated with a youth format. In Halifax we are in no position to do that right now. You can see that from the PBIT.

1390 With an AC, something that we know well, and it is clearly definable that that opening is there, it will give us stronger opportunities to compete effectively against MRG.

1391 THE CHAIRPERSON: I guess Mr. Barton has just underscored the concern that was running through my mind: You haven't even got the licence and they are already going after you is really what you are saying. I understand the riskiness and I guess that is really why I was posing the question and I guess you have answered it really that something really different might be riskier but less likely that the other guys go after it. I don't know. You are the expert here

1392 MR. PACE: Mr. Chairman, on that point, I was quite surprised, as well as our team, that no other broadcaster applied for this. I found that highly unusual, given that in the top 13 markets in Canada everybody has an AC except Halifax.

1393 THE CHAIRPERSON: Okay. Thank you.

1394 Counsel?

1395 MR. McCALLUM: Just one area. You have said that you thought that the market could sustain the licensing of yourself and one other of the applicants as resulting from this process.

1396 What about the further hypothesis of licensing yourself and two other applicants as a result of this process? Obviously there are two different scenarios under that: one is, licensing yourself and two independent parties; and the second one is licensing yourself and one of the two parties, let's say, we heard yesterday where they are both applying for two licences.

1397 Could you comment on those two different scenarios in which the Commission would license three?

1398 MR. PACE: Yesterday I was confused because I wasn't sure whether some people were applying for six or at the end of the day one. I even said to Merv this morning, "We should change this. Instead of going for one station we should apply for six."

1399 Taking your question seriously, the --

1400 COMMISSIONER LANGFORD: No one else does, I don't know why you should.

--- Laughter / Rires

1401 MR. PACE: The only fear that we would have -- let's put this in perspective. Our total revenues -- and I might be off by a million or so, but I would be close. Our total revenue as representing our whole company, 23 stations in the Maritimes, represents one station that Rogers has in Toronto.

1402 I am going to be candid with you: If you licensed someone that is prepared to just come into this market and gain share at the expense of everybody, we are back then to the dot-com environments of 1999 and 2000 where it is all about investment, no concern about running a solid business venture.

1403 I know you have no control over that, but you have some control.

1404 I am attempting to answer your question but it is pretty hypothetical.

1405 What we are here looking for is our licence and we do believe that there is a hole -- less so now than when these applications all went in -- for the youth format. Because that demographic in the BBM 2003 has increased 15 or 20 per cent, so I don't think that should be overlooked.

1406 So the only concern we have is somebody that really is not concerned about the bottom line at all and we get into a situation where we have predatory pricing.

1407 MR. McCALLUM: That applies to the both of them, the two ways that I asked the question I take it?

1408 MR. PACE: Yes.

1409 MR. McCALLUM: Thank you, Mr. Chair.

1410 THE CHAIRPERSON: Thank you, counsel. Thank you very much, ladies and gentlemen. I appreciate your appearance here today and you answering our questions.

1411 We will take our morning break now and reconvene in 15 minutes with the next application by Global.

--- Upon recessing at 1036 / Suspension à 1036

--- Upon resuming at 1049 / Reprise à 1049

1412 THE CHAIRPERSON: Order please, ladies and gentlemen.

1413 We will return to our proceeding now, Mr. Secretary.

1414 MR. LEBEL: Thank you, Mr. Chairman. We will now hear Item 6 on the Agenda, which is an application by Global Communications Limited for a licence to operate an English-language commercial FM radio programming undertaking in Halifax.

1415 The new station would operate on frequency 103.5 MHz, channel 278C, with an effective radiated power of 100,000 watts.

1416 The applicant is proposing to operate an easy listening music format, blending easy listening favourites with folk, Celtic, softer jazz and softer pop music selections.

1417 Mr. Peter Viner will introduce his panel members. You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

1418 MR. VINER: Thank you. Good morning, Chairman Colville. I am happy to see there is life after 58. I will be joining you in a matter of months and I think this application --

1419 THE CHAIRPERSON: But no one wants to play music for us.

--- Laughter / Rires

1420 MR. VINER: I think you are going to find that we do.

1421 Commissioners and Commission staff, thank you very much. My name is Peter Viner and I am the Executive Vice-President of CanWest Global Communications with responsibility for the company's radio development.

1422 Commissioners, we are pleased to appear before you today to present our application for a new Halifax FM station, "The Breeze".

1423 With us today, to my left is Charlotte Bell, Vice-President of Regulatory Affairs.

1424 Next to her is Ross Porter, Vice-President of Programming for CJZZ in Winnipeg and COOL-TV. Mr. Porter joined our company last year and brings with him an extensive knowledge of music of all kinds, especially jazz for which he is regarded as a leading authority in the country. In fact, Mr. Porter was awarded "Broadcaster of the Year Award" at the National Jazz Awards last week.

1425 In the row behind us, at the far left is Patricia Gallagher, Marketing and Promotions Manager for our local station Global Maritimes here in Halifax.

1426 Next to her is Ken Johnson, Vice-President of CanWest Media Sales.

1427 Next to him is Katherine Browne, CanWest's Vice-President of Finance.

1428 At the side table, somewhere near Dartmouth, we are joined by David Oakes, President of Oakes Research who conducted our demand survey, as well as Jim Moltner, our consulting engineer and President of Teknyx Ltd.

1429 I would like to take a moment to talk about our relatively recent entry into radio in Canada and how our proposal for a new contemporary easy listening station in Halifax fits with our radio plans.

1430 Just a little more than a year ago, we launched our first radio station in Canada, CJZZ Winnipeg, offering a unique blend of smooth and traditional jazz music, tailor-made to suit the needs of Winnipeg jazz fans. We are pleased to report that our new station is already meeting with success in the Winnipeg radio marketplace.

1431 The promotional support of COOL-TV, our digital specialty channel dedicated to jazz, blues and world music, has also helped elevate our place in the Canadian jazz scene by providing additional cross-promotion opportunities between the stations for the benefit of Canadian artists.

1432 With the launch of our new rhythmic CHR station in Kitchener-Waterloo in January of this year, we further moved ahead with our plan to establish a new radio voice in Canada.

1433 While our radio share in Canada represents less than 1 per cent of the radio industry, our presence in the two markets where we operate stations is anything but small. In Winnipeg, beyond meeting the expectations of our audience by providing a first-rate jazz radio station, we have created a new outlet for exposure of established and emerging jazz artists from Winnipeg and throughout Manitoba that simply did not exist before.

1434 Our recent launch of "The Beat" in Kitchener created a flurry of excitement in the marketplace in the months leading to its launch and since it has been on-air. Our young audience has already connected with the station they call their own and advertisers are responding positively to the addition of a radio station that finally allows them to reach a younger audience in Kitchener.

1435 We are here today looking forward to continued growth in the radio sector with our proposal for "The Breeze". We believe can become a distinctive and fresh new FM radio service for Halifax.

1436 This application reflects our commitment to serve and support local communities and local talent in the Halifax area, across Nova Scotia, the Maritimes and throughout Canada. By approving this proposal you will help us create a forum to support, nurture, and promote new and emerging easy listening, folk, Celtic, jazz, blues and world beat artists, and provide an excellent opportunity for local and Canadian talent to benefit from the strength of cross-promotion over a number of media platforms, including television and the Internet.

1437 At the same time, we will be providing an attractive new alternative to listeners in the Halifax market.

1438 I would like now to ask Charlotte to tell you more about our application.

1439 MS BELL: Thank you, Peter.

1440 Good morning, Commissioners, Commission staff. This application fully responds to the Commission's selection criteria for licensing new stations:

1441 "The Breeze" will be a quality service providing a high level of diversity to the Halifax marketplace;

1442 It will provide significant exposure for both new and emerging and more established local and Canadian easy listening, Celtic, folk, blues, jazz, and world beat artists;

1443 It will provide a new reflection of the local cultural scene;

1444 It will make a significant contribution to Canadian Talent Development;

1445 It will provide an alternative music format to meet the needs of the most under-served audience in this market; and

1446 It will do all this while having a minimal impact on incumbents.

1447 Commissioners, we began this exercise by asking Oakes Research to survey Halifax residents in order to assess their musical interests and tastes. In commissioning this research we followed the same fundamental principles as we did in each of the other four markets where we have filed applications for radio stations in the past two years. Our instructions were clear: We asked our research firm to test a wide range of musical styles in order to assess where the largest demand is, in order to make certain that our proposal would add maximum diversity to the marketplace, appeal to advertisers in order to ensure financial viability of the service as a stand-alone station, and that it would have a minimal impact on incumbents.

1448 The research tested 21 music styles. The results clearly told us there was strong demand for this format, with 58 per cent of respondents expressing interest in a contemporary easy listening format.

1449 There was strong appeal for related music genres that offer a softer, melodic sound that blends well within the format.

1450 Finally, and most telling to us, was that 26 per cent of respondents chose contemporary easy listening as their number one choice for a new radio station in Halifax over all other formats.

1451 Upon reviewing what is already available, it is also clear to us that the 25 to 54 demographic is more than well-served by existing offerings, and it is the more mature audience of 35 to 64 that is most under-served.

1452 Further, this format allows advertisers to reach the most affluent demographic group, given its higher than average disposable income.

1453 Our proposal includes Canadian content levels that exceed Commission regulatory minimum requirements. "The Breeze" has committed to broadcast a minimum of 40 per cent Canadian content in Category 2, as well as 30 per cent in Category 3. Our commitment to Canadian Category 3 artists is especially significant because it is often difficult for them to get airplay on mainstream, commercial radio.

1454 Finally, our comprehensive Canadian Talent Development proposal will direct $700,000 over the period of the licence term to help fund new recordings for local and national artists performing within our format, provide exposure for new and emerging talent, support local art and music festivals, including the annual Nations in a Circle Festival promoting aboriginal artists, as well as provide support for the education of tomorrow's musicians and broadcast journalists, with preference given to visible minority and Aboriginal candidates.

1455 Patricia.

1456 MS GALLAGHER: Commissioners, this year Global Maritimes, or CIHF-TV, as you would know it, is celebrating 15 years of serving the needs of this unique marketplace, a nice little milestone for us. As Marketing and Promotions Manager for this station since 1995, I can tell you that we are already very active in this community, lending promotional and financial support as well as marketing expertise to many cultural, music and arts organizations throughout the region. Global Maritimes is very much considered a local, community-based broadcaster, something we are quite proud of.

1457 Nova Scotia, and especially Halifax, is what I would call a "festival-central" community during the summer, spring and fall months. As a result, there are many events we already promote that would clearly benefit from the additional support "The Breeze" could provide, especially given its target demographic and music format.

1458 For instance, Global supports and promotes the Art Gallery of Nova Scotia through a variety of initiatives and has had a 10-year relationship supporting the Atlantic Jazz Festival.

1459 We are also proud of our ongoing relationships with community organizations such as the Black Business Initiative, Excellence in Action for Disabled Athletes, Adsum House, the Dragon Boat Festival and many, many others.

1460 In fiscal 2002-2003, Global provided $680,000 in airtime to our community partners. To date in this fiscal year, we have already provided $450,000 in airtime and production support to our partner organizations.

1461 While our Global Noon interview program already provides a regular weekly forum for artist performances and promotion, we believe that the additional support from "The Breeze" would supplement these efforts as a new outlet for emerging local and national talent through artist interviews, coverage of special events, entertainment updates and promotions.

1462 Our approach to news, entertainment, and information programming will be decidedly local. While "The Breeze" will benefit from the news-gathering and cross-promotional resources of Global Maritimes, it will have its own dedicated news department, including a news director who will be responsible for decisions relating to the news content of the radio station.

1463 While separate, the combined efforts of our local outlets will only serve to strengthen our already strong local commitment to this community.

1464 Over to you, Ross.

1465 MR. PORTER: Commissioners, "The Breeze" will serve the needs of the modern, mature listener and will do it with a distinctive blend of consistently soft and melodic music styles that will provide listeners with a local and distinct radio service.

1466 The music tastes of today's 35 to 64 year olds are unique. While they do enjoy some instrumental selections, mostly in the jazz and jazz-related genres, they were raised primarily on vocal music and, by extension, they have developed an appreciation for the softer side of vocal music.

1467 As a result, the primarily instrumental easy listening format their parents listened to some 20-30 years ago is not what they are looking for today. It is more akin to what they consider to be "elevator music" or what I like to call "electronic valium".

1468 While the easy listening format of yesterday was designed to provide passive, background music, the format developed for "The Breeze" is far more engaging for the listener. You only have to look at the soaring popularity of artists such as Michael Buble, Norah Jones, and Josh Groban, to see that there is huge appeal for the softer side of popular vocal music styles with recognizable lyrics that listeners connect with.

1469 We are still seeing the growing emergence of established pop and rock stars such as Rod Stewart, Cindy Lauper, Boz Scaggs, Charlie Watts of the Rolling Stones, and Bette Midler, who are rerecording old vocal favourites and standards on their latest CDs, bringing a more modern, recognizable sound to music from the past. While on existing stations a small amount of this music receives airplay, it is mostly chart-driven or, in other words, limited to songs that have reached hit status and does not constitute a large portion of any station's playlist.

1470 For instance, AC and CHR stations tend to blend small portions of softer music styles with large amounts of more rhythmic hits, including harder-edged songs by Aerosmith, Madonna, Janet Jackson and Jennifer Lopez, that would disrupt the softer flow of the format developed for "The Breeze".

1471 By contrast, the blending of all forms of softer music styles allows this format to appeal to the widest possible audience within the 35 to 64 year old demographic and does not compete with existing mainstream stations.

1472 As we all know, the Maritimes are home to a number of artists who perform in music styles that fit our format, including Lisa MacDougall, Natalie MacMaster, Bill Stevenson, Lennie Gallant, The Rankins, the Bara MacNeils, Laura Smith and many more.

1473 While we did not test folk or Celtic music styles in our demand survey, their appeal in this market is unquestionable. In how many other provinces can you find entire sections in music stores devoted to east coast music? The softer side of these music styles blends perfectly with the music mix we have developed for "The Breeze" and, naturally, they will have a prominent place on our playlist.

1474 Commissioners, we would like to stop here and show you a short video presentation in order to better acquaint you with this sound

--- Video presentation / Présentation vidéo

1475 MR. VINER: Thank you for your attention. We would be happy to receive your questions.

1476 THE CHAIRPERSON: Interesting concept, radio with pictures.

1477 Thank you for your presentation. Welcome to our hearing to the team. Mr. Porter, it is interesting to put a face to the voice that we used to hear until you joined Global.

1478 I will turn the questioning over to Commissioner Langford.

1479 COMMISSIONER LANGFORD: Thank you, Mr. Chairman. Welcome folks from Global CanWest. I have a few questions, not too many. We will see if we can have a little fun with them and get some information.

1480 A general one first off. Throughout your application and supplementary brief, deficiency questions that you answered by letter, again today, you made some commitments. I will give you an example. On page 6, 40 per cent Canadian content, et cetera.

1481 Are there any of those that you want to change at this point or can we take those as given?

1482 MR. VINER: You can take those as given.

1483 COMMISSIONER LANGFORD: I think we can save some time, then. There is no point in killing the field. They are very clear with regard to things like your news services and stuff like that.

1484 Mr. Porter, you certainly cleared up a historic line of questioning I was going to get into about an earlier experiment with easy listening, so unless something arises that you want to get into I am going to just cross that section out of my book. You explained it quite well in your opening remarks, the difference between your format today and what SUN was doing some years back.

1485 But where I would like to turn -- and where I have a number of questions which may really serve only to prove that I know nothing about statistical research but I still have to get into -- I have some questions about your research in trying to figure out exactly where some of the numbers you got came from and what they mean in terms of what people will hear and what they mean in terms of a business case.

1486 For example, there is a number today on the top of page 6 of your opening remarks:

"...58% of respondents expressing interest in a contemporary Easy Listening format."

1487 I don't think I saw that number at all. It doesn't come to the top of my mind anyway as one of the numbers in your survey that you filed with the Commission so maybe we could start with that one.

1488 Where did the number come from:

"...58% of respondents expressing interest in a contemporary Easy Listening format."

1489 MR. VINER: Before I pass that to David Oakes, Mr. Commissioner, I should tell you how this was set up.

1490 We directed Mr. Oakes to find the largest niche available that was unduplicated in the market. That is the only direction we gave him. It was when his findings came back to us, which in our view were quite clear, is when we determined the format.

1491 David, would you care to answer specifically?

1492 MR. OAKES: You just gave a statistician their worst nightmare by pulling one figure out of a survey and asking me to --

1493 COMMISSIONER LANGFORD: No, I didn't do it. Ms Bell pulled that number I think out of the surveys.

1494 MR. OAKES: Okay.

1495 COMMISSIONER LANGFORD: I am just quoting it back to you from the opening remarks.

1496 MR. OAKES: I think it would probably be best if I explained how I went through the survey and analyzed some of the information and how I got to this particular format, very briefly.

1497 COMMISSIONER LANGFORD: Okay. But if you are going to switch, can we just shelve the 58 per cent for a minute and before you do that let me ask you an even more basic question.

1498 MR. OAKES: I could answer that right now.

1499 COMMISSIONER LANGFORD: Well, go ahead and answer it now.

1500 MR. OAKES: A question asked in the survey, I believe it was of five formats, and we asked each of the five formats mutually inclusive to get the demand for each particular format. We asked the respondents to agree strongly or agree slightly or disagree slightly or disagree strongly that they wanted that particular format on a new FM station.

1501 So if you look at the soft, easy to listen to music format, 30 per cent of the respondents strongly agreed they wanted it and 28 per cent slightly agreed. So adding that up, that gives 58 per cent that agreed that they want the new format on a new FM.

1502 COMMISSIONER LANGFORD: What question was that, sir, if you don't mind pointing it out to me?

1503 MR. OAKES: I believe that is Question 9(e).

1504 COMMISSIONER LANGFORD: So it is:

"I want the new FM station to specialize in playing softer, more relaxing, easy to listen to music from well known artists"? (As read)

1505 MR. OAKES: Right.

1506 COMMISSIONER LANGFORD: You got 30 per cent strongly agreed and 28 per cent slightly agreed?

1507 MR. OAKES: Right.

1508 COMMISSIONER LANGFORD: Okay. Thank you very much.

1509 Perhaps we can just move on, then, to some general questions about the survey. Would that be all right?

1510 MR. OAKES: Sure.

1511 COMMISSIONER LANGFORD: I'm just going to mark that in so when I come back to it I will have it later, 30 and 28.

1512 When I look at page 6 of your supplementary brief and you talk about the type of music generally in the description, easy listening format description, the sort of thing that Mr. Porter was describing in the opening remarks.

1513 Then getting down to the end of the page you have three bullets. For those of you who can't see the paper I'm dealing with, by bullets I mean those three dots that people tend to use or, depending on your computer format they are diamonds or squares, but if you are looking for a competitive edge Global uses bullets, dots.

--- Laughter / Rires

1514 COMMISSIONER LANGFORD: The second one says:

1515 The potential easy listening cume" -- C-U-M-E, which I guess stands for cumulative -- reach share of people 12 years and older -- I am kind of paraphrasing for other people who don't have this in front of them -- "of the new FM is estimated to be 26 per cent and the easy listening share of hours tuned is estimated to be 15 per cent.

1516 I guess what I am trying to figure out here, because I am not a researcher or a surveyor, is how you got those numbers? Did you ask the 600 people -- because I can't find that question exactly in here -- whether they like easy listening? Or did you, as I think you may have looking at your survey questions, name a lot of different singers and entertainers over the phone in your survey and then once you have the responses kind of say to yourself, "Ah, that is how we define easy listening"?

1517 Does that question make sense?

1518 MR. OAKES: Yes, it makes sense. You have about half of it. There is a --

1519 COMMISSIONER LANGFORD: Imagine how lost I am. I'm lost with half, so take it slowly. When I get the whole thing I will be totally confused.

1520 MR. OAKES: I apologize.

1521 If you look at Question 10 in the questionnaire, I have already described Question 9 which is taking five formats and mutually inclusive so that they would grade each one. Now in Question 10 I am asking them what one format they most prefer on a new FM station.

1522 COMMISSIONER LANGFORD: Okay. Yes?

1523 MR. OAKES: The results of that, 26 per cent of the top testing format was the easy listening format.

1524 COMMISSIONER LANGFORD: But you would agree that the words "easy listening" exactly aren't used. There is no trick to this, this is again just educational.

1525 As I understand this, it says:

"You may respond to one only.

Please tell me which one music format you would most prefer for a new FM station in Halifax?" (As read)

1526 The second possibility is:

"Specializing in soft, relaxing, easy to listen to music by well-know artists." (As read)

1527 MR. OAKES: Right.

1528 COMMISSIONER LANGFORD: Is that some sort of trade description of easy listening? Is that an accepted survey description or musicologist description?

1529 How do we translate that to the term "easy listening"?

1530 MR. OAKES: I have to apologize for using the term "easy listening" because it conjures up the old-fashioned easy listening and I tried to get away from it as much as possible.

1531 What I was looking for here was a format that was distinct by its tempo alone. Then, when I got the audience, the 26 per cent that said they wanted a calm, relaxing, easy to listen to format, I went back and took a look at their musical styles that they want of the 21 musical styles and most of their top styles are soft, pop.

1532 I had one style called "easy listening". I apologize for that. I wish I would have called it something else.

1533 COMMISSIONER LANGFORD: We are going back to that long series of questions on artists, is it?

1534 MR. OAKES: Yes. The 21 music styles.

1535 COMMISSIONER LANGFORD: That is questions -- it just goes on and on -- that I guess is question -- is it 8 that goes on and on and on. Is that it?

1536 MR. OAKES: Right.

1537 COMMISSIONER LANGFORD: I don't mean to say that it bores me in any way, but it does go on. page after page. This is the one that lists all of the styles.

1538 But you gave them no style name, as I understand from reading this question.

1539 MR. OAKES: I did in some areas. It's not easy to give a style name. Where possible I gave stylings. Like traditional country, that is a style name. Today's softer hits, I really wouldn't call that a style name. It embraces a lot of different styles, I guess, depending on how --

1540 COMMISSIONER LANGFORD: For example, 12(g) is the latest rock, whereas 12(h) is the latest pop, that sort of thing.

1541 MR. OAKES: Right.

1542 COMMISSIONER LANGFORD: Okay. How do these things work together? I am trying to figure out how these questions come together, where you first put people through a list of 21 styles, if I can call them that, types. Actually, in each one it seems to me you name three entertainers of that type.

1543 MR. OAKES: Representative, yes.

1544 COMMISSIONER LANGFORD: For example in the latest rhythm hits by artists like Destiny's Child, Jennifer Lopez and Shaggy.

1545 Then later, when they have gone through all of that, then you have done Question 9, which gives them some sort of a choice of five different formats --

1546 MR. OAKES: No, 9 does not give them a choice. They rate each one individually.

1547 COMMISSIONER LANGFORD: They rate. Okay, they get to rate them. And then 10 gives them the choice.

1548 MR. OAKES: That's it.

1549 COMMISSIONER LANGFORD: How does all that work together?

1550 Because interestingly enough the number you seem to be using throughout this is 26 per cent, which comes arguably from Question 10 alone, but yet all these other ones must have an impact. That is what I don't understand, is how all that works.

1551 MR. OAKES: A lot of those are backup. The music styles, I basically take the audience out of each of the Question 10 items. For example, the soft, easy to listen to music, I took the 26 per cent, I took that audience out and took a look at their musical tastes. So I determined from that what possible styles you could make out of a format.

1552 When I started I had no idea. You don't know nowadays with what is soft. For somebody that is 15 it could be something that is outrageously hard compared to somebody that is 64.

1553 So I go back in, take a look at their music styles, what they like, what they don't like on a new FM and then, also with correlation analysis, try to determine what styles I can put that would attract those 26 per cent of the respondents.

1554 COMMISSIONER LANGFORD: Building a little bit on what is soft to a 13 year old or 14 year old may not be soft to an old geezer like Colville here. This is not going to be the best birthday you have ever had, David, I'm telling you right now. I somehow just can't leave it alone. I will try.

--- Laughter / Rires

1555 COMMISSIONER LANGFORD: We get the 26 per cent from Question 10. 26 per cent of the 600 people said, I gather, "I prefer soft, relaxing, easy to listen to music by well-known artists." But then you have just said -- and if I am putting words in your mouth please pull them out -- I think you have just said that could mean different things to different people depending on age.

1556 So if you go back -- let me put it in the form of a question: Do you then take each one of these 26 per cent -- how many does that come to by the way, 26 per cent of 600?

1557 MR. OAKES: A hundred and eighty-something.

1558 COMMISSIONER LANGFORD: So do you take each of the 180 and then go back to see what they answered to Question 8 in identifying the groups? If you do, do you throw them out if their definition of soft is just completely out of line with the way Mr. Porter so eloquently defined it this morning in his opening remarks?

1559 MR. OAKES: That is essentially why I did go through each one and take a look and see what their musical tastes are. Question 8 asks what of those particular musical styles that -- I go through each one and ask do they want that on a new FM station. I then look at that and then look at what stations they are currently listening to and then determine if they are a potential for this type of a format.

1560 COMMISSIONER LANGFORD: So what if out of the 180 you find one who answers, "Yes, I like this soft" -- answers No. 10 in such a way as to put it in your 26 per cent, then you go back and check out all of their preferred entertainers in that long Question 8 and you find that what they prefer is Nirvana, Pearl Jam and Sound Garden. Would you remove that from the 180?

1561 MR. OAKES: If that is all they liked or if it was just music that had no bearing on what the rest of the group would consider soft, yes, I would throw them out.

1562 COMMISSIONER LANGFORD: So how many did you throw out?

1563 MR. OAKES: I didn't throw one out. In fact, there aren't that many, first of all, that are between the ages of -- what did we do -- 15 to 35.

1564 COMMISSIONER LANGFORD: But you surveyed 12 to 64, didn't you?

1565 MR. OAKES: No, 15 to 64.

1566 COMMISSIONER LANGFORD: I'm sorry, 15 to 64.

1567 MR. OAKES: In fact, I found some that liked harder-edged rock, but also liked soft stuff.

1568 COMMISSIONER LANGFORD: So you kept them?

1569 MR. OAKES: Yes.

1570 COMMISSIONER LANGFORD: Did you get rid of any of the 26 per cent of the 180 that answered No. 10 by saying they preferred what we are now calling easy listening, or soft, relaxing, easy to listen to music by well-known artists?

1571 MR. OAKES: No, I didn't. After looking at them I didn't see any reason to throw them out.

1572 Some of them are only going to give a few hours tuned to the station. Some of them that like classic rock that are in their 50s really do want softer pop, today's softer hits, this type of thing. So if you are looking at people's musical taste nowadays, they can be quite wide. So I really felt that -- maybe I was trying to squeeze hours tuned out of younger listeners, but from what I found when I put the audience together and took a really good look at it, there weren't that many 15 to 24.

1573 COMMISSIONER LANGFORD: I'm not trying to attack your methods, believe me.

1574 MR. OAKES: No, no, that's fine.

1575 COMMISSIONER LANGFORD: I'm just trying to figure out how they work and give Ms Bell and Mr. Viner a rest. They are always under the gun so we will make you earn your crusts this morning.

1576 Is it fair to say, then, that the 26 per cent is fairly firm, that it is representative, that though there may be some slight anomalies, some of them may prefer what we are calling easy listening as well as stuff that doesn't fit in, they at least do prefer some of what you are calling easy listening?

1577 MR. OAKES: Yes.

1578 COMMISSIONER LANGFORD: They are solid there. Okay.

1579 Could we move to page 8. There are so many pages here I can never remember whether I am referring to your supplementary brief or to the research, but I am referring now on page 8 and page 13, I believe, to your supplementary brief. That really is a discussion of more of the survey that you did, sir.

1580 On page 8 --

1581 MR. OAKES: Excuse me. I may have slightly different pages.

1582 COMMISSIONER LANGFORD: I am just going by the numbers on the pages that --

1583 MR. OAKES: That's okay.

1584 COMMISSIONER LANGFORD: But I will read you -- I am not referring to the survey now, I am referring to the supplementary brief which picks up survey questions. I don't know if you have a copy of the supplementary brief.

1585 MR. OAKES: I'm not sure if I have. No, I don't.

1586 COMMISSIONER LANGFORD: Let me see if I can read it to you and if you need one I'm sure someone can get you one, but they really are just usages of your information so perhaps you will be able to work with it. I see there is one coming over to you now.

1587 MR. OAKES: Thank you. Okay.

--- Pause

1588 COMMISSIONER LANGFORD: If we go to the very bottom of that page -- the first two areas on that page deal with news and softer music generally. Then we go down to what you entitle:

"The diversity that easy listening format offers Halifax radio". (As read)

1589 Global, in its brief, quotes some of your survey in the little box at the bottom of the page which says:

"I want the new FM to broadcast music that is different from music played on Halifax stations." (As read)

1590 69 per cent agree.

1591 My question is I think obvious, but I think sometimes one gets tripped by not asking the obvious: Is that 69 per cent of 26 per cent?

1592 MR. OAKES: Yes.

1593 COMMISSIONER LANGFORD: Okay. Now if I go to page 13 of that same supplementary brief there is a box at the top. This again is answering the:

"I want the new FM to..."

1594 The third box down says:

"...to broadcast music that is different from music played on Halifax stations."

1595 That is quoting only the strongly agree rather than all the agree, and that is 45 per cent.

1596 Is that right?

1597 MR. OAKES: Correct.

1598 COMMISSIONER LANGFORD: So if I read this correctly, 45 per cent, or just under half of the 26 per cent of the 600 people you surveyed, want music that is different from the music they are already hearing.

1599 If I have done my math correctly, 45 per cent of 26 per cent is about 11.7 per cent of the original 600.

1600 Does that sound about right?

1601 MR. OAKES: Roughly, yes.

1602 COMMISSIONER LANGFORD: What I'm trying to figure out here is whether you have made the right choice in a business sense, because first you get 26 per cent or 180 of the 600 surveyed saying they would like some soft music, something of what we are calling easy listening music. Then, of those, fewer than half say they want something they are not hearing.

1603 I guess what I'm asking is: Does that suggest a mass migration to "The Breeze" once it is up and broadcasting?

1604 MR. VINER: We can only hope, but we don't expect that.

1605 Just to give you some context, Mr. Oakes has been doing this for over 25 years and has had a great deal of success in identifying successful radio formats and discovering where niches exist or gaps exist in a market. In fact we have used him extensively in probably our best and most successful application in Kitchener was a direct result of his work.

1606 But to answer your other question directly, the only direction we gave Oakes Research was we wanted an unduplicated format and two came out, in our view. One of them was a youth format, but the share of audience -- or the size of that in our view was not commercially viable.

1607 COMMISSIONER LANGFORD: The size of the audience?

1608 MR. VINER: Yes, just because of the scale.

1609 It was our view that the middle was quite congested with AC and AC look-alikes and we felt, based on the research, that there was a niche in a group that is under-served between 35 and 64. So that is how we arrived at the selection.

1610 COMMISSIONER LANGFORD: Let's look at audience size. I'm going to go to page 9 of your supplementary brief, which is just a matter of flipping over one page, where you say at the top:

"The estimated maximum reach or cume share potential..."

1611 That, for the poor transcribers, is spelled C-U-M-E by the way:

"...of the easy listening format is 26%, 12+ in Halifax CMA. This 26% reach share represents approximately 100,000 listeners 12+." (As read)

1612 Over the age of 12. But if you take the notion that perhaps only those who agree or strongly agree or slightly agree they can't find what they want, we are only dealing with 69 per cent of the 26 per cent. I guess that would represent, if I'm doing my math correctly, 69,000 listeners.

1613 Then, if we take the 45 per cent, which we got from page 13, and these are the people who we may say really want it:

"I want the new FM to broadcast music that is different from the music played."

1614 Those are the people who are your strongest I guess, and there is only 45 per cent of those. We may be down to 45,000.

1615 I just wonder, if you can only count on 45,000 listening, does that make a business proposition? You are the business people and you are the surveyors.

1616 I guess Mr. Oakes wants to go first and Mr. Viner can go second, but I am trying to find out whether you picked the right format.

1617 I know we don't regulate format, but we do look at business case and we do look, in trying to figure out whether we should grant a licence, as to whether people have chosen the right area. Obviously this is a competitive process. As you know, other people are choosing other formats and it would be fairly unfair to us to grant a format that isn't going to make it economically, viably and shut out people who perhaps are proposing a format that would. That is why I'm spending so much time on this.

1618 You can choose any format you want, but having chosen this I am trying to figure out whether this is a format where (1) there is an appetite and (2) whether that appetite is in a demographic where a business case can be made.

1619 So that is where I'm coming from in all these questions.

1620 I don't know if Ms Bell wants to go. Maybe, Mr. Oakes, you could --

1621 MR. OAKES: I would like to clear up some of the things you have said here.

1622 COMMISSIONER LANGFORD: Sure.

1623 MR. OAKES: This is 45 per cent that strongly agree, not just ho-hum.

1624 COMMISSIONER LANGFORD: That is what I said. The 69 is a combination of the ho-hums and the strongs. Right?

1625 MR. OAKES: Right. That is a pretty substantial number from my experience of doing this. You will also get a lot of people who go through a survey and say "Well, I'm sort of" -- especially older listeners that will say "Well, I'm sort of satisfied with what I have now", but when they hear something they haven't heard before they will go and spend some hours tuned to that station.

1626 The 26 per cent, I have pushed those people to the limit. I have given them a number of items to assess their demand on and then finally it is push come to shove, "What one format do you most want on a new FM station?" 26 per cent said that.

1627 When I went back and took a look at the musical styles, very consistent. So I stand by that 26 per cent.

1628 COMMISSIONER LANGFORD: I don't suggest there is anything wrong with the 26 per cent but I am trying to figure out the other numbers in your survey and it seems to me that the only ones perhaps you can count on absolutely are the 45 per cent of the 26 per cent.

1629 MR. OAKES: No, I disagree because they want a station to broadcast music that is different from music played on Halifax radio stations.

1630 COMMISSIONER LANGFORD: Right.

1631 MR. OAKES: That is strongly agree.

1632 COMMISSIONER LANGFORD: Right. That is 45 per cent.

1633 MR. OAKES: Right.

1634 COMMISSIONER LANGFORD: So they are looking for a new radio station.

1635 MR. OAKES: But that doesn't mean -- if you add in the others you have, as you say, 69 per cent. One of the problems with doing this type of research is it is very difficult for the listener to sit back and say "Okay, I have been given this short, brief definition of a format. Would I want it?" Many people will want it when they hear it.

1636 This 45 per cent strongly agree tells me that that is a huge number of people, not a small -- 45 per cent of the whole population plus 45 per cent of who we have earmarked that are absolutely pushed to the wall saying that they want a new, softer FM.

1637 COMMISSIONER LANGFORD: But 45 per cent of the whole population gives you no comfort because that would make up everybody, people who want only hard rock all the time, people who want -- correct me if I'm wrong. That means everybody who would like to hear something different. We have to take the 45 per cent of your 26 per cent to get the relevant number, do we not?

1638 MR. OAKES: Right.

1639 COMMISSIONER LANGFORD: That is 11.7 per cent of the 600 interviewed. Can you build a business case on 11.7 per cent?

1640 MR. OAKES: I would challenge your 11 per cent. They were asked, and I will read this to you --

1641 COMMISSIONER LANGFORD: I think we do. Mr. Chairman, do we have time?

1642 He is not aging too quickly, he thinks we have time.

--- Laughter / Rires

1643 COMMISSIONER LANGFORD: What number are we going to now?

1644 MR. OAKES: Let me get the actual question out and I will read you the question.

--- Pause

1645 MR. OAKES: I am going to read you the whole question. I think it will help.

1646 COMMISSIONER LANGFORD: This isn't the three-page one, is it?

1647 MR. OAKES: No, it's not.

1648 COMMISSIONER LANGFORD: Okay.

1649 MR. OAKES: It is relatively short.

1650 COMMISSIONER LANGFORD: Okay. Go ahead.

1651 MR. OAKES: Okay.

"I will read you a few statements describing programming approaches the new FM station could take. Please tell me if you agree or disagree with each of the following statements". (As read)

1652 The first statement is, blah, blah, blah. I will go down to the one that is pertinent to us, which is:

"I want the new FM station to broadcast music that is different from the music currently played on Halifax stations." (As read)

1653 That is not necessarily mutually exclusive with wanting a station that plays soft music.

1654 COMMISSIONER LANGFORD: No, but a general -- an answer yes to that general question could include people in your group, people in -- well, in Mr. Viner's group, in the Global CanWest group, the people who want easy listening, but it could also include, could it not, people who want something completely different from easy listening.

1655 MR. OAKES: Sure.

1656 COMMISSIONER LANGFORD: In other words, people who just want something different.

1657 MR. OAKES: Right. No question about that.

1658 All that is designed to do is get some kind of a sense of: Is there anything missing in the market.

1659 COMMISSIONER LANGFORD: So we now realize that a number of people feel there is something missing in the market.

1660 MR. OAKES: Right.

1661 COMMISSIONER LANGFORD: We now realize as well that 26 per cent of those people, coming from your Question 10, think that what is missing -- well maybe, because they would like to hear more, they would prefer a new FM station in Halifax specializing in soft, relaxing, easy to listen to music by well-known artists.

1662 Is that correct? 26 per cent there.

1663 MR. OAKES: Right.

1664 COMMISSIONER LANGFORD: Is that the bottom line of your -- is that the lowest number of the people who want -- I'm sorry, I'm having trouble framing this question.

1665 Is that the lowest possible cumulative number of people in this market seeking the type of music offered by the Global CanWest application today, or can we ratchet it down lower by looking at the 69 per cent of the 26, the 45 per cent of the 26? I am not trying to ratchet it down lower, but I want to find out where the baseline is.

1666 MR. OAKES: I would say that is the baseline.

1667 If somebody is being relatively served in this market and feels that they are getting -- that they don't want something necessarily different, that the music they have here is fine, that doesn't mean they are not going to listen to the station.

1668 MR. VINER: Perhaps I can get us out of this research and go to your underlying direction, and that is: Do we have a business plan that makes sense based on this format.

1669 I would like to throw it over to our VP Finance who will talk a little bit about the number of hours tuned that our plan was based on and how that ratchets up over a number of years.

1670 But I think it is worth repeating to you what Mr. Oakes said, that in his experience doing this this is quite a substantial number and this is certainly a number of which you would have no difficulty rationalizing a format on.

1671 Meanwhile, I think, Katherine, if you have your numbers ready.

1672 MS BROWNE: Yes.

1673 MR. VINER: Thank you.

1674 MS BROWNE: The 26 per cent that David is referring to and that you are referring to is the maximum reach number that we could potentially reach at some point in the license term. That translates to about 15 per cent hours tuned. Correct?

1675 MR. OAKES: Right.

1676 MS BROWNE: If you look at Schedule 13 of our business plan, we never get there. We have taken a very conservative approach to this, understanding that the maximum reach potential that is shown in the research would be Nirvana, so to speak, and we have not built our business plan on the highest case scenario.

1677 If you look at our answer to Question 4.1, the marketing information, in the first year we are anticipating a potential reach of 50,000, which is only a 14 per cent reach which compares to David's 26 per cent. So we enter the market at 7 per cent hours tuned versus the maximum potential of 15.

1678 So we have factored in a considerable amount of conservatism into our business plan, understanding that the 26 per cent that came out of the research points to the maximum potential in the marketplace and understanding that a new entrant is not going to reach that potential. In fact, we don't reach that potential throughout the licence term and have built a reliable business plan, we believe.

1679 MR. VINER: That is what we have been doing in all of our radio business plans. We have been very conservative. We realize that this is an art as much as a science and we want to be conservative. We have not built a business case on what could be termed optimistically interpreted numbers. Frankly, all research is that. It depends on how you want to look at it.

1680 COMMISSIONER LANGFORD: Just listening to the numbers you gave me which said 7 per cent rather than 15. I can't find that in front of me but I think I have it in memory. Does it not ratchet, though, over seven years to 15 per cent?

1681 MS BROWNE: It increases over seven years to 13 per cent.

1682 COMMISSIONER LANGFORD: It's 13, is it? That's funny, I wonder why I had 15.

1683 MS BROWNE: It is Schedule 13 that you are looking for.

1684 COMMISSIONER LANGFORD: So you are basically saying to me that the 26 per cent is firm, the 26 per cent cume, and the 15 per cent reach. You are never, even over the whole seven years, expecting to get the full 15 per cent reach. You are expecting to go as high as 13.

1685 Is that right?

1686 MR. VINER: We are saying our business plan is built on that.

1687 COMMISSIONER LANGFORD: Exactly.

1688 MR. VINER: We are saying that 26 per cent in our view is potential. We hope we can do 15 or north of 15, but we are not predicating our business plan on it.

1689 COMMISSIONER LANGFORD: Let me clear this up. Is the number 13 that you expect to reach in year seven half of 26 or almost all of 15? Which number are we using?

1690 MR. VINER: I think it is -- I don't really think it matters either, to be honest, but I think it is closer to a discount from 15, which is a number we felt more comfortable with.

1691 COMMISSIONER LANGFORD: Which is your reach number.

1692 MR. VINER: That is correct.

1693 COMMISSIONER LANGFORD: So essentially you are saying you have built a conservative business plan -- I don't want to put words in your mouth so do correct me if I'm wrong -- because you are starting off with expectations of obtaining a 7 per cent share, climbing only to 13 in the seven years, whereas your research indicates that the market share open to you is about 15 per cent.

1694 Is that correct?

1695 MR. VINER: That is correct. The possible market share open to us is quite a bit larger, but there are other factors that are involved in making a conservative business case. How competitive is the market going to be? How many licences are going to be awarded?

1696 Our experience in the past is we prefer to be conservative and surprise ourselves on the upside. We are trying to put together a realistic business case. We have to sell this business case to other people and our experience is one that is conservative is a much more prudent way to go.

1697 COMMISSIONER LANGFORD: I have a few more questions for Mr. Oakes, but we will rest him for a while and stay with business, because it is your application.

1698 MR. OAKES: Thank you for that. Thank you for that.

1699 COMMISSIONER LANGFORD: We will maybe come back to him. Let's talk about business, then, a little bit.

1700 You say your numbers are conservative, yet by year seven you are looking at owning almost everybody in this area who is interested. We heard a number of definitions of kind of what soft music is from other applicants and from yourself, but why will advertisers be attracted to this share of the market you have, which is basically 35 to 64? What is it about that market? What kind of advertisers are they going to attract?

1701 Is there enough money there? We are all told that the big money is in sort of the younger demographics, "shop 'til you drop" every weekend, and geezers like Colville are just sitting around waiting for the golf course to lose its snow cover. That will be the last, David. I promise that is the last.

--- Laughter / Rires

1702 COMMISSIONER LANGFORD: It is starting to hurt him. I won't do any more.

1703 But what are you going to market to us, if I may put it that way?

1704 MR. VINER: Let me start off and then I will ask Ken Johnson to add. He is really our advertising and marketing expert.

1705 In fact, while it is true advertisers were somewhat obsessed a decade ago and 15 years ago with what I can call an 18 to 34 market, the baby-boomers have come through the -- the pig has come through the python. There are more and more products being directed and actually originated for an affluent 50-plus group. Some of the obvious products are financial services, travel, health-related products.

1706 One of the reasons that easy listening in the past was unsuccessful is that it was difficult to interest kind of youth-obsessed advertisers who were after beer drinkers and cola drinkers to pay attention to a plus 50 audience. Also, frankly, they weren't quite as affluent as they are now.

1707 So we are confident in the market. We have some experience in it in television, but I will let Ken elaborate.

1708 MR. JOHNSON: As Peter said, many advertisers now are starting to gear products specifically to the baby-boomers and we see most of our listeners being from the baby-boomer sector. It is a growing sector. It is about to enter another phase.

1709 We have seen products from the package goods people being directed to that group. Certainly there are sectors such as the financial sector, the upscale car sector, the health sector are all starting to spend money targeting towards this group.

1710 As Peter said, our experience, basically with one of our specialty stations, Prime TV, which is geared towards this specific audience, has had success with both viewers and advertisers.

1711 COMMISSIONER LANGFORD: But isn't this market rather flooded with formats up in that area, so that even though you found a possible section of the market, possibly as big as a quarter or a tiny bit more, 26 per cent, that may be interested in your music, surely no one here would argue, I would hope, they are going to be interested exclusively in your music because there is, as someone described earlier, bleed among the different formats.

1712 There are a lot of stations right now appealing to that same, shall I call it bolder format, certainly above 25, above 30, in fact above 40 years of age. All but two of the radio stations here in Halifax seem to have picked out that same demographic.

1713 MR. VINER: I don't think that is quite correct. In fact, as we heard this morning I think, the congestion in the market is around 25 to 49 or 25-54.

1714 This is a station that will appeal -- we say 35 to 64, but essentially it is a 45-plus station. If you take the AM stations out of the mix, which have some severe disadvantages in terms of music, and you take the CBC out, then it would be our view we would be the only station in the market targeting the upper end, the 35 but more probably the 45 to 64 market.

1715 That is a market that is growing. We are confident that over the course of the seven years, with the uniqueness of the format -- and this is a different format, it is not the old easy listening -- we are confident we can attract a substantial audience and significant advertisers. We have shown that in television.

1716 The other thing is that this is a robust market, both in terms of radio and in terms of its growth. A station with a smaller share can exist in this market, in our opinion, and in fact once you get past the mainstream kind of original six-type stations you are, by definition, in some sort of a subset. You have to have the wherewithal and the resources to sustain it, because it will take slightly longer to develop, but I think when you are looking at adding diversity to the market as an applicant, that is simply inescapable.

1717 So you are going to be dealing with a smaller share, you are going to be dealing with a format that takes longer to develop.

1718 COMMISSIONER LANGFORD: But you have taken out the CBC, to use your example, obviously because they don't sell ads, but people do listen to them. So what guarantees can you bring to the people you are trying to sell ads to that you are going to have a large enough audience and an affluent enough audience?

1719 How do you do that at the beginning? Certainly as you get farther in you will have statistics, but how do you do that at the beginning?

1720 MR. VINER: Certainly there are no guarantees. We will be in the same position as any other successful applicant in trying to sell an audience based on estimates, but there are ways in which you can sell it.

1721 Did your promotion create traffic? Is there kind of a buzz around town? There are a number of ways to do it.

1722 But in fact like most new entrants in a market, we don't expect to capture 100 per cent of anybody's listening. We expect to share listening, sometimes on a second and third preference basis with the CBC, with stations that generally are broadly or have a portion of their audience in our target group.

1723 We will know within six months whether we are successful or where it needs work, just like every other applicant. Then the BBMs come out, they will be telling us what kind of success we have met with.

1724 COMMISSIONER LANGFORD: You will be a stand-alone station and we have heard this morning and we have heard yesterday that some of the other applicants have concerns about that because they see marketing groups here and don't see how they can compete.

1725 MR. VINER: I think that is a concern, but I don't view our application as a stand-alone application. We are a successful television operator in the market, we have been here for 15 years. We know the advertising community, we know the media community. We are confident we bring some advantages with that in terms of the ability to promote on the air, cross-promotion. We know who the smart radio operators in the market are.

1726 So I don't view ourselves as being naked, stand-alone at all. We have a very different circumstance here.

1727 COMMISSIONER LANGFORD: Can you help me through that? You do have a television station here, 15 years old you said this morning. I guess The National Post is sold here so you have some opportunities there.

1728 Give me a little idea about how the synergies -- as the favourite word of the day seems to be -- how would they work for you?

1729 MR. VINER: I am going to ask that to be approached from two angles, financial, because there are some financial back shop advantages, and also promotion and cross-promotion.

1730 The Post doesn't bring any advantage. The Post sells about 5,700 copies in Halifax. We don't have the ability to cut in on a regional basis. So it doesn't bring any advantage.

1731 COMMISSIONER LANGFORD: So The Post is The Post. Whatever comes out everybody gets the same paper, is that it?

1732 MR. VINER: In the Atlantic provinces it is.

1733 COMMISSIONER LANGFORD: No inserts or anything?

1734 MR. VINER: Yes, but I wouldn't -- I'm not sure that I would be putting it in 5,700. I think we can find more efficient ways to do it, let me put it that way.

1735 COMMISSIONER LANGFORD: Okay.

1736 MR. VINER: First of all I will ask Katherine to address the financial advantages of having a television station in the market.

1737 MS BROWNE: Thanks, Peter. In our business plan we have contemplated some back office synergies, mainly in things like HR, legal, administrative costs, regulatory, things like that. We have assumed they would be about $300,000 to $400,000 per year annually.

1738 But I think the bigger opportunities are what Patricia is going to tell you about now.

1739 MS GALLAGHER: The third party dollars that Katherine has mentioned will be used for a standard cash media buy. These will include out of home, obviously, bus shelters, billboards, interior busboards and even, hopefully, a splashy bus wrap. It would also include print.

1740 More importantly, in conjunction with television we have devised a Plan A and a Plan B. Those are dependent upon when the station might launch.

1741 For example, if we were gearing for a September launch, which will allow us the terrific temperatures that we have of a Halifax summer, we could be looking at an outdoor concert at Albany Landing or in Parade Square featuring local entertainers and a Maritime headliner.

1742 Here is our big idea for the radio station called "The Breeze" with a demo of 35-plus in the sailing community. Imagine, if you will, a ship sailing around the Halifax Harbour with the topsail flying "The Breeze" colours. We think that would be pretty exciting.

1743 Additionally, if we were to launch in January, that can only mean one thing in this market, the Herald Holiday Parade of Lights. It is exactly the right demo for "The Breeze", families and adults 35-plus, a colourful Christmas parade winding through the streets of downtown Halifax and of course our float would be the winning entry.

1744 We have quite a number of additional marketing and promotional ideas, but since we can't attach a copyright logo we don't want too many of them floating out there to be scooped by the competition.

1745 Just a really important note, those third party dollars being budgeted will be spent with either Plan A or Plan B, so there will be money put back into the community.

1746 COMMISSIONER LANGFORD: That is interesting, but I'm trying to figure out how that would -- would that somehow be working with the television station at the same time?

1747 MR. VINER: I think there are two things. First of all, the television station obviously after 15 years has developed tremendous relationships in the community so they are able to identify opportunities for us.

1748 Katherine outlined the magnitude of the budget, which is the budget goes to third parties. That does not include any kind of internal contra or barter arrangements we would make with the television station, which does give us an advantage.

1749 Thirdly, the opportunity to showcase talent and perhaps co-promote cultural and arts events that made sense for both through the noontime television show or in fact on public service and promotion spots on the television station.

1750 MS GALLAGHER: I can actually give you a more specific example. We have been a partner with the Atlantic Jazz Festival for 10 years. Last year we ran a series of television profiles on Canadian entertainers who were here for the Jazz Festival.

1751 How we might work with "The Breeze", we can actually enhance the television marketing in a number of ways.

1752 One is we can obviously expand the audience base.

1753 Secondly, we can produce on-site on-location interviews and profiles of the artists with a distinctly local perspective.

1754 We can provide additional exposure for the work of these musicians, and because radio is so topical and reactive we can actually be at the Jazz Festival and talk about that.

1755 Furthermore, as Peter was saying, we have a program called "Global Noon". Every Thursday is entertainment day where we feature specifically east coast musicians or Canadian musicians who happen to be in town at the time. We have also prerecorded segments as well.

1756 So we have lots of opportunities that way, plus we have the medium itself, the opportunity to run stand-alone promotions for "The Breeze" on Global as well.

1757 COMMISSIONER LANGFORD: Have they been effective, for example, with your jazz station in Winnipeg? Is that the same approach you have taken there?

1758 MR. VINER: Ross has been living that so I will ask him to comment.

1759 COMMISSIONER LANGFORD: Give the poor man something to do here today.

1760 MR. PORTER: How it proved to be most beneficial is with the talent competition that we are running right now. The television station in Winnipeg has provided us with ample opportunity to spread the word so that we spread it outside of our core demographic so that entertainers and performers outside of that have an opportunity to be aware of it.

1761 COMMISSIONER LANGFORD: Looking at some of the programming you have coming up, I will have some questions about news in a minute or two but you do talk about a three-hour folk and Celtic show and a two-hour jazz. Has the appetite for that come out of Mr. Oakes' research or has it come out of your experience from having a television station here in the Maritimes?

1762 MR. VINER: I will let Ross begin that answer.

1763 MR. PORTER: The concept of the folk world, the Celtic program was a no-brainer for us just given the make-up of the community that we would be broadcasting from. The jazz portion of that was because some of the programming that we were going to be featuring day to day would be jazz-oriented, jazz-flavoured.

1764 COMMISSIONER LANGFORD: Would it be the same programming that you would have in the Winnipeg station --

1765 MR. PORTER: No.

1766 COMMISSIONER LANGFORD:  -- and just played here or would it be totally different programming?

1767 MR. PORTER: This would be programming that would come from "The Breeze". The only sharing might be if there was a record, a CD that was attracting a fair amount of attention in Halifax, I would certainly hope that the people here would make us aware of it in Winnipeg so that we could promote entertainers, musicians from this community across Canada.

1768 COMMISSIONER LANGFORD: Your market study shows an appetite for community and entertainment information. Is that what they are going to get is the three hours of folk, Celtic and the two hours of jazz, or are you going to have kind of Entertainment Tonight-type programming as well built into "The Breeze"?

1769 MR. PORTER: Absolutely. Are we still talking about the specialty programming?

1770 COMMISSIONER LANGFORD: Absolutely, yes.

1771 MR. PORTER: Oh gosh, no. This is the programming that excites me the most, give my point of origin as a broadcaster. There would be interviews incorporated into this.

1772 For instance, in the jazz program Jeff Goodspeed might be one of the guests. He could be talking about a recent trip to Cuba or talk about winning his recent award at the East Coast Music Awards.

1773 We could have Jamie Gattie, who is an exceptional base player that is based here. If it was around Christmas we could have him talking about his Christmas CD and about the opportunity that he almost had to play with the Rolling Stones.

1774 The folk, world beat, Celtic program has all kinds of opportunities. It could be For The Moment dropping by to play tracks or to talk about their most recent album. It could also include Natalie MacMaster coming by to feature tracks from a new release, or we could ask Mary Jane Lamont to come by and what are the five essential Gaelic CDs that you should have in your record collection.

1775 COMMISSIONER LANGFORD: This would be part of these two shows?

1776 MR. PORTER: Yes.

1777 COMMISSIONER LANGFORD: Would there be more on top of that?

1778 MR. PORTER: Outside of the --

1779 COMMISSIONER LANGFORD: I'm not trying to be picky here, I'm just trying to make sure I understand your program.

1780 MR. PORTER: No, no, I love this.

1781 So outside of the specialty program?

1782 COMMISSIONER LANGFORD: Yes.]

1783 MR. PORTER: Oh, yes. We would have guests that would pop up throughout our programming daily. For instance, if Mary Jane Lamont had a new album that had come out, we might have her as a guest on the morning program or we might have her as a guest on the afternoon program.

1784 It wouldn't be limited just to entertainers. If the Fringe Festival was kicking off we might have the artistic director of the Fringe Festival come on, or we might have a couple of people from the cast of CATS come on and be guests on the programs.

1785 COMMISSIONER LANGFORD: I may have missed it, but you do talk in general terms. There are two areas in your application where you talk in general terms about this type of programming, community programming, entertainment programming and about news, but I didn't find there was a huge amount of hard information about actual minutes and hours and how much of that there would actually be there.

1786 I may have missed something quite obvious and if I did I apologize.

1787 MR. VINER: You were probably still in the research.

1788 COMMISSIONER LANGFORD: It's okay for me to pick on Colville, but it is not prudent for you to pick on me.

--- Laughter / Rires

1789 MR. VINER: Perhaps Ross, if you could assist us by taking us through the news.

1790 MR. PORTER: Sure. The news, there would be major seven-minute news casts seven times a day. There would be three in our morning drive, one at noon and three in our afternoon drive. Each news package would be approximately seven minutes in duration. It would include regional, national and international news, sports, business and travel, entertainment news.

1791 There would be minor three-minute newscasts that would happen six times a day at 9:00, 10:00, 11:00, 1:00, 2:00 and 3:00.

1792 COMMISSIONER LANGFORD: You talk about it being more sophisticated than other people's news. Can you put some meat on that skeleton?

1793 MR. PORTER: From the research that we have done in the Winnipeg station in terms of -- and I see some duplication in terms of the target demos that we are after and have achieved in bringing to the fold in Winnipeg and what is happening here in terms of this is an audience that likes to go to the theatre, this is an audience that goes to move movies than a good portion of the population. This is an audience that -- I'm trying to think of a parallel. If they were going to buy CDs they would tend to go to Indigo rather than Wal-Mart or HMV.

1794 COMMISSIONER LANGFORD: They eat with a fork rather than a knife is what you are telling me. Okay.

1795 So how do you appeal to them? How do you write the news to that level?

1796 MR. PORTER: Well, first of all you look at the stories that are relevant. Business is an interesting part of this, the business news.

1797 You look at the stories that are relative to the community that they live in. If there is an entertainment news story that is happening, you would first of all look at the relevant areas that are appealing to our audience.

1798 Something might be happening at the Neptune Theatre, they might have a deficit one year and that would be a news story that we would certainly cover. Or they might be in the black, we would certainly cover that too.

1799 The Jazz Festival announcing their lineup would certainly be a news story that we would cover.

1800 COMMISSIONER LANGFORD: Talking about who would do that -- I'm sorry, Mr. Viner, did you have something more you --

1801 MR. VINER: No. I just wanted to -- I think it is interesting to bear in mind this is a music application and as such you present enough news and surveillance so that your audience doesn't feel they have to go elsewhere to get it.

1802 But that is not our primary reason for doing it, we just want you as a listener to feel informed. In fact, this is a group that likely gets most of its information from print, still a loyal newspaper reader. So I think we have thought it out carefully in terms of trying to find content that is compatible with the group, but we don't claim in any way to be a news station.

1803 COMMISSIONER LANGFORD: How do you keep them, though, from going to the CBC at 6:00, or do you just assume they will and hope they will come back?

1804 MR. VINER: You probably don't. I think it is the same problem television broadcasters had for years: How do you prevent people from going to the CBC television at 6:00. In fact, you don't. Over time fewer might go and they might go for less time, but in fact I would expect our audience composition to be CBC listeners and in fact go to the CBC as their primary source of news.

1805 COMMISSIONER LANGFORD: Getting back to your news group, you say in your application -- and again if I have missed something I apologize, but what I read in your application is that you will have a separate news director thereby meeting that kind of Winnipeg test of sensitivity.

1806 It is amazing, we all want synergies and as soon as you get some synergies we accuse you of having too many synergies. We will try to walk that line.

1807 You have a news director and your talk about journalist announcers, but you don't tell me how many you will have or when they will work. I have no idea of the staff of the station I guess. It would help me to have some idea of that.

1808 MR. VINER: It is there. I'm not positive of the schedule number, but perhaps in terms of size I could ask Katherine, both in terms of the total station but also in terms of news, to go through it with you.

1809 COMMISSIONER LANGFORD: I'm sorry, then, I missed it so I would appreciate having it, Katherine, if you don't mind.

1810 MS BROWNE: No problem. Actually, we didn't give you the breakdown of the staff in the application.

1811 COMMISSIONER LANGFORD: Oh, good, because I'm not that many years behind Colville you know.

1812 MS BROWNE: In total we are looking at 22 full-time equivalents to the station. Dedicated to news directly we are looking at four full-time equivalents.

1813 Did you want a further breakdown of the 22?

1814 COMMISSIONER LANGFORD: If you have it we will take all we can get and use it against you when the time comes. No, I'm joking.

--- Laughter / Rires

1815 COMMISSIONER LANGFORD: Sure, information is always valuable stuff.

1816 MS BROWNE: We have 12 positions dedicated to programming. Within those are the four news people. We are looking at four people dedicated to local sales, two and a half to local marketing and promotion, and the balance are technical, traffic and administration.

1817 COMMISSIONER LANGFORD: None of those will be shared with your television. Will you be in the same building as your television station, do you know?

1818 MR. VINER: No, we will not.

1819 COMMISSIONER LANGFORD: In terms of staff.

1820 MR. VINER: This is the dedicated staff.

1821 COMMISSIONER LANGFORD: Why is that, by the way? Why wouldn't you be in the same place?

1822 MR. VINER: First of all, there is no room is the practical answer. We haven't done it in Winnipeg either where there is room.

1823 I think if it made sense and there was room and we were in the right location, I think we would do it.

1824 COMMISSIONER LANGFORD: I have seen the CHUM building in Ottawa, because I live in Ottawa, and it is an interesting experiment having the radio sort of up above, up in the kind of mezzanine, and the television going on on the floor down below. I don't know what it's like as a place to work in, it may be quite frenetic at times, but they do work it all out of the same building there and I haven't seen any fist fights breaking out yet so I guess it can work for people.

1825 I am almost finished. I want to get back a little more on the format questions that I was discussing earlier with you, Mr. Viner, Mr. Porter and a little bit with Mr. Oakes trying to figure out how we got there.

1826 Do you know of anywhere who has tried this same type of experiment lately? We know the history. You refer to it in your brief of the history of the unfortunate earlier experiment with a slightly different type of easy listening, but is anyone else trying this anywhere else in Canada or the States and are they trying it successfully?

1827 MR. VINER: Let me start off, if I can, before I turn it over to David and then to Ross.

1828 The easy listening that we as plus-45ers know of would also -- and that is 80 per cent instrumental, cover hits by Ray Coniff and the singers, et cetera, would not work. It didn't work particularly well then because it was hard to find advertising support and, frankly, would not work today.

1829 What we are talking about -- and I wish we had come up with a new exciting package for it -- is a very different service. It is 80 per cent vocal, 20 per cent instrumental, it is a considerable amount of current, so it is very different.

1830 It is not unlike seven years ago or eight years ago I had never heard of the term "smooth jazz", but now it is popping up all over the place. I had never heard the term of "urban". It was "dance" at that time and "urban" kind of was spawned out of that.

1831 So the point is that these are all slightly different news formats.

1832 David has quite a bit of experience, he consults all over North America, so I will ask him to say his comment on the formats and then I will ask Ross perhaps to elaborate a little bit more on why ours is different, both in terms of oldie easy listening and in terms of the other applicants.

1833 MR. OAKES: There isn't any station programming the format the way we have exactly. I guess the closest you could get would be American stations that would do adult standards, but that is only part of what we do.

1834 In America adult contemporary has been cut up into various niches and there isn't as much soft adult contemporary as there used to. That is part of what we do.

1835 I guess the answer is not really.

1836 Ross, do you want to chip in?

1837 MR. PORTER: I wanted to add to some of the things that Peter had to say about the contrast between the old format and the new format.

1838 If we can go back 20-30 years, I grew up in Ottawa. The station that my parents listened to was CFMO. That was pretty much the prototype of easy listening at that point. It was predominantly an instrumental station, I think it was an 80 per cent instrumental, 20 per cent vocal. It was a station that my parents enjoyed listening to. They liked instrumental music because they came out of the big band era and the predominant flavour in big band music was instrumental.

1839 It was very passive, very soothing. Someone else almost always wrote the music that these artists were playing. The artists had virtually no profile. The bands were made up predominantly of anonymous session musicians and it was listened to as background musak. Some of those artists included James Last, Montovani, Percy Faith, the Ray Coniff Singers and Paul Mauriat.

1840 The new easy listening truly reflects today's audience and its marketplace, musicians who write their own songs and play them, but we are also seeing many artists rediscovering the standards, the songs of the past.

1841 Unlike many of the artists from 30 years ago, these performers have profiles and stories to tell in the music world. It is primarily vocal instead of instrumental so you are seeing 80 per cent vocal, 20 per cent instrumental and it is a far more vibrant and engaging style of music that people like to listen to in the foreground.

1842 You find a great deal of cross-pollenization. People's record collections today bleed into many styles. If you go to someone's record collection you would probably see a Sting album and you would see something by Branford Marsalis and you would probably see the new Lucinda Williams album. There is a great deal of cross-pollenization that is going on.

1843 COMMISSIONER LANGFORD: Sometimes you have to go to their hard drives to find out what they are really listening to, but I take your point.

1844 MR. PORTER: If I could just add one more footnote to what I was saying, I just wanted to give you some more examples of the artists that would be included in the new easy listening, and they would be Amy Skye, Matt Dusk from here, Doug Mallory, Bill Stevenson, Johnathan, Laura Smith, Lisa MacDougall, Rita MacNeil.

1845 We are finding that there are a great number of artists out there who sonically live in the same place as a Norah Jones and have just as much talent but they don't have the benefit of the star-making machinery of a Blue Note/EMI label behind them so that they are -- Norah Jones is a good example. That was 17 million copies that was sold around the world. But Laura Smith in this marketplace has just as much talent as Norah.

1846 So it is important. These artists aren't getting airplay anywhere in Canada.

1847 COMMISSIONER LANGFORD: There is a little station -- I shouldn't call it little, but a low-power station here called CFEP-FM, I think -- am I right -- and they play what they call "easy listening". Have you had an opportunity to listen to their station?

1848 MR. PORTER: Yes, I have.

1849 COMMISSIONER LANGFORD: Can you tell me how you will be different?

1850 MR. PORTER: First, it was difficult to receive them because I think they really only come into Dartmouth. But I stood with my hand on the radio and I am a fairly big antenna so I was able to receive them yesterday.

1851 What I was listening to was the easy listening of yesterday. It was the flavour that CFMO would have been programming decades ago.

1852 COMMISSIONER LANGFORD: Gord Atkinson's Show Bill or whatever.

1853 So you wouldn't advise us, then, to look too hard at their success or lack of success. They are getting a 1.5 per cent share, they are not totally without some impact, but you wouldn't advise us to look at that as kind of precedential to what you people are planning to do?

1854 MR VINER: No, I wouldn't. It is a community channel, it has very limited and restricted reception, and it is playing a format that is nowhere close to ours. They are playing the format, as Ross said, that was our parent's easy listening. It is not the format that we are proposing.

1855 COMMISSIONER LANGFORD: Those are my questions, but some of the other Commissioners or counsel may have something for you. Thank you, Mr. Chairman.

1856 THE CHAIRPERSON: Thank you, Commissioner Langford. Commissioner Williams.

1857 COMMISSIONER WILLIAMS: Good afternoon, panel.

1858 MR. VINER: Good afternoon.

1859 COMMISSIONER WILLIAMS: Why has Global chosen to apply for a non-specialty FM easy listening format?

1860 MR. VINER: It came out of the research. We wanted to appeal to the broadest possible audience and we wanted to have -- in order to have a licence that was commercially viable. So we looked at the formats that lend themselves to Category 3 or specialty licences we felt wouldn't attract enough audience and were too niche for this market and, frankly, you would never make money with them.

1861 COMMISSIONER WILLIAMS: Assuming your application was successful in obtaining a licence for the Halifax marketplace, would your listeners be able to count on "The Breeze" maintaining its format for at least the full first term of its licence?

1862 MR. VINER: We have a unique format, in our view. We are committed to it. We don't seem to be able to articulate it at hearings, but we are getting better.

1863 We are committed to it. We have the financial resources to make it work. We have the television station and our advertising relationships in the market. We believe this is the format of the future. The baby-boomers are just going to expand that audience and it takes us out of the congestion.

1864 Part of the reason Maritime wants another licence is they have two licences that are slightly old and they are going to go into the middle again. We are just going to be just a little bit north of that.

1865 COMMISSIONER WILLIAMS: At the very real risk, building on Commissioner Langford's extensive record and questioning in this area, to help that in a one word answer, please: Is your format and business plan financially viable for the long term?

1866 MR. VINER: Absolutely.

1867 COMMISSIONER WILLIAMS: Thank you, Mr. Viner and your team of Global panellists for your interesting presentation. Special recognition to Mr. Porter on his achievement of Broadcaster of the Year Award last week at the National Jazz Awards.

1868 I have no further questions, Mr. Chairman.

1869 THE CHAIRPERSON: Commissioner Cram.

1870 COMMISSIONER CRAM: Thank you. Just some easy questions I think.

1871 How much of your programming will be Celtic, folk, jazz and world beat music

1872 MR. PORTER: We are looking at approximately 20 per cent of that.

1873 COMMISSIONER CRAM: True to yourself, Mr. Porter, you said that there was no demand studies for the Celtic and folk in Mr. Oakes study and you said the demand was not to be -- it is sort of like it goes without saying that there is a demand here.

1874 I guess my question is: What was your purpose? I thought your purpose and I thought what your study said was the people wanted music that wasn't otherwise on stations here in Halifax. Although I haven't listened to them all, my guess would be, given that it is Halifax, there would be a fair bit of local, Celtic and folk music from local artists.

1875 I guess my point is, you are at cross-purposes. You are saying the demand --

1876 MR. VINER: Can I just sort of start off and help out a bit?

1877 COMMISSIONER CRAM: Yes.

1878 MR. VINER: The reason we chose those subsets, if you will, are because there is much of it available locally, but the overriding reason -- there are two overriding reasons, are that it is compatible with the format that we selected, the general, if you call it the 80 per cent or the 70 per cent, it is compatible.

1879 It also is not necessarily selections that are played in the market. They may well be artists that are played in the market, but they are not songs necessarily played in the market.

1880 The third thing is that if we are trying to appeal to the broadest possible group we have to have something that is a bit different. We have to have a diverse music base. The difference between ourselves and an AC is that (a) repeat factor, we repeat them a heck of a lot less; and (b) the size and scope of your library. So if you are going to try to appeal to somebody who has relatively Catholic taste in music, you have to blend other elements because, frankly, all of the main core natural formats are occupied.

1881 I'm sorry, Ross.

1882 COMMISSIONER CRAM: So notwithstanding the fact that it may be played elsewhere -- what I'm trying to get is the purpose. If you go by your study, and you were talking, Mr. Viner, about that is why you didn't go for a specialty format, that you were bound by your study, then you would want to play genres that are not anywhere else. So you add these to broaden the base of appeal?

1883 MR. VINER: That is not quite -- yes, in part. If we are talking about a style of music and a style of presentation, it could well be artists or songs from their repertoire that aren't currently played. That doesn't mean the artist won't necessarily be played.

1884 Ross, you are the expert, I don't know why I am answering.

--- Laughter / Rires

1885 MR. PORTER: I think first of all we are working with the assumption that they are getting a great deal of airplay or exposure in this community and I am not aware of that. I have spent a considerable amount of time over here -- or in Halifax over the last 10 years and if I hadn't taken a job with Global this is one of the cities that I was considering moving to. So outside of University Radio and the CBC, I am not seeing a lot of this  -- or haven't heard a lot of this music being exposed in the community.

1886 Additionally, when I have looked into BDS and checked the rotation on some of the pivotal acts in this community, I am talking about the Rankins, these artists don't show up.

1887 COMMISSIONER CRAM: Thank you.

1888 MR. PORTER: Okay.

1889 COMMISSIONER CRAM: Mr. Oakes, then why didn't you include this genre in your study?

1890 MR. OAKES: We are a bit limited, first of all, with the research of how much we can ask.

1891 Secondly, it is not regarded as a mainstream and my client wanted mainstream out of the research and not specialty.

1892 COMMISSIONER CRAM: So that would also go for world beat music too --

1893 MR. OAKES: Right.

1894 COMMISSIONER CRAM:  -- for which there is no demand study.

1895 You did do jazz, though, didn't you?

1896 MR. OAKES: Yes.

1897 COMMISSIONER CRAM: Do I read your study to say, at pages 12 and 13, that the demand for jazz -- and you only asked "soft, melodic jazz music", is 13 per cent?

1898 MR. OAKES: Yes.

1899 COMMISSIONER CRAM: So they would be playing the five top popular ones out of your list that range in acceptability or they agree they would like it, 77 per cent to 53, and then you are adding jazz for which there is a 13 per cent appeal.

1900 Is that correct? You say the jazz appeal was 13 per cent.

1901 MR. OAKES: Overall, yes. Among our particular audience it is higher. That is exactly what we are trying to do. You have hit on the point. We are trying to create a format that is going to be as broad as possible considering the size of the market and considering the competitive environment.

1902 So we are trying to take, through the survey and through Ross' expertise, if you will, shoulder subsets that are compatible both in terms of style and in terms of sound and try to build as big a coalition, as big a blend as we can possibly, because the middle has been well staked out and they are very successful and they are good at it.

1903 COMMISSIONER CRAM: I hear you, Mr. Viner and I listened to what you said in the video. They were talking more about a -- and I wrote it down -- "palpable soothing feel". I immediately felt very relaxed.

1904 But my concern is: What else will be added and when will it be added and will it eventually end up being just a palpable feel, as in rock, or a soothing feel as in AC. But we start with your demand study and then we add -- I hear you --

1905 MR. VINER: I think that's fair.

1906 COMMISSIONER CRAM:  -- you want a feel and a soothing --

1907 MR. VINER: I think that is fair.

1908 COMMISSIONER CRAM: Morphing is my question.

1909 MR. VINER: First of all, if we thought there was a niche in the middle of the market -- it is easier to sell 25 to 49 -- we would have been there. We don't believe there is. We think it is well occupied.

1910 I think we have heard earlier from Maritime that this is also a market that is subject to change and quite organic at the edges.

1911 We fell confident that we are in a niche that is not going to be attacked and we are committed to this format. We are not concerned about it. We built a conservative business plan on conservative share numbers. We obviously have the wherewithal to sustain it. We are not planning to morph into anything.

1912 Having said that, I think there will be changes in the market, but I don't think they will be coming at that end of the market.

1913 COMMISSIONER CRAM: So if you were licensed we would still expect you to be both palpable and soothing or palpable soothing.

1914 MR. VINER: Those weren't my words. That sounds a little too much like a day at the spa, but I think you would recognize our format and recognize our business plan, yes.

1915 COMMISSIONER CRAM: Thank you. Thank you, Mr. Chair.

1916 THE CHAIRPERSON: Thank you, Commissioner Cram.

1917 I just want to pose the follow-up sort of concluding question, if you will, given the competitive nature of the applications in front of us, both in terms of numbers and in frequency, why you think your application is the best use of the frequency you have proposed.

1918 MR. VINER: Thank you very much. As we have tried to demonstrate today, "The Breeze" is a very fresh, new format that speaks to the listening desires of Halifax listeners. Our research reflects this and the 210 positive intervenors we had confirms this.

1919 We believe "The Breeze" will contribute to the musical diversity in the market and

"The Breeze" will have a minimum impact on existing stations, as no stations, in our view, are after a 35-plus audience.

1920 We have developed a format that plays 40 per cent Canadian content and draws 20 per cent of its musical selections from Category 3, which makes us unique. In fact, according to Ross' numbers, over 80 per cent of the music played on "The Breeze" will be unique to "The Breeze". It will not be heard in the Halifax market.

1921 "The Breeze" proposal also, in our view, makes the best use of the 103.5 frequency due to our plans for maximum power and a higher antenna. This simply means a bigger potential coverage area.

1922 Our application is a Canadian Talent Development program that reflects this community, our format and our resources.

1923 Lastly, CanWest has the means to sustain a new format over its development period and honour its commitments in what is going to be -- what is a competitive market and what is going to be a very much more competitive market.

1924 Just in conclusion, it is with considerable enthusiasm and excitement that we ask for a new format -- because that is what it is -- as well as a new licence for Haligonians over 35 years old. We think they deserve a new breeze and some fresh air. Thank you very much.

1925 THE CHAIRPERSON: Thank you, Mr. Viner. I think counsel Jones has a couple of questions.

1926 MS JONES: Thank you.

1927 It is with respect to your financial projections. We note that you project approximately $1.2 million in revenue in the first year of operation. Can you tell us where you expect these revenues will be coming from?

1928 MR. VINER: Yes, we can. I would like to ask Ken Johnson, who got off relatively scott free, to answer that if he could.

1929 MR. JOHNSON: We are expecting about 50 per cent of our revenues to come from existing stations; about 25 per cent of our revenues to come from other media such as television and newspaper; and 25 per cent new business.

1930 MS JONES: The last question is just how many stations do you think the Commission can license in this Halifax market?

1931 MR. VINER: We think the market is -- actually, we think the market is quite robust. I think the figures released yesterday suggest it is more robust than we thought. We think that at least two stations could be absorbed in the market.

1932 MS JONES: Those are all my questions.

1933 THE CHAIRPERSON: Thank you, counsel. Thank you very much, ladies and gentlemen. We appreciate your clear answers to our questions here this morning -- this afternoon now I guess.

1934 We will take our lunch break now and we will reconvene at 2:00 p.m.

--- Upon recessing at 1245 / Suspension à 1245

--- Upon resuming at 1401 / Reprise à 1401

1935 THE CHAIRPERSON: Order please, ladies and gentlemen. Welcome back to our proceeding. We will return to our agenda for hearing the radio applications for Halifax.

1936 Mr. Secretary.

1937 MR. LEBEL: Thank you, Mr. Chairman. We will now hear Item 7 on the Agenda, which is an application by East Coast Broadcasting Incorporated for a licence to operate an English-language FM commercial radio programming undertaking in Halifax.

1938 The new station would operate on frequency 89.7 MHz on channel 209A with an effective radiated power of 2,975 watts.

1939 Mr. Serge Cormier will introduce his colleagues. You have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

1940 MR. CORMIER: Good afternoon, everyone. Good afternoon, Mr. Chair, Members of the Commission. I am Serge Cormier, President and CEO of East Coast Broadcasting Incorporated.

1941 With me today, Sebastien LeBlanc, who is on the far side of the table here, who is Vice-President of East Coast Broadcasting.

1942 To the back, Mr. Paul Dixon, who is our engineering consultant. He also has a lot of experience with start-up radio stations so he is going to be assisting us with this endeavour.

1943 Also, as well, Luke Bishop. He is sitting right there in the back table. He is a local Halifax DJ with 15 years experience.

1944 Beside me, Mr. Marshall Williams, owner and CEO of Reflective Entertainment and Production, a small local company located in Halifax.

1945 We are pleased to appear before you today to present our application for B 89.7 FM in Halifax.

1946 Sebastien.

1947 MR. LeBLANC: Thank you, Serge.

1948 An exciting new addition to Halifax radio. B 89.7 will feature CHR rhythmic music format, not currently offered by existing stations.

1949 B 89.7 FM will target the under-served 12 to 34 year old.

1950 B 89.7 FM will provide new advertising opportunities for local and national organizations.

1951 B 89.7 FM will broadcast 40 per cent Canadian content.

1952 B 89.7 FM will contribute significantly to urban music culture and artist development in the Metro Halifax area.

1953 B 89.7 FM will provide a new and distinctive news voice covering local and regional happenings.

1954 The metro Halifax population is over 350,000 people. It is home to 40 per cent of Nova Scotia's population. It is the largest population base in Atlantic Canada. It has over 100,000 people are between the ages of 12 to 34. The population is younger than the national average, with a median age of approximately 36 years old. There are seven post-secondary educational institutes, hosting a transient population of 28,000 students.

1955 This slide shows, based on BBM radio data book that since year 2000 there is a growth in population of 12 and over.

1956 Halifax is a major commerce centre in the Maritimes. It has a positive short-term growth and a long-term GDP, projected to stand at more than $10 million by year end. It has a healthy radio market profit before income and taxes of over 33 per cent, more than double the national average and above regional average of 21 per cent. It has an average household income level of over $55,000.

1957 Our research has been done on teen radio listeners. It was called "In the Name of Cool". That research was a telephone survey of 1,500 respondents aged 12 and older in February 2003.

1958 Respondents were asked what was their favourite radio station. While the overall Canadian average ranks CHR/Urban as the number one format, it ranks fifth in Atlantic Canada. This indicates that there is a lack of CHR/urban radio stations in Atlantic Canada as it lags behind the national average.

1959 As Halifax is the biggest market in Atlantic Canada and still doesn't have a station of this format, there is a definite need for a CHR/urban station in Halifax.

1960 This shows that based on the "in the Name of Cool" research, in Canada the CHR/urban format is the number one format. In Atlantic Canada, as you see, it is ranked fifth. You can see on the national average there is a potential for this format and it is under-served in Atlantic Canada.

1961 In the past years, Halifax has not had the same growth of radio listening hours as the entire Province of Nova Scotia, which indicates an increasing potential market for radio listeners in metro Halifax.

1962 By comparing 2001 to 2003, we notice a decline in tuning hours per capita of 13.4 per cent for 12 to 17; 21.4 per cent for 18 to 24; and 18.3 per cent for 18 to 34. This shows that the younger demographics are the most unsatisfied with current Halifax radio.

1963 The target market is Halifax, Dartmouth, Bedford and surrounding areas, the 12 to 34 year old males and females representing over 30 per cent of the population, people who exclusively listen to urban and dance music albums; people who exclusively listen to urban and dance downloaded music; people who watch urban and dance music videos.

1964 This is a map that shows our target market.

1965 I am going to pass it along to Marshall Williams who is going to speak in support of our proposal.

1966 MR. WILLIAMS: Good afternoon, Members of the Commission and the CRTC. My presentation has sales data from HMV. HMV currently owns 53 per cent of the music market among music retailers, 26 per cent of the overall market.

1967 In my presentation here I have four HMV charts. One is a national chart which shows that 29 per cent of the titled listed are of an urban variety and 15 per cent of those are in the top 20 among albums sold.

1968 Also I have the catalogue charts which represents older albums and that 18 per cent of the titles are of the urban variety. Two of them are in the top 10, which represents 20 per cent of the top 10.

1969 I have also composed some data locally from the Dartmouth Mic Mac Mall store. Here we have 19 per cent of an urban variety, five in the top 20 composing 25 per cent.

1970 I also have best sellers from prior to Christmas up until February 23rd, as you note there. Then also to represent new releases I got another list starting from the beginning of February and that list also shows 19 per cent, with 30 per cent of those being in the top 20.

1971 What this says to me is that 20 per cent of the albums that are being sold -- these are hard sales figures -- are of an urban variety.

1972 As well, I have another related figure which is the Grammy Nominees Album which consists of the Grammy nominees for 2004. On that particular album 43 per cent of the titles are urban and all of the artists that are on the Grammy album, except for one, and the Grammy album itself were also listed on these HMV charts. So it is the artists that are selling in the urban variety.

1973 Basically what that tells me is that there is definitely a shortage where there is no music in the area of that and it is still selling. The regional average, based on this particular store, lags slightly behind the national average by about 10 percentage points as well. That shows me that there is room for growth.

1974 Now I am going to get into my own personal observations.

1975 I feel that there is C100-FM, which is the only station that plays any of the urban music now, doesn't play enough because they have a very wide variety of music that they play and I think urban composes maybe about 10 to 15 per cent, from my own listening experience, but that is not enough to supply an urban market that is buying over 20 per cent of the music.

1976 In addition to that, C100 sponsored four major shows over the past two years, which was Redman in March 2002, the Rascalz and Shawn Desman co-headlined the show last March, Ludacris in November 2003, and then Snoop Dog in December 2003. The only one of those artists that is in rotation on C100 is Shawn Desman. That goes to show that there is definitely an economic market if they are willing to put their name on it, but it is still not in rotation unfortunately.

1977 Aside from that, there is also only three urban shows weekly that I know of, two of which air on CKDU, Dalhousie's College Radio, for a total of four hours. Then also I have listed here that it is Chris Sheppard but I think I was mistaken and it is MC Marios which airs on C100 for four hours on the weekend, which again isn't enough to suffice the urban market that is being represented here, representing over 20 per cent of the sales of the music.

1978 Myself personally over the last three years, I have been directly involved in the promotion of three events, most recently last May. I am the Chair of the East Preston Recreation Board. We put together a free talent show showcasing local talent and also we had a group down from Montreal that participated as well.

1979 It was free so there was no cost to it. We got less than 10 per cent of the venue full because we couldn't get the word out. There was not enough listeners, not enough -- sorry, not enough avenues to get the word out. Basically everyone who was there was there by word of mouth. When you have an event that is free you should be able to fill it up when the numbers clearly show that the urban music is what is selling but we can't get a free venue filled.

1980 Also, with the prior two shows that I had before that, it was the similar situation where basically everyone who was there was there by word of mouth and one of them was in Halifax right over on Quinpool Road when they had the Splat Shot there and that only had a few people at it.

1981 Then there was another one in Dartmouth at a club that is now closed which was down on Portland Street. So these were two much busier areas than just the East Preston Rec Centre. These were in town and we only had 100 people there at each show because the venues are so limited with which to advertise and with which to promote the shows.

1982 I am going to skip this next paragraph here, but also what I have noticed, I have visited and lived in many different cities in the U.S. and Canada to some extent, not as much as I have in the U.S., but every other city of comparable size, that is geographic size and the population base, usually has at least two exclusively urban stations as well as a station that mixes the music that plays urban as well.

1983 Like I said, that is mostly based on the States. I understand there are different economics, but that is what I have seen just basically through my travels as well.

1984 Also, in spite of all the shortcomings with respect to that which I have stated, we also have a number of -- like I showed that at least 20 per cent of the records being bought in spite of the fact that there is no airplay; in spite of the fact that there are no events that can be advertised well based on that.

1985 Also, we have a number of local artists that are nationally known now and, to some extent, internationally known, like Classified, the Ground Squad, Trobiz, Buck 65. The Ground Squad has many different members like Pappa Grand, Nathan C., lots of many different artists that are becoming nationally known urban artists and they are doing this with no local airplay.

1986 They can go to Toronto and get their records played, they can go down to the States and get their records played and sell tons of records, and they are not even getting played locally where they live. It is upsetting to me anyway as a person who is involved in the business as well and also as a local performer myself.

1987 It is basically with that that I support East Coast Broadcasting's application for this endeavour.

1988 MR. CORMIER: Thank you, Marshall.

1989 I will now just briefly look at quotes, memorable quotes from letters of support that were sent to us over the past several months. Just to give you an example, we actually broke it down to several categories.

1990 The first category actually proves that a new CHR/rhythmic radio station as proposed by East Coast Broadcasting would increase radio listenership. For example, Renee MacKay-Lyons states:

"I would personally listen to the radio a lot more if such a station existed."

1991 We go on saying that:

"A New CHR/Rhythmic Radio Station Would Benefit Local Music Artists!"

1992 We have three quotes there from Derek O'Nel, Muzz Marshall & Atlantic Soul, which is a local group, and Spesh K, who support that statement.

1993 Our next slide:

"A new CHR/Rhythmic Radio Station Would Benefit the Community!"

1994 Such as stated by Holly Clements, stating:

"If there was more out there oriented towards the youth..."

1995 As far as radio is concerned, then there would be less drug addicts or young offenders.

"A New CHR/Rhythmic Radio Station Would Help Keep the Youth in Halifax."

1996 Which is stated by Melisa Marsman when she says:

"Perhaps if Halifax was more in tune with the needs and desires of their youth, the youth would not so eager to move away."

1997 As well:

"A New CHR/Rhythmic Radio Station Would be Appealing to Advertisers!"

1998 Several comments there as well. The second one stated by Matt Chisholm saying that:

"More and more companies are utilizing the power of hip hop..."

1999 As we can see when these celebrities with Reebok with artists 50 Cent and Jay Z.

2000 Also, as well, young adults will actually listen to this kind of music as well, urban and dance music on radio, as stated by a few people here, Michelle Simmons saying:

"Halifax would be surprised to know that adults would listen to this station as much as the youth!"

2001 Also another good point: A new CHR/rhythmic radio station will actually help reduce music piracy, as stated by several people as well.

2002 We go on here, why CHR/rhythmic is the best format for Halifax. It is today's most popular format for people between the ages of 12 to 34 years old.

2003 Halifax has a significant population of urban and dance music enthusiasts.

2004 Halifax features a vibrant music scene in the urban genre.

2005 Halifax has the most nightclubs per capita in Canada. That is a very interesting fact.

2006 Also, the lack of urban and dance music exposure on Halifax radio would support this format.

2007 Here is a look at the current Halifax commercial radio market, just to notice real quick that existing stations target 25-plus, completely ignoring the 12 to 24 demographic.

2008 Let's compare. In order to see how many stations the market could actually support we did a comparison between the Halifax market and the Moncton market and to our view the Moncton market is a good example of a now saturated market.

2009 As you can see, the radio listeners per capita count with the current seven stations commercial in Halifax, it is 40,000-plus, which is basically double the amount of the Moncton market. As we go up, if four new radio stations were licensed, that number goes down to 30,000, which is still significantly still higher than the Moncton count which is 22,000.

2010 What impact our station would have on the existing incumbents, we can see here that we project having most of the audience, a 4 per cent share taken from C100 because they are the ones who are trying to appeal to our target demographic as of now. However, even by removing four share points they still are the leaders. It would not really affect them as far as advertising sales are concerned.

2011 As we move on to the next slide, here are our seven year audience share projections. Of course it depends mostly on how many stations the Commission licenses, because the more stations you license the smaller piece of pie each station is going to get, depending on the demographics and so on.

2012 As we can see, with three new stations licensed we would still be able to get a 5 per cent share first year and go on to 7.25 per cent, which is very modest.

2013 With our CTD commitment, our first component would be a commitment to give funds to FACTOR. The funds will be directed to Atlantic Canadian urban and dance talent. Any unused funds will be reallocated to other Canadian urban and dance talent. Overall, over the seven years it would be a commitment of over $130,000.

2014 As far as the Halifax Dance and Urban Music Festival is concerned, that is a major component of our CTD plan. It would be a one-day outdoor musical extravaganza, 100 per cent Canadian local and regional talent. All performers will have their music aired on B 89.7 before the event. The event will have a significant impact in the Halifax urban music community. There would be a commitment of over $325,000 over seven years.

2015 With Halifax Idol, this would be a yearly radio talent search for Halifax and surrounding areas. Any local resident would be able to participate. Contestants who pass the tryouts would get to compete in a local Halifax bar. Contestants will be profiled on the air as well and finals would be broadcast live on-the-air as well. This would represent a commitment of over $40,000 over seven years.

2016 As far as the music programming is concerning, the CHR/rhythmic music format would feature current popular and new music including: R&B, including hip hop and including dance. The most important part of course is the 40 per cent Canadian content that we would adhere to.

2017 As far as spoken word programming is concerned, we would have a total of seven hours per week of locally produced spoken word programming. The bulk of it would come from 110 newscasts per week, totalling 5.5 hours. As well, we would have a weekly hour-long talk show featuring topics of relevance to Halifax youth. As well we would have various PSA's and other messages as well.

2018 Special programming features, we would have features such as MCWarz; Street Talk; Live to Air and also mixed shows.

2019 Just to give a couple of details of our employment equity plan, something that we want to make note of is that we would have a yearly conference entitled "Women in Radio" and that would be in collaboration with Canadian women in communications. As well, we would have a yearly aboriginal radio workshop.

2020 Finally, the big question:

"Why East Coast Broadcasting is the Best Choice for a New Station?"

2021 First of all, we are a locally based company in Atlantic Canada.

2022 Our proposal would have a low economic impact on existing stations.

2023 We have significant CTD contributions and initiatives.

2024 We are proposing high quality programming focused on the local community.

2025 We would promote and participate in community events.

2026 We have proven that there is actually a market demand for CHR/rhythmic format.

2027 We would introduce a new distinct news voice which would add editorial diversity in the Halifax market.

2028 Finally, we would actually be a new player in the Canadian broadcast system, adding diversity in the whole broadcast system as a whole.

2029 In closing, we believe that our application meets all objectives of the commercial radio broadcasting policy and the Broadcasting Act.

2030 Our proposal offers an excellent use of the frequency and we strongly believe approval would be in the best public interest.

2031 That concludes our 20-minute presentation. Commissioners, we would be happy to answer any of your questions.

2032 THE CHAIRPERSON: Thank you very much. Do you suppose you could talk faster?

2033 MR. CORMIER: I'm sorry. We just had a lot of slides. Actually, there was more and we had to cut a few off and we were trying to cram it down to 20 minutes but it was very hard.

2034 THE CHAIRPERSON: It is a good thing you did, you would probably kill yourself.

--- Laughter / Rires

2035 THE CHAIRPERSON: Take a deep breath and relax, guys.

2036 Commissioner Cram.

2037 COMMISSIONER CRAM: Thank you. Could there be light?

2038 Welcome, gentlemen. I will address my questions to you, Mr. Cormier, and you may have any of your colleagues on the panel answer for you.

2039 I don't know the gentleman's name behind you, Mr. Cormier.

2040 MR. ANDERSON: It is Wade, Wade Anderson.

2041 COMMISSIONER CRAM: Mr. Anderson?

2042 MR. ANDERSON: Yes, Wade Anderson.

2043 COMMISSIONER CRAM: Thank you.

2044 As far as I understand your application to start, Mr. Cormier, it is going to be CHR/rhythmic which has dance, hip hop, R&B and rap. How do you plan to play these genres? Do you plan to day-part them or to blend them?

2045 MR. CORMIER: It will be blended. It will be a blended -- we would play basically, as far as percentage-wise we would be thinking of -- we are proposing to play 75 per cent urban, which includes R&B, hip hop and we would also play 25 per cent dance, which would make 100 per cent. So yes, it would not be like block programming, meaning like one hour of dance and one hour of hip hop. It would be blended throughout the day parts.

2046 COMMISSIONER CRAM: You said it added up to 100 per cent?

2047 MR. CORMIER: Yes.

2048 COMMISSIONER CRAM: So you won't be playing any songs outside that genre?

2049 MR. CORMIER: No.

2050 COMMISSIONER CRAM: How, compared to the other applicants who have applied today and are being heard yesterday, today and tomorrow, how does your proposal provide the best diversity for the Halifax market?

2051 MR. CORMIER: It provides the best diversity because we would have a strong focus on local music in addition to music that is popular, of course Canadian music and overall music all across Canada and in the world.

2052 With the 40 per cent Canadian content, we believe that is going to significantly promote Canadian talent. We propose a pure urban or CHR/rhythmic format, whereas some other applicants are actually proposing to utilize a blend of not only urban but also rock music, and so on, which really doesn't offer what metro Halifax wants. The rock to some extent is already being served by existing stations.

2053 We would have minimal duplication of the music that we play from other stations and I believe that we would have at least 85 per cent of our music that would be unduplicated on existing stations.

2054 COMMISSIONER CRAM: So there would be, you think, about a 15 per cent duplication with the other stations because they would be playing that amount of urban?

2055 MR. CORMIER: The thing is that currently as it stands right now with the market, if the existing stations don't change the selections that they play, it would be 85 per cent unduplicated and 15 per cent duplicated, just based on the fact that the current station, namely C100, they are trying to cater to such a wide audience that they have to play a couple of more popular urban titles. However, I believe that with the introduction of a new station dedicated to urban they would actually narrow down and focus more on their 25 to 54 demo instead of trying to appeal to a mass audience.

2056 COMMISSIONER CRAM: You say your demographic is 12 to 34 and that they are under-served.

2057 MR. CORMIER: Correct.

2058 COMMISSIONER CRAM: Somewhere in your presentation you talked about the 12 to 24 demographic. Why would you narrow -- that is on page 11.

2059 Is that really your primary demographic?

2060 MR. CORMIER: Yes, it would be 12 to 34. I will ask Sebastien to add to that.

2061 COMMISSIONER CRAM: No, no. On page 11 you refer to:

"Existing stations target 25+, completely ignoring the 12-24 demographic!"

2062 MR. CORMIER: Yes.

2063 COMMISSIONER CRAM: Is that more your core demographic?

2064 MR. LeBLANC: Is this relating to the existing radio stations right now and showing you what is not under-served and showing that the 12 to 24 is not being served right now and that we also would have the 24 to 34 served because like he was saying that C100 is trying to serve that demographic.

2065 Just to add, that 15 per cent he was talking about, if we are a new player in the market and we serve that market as what they want to hear, then C100 wouldn't have any choice but to go and reformat their programming to target what they want to target. If it is a rock group, then, you know.

2066 So currently we are looking at serving 85 per cent of our music that is not served and it could grow if C100 has to change their programming.

2067 For the demographics, well, our format -- and it shows nationwide that the format is listened to by the demographic of 12 to 34.

2068 COMMISSIONER CRAM: So it is the 12 to 34 demographic that you say is 100,000 people. Is that correct? If I look at 14 to 24, which is the part that is measured by the BBMs, in terms of the under-served I add up to about 50,000 people.

2069 Would you agree with me?

2070 MR. CORMIER: Yes.

2071 COMMISSIONER CRAM: Would you agree with me that yesterday Astral was talking about that demographic and that they are either one or the other: they are either urban or they are rock. They are within that demographic. Urban listeners don't like listening to rock and rock listeners wouldn't accept a station that would have too much urban in it.

2072 Is that fair?

2073 MR. CORMIER: Yes, that's fair. I believe that represents the majority of youth listening habits. You would have people that listen to rock and rock influenced musical genres and they wouldn't listen to urban. A lot of those people love specific instruments, they love guitars. Some of those people as well play the guitar and usually they listen to rock. They are more of a rock-based audience and they wouldn't really listen to urban music and vice versa.

2074 COMMISSIONER CRAM: So out of that demographic, and again I'm using 14 to 24, how would it divide up into those who like urban and those who like rock?

2075 MR. CORMIER: I believe from -- I will pass that question on to Mr. Luke Bishop. He is a DJ of course with 15 years experience and he has more of a sense of the musical tastes of the Halifax market.

2076 MR. BISHOP: Thanks, Serge.

2077 Through my experience thus far, being 15 years in the industry, I have had the opportunity to play many venues from Yarmouth right straight up to Halifax, New Brunswick; I have had the opportunity to manage two teen-oriented nightclubs in the Digby area which were 14 to 18 majority, nightly dances, on a weekly basis nightly dances at a number of the high schools in the area, and what I have found thus far is that the need -- the demand for urban-type music has just become phenomenal over the past five years. It is absolutely phenomenal.

2078 I mean, I can give you 1,000 examples. Marshall mentioned a number of the venues that have happened here in Halifax over the past year or so with a number of the big name artists. The majority of the people that come to the shows are in that age group. Those are the ones that are spending the money to see those artists. Those are the artists that are being sold.

2079 That is not to say -- there are always exceptions. There are people that are closer to 34 that are listening to that genre, but the majority if between that age, the younger.

2080 COMMISSIONER CRAM: My question, Mr. Bishop, was -- and if you want we can use the 12 to 34 demographic, out of those normally those who like rock don't like urban and vice versa.

2081 MR. BISHOP: There are always exceptions to the rule. There is always exceptions to that. Majority --

2082 COMMISSIONER CRAM: But as a rule that is the case, so how does it divide down into who like urban and don't like rock and who like rock and don't like urban?

2083 MR. BISHOP: I can give you an example. For instance, Q104 is one of our existing stations that caters to the rock market. If there was no need or no demand for anything from that particular age group there would be no need for an urban station if Q104 was supplying for the majority of that market.

2084 COMMISSIONER CRAM: I asked for how many as a percentage of the total like urban and not rock and would like rock and not urban.

2085 MR. BISHOP: The thing about that particular age group is there is no basis to justify -- besides record sales, no basis to justify how many listeners there are for each of those particular markets.

2086 COMMISSIONER CRAM: Okay. So if I use record sales and if I use Mr. Williams data in his Item No. 3, he said five out of the top 20 were urban.

2087 MR. BISHOP: That was correct, yes.

2088 COMMISSIONER CRAM: So I would then take that as 25 per cent of that demographic would be interested in urban.

2089 MR. BISHOP: That is correct.

2090 COMMISSIONER CRAM: Thank you. It appears, and maybe you can explain that, that the fall BDMs of 2003 in the 12 to 17 and 18 to 24 demographic, there were stronger hours being tuned per capita than the Canadian average.

2091 What this suggests to me is that that demographic 12 to 24 considers itself over time being better served.

2092 Would you agree with that? That was in the MBS intervention when they referred to the increase of hours per capita in this demographic.

2093 MR. CORMIER: I would agree with that statement, but however in having worked in the past with BBM as an interviewer, the way that they do research, they have a lot more older people. Basically when they call in order to fill the diary, the ratings diary, they ask for the person that is the head of the household. In other words, that person usually is more committed to fill the ratings for the diary.

2094 Other than that, the only thing I could say would be that according to our research we see that there is a clear demand for this genre of music.

2095 A lot of youth simply don't listen to radio and really the increase -- I would say as well the increase in listening hours tuned to existing stations would be based on the fact that there was a large population growth within the past two years and out of that population growth, of course more population means more people that would listen to longer hours on the radio.

2096 COMMISSIONER CRAM: Thank you. You are proposing 40 per cent Canadian content. I take it clearly that you then think there is sufficient supply?

2097 MR. CORMIER: Yes, definitely. With that, I will pass that along to Marshall who will add a few comments on that since he knows the music better than me.

2098 MR. WILLIAMS: With the 40 per cent Canadian content based on MAPL, like I can name dozens of artists right off the top of my head that could get played, like Swollen Members, Choclair, Chaos, Cardinal. Those are some of the more popular artists based out of Toronto and Vancouver.

2099 But also, a number of American artists are also contacting Canadian producers and writers to product their music. For example, with urban a lot of time the production and the writing of the music go hand-in-hand.

2100 Nas for example, Naz, Jay-Z, 50 Cent, Snoop Dog, Black Eyed Peas have all worked with Canadian producers and composers so some of those tracks would be radio friendly which would be able to be played. For example, "21 Questions", which was the number one single last year I believe, number one urban single all last year was "21 Questions" by 50 Cent which was produced by a producer named Dirty Swift who is from Ottawa. He wrote the music and produced it.

2101 So there would be a lot of American artists as well that have Canadian content in their music that would be able to by played as well as some of the local artists that are currently not receiving play as well as some of the more popular Canadian artists out of Toronto, Vancouver, Winnipeg and what have you.

2102 COMMISSIONER CRAM: Excuse me, Mr. Williams.

2103 MR. WILLIAMS: I'm sorry.

2104 COMMISSIONER CRAM: No, no, this is my own ignorance. An American artist could qualify under Maple as long as everything else was --

2105 MR. WILLIAMS: Yes, exactly. The production and the music qualifies as long as the Canadian did the music and the production.

2106 COMMISSIONER CRAM: So you would agree to a condition of licence to the 40 per cent?

2107 MR. CORMIER: Most definitely.

2108 COMMISSIONER CRAM: I wanted to get into your demand issues. At page 12 of your presentation you compare Halifax to Moncton. I take it that your position is that because Moncton has five and has 100,000 that essentially, based on this analysis, Halifax could have 11?

2109 MR. CORMIER: Up to 11. That means that with radio listening habits that are so diverse in today's society it is hard for any one station to cater to such a wide audience unless they try to program to a broad spectrum, basically trying to fill all the bases.

2110 Right now in this market we can see that clearly C100 with a 25 share is doing that. They are trying to appeal to everyone. By observing the last BBMs we can see that Q104, which is number two in the market, has a 15 share. So there is a 10 share gap between the number one and the number two station in the market.

2111 That shows clearly that C100 is trying to be the station that pleases everyone, but by doing that they are not being able to successfully focus on specific music genres, meaning that if the average youth listener who listens to urban music, there might be one or two songs per hour maximum that is of urban. They might just turn it on and then as soon as that song is over there will be a rock song or a more AC-type adult song and they will just put a CD on or they will try to find another station because they are not being served.

2112 Right now the music programming on C100 is extremely unfocussed, like I said, because they are trying to serve everyone. That proves that there is a lack of radio stations specializing in each genre of music that C100 is doing. The market wants that and since there are no stations that cater to that specific music genre, C100 is obligated to cover all the bases, but you can just do that just so often.

2113 Also, just with the society trends, today's trend with the advances in digital satellite TV, there are more and more digital specialty channels and that is what we want to do, we want to serve a specialty market, mainly the urban market, with radio and even with digital radio which is going to be here in five to 10 years.

2114 I will let Mr. Dixon add a few comments on that.

2115 COMMISSIONER CRAM: Mr. Cormier, I was talking about the demand for the station so I don't really need to go into digital radio right now.

2116 MR. CORMIER: Okay.

2117 COMMISSIONER CRAM: What I was going to suggest that comparing Halifax to Moncton is maybe like comparing apples to oranges, because at page 12 -- I have the printed part of this so I don't know what page that is -- the difference is that Moncton has both French-language stations and English-language stations.

2118 MR. CORMIER: Correct, there is one commercial --

2119 COMMISSIONER CRAM: That isn't really the case here, is it?

2120 MR. CORMIER: No, it wouldn't be.

2121 COMMISSIONER CRAM: In your five, are those all commercial stations for Moncton?

2122 MR. CORMIER: Yes. There is overall the five. There is four English-language and one FM French.

2123 COMMISSIONER CRAM: And the new French FM, yes.

2124 MR. CORMIER: Correct.

2125 COMMISSIONER CRAM: So it is probably not the best place to use as a comparison, is it?

2126 MR. CORMIER: It is just a vague comparison that shows that with the high radio listeners per capita count as shown in the Halifax market, it shows that there is a definite need for new station. But as far as the amount of radio stations that could be licensed in the market, of course we would be of the view of at least three and maybe four, depending on the -- there are variables that enter into play here like the demographics that they are trying to target and the music format, and so on.

2127 COMMISSIONER CRAM: At page 4 of what I have, the printout, you were referring to the Solutions Study about CHR urban being number one format in Canada. It ranks fifth for Atlantic Canada.

2128 It appears that your view of that data is that it is a huge unmet demand.

2129 Can I suggest that the other way you can look at that data is the half empty glass and that Maritimers are different. Maybe Maritimers don't like urban. Maybe their demand for urban is lower than in Canada as an average.

2130 When I was listening to Mr. Williams, maybe, Mr. Williams, that is why your sales are 10 per cent lower in urban than nationally and maybe that is why you can't get people into a free venue. Maybe all English people aren't homogenous. I'm a westerner so I can certainly understand Maritimers being different.

2131 Would you agree that that is a possible way you could look at that?

2132 MR. BISHOP: Could I elaborate on that, Serge, if that is all right?

2133 MR. CORMIER: Yes, go ahead.

2134 COMMISSIONER CRAM: Yes.

2135 MR. BISHOP: One thing that I have noticed, being that I have been in this industry for 15 years, I recently had the opportunity to open for the Snoop Dog concert in Saint John, New Brunswick. One thing that nobody has mentioned here is that Halifax has the largest Afro Nova Scotian community on the east coast, east of Montreal -- east of Toronto, sorry. That is a large part of the urban community. They are the majority of the urban community, it is safe to say so.

2136 The show in Saint John, there is very little of an African community in Saint John, very little. It was a sold out show, 7,000 people, and it didn't sell out in Halifax. They are Maritimers as well, so --

2137 COMMISSIONER CRAM: Maybe there is a difference. Maybe again Halifax has a lower demand for this kind of -- the problem is, you are using national data and the only local data I have are Mr. Williams sales date.

2138 MR. BISHOP: Exactly. That is because there is very little data available.

2139 COMMISSIONER CRAM: Yes, that shows a 25 per cent demand, which is not exactly a huge --

2140 MR. BISHOP: It is definitely unexplored territory, but --

2141 COMMISSIONER CRAM: Or, alternatively, is it that there is the demand is that limited?

2142 MR. BISHOP: The demand is there on it, yes, exactly.

2143 COMMISSIONER CRAM: No, that the demand is limited.

2144 MR. BISHOP: Limited. With the amount of sales, along with the success of a number of these venues across the Maritimes, the big concerts, big name artists being here, these are not $5,000-$6,000 shows. These are people who are being paid $35,000, $40,000, $50,000, in excess of that, to come to the Maritimes. They would not come here if there wasn't a demand for that particular type of music.

2145 The fact that that many people would go and see one of those venues and it is not being fulfilled on the airwaves, they are not hearing it there, they are hearing it on TV or they are downloading the music, suggests that if there was a radio station here, if we were to be licensed, then that demand would increase. That is what that suggests, just by that comparison.

2146 COMMISSIONER CRAM: Mr. Cormier, you show on your projections a positive PBIT in year two and yet you show revenues of about $300,000. One or the other thing is inconsistent.

2147 If you project revenues of $300,000 it appears in Halifax market you would be getting a one or a two share. If you project a share of 7 per cent I believe, you would be having a much higher revenue I would expect.

2148 Maybe you can tell me how you did your projections?

2149 MR. CORMIER: Yes, certainly.

--- Pause

2150 MR. CORMIER: As far as for the 7 per cent projection on year one, we largely based it on BBM data for the Halifax market and we also took into account the advertising rates that were charged with the existing stations and basically the ratio between the share that the station has in relation to what they charge for advertising and from there we used that and we determined that for the first year we would get 7 per cent on the assumption that we would be the only station licensed.

2151 When we did this report we didn't know how many other applicants were going to try for the same format. Of course, if more than one station is licensed it would bring that number down significantly to, as I was showing, even 5 per cent if three stations were licensed.

2152 COMMISSIONER CRAM: Thank you. Your sources of revenue, where would you be expecting to get that revenue? What percentage would come from the incumbent radio stations and where would it come from other than that?

2153 MR. CORMIER: I believe there would be a minimal impact on existing stations due to the fact that many advertisers simply aren't using radio right now to target this demographic because the fact is that they don't see the youth listen to the existing stations.

2154 What I would say is it would be 25 per cent of existing stations and, of course, we would also take from other media, namely local newspapers, like the local, local newspapers like "The Coast" and so on. It would be 15 per cent and the rest would be from new advertisers.

2155 COMMISSIONER CRAM: Such as?

2156 MR. CORMIER: Such as I would believe nightclubs, I would believe as well youth organizations like Junior Achievement that want to advertise their events and such. There is plenty, plenty of companies that would be able to use the station as a means of advertising.

2157 MR. BISHOP: I can elaborate on that as well for additional advertisers.

2158 I have with me Wade Anderson, he is an aspiring R&B singer and hip hop singer, there are a number of producers, people in the music industry that are willing to use radio as a means to get the word out about their particular business and production or producing albums, sales of albums. People in urban stations in the States promote new albums all the time. They do that in conjunction with local bars and that type of thing for CD release parties, that type of thing.

2159 Any youth-oriented business, Empire Theatres, pretty well half the clothing stores in the mall would be looking for that type of thing, Stitches, Randy River, businesses like that. Those are the type of advertisers that we would be looking at.

2160 COMMISSIONER CRAM: Mr. Cormier, you have the lowest projections of any commercial applicant here. Over the seven years you are projecting total expenses of $161,000 versus several million for all of the other commercial applicants.

2161 How did you establish your budget?

2162 MR. CORMIER: What we did is we took into account all the possible expenses that the radio station could incur and basically our strategy is that we know there is a demand for the market, we know that there is a demand for the format.

2163 However, and as Astral and even Rogers has stated to a lesser extent, since the format is so new it is very hard to make a station of a full stage -- a full coverage station 100,000 watts profitable because of the huge overhead.

2164 So our strategy is, instead of trying to be a big station and trying to service a demand for a format that is so new, we decided to be small, focus into the community and have a low overhead so that with the relatively new format, which is urban, that it would be profitable. Basically by keeping the overhead low and also by utilizing a three kilowatt transmitter as opposed to using 100 kilowatt transmitter, that gives us a significant advantage as far as cost is concerned.

2165 I will let Mr. Dixon elaborate on the added expenses of operating a full-blown 100,000 watt transmitter as compared to us, which we are only proposing to use a three kilowatt transmitter.

2166 Paul.

2167 MR. DIXON: Thank you, Serge.

2168 I have been in the broadcast business for about 35 years now and I am representing Mr. Len Petrie, our engineering consultant in Toronto.

2169 Serge's application is -- we have heard the other applications and they have pretty well all dropped the urban because it is a non-profit venture.

2170 He is looking to go to a small three kilowatt transmitter using the frequency of 89.7. Running three kilowatts on that frequency instead of 100,000 watts on it would mean that that frequency most likely could be used in several other places in the Maritimes besides just Halifax.

2171 The maintenance and the cost of running that small a station would be considerably less than these other high-powered 100,000 watt stations.

2172 That is why I have come here to speak on his behalf as to this would be a good way to keep costs down; the staff could probably be kept down; his coverage area probably would be cut down, meaning that the advertisers and the salesmen wouldn't have to travel as far. So he has downscaled everything from the transmission facilities to the studio.

2173 Yet, on the other hand, the type of transmitter that he has chosen, the antenna is of the very highest quality. It falls in line with the type that the CBC is buying at the present time and it should -- it is a redundancy system so it will stay online, it is not going to go off. It is all solid state. It is a broadcast engineering type.

2174 The antenna and the site is all approved and should serve him well with a very low cost.

2175 COMMISSIONER CRAM: Thank you. So if I get your strategy, Mr. Cormier, it is sort of a small, frugal strategy and a small station.

2176 You just heard this morning what MBS was talking about, that they claim they are fighting in this market a five to two battle. How do you think, if you were licensed, you would fare? You would be one out of eight or nine stations spending very small, modest amounts on expenses. How do you think you could survive here?

2177 MR. CORMIER: By of course with our strategy of being a smaller operation and also with our focus with a format that is not being currently served in the Halifax area, the advertisers that we would go after would be advertisers that mostly don't advertise on existing stations.

2178 With that, with the existing stations all competing against each other as the market is at right now, their demographics all overlap, meaning that they mostly target the 25 and up audience, with four stations targeting the 35 and older populations.

2179 Of course, with a small station such as the one we are proposing, if we were to try to compete with that demographic it would be very difficult for us, but by targeting a demographic that is currently way under-served, businesses and organizations that want to target the youth would come to our station for advertising simply because they want to get the message across and the fact that we are the station that is most being listened to by the average Halifax youth.

2180 COMMISSIONER CRAM: Mr. Cormier, let me be frank. You heard Mr. Russell this morning, he has two stations. The other five stations, two of them changed format in order to fight directly against him. They have the stations to fight you directly on format. So if you are successful, you can expect that they will directly fight you on format. How will you survive, sir?

2181 MR. CORMIER: You mean if they would switch one of their stations with an urban format to compete with us?

2182 COMMISSIONER CRAM: That seems to be the behaviour in this market. That is why I'm saying it is a highly competitive market.

2183 MR. CORMIER: Yes. We would be able to target a lot of people who currently don't advertise on the radio, but as far as the strategy is concerned with the existing stations, we would ensure that our programming and our focus is always unique. In other words, we will try never to be like the other stations so that there is always something unique with our station so that the advertisers would be willing to go to our station for their advertising needs.

2184 COMMISSIONER CRAM: I want to move to CTD and I want to talk to you first about what you proposed in your application and what was gazetted and therefore notified the other applicants that you would be applying for. I wanted to clarify if today you are changing that.

2185 MR. CORMIER: There was actually a bit of a discrepancy as far as the proposed numbers for the CTD and revised financial statements were submitted. Unfortunately, it was after the fact that the application was gazetted so the original numbers would stand, the numbers originally submitted back in September -- August or September.

2186 COMMISSIONER CRAM: So as opposed to what you said today in your slides, it would be the original application CTD that we are talking about?

2187 MR. CORMIER: We would be ready to actually commit to the numbers that we talked about today during the PowerPoint presentation.

2188 The thing is that at first we were proposing a CTD of $60,000 with annual increases of 5 per cent and then we revised it. We wanted to revise it so that it would be $60,000 with annual increases of 10 per cent, but due to a discrepancy with the spreadsheet when we submitted it we were able to put the 10 per cent there, the 10 per cent increases, but the number actually got changed to $30,000 with 10 per cent increases.

2189 Just for the record, our CTD commitment would be $60,000 per year, with all initiatives combined, with annual increases of 10 per cent.

2190 COMMISSIONER CRAM: You sent that in to the Commission, I believe about last week, and that was refused by the Panel, wasn't it?

2191 MR. CORMIER: Correct.

2192 COMMISSIONER CRAM: So the numbers you have today, are those the numbers that were refused by the Panel?

2193 MR. CORMIER: Yes, they were. I believe so, yes.

2194 COMMISSIONER CRAM: If I can go to your original CTD as filed by yourself initially, you propose to have annual increases in your CTD and I thought it was 10 per cent. That is in the application I read.

2195 Would you agree by condition of licence to these increases?

2196 MR. CORMIER: Yes.

2197 COMMISSIONER CRAM: Notwithstanding if your financial situation does not improve as projected?

2198 MR. CORMIER: Correct.

2199 COMMISSIONER CRAM: With the Dance and Urban Music Festival, what kind of artists do you envisage?

2200 MR. CORMIER: We envisage mostly local artists, but as well we would also have one or two major Canadian headliners as well with the festival. It would be an avenue, of course, mostly to promote local talent. With the success of the one or two headliners, our strategy is to draw people to see one of those two headliners and at the same time the people will also get the chance to see all the local performers and they would get major exposure from that.

2201 COMMISSIONER CRAM: Mr. Bishop, how much would a headliner cost?

2202 MR. BISHOP: Canadian, I really can't tell you, to be honest, because the majority of the artists that I have had an opportunity to open for were American. I know for Snoop Dog, for example, it was in excess of $35,000 just for his pay, that is not include the rider or anything like that as well.

2203 COMMISSIONER CRAM: So you wouldn't even know what a Canadian headliner would cost?

2204 MR. BISHOP: Not off the top of my head, no.

2205 MR. CORMIER: But it would be significantly lower than the American artists, just the fact that usually with American artists you have to pay for a lot of extra expenses as far as travel and everything. With everything in American dollars, with the exchange rate is rises the costs significantly.

2206 COMMISSIONER CRAM: Do you think it is cheaper to travel from Vancouver to Halifax than from New York to Halifax?

2207 MR. CORMIER: No, I didn't -- that was not my intention of saying that, no. It is just like if you compare similar distances it would be cheaper if you stay in Canada.

2208 COMMISSIONER CRAM: Yes. How would your budget compare with other Halifax festivals?

2209 MR. CORMIER: I believe it would be similarly comparable with other festivals. We do have -- just in general?

2210 COMMISSIONER CRAM: Just in general.

2211 MR. CORMIER: Just in general, okay. I will ask Mr. Marshall to comment on that, since he knows more about the festivals and events that are taking place in the Halifax municipality.

2212 MR. WILLIAMS: Okay. I know that there are a lot of local festivals in other genres like the Jazz Festival -- that is the first one that comes into my head -- but there are also many events here that are of an urban variety.

2213 For example, the Terry Symonds Memorial Basketball Tournament has a strong urban content to it and there is lots of money put up for that yearly. I don't know exact numbers on the cost of these festivals. I do know that we have a number yearly, but I anticipate that Serge and East Coast Broadcasting will put forth roughly an equivalent amount with respect to the demographic. For example if, say, a demographic is 20 per cent, they would put $50,000 in the festival. If our demographic is 10, Serge will put, you know, 25-30 into the festival. That is what I would expect based on the festivals.

2214 I don't know the exact numbers, that was just a quick estimation, but that is what I would expect.

2215 COMMISSIONER CRAM: Would 7,500 sound like an okay number to you, Mr. Bishop?

2216 MR. BISHOP: For a particular festival of that sort?

2217 COMMISSIONER CRAM: For national talent, Canadian.

2218 MR. BISHOP: Well, being that it has never been tried --

2219 COMMISSIONER CRAM: Pardon me?

2220 MR. BISHOP: Being that it has never been tried by ourselves I would say that it may be a little generous, but we have complete confidence in ourselves to be able to pull it off.

2221 COMMISSIONER CRAM: Okay.

2222 In your Idol and your Urban Music Festival you have given different budgets for advertising, $1,500 for the festival and $500 for the Idol.

2223 Why did you do the difference? Why was it a factor of three to one?

--- Pause

2224 MR. CORMIER: So you are saying about the $500 for advertising and what else?

2225 COMMISSIONER CRAM: Yes. Advertising for the Halifax Dance and Urban Music Festival is $1,500 and for your Halifax Idol, which I suspect -- by the way, is a copyrighted term, "Idol" -- is $500.

2226 Why would you do the difference?

2227 MR. CORMIER: Oh, the difference between the two events.

2228 Mainly because the Halifax Dance and Urban Music Festival would be a much bigger event so we would invest significantly more money into advertising. We would explore other media as well. We would put flyers all across the Halifax area. We would also examine advertising opportunities in the locally based newspaper, "The Coast", and so on.

2229 Whereas the Halifax Idol competition would be mostly advertising with the actual bar that would be sponsoring the event and would be associated with the event. They would promote it as well and we would promote it as well.

2230 With the Urban Music Festival, of course, since it is a bigger event, as I said, that is why we would invest more monies into that.

2231 COMMISSIONER CRAM: I just have a few questions about your local and spoken word.

2232 How are you going to present your local and spoken word so it is attractive to your demographic?

2233 MR. CORMIER: We would provide a lot of news, a lot of content relating to urban and dance music culture; news about artists; news about things of interest to youth such as the latest computer or so on, things like that and so on. It would be a very dynamic -- it would be a very dynamic programming approach and we would respond to whatever is making the trends as far as the young population is concerned.

2234 COMMISSIONER CRAM: It seems to me if you are talking age 12 to 34 you are talking a very, very diverse group. I have a niece who is 16 and every second word she says is "whatever", and when I was 34 I had already had three post graduate degrees.

2235 So I am having a hard time in thinking how your spoken word can attract that range of people.

2236 MR. CORMIER: For that, I will pass that along to Sebastien who will comment on that.

2237 MR. LeBLANC: The programming can also cater a certain age. When you want to talk of particular news or an event, sometimes it is going to cater a certain age group. Depending on the event or the news that you want to transfer to the population, it is going to affect a certain type of age. Obviously our targeted demographic, we want to make sure that we inform them as much as we can of the local news and things like that.

2238 Just also to let you know that most of the youth, they don't -- I'm just saying in a case -- they don't really watch that much of news on TV -- they watch programming, but not the news. Also, in the newspaper it is kind of rare you see youth reading the news in the newspaper. So it is to try to cater to the youth the news that they want to hear and listen, that they need to listen to and they need to be informed about.

2239 COMMISSIONER CRAM: But, Mr. LeBlanc, at age 30 I was reading "The Globe and Mail" and I think a lot of 30 year olds do. That is my point.

2240 You were talking about youth, but you are supposed to be going through to age 34, so how are you going to address that vast demographic?

2241 MR. LeBLANC: Certainly if there is news broadcasts or events that we want to inform the people, we will try to inform them as much as what we want to inform our age demographic.

2242 What we have as the news broadcast, we can have them do, we will try to cater as much as we can to the age demographic we want to inform.

2243 MR. BISHOP: Can I elaborate a little bit on that?

2244 COMMISSIONER CRAM: Sure.

2245 MR. CORMIER: Sure.

2246 MR. BISHOP: I think the thing to remember here is that we are all -- the people that will be locally running the station are in that demographic. We will be focusing on the major news issues that you see on TV every day, but it is from our perspective, the youth perspective, that we will be delivering it. That in itself is attractive to that demographic.

2247 COMMISSIONER CRAM: Okay.

2248 The other possibility, and you heard it this morning with Global, is that if you were licensed there is the possibility that you too would choose to go into a sales or a sales management agreement in order to survive the market. Would you agree to a condition of licence requiring prior Commission approval to any agreement regarding sales or a sales management agreement?

2249 MR. CORMIER: Yes, surely we would make sure no matter what that we would observe any CRTC regulations. With the fact that Commission approval is required before coming into an LMA, we would surely request approval if it comes to that.

2250 COMMISSIONER CRAM: It wasn't a local management agreement, it was any agreement having to do with --

2251 MR. CORMIER: Any agreement, yes.

2252 COMMISSIONER CRAM:  -- having to do with sales or sales management.

2253 MR. CORMIER: Yes.

2254 COMMISSIONER CRAM: Thank you. Okay. Here is your time to shine.

2255 You have applied for a frequency that is mutually exclusive with Astral. What are the compelling reasons for us to give you the frequency and why are you the best use of the frequency?

2256 MR. CORMIER: For that I will pass it along to Mr. Paul Dixon who will comment on that.

2257 COMMISSIONER CRAM: I don't mean it just technically either. This is your sum up. This is your chance to say why you should be given the application.

2258 MR. CORMIER: Okay. I will add a few comments before and then I will pass it on to Mr. Dixon.

2259 I believe -- or we believe, I should say, that 89.7, we would make the best use out of that frequency because we are a local company with a local focus. We are in touch with the community. We have a strong community involvement. We offer some wonderful initiatives as far as CTD is concerned.

2260 As well, we offer to serve the under-served 12 to 34 demographic and we offer a format of music that is in demand, the urban music format, as compared to Astral who, with 89.9, they are proposing the rock format. We believe that the rock format would have a much higher number of songs being duplicated with existing stations since Q104, to my opinion, even though its primary focus is in the classic rock genre, they also play a significant number of artists from the modern rock era since they are trying to cater to a wide demographic. So really, rock needs, to our opinion, are being met to a certain extent by Q104.

2261 Also, if you observe all the other proposals that were submitted to the Commission for urban format, there are a lot more proposals for urban format that were proposed than a rock format.

2262 To my knowledge, there is only one group that decided to try to attack the rock format and, to a lesser extent, with CKMW. Their strategy is to blend the rock format along with the urban format and just deliver it with one station, with one package. But as far as offering urban programming, there are four stations that offer urban programming and you can compare that to two, one with strictly rock programming and the CKMW proposal which offers a mix of rock and urban.

2263 I will let Mr. Dixon elaborate on that as far as the technical aspects are concerned.

2264 MR. DIXON; The only thing we can add to that, after speaking with Mr. Petrie we spoke to Industry Canada and with Spectrum Management and the difficulty of finding frequencies on the spectrum, we thought that instead of going, like I said before, the 100,000, the 50,000, that a 3,000 watt station -- less than 3,000 actually -- would not be invasive on the spectrum as much as the other higher-powered stations.

2265 And where it is a new format. It is something that I believe is going to come sooner or later. My grey hair says "Hmmm, you know, it is hard for me to wrap my ears around it", but I am here as a technical spokesman and not a program person.

2266 COMMISSIONER CRAM: Thank you, Mr. Dixon. Thank you, Mr. Cormier. Thank you, panel. Thank you, Mr. Chair.

2267 THE CHAIRPERSON: Thank you, Commissioner Cram.

2268 Commissioner Williams.

2269 COMMISSIONER WILLIAMS: Good afternoon, panel. I have a couple of questions.

2270 One of them has to do with your employment equity plan that you discussed briefly in your verbal presentation today and in your application. If I can just read a small part just to refresh you perhaps and then ask you a question on it.

2271 MR. CORMIER: Yes.

2272 COMMISSIONER WILLIAMS: It says:

"The station is also meant to give a voice and presence to Halifax's diverse communities. East Coast intends to do this by encouraging members of designated groups to apply for positions and basic training. It will hold seminars and workshops for women and aboriginals concerning their role in broadcasting." (As read)

2273 And that you would approach other broadcasters like Aboriginal Voices Radio Network for collaboration opportunities.

2274 I guess my question is: Describe these seminars and workshops for women and aboriginals. What would be the content of them? How often would they be held? What would their purpose be? What would the outcome or expected outcome from them be?

2275 MR. CORMIER: As far as the women in radio seminar, it would be a yearly seminar once a year and basically the main topics being discussed in the day-long seminar would be topics of interest as far as women in broadcasting is concerned, for instance, the challenges faced with women as they enter the broadcasting industry; any other --

2276 It would be mostly an event that would allow women to network and offer an exchange of resources in order for them to be able to more effectively enter the broadcasting industry as broadcasters.

2277 As far as the aboriginal proposal, basically that would be a one-day workshop where basically we would open our doors and allow members from the aboriginal community to come and see what radio is all about and hopefully entice their interest to go and take training at a radio broadcasting institute and hopefully become broadcasters in the future.

2278 Consequently, they would be able to not only work at any commercial or any radio station, more specifically they would be able to work with Aboriginal Voices Radio Network, which I understand -- I talked to Mark McLeod on a number of occasions and one of the problems they are having right now is the fact that they are having a hard time finding talent, on-air personalities in order to fill their programming. With this workshop we believe that we can try to get the interest level up with the aboriginal community in order for them to hopefully and eventually be successful broadcasters.

2279 COMMISSIONER WILLIAMS: Okay. Thank you.

2280 In regards to the generational gap and appealing to 14 year olds and 34 year olds that Commissioner Cram raised -- the first thing I think is what was I doing when I was 34. I guess I was also reading "The Globe and Mail", but I had a 14 year old in the house and I remained interested in what they were listening to and what they were exposed to and what appealed to them. I think in fact that at that particular time -- it was around the launch of MuchMusic, if I remember, and that seemed to be the most appealing entertainment.

2281 I would suggest, just based on my experience -- which obviously is somewhat different than hers -- is that maybe there is appeal at both ends of that spectrum.

2282 Anyway, I have no further questions, Mr. Chairman.

2283 THE CHAIRPERSON: Are you part of the application?

2284 COMMISSIONER WILLIAMS: No, I'm not, just for the record.

2285 THE CHAIRPERSON: Thank you, Commissioner Williams.

2286 Just one question I have that I guess doesn't relate directly to the application -- but since you are closer to the demographic of my question certainly than I am. As you know, I turned 59 today so I am far from it.

2287 MR. CORMIER: Happy birthday.

--- Laughter / Rires

2288 THE CHAIRPERSON: We as a country like to brag that we have the second highest broadband high speed Internet penetration in the world, second to South Korea, and the consequence of that has largely been that we are sort of creating a nation of thieves in the sense that people are downloading movies, music, and so on, to the point where a lot of people, mostly young people are using MP3 players or iPods and it is being suggested in other fora to us that that is probably the new wave of young people in particular getting their music, indeed rather than listening to radio.

2289 I guess I would just appreciate your views -- any of you, but perhaps in particular Mr. Bishop -- about this phenomenon and how it relates to whether or not youth in this particular demographic indeed will listen to music of this sort on the radio or whether their preference indeed is likely to be to take it off the Net and listen to it on an MP3 player or an iPod or whatever, the next whiz-bang device that is going to be, and whether that may well indeed account for some of the differences in some of the statistics you gave out earlier?

2290 MR. BISHOP: I can honestly say that being that I am originally from Weymouth, Nova Scotia, which is a really rural community, the only stations I had access to growing up were CBC and AVR, which came along later on, and once in a while we could pick up a few of the stations across the Bay of Fundy from Saint John.

2291 Because I needed to keep in touch with the hip hop and the dance music for the amount of times that I was DJ-ing, I used to actually -- you might be familiar with the show "Brave New Waves" which was on CBC. They used to feature a lot of hip hop artists so I actually used to record those shows so I would have the latest hip hop and dance music.

2292 I also used to travel to Halifax quite frequently just for the two hour show that is on the college radio station on Sundays -- "Smooth Grooves" I believe it is called now, with R. Smooth. He is a well-known DJ in the city -- just to record that show and take it home and I would have the latest hip hop and R&B before everybody else did. This was before MuchMusic came along and before the Internet as well.

2293 For example, MuchMusic, they definitely have identified a need in that particular market. They have introduced a number of urban formatted shows over the years, the most recent being a whole separate station, a whole separate entity from MuchMusic itself, a totally 100 per cent dedicated to R&B and hip hop. That is MuchVIBE.

2294 So I definitely think that there is a huge need. If that was the case when I was growing up I think if there was a radio station at that particular time I would have avoided a lot of those other venues.

2295 Now, being that the Internet has been around for a little while, I think a lot of main focus should be moreso on the local artists. You won't find any of the local artists on the Internet, not to say that over time you won't be able to find them, but I think that should be part of our main focus, to get the local artists on the airwaves, get the community familiar with the local artists.

2296 Also, being that that music is being played, you won't have to burn a CD, you can listen to our station in a car, plus get all the latest hip hop news, all the latest urban news, what is going on in the community, where the next show is going to be, that type of thing. That is how I feel strongly about that.

2297 THE CHAIRPERSON: Thank you for that.

2298 Counsel, any questions?

2299 MS JONES: I just have a few questions. I would just like to pick up on your discussion with Commissioner Cram about your budget for programming. How many staff do you project to hire for the first year?

2300 MR. CORMIER: We initially propose to hire first year a minimum of seven people. Based on economic performance, that number would go up quickly and over three years we plan to hire three more people. Finally, at year seven we plan to have a staff of approximately 15 to 20 people.

2301 MS JONES: That is not only programming. That is overall or that is just programming?

2302 MR. CORMIER: Overall, yes.

2303 MS JONES: And programming?

2304 MR. CORMIER: Programming, we plan to start with the program director and also as well two personalities and the program director of course would also do a national show. So there would be three people at first and then later on, after three years, we plan to have two more people so that we can have programming -- a wider variety of hosts on the air.

2305 MS JONES: Their salaries are reflected in your operating expenses for the programming that you submitted to us?

2306 MR. CORMIER: Yes. Yes. Just to make a point here, when we calculated salaries for all the staff, for everyone, they were calculated in a general administrative expenses category and not a line for programming. I just wanted to make that point.

2307 MS JONES: That clarifies things. Thanks.

2308 How many stations do you think the Halifax market could sustain, new stations?

2309 MS JONES: I would say a minimum of two, bare minimum, and more likely the market would be able to sustain three stations. To a maximum, the market could sustain four stations.

2310 MS JONES: The last question is: Your main shareholder is Mr. Leandre Cormier?

2311 MR. CORMIER: Yes. Unfortunately his flight was delayed in Boston so he was unable to assist the hearings today, just to make a point here.

2312 MS JONES: Will he be involved in the day-to-day operations of the station?

2313 MR. CORMIER: He would be sitting on the Board of Directors where we would meet over the course of time. We would be meeting every few months and he would be involved in making major decisions as far as finances are concerned, and so on.

2314 So yes, he would be involved with the Board of Directors.

2315 MS JONES: Thanks. Those are all my questions.

2316 THE CHAIRPERSON: Thank you, counsel. Thank you very much, gentleman. Those are all our questions.

2317 That concludes this presentation. We will take our afternoon break now and reconvene in 15 minutes, which by my watch is 10 to 4:00, where we will hear the next applicant.

--- Upon recessing at 1530 / Suspension à 1530

--- Upon resuming at 1550 / Reprise à 1550

2318 THE CHAIRPERSON: With the number of people in the room I hesitate to say "Order please, ladies and gentlemen".

2319 We will return to our proceeding now to hear the next applicant, Mr. Secretary.

2320 MR. LEBEL: Thank you, Mr. Chairman. We will hear Item 8 on the Agenda, which is an application by International Harvesters for Christ Evangelistic Association Incorporated for a licence to operate an English-language FM specialty commercial radio programming undertaking in Halifax.

2321 The new station would operate on frequency 93.9 MHz on channel 230A with an effective radiated power of 5,000 watts.

2322 You have 20 minutes to make your presentation.

PRESENTATION / PRÉENTATION

2323 MR. LUTES: We are so pleased to be presenting to you today, and welcome.

2324 Allow me to introduce our committee for you. To my right is Jerry Kendrick. He is the chair of the local Halifax Committee. He has been a resident here in Halifax for 40 years. He spent 25 years in professional journalism and 18 of those years were in radio, CHNS, where Jerry was news director and also program director of CHFX-FM and CHNS-AM.

2325 Jerry has been a church pastor for the past 25 years and is a member of three ministerial associations here in Halifax, also Vice-Chair of the Executive Committee that is scheduling Franklin Graham to come to Halifax this fall.

2326 Jerry has been the recipient of several awards of recognition of community service to Halifax.

2327 Barry Arnold couldn't be with us today. He has flown out for meetings in California. He is our Vice-Chair and he is sales manager of Sojourn Enterprises.

2328 Next to Jerry is Judy Baxter. She is a local singer songwriter and a recording artist from right here in Halifax.

2329 Then Don James at the far end of the table. He is a retired instructor with the Canadian Armed Forces, certified engineering technician and electronics. He worked for Transport Canada, Airport Division installing and monitoring electronics equipment.

2330 My name is Reverend Jeff Lutes. I have a Bachelor of Arts Masters of Divinity, 20 years experience as pastor, founder and president of International Harvesters and operator of CITA-FM 105.9 in Moncton, New Brunswick. We are now in our fourth year of broadcasting.

2331 Now I will ask our Chairman, Pastor Kendrick, to make a brief presentation before we present to you a visual presentation.

2332 MR. KENDRICK: We have been working for four years to arrive at this point. You have, I believe, a statement which does allow me to outline our intentions in brief segments.

2333 The Intent is to provide quality programming with a 24-hour commercially supported 5,000 watt FM station. 100 per cent of the music will be drawn from subcategory 35, non-classical religious.

2334 While the station will be predominately music, we will offer word programs that abide by the requirements set out in Public Notice CRTC 1993-78 with respect to balance and other matters involving broadcasting religious material.

2335 We want to provide locally produced programs, but also network with other Canadian radio programs as part of a Canadian program exchange.

2336 The intent is to cultivate respect for the diversity of beliefs. We intend to provide for the community a radio station that would encourage, build up and promote faith.

2337 To help ensure this, an independent advisory board of four community members drawn from four different denominations will be selected to monitor the activities of the new station. The advisory board will be responsible for receiving balanced input from various faiths, as well as screening music to ensure that no offensive material is broadcast.

2338 Point number three. The intent is to inform people of the resources available from various churches and organizations. We want to encourage cross-denominational fellowship. We believe this radio station can be a bridge to assist in uniting the community.

2339 Point number four. The intent is to promote the development of Canadian talent. We will meet and exceed all Canadian content requirements. We will provide Canadian Christian musicians with a radio showcase, hence helping to develop the Canadian gospel music industry by staging and airing concerts by local artists as much as we are able.

2340 There is an amazing range of talent that presently does not have access to airplay and we commit to allocate funds to initiate gospel music talent searches. We also want to conduct interviews with music artists.

2341 Point number five. The intent is to provide fast, accurate news and weather service. We will make every effort to provide listeners with information that is impacting the area.

2342 Point number six. The intent is to provide the very best in Christian Music. It will be a rich blend of inspirational, light praise songs. The station will program adult contemporary and pop styles in the daytime, with selections in the evening for a younger audience. As well, there would be specialty music segments for other music genres such as country music style.

2343 The intent is to provide a fair reflection of the religious community. We will always serve the needs of our listeners and our daily programming will continuously reflect the faith community. We desire to dialogue with local faith groups to provide free airtime. Segments will include interviews with invited guests representing various faith groups, exposing our listening audience to different points of view on matters of public concern.

2344 Should you choose to grant to us the privilege of serving the public over the airwaves, we will always do everything we can to ensure that the confidence you place in us will never be jeopardized.

2345 MR. LUTES: I would like to begin our visual presentation "A Case for a Religious FM Class A Broadcasting License to Service the Halifax Region".

"I would like to express my support for the application by International Harvesters for an FM radio licence serving the Halifax region.... This is long overdue."

2346 This is typical of the hundreds of letters that we have brought here today collected for you in support of this application, which we would have liked to have been able to hand in.

"One of the only reasons that we have high speed internet is so that we can listen to air1.com from the USA. We would be delighted to find out that a station had started."

2347 So we need a station of this nature so people do not turn to the United States for their requirements.

"I have knowledge of many Christian radio stations throughout North America, and I was for many years involved in broadcasting in Ontario, PEI and NS. I have found a keen interest in such Christian stations on the part of a wide spectrum of people from all walks of life. A similar station operated by the same people, has been broadcasting in Moncton, N.B. for about three years. I made inquiries as to how it was being received. The response was very positive. I believe its approval will do much to enrich the lives of thousands of people."

"I would like to see a 24 hour Christian radio station. It would be great to know that I can tune in to the kind of music I want."

2348 Please note that we recognize that this is a religious FM licence and is not to service the Christian faith singularly.

"When travelling I have been thrilled to hear Christian radio stations in other provinces and have lamented on why, with Halifax municipality being such a large center, we do not have one single Christian radio station. The music we hear on the popular radio stations today is full of offensive, sexually explicit and crass content, not at all appropriate for family listening. As a mother of two preteen girls who love to listen to music, I would be thrilled with the positive influence such a station would bring. Approving this license would definitely enrich our community and provide a very positive influence on our community and especially our youth."

"I am writing as a local resident in the City of Halifax in support of a CRTC -- YES -- vote in approving a Christian Radio Station in the Halifax-Dartmouth area.

Ross Harbridge, Able Seaman Aboard HMCS TORONTO"

"My husband and I only listen to the radio in the car if our children, ages 5 and 3 are not with us. Otherwise its Veggie Tales or other appropriate music. I think you'll be pleasantly surprised at the response you will receive in supporting this cause."

"I am so happy to hear that Halifax may finally have a Christian radio station! I am definitely in support of this application to the CRTC."

"There are many people for various reasons who can't get out to church and a Christian radio station would make available to them a way they wouldn't miss out on good listening."

"Approving this license would enrich our community. This would bring hope and help to those seeking purpose and peace in their lives. Thank you for your consideration."

2349 Note the crane in the background indicative of the economic development. Halifax is growing and can support religious radio.

"The current radio stations in Halifax appear to represent all genres of music, but Christian artists seem to have been forgotten. There are a number of excellent local artists that can be supported with this station as well. Please count me in as a supporter."

"I am in full favour of a Christian radio station in Halifax. The recent changes in on air format of the local stations, coupled with the pushing of the envelope leave precious few alternatives for my tastes.... I know of a wealth of talent in this region just waiting to be discovered. This radio station would offer a format to an otherwise closed and sealed door to local talent. I am fully behind this venture."

2350 We keep a roster of over 60 singers here in the Maritimes. We have a clear vision to encourage the development of this genre of Canadian music.

"As a resident of the Halifax region for the past seven years, I've been amazed by the lack of choice on the airwaves. The current alternatives do not provide the positive listening alternatives that meet the core needs of all residents of the Halifax Regional municipality."

"I am writing today to add my voice to the many who are calling for a Christian radio station in Halifax. I recently lived in Moncton, N.B. and while there I listened to the Christian radio stations. It was always great to listen to music that I enjoyed and to keep up to date on issues that affected my life. After moving to Halifax, I was disappointed that such a great city with so many potential listeners and supporters did not have a station to call their own. Today we have the option to give Haligonians the choice to listen to what they enjoy. I am very excited that soon I will be able to hear and be kept informed in today's active world. I suppose I am getting ahead of myself. The station that I am so excited about is not on the air yet."

"I believe strongly in the idea and promote it heartily. (People) generally agree that the principles of love taught through the Bible are true and relevant to everyone."

"With churches being closed in our community we need positive programming in these troublesome times."

2351 A station of this nature will encourage church attendance.

"Dear CRTC Commissioners:

I have read the aims of the applicants and I am confident that they reflect our needs in this region."

"My name is Krystal and I am currently a grade 11 student and I am in full support of a Christian radio station. I am praying that this station is approved because God will use it to help heal some of the broken hearts in Halifax."

"I never listen to the radio because I don't enjoy the music. It would be nice to drive down the road listening to some up beat Christian music that I can sing along with. I never have the radio on at home either but would do my housework listening to a Christian radio station if there was one in my area."

"Re: Positive intervention of Support of App. ...

1. Christian Hit Radio Inc. (Ottawa) operates contemporary Christian music radio station CHRI ... serving Ottawa, where we have demonstrated the vitality and viability of the format.

2. International Harvesters for Christ has efficiently and responsibly operated a religious programming station in Moncton. We have great respect for the vision and initiative of the management of that station.

3. We ask that the Commission license this station applicant.

Sincerely, Robert Du Broy"

"I believe the influence of such a station would enhance people within HRM -- whether they be Christian, Muslim, Jewish or whatever the faith. A station that promotes unity and friendship instead of the violent and negative music of contemporary radio would only aid in fostering better relations between people and faiths. Through education, love and prayer all faiths can be strengthened and a greater understanding of people's differences be made. Approving this license would enrich our community. It would help facilitate communication and action for organizations that are impacting our neighbourhoods with positive outreach programs that meet people's core needs. This would bring hope and help to those seeking purpose and peace in their lives. Thank you for your consideration."

2352 We have contacted the Hindu and Moslem communities specifically in Halifax inviting them to be a part. A representative of the Hindu community has responded. In Moncton we are in regular contact with the Jewish and Bahai communities. We seek to reflect a wide perspective.

"Dear CRTC,

I would like to express my support for an FM Radio Station serving the Halifax region. On March (2nd)... please approve this application so that our city can be served with quality radio programming that will impact people's lives.

Joan F. Johnston, Accountant"

2353 A wide variety of business and religious leaders stand behind our application and they are reflected here in this binder with hundreds of letters of support.

"Greater Halifax is home to 40 per cent of Nova Scotia's residents, and is the largest city east of Montreal and north of Boston."

"A Surging Tide of Creative Energy.

MacLean's Article by JOHN DEMONT

January 19, 2003

Halifax now boasts forward-looking industries -- offshore energy, IT and biotechnology -- more Ph.D.s per capita than anywhere else in Canada, and, for the first time since the Second World War, a boom-town economy."

"Chamber Luncheon speech -- June 04, 2003

HRM has a population of approximately 360,000 and is expected to grow another 100,000 by 2026, bringing HRM close to the half a million mark.

His Worship Mayor Peter J. Kelly"

"In 2002 permits were issued for $538 million of construction this was 25% higher than for 2001

2002 housing starts were up 42% over 2001

Dec 2002 saw the highest number of housing starts since 1977

2002 residential construction value increased 52% over 2001

In 2002, permits were issued for institutional construction worth nearly $13 million"

"A Christian radio station is particularly important for young people. I am a strong supporter of this application for a Christian radio station in metro Halifax.

Dr. Kiesekamp, St. Mary's University"

"I have two children, 9 and 12 who both enjoy listening to music. I have tried to provide them with wholesome music to listen to, however my financial situation does not allow me to buy many tapes/cd's and so while in the car we are stuck with whatever is on."

"I was so pleased when I heard of the possibility of having a full time Christian radio station here in Metro Halifax. Please forward my support to the CRTC.

Father Marchildon"

2354 The hundreds of letters are representative of the people who attend churches in our area, including Catholic, Anglican, Pentecostal, United Church, Vineyard, Wesleyan, Baptist as well as clergy of the congregations.

"It is not just about music. It's about informing people about events, bringing people together, and allowing a voice to be heard, that is not well represented by other local radio stations."

"As a musician and lead singer of a 2004 ECMA nominated group based out of Halifax, I believe this will further expose local Christian artistic talent. As a result, both the Christian music scene and the economy will benefit."

"Count us in as far as support."

"I have moved here from BC and have recognized the need for a Christian radio station for the Halifax region. This is one area that I have felt was lacking in NS."

"When I moved here from Newfoundland one of the things that I really missed was VOAR -- which is the Christian radio station there. I found VOAR uplifting and refreshing when I tuned in during my day."

"I believe Halifax needs its own Christian Radio Station to meet the listening needs of a large and growing Christian population. It would be nice to have a station the whole family can listen to."

"It was my pleasure to work in the Southern USA, in particular Atlanta Ga. For those two years I could not get enough Christian Radio. To be able to tune into as many as a dozen Christian radio stations was amazing to me. Arriving back in Halifax meant it was gone. There are so many advantages to having a Christian Radio Station."

2355 The CRTC's foresight in approving religious licences is commendable, because Canadian programming is developing. This replaces the dependence on American programs. In Moncton we are watching two broadcasters develop.

"I wish to add my voice in support of Halifax receiving a Christian radio station.

Ted Yuke".

2356 He is the Pastor of the Rock Church which has the largest attendance in Halifax or in Atlantic Canada.

2357 A Secretary General application:

"My name is Noreen Corkum and I am a singer songwriter, recording artist from Enfield, Nova Scotia. As an artist who is striving to be financially independent supported by a music career in Canada, Christian Radio plays a vital role in my future. At the moment the people of the HRM have been deprived of a full time Christian Radio station. At a time when our country is struggling with issues of honesty, integrity, respect for each other it will be great to have Christian station that will be promoting these virtues. I hope that you would seriously consider this application. Thank you and have a wonderful day."

"I don't listen to the radio right now (not finding anything that I like), but if there were a Christian station, I would listen all the time."

2358 We have studies with us today to show that we are little to no threat to existing radio stations. Radio of this nature carves out a new niche. People generally increase their radio time to include religious listening. We tap into a market that is not being served.

2359 The Stonehouse Marketing & Feasibility Group:

"Both Jerry Kendrick and Jeff Lutes are experienced radio people with a combined wealth of knowledge and talent. This will assure a quality product for this new station.

There are two groups. Metro Radio and MBS that dominate 6 of the top stations in his marketplace. It will be a major benefit for those of us in the advertising business to have another option and especially an independent one.

Ged Stonehouse".

"The Christian Media Association strongly supports this application. With over 250 churches in the Halifax Regional Municipality there is a very strong interest in a Christian Radio Station. We feel it is exciting to see an independent operator come into this marketplace and reach out to a wide range of listeners in the community.

This is a station committed to good Christian Values and will be SAFE for the whole family to listen to.... Thank you for your consideration and please don't allow us to have only one or two choices of companies with radio stations to listen to in this city."

"Please accept this letter as an expression of support towards the application ....

As the organizer and visionary behind Vibe Gospel Music presenters of the Canadian Gospel People's Choice Awards known as the Vibe Awards, the participation of the Christian radio stations across Canada has proven to be instrumental to our success.

A 24 hour Christian radio station in Dartmouth would provide an additional location for Canadian gospel artists to showcase their music. The gospel music industry in Canada through the licenses provided by the CRTC is experiencing exponential growth and radio is playing a big part in this expansion.

Blessings, Dionne Smith"

2360 Of Calgary, Alberta.

"The CRTC's wise leadership is in part responsible for this exponential growth. Their careful policies are guiding this aspect of the music industry to unprecedented success. While all genres of music have reached a plateau with flat sales the Christian music industry reports a twelve percent annual increase. We need the CRTC to continue to protect us from those who seek to exclude us from the market. Their grasp on what is happening on the radio scene in Canada provides expertise that is irreplaceable to ensure that this industry continues to enhance the mosaic of Canadian society."

"International Harvesters ... has been in existence for over fifteen years. We have entered our fourth year of broadcasting. We are an interdenominational organization with a passion to help underdeveloped countries. We have offices in Uganda, the Democratic Republic of Congo, Rwanda and Burundi. Our vision over the next five years is to start radio stations to be used to combat AIDS and illiteracy."

"By granting us a license you will not only enable us to bring joy to the hearts of Haligonians but you will be empowering us to do more good overseas. As a charitable organization, registered with Revenue Canada we want to use profit from the proposed Halifax radio station for relief and development work in Africa."

"(International Harvesters) is asking for a Religious FM Class A Broadcasting License to service the Halifax Region and for CJLU and 93.9 to be reserved. Thank you for your careful consideration."

2361 THE CHAIRPERSON: Thank you, Mr. Lutes and Mr. Kendrick. I will turn the questioning over to Commission Langford.

2362 COMMISSIONER LANGFORD: Thank you, ladies and gentlemen, for coming out and sharing your enthusiasm with us. I do have some questions.

2363 I want to warn you in advance that sometimes to people who are new to this process the questions seem critical and they are not. It is just that we have questions when we go through it and you tend to look for places you don't know the answer.

2364 There is a lot of your application that is clear and you have been in communication with our department and answered deficiency letters, so there is a lot of good information on the file. We are aware of that. Where I will be trying to focus my attention is on places where I am at least a big foggy on it and perhaps staff is as well.

2365 So I don't want you think -- I should have perhaps said this to the Global people a little earlier too. We are not ganging up on anybody, we are just trying to make sure we have the full picture. This is the opportunity to get it all.

2366 I will start with one very -- I want to get into programming in a big way with you, because you are a specialty station and of course whatever we discuss and define through your application and through this process is what you will be bound by, so we all want to make sure we understand what is going to be on the air.

2367 Before I do, there was just one little question about the tower which you are going to build, hopefully you think, beside a Baptist church or behind a Baptist church or on a Baptist church. I'm not quite sure where.

2368 What happens if there is a zoning problem or something? What is your fallback plan?

2369 MR. LUTES: There was a zoning problem.

2370 COMMISSIONER LANGFORD: Well, there you go.

2371 MR. LUTES: We have had to relocate to the Burnside Industrial Park where the city officials have informed us that it is permissible to operate a radio station there.

2372 COMMISSIONER LANGFORD: With this relocation, does that change the engineering parameters?

2373 MR. LUTES: It did and that was reflected and we have resubmitted the changes of our technical brief.

2374 COMMISSIONER LANGFORD: There is no problem, then, with your business plan? It doesn't affect your business plan?

2375 MR. LUTES: No.

2376 COMMISSIONER LANGFORD: You will still get enough coverage to be able to --

2377 MR. LUTES: Yes.

2378 COMMISSIONER LANGFORD:  -- be able to do what you want to do?

2379 MR. LUTES: That's right.

2380 COMMISSIONER LANGFORD: Thank you for that.

2381 So let's get on to what you want to do. I want to talk, as I said, quite a bit about programming. Though we don't normally with commercial stations regulate format, we do with specialty stations.

2382 Again perhaps an easy one to start with, perhaps not, your programming obviously is divided between music and spoken word.

2383 MR. LUTES: Right.

2384 COMMISSIONER LANGFORD: On the music it is very clear where it is coming from. What I am a little less clear about is your commitment to Canadian content.

2385 MR. LUTES: Yes.

2386 COMMISSIONER LANGFORD: Which, as I understand it -- and certainly correct me if I'm wrong -- is the minimum, simply 10 per cent, which is the minimum under the regulations. Yet in Moncton you have committed to 20 per cent and other broadcasters in a similar genre have committed to 15 and 20 per cent. I just wondered, now that you are more experienced, now that you know the game, what is it that caused you to pull back and say "Gee, maybe we better be satisfied with a minimum here"?

2387 MR. LUTES: The Bible teaching programs originate out of the United States. For example, in Moncton there is Pastor Bill Annis who we are trying to encourage so that his program could be made available to the almost 30 radio stations across Canada. We need more time for Canadian broadcasting in the religious field to develop.

2388 In not wanting to over commit ourselves, hence the 10 per cent.

2389 COMMISSIONER LANGFORD: I think you will be able to educate me a little bit. Are you talking about, then, obtaining pre-made programs that have music built into them? Is that the problem? Therefore it is American music. Or can you separate the musical part of your program from the spoken word part?

2390 MR. LUTES: Yes. We have foremost leading singers worldwide that are being heard in Australia and so forth. Brian Doerksen of British Columbia has a large airplay. We have very little trouble meeting Canadian content when it comes to the actual music because there is a lot of good local talent as well. I think we surpass the requirements for Cancon when it comes to music specifically.

2391 But these Bible teaching programs that I would like to alert us to, like with Dr. David Jeremiah, Dr. Charles Stanley out of Atlanta, Georgia, these American broadcasters have Canadian offices in Vancouver and Montreal for example and it is the responsibility of those Canadian offices to screen those Bible sermons before they go on air so that we are sensitive to Canadian culture.

2392 I trust those Canadian offices to make sure when I download an MP3 from an FTP site, because I don't listen to every little thing before it goes on the air -- I will offer this: I have seen myself rush in and pull the fader down right quick because I don't want anything that is going to create problems here in Canada that is not sensitive.

2393 These programs have Canadian offices, but they do come from the United States.

2394 COMMISSIONER LANGFORD: We will get to those. Those are more under the category of teaching programs, aren't they?

2395 MR. LUTES: Yes.

2396 COMMISSIONER LANGFORD: We will get to those in a minute. Excuse me if I'm not being clear here: What I am referring to is simply music, the content of music.

2397 MR. LUTES: Okay.

2398 COMMISSIONER LANGFORD: You have music on your show, you have a musician with you. Some music will come from the United States, from England, from Australia, but by regulation 10 per cent of it must come from Canada.

2399 MR. LUTES: Right.

2400 COMMISSIONER LANGFORD: It must meet the test of being Canadian. You have agreed to that 10 per cent.

2401 MR. LUTES: Yes.

2402 COMMISSIONER LANGFORD: But in your other station you have not only agreed to the 10 per cent but you have said "Look, we can do better than that. We will do 20 per cent of the music as Canadian".

2403 MR. LUTES: Right.

2404 COMMISSIONER LANGFORD: And other Christian stations around the country have done the same, 15 per cent, 20 per cent.

2405 My question is: Leaving aside the spoken word stuff, just dealing with the music you are going to play, why is it that you have pulled back in Halifax from what you are able to achieve in Moncton?

2406 MR. LUTES: Okay. In Halifax we will exceed 10 per cent very, very easily, and almost -- if I could just add this -- almost to the point of perhaps jeopardizing ratings. I really try to stretch the envelope and give extra time to Maritime artists and sometimes it may not be on par with something, say, out of Australia, Hillsongs Australia and so forth.

2407 In wanting to -- I figure if somebody has put $10,000 or $20,000 into an album here in Atlantic Canada, I want to try to stretch the envelope for them in terms of making sure that they get airplay.

2408 So we will, when it comes to specifically music, have at least 20 per cent if not more for the Halifax region.

2409 COMMISSIONER LANGFORD: I don't want to push you into an intemperate bargain here.

2410 MR. LUTES: All right. Okay.

2411 COMMISSIONER LANGFORD: If you can make 20 per cent -- because you know this Commission just loves the term "Canadian content". It brings a sparkle to our eyes. We are enthused by it. If you can easily make 20 per cent why wouldn't you agree to a higher number than the 10 per cent? Why did you stick at the 10?

2412 Did you simply misunderstand what we were asking you?

2413 MR. LUTES: Just if I could, I am one of the founders for the Maritime Gospel Artists Association, which is the Gospelfest, and they have concerts quarterly with 450-500 people in Moncton. I take great pride in managing this roster of 60 singers from here in the Maritimes. My only concern was with the American teaching.

2414 Now that it has been clarified that we are speaking specifically about music and not spoken word content, then the anticipation of seeing the Maritime gospel music receive lots of airplay will follow suit here in Halifax as well.

2415 COMMISSIONER LANGFORD: I am very tempted to ask you to commit to 20 per cent, but being a fair person I am going to allow counsel to do that at the end of the examination. So you have lots of time to think about it among yourselves.

2416 MR. LUTES: Okay.

2417 COMMISSIONER LANGFORD: Counsel hasn't had a lot of opportunity to smile broadly today, but she may ask you to commit to that and I will allow you to give that some thought.

2418 MR. LUTES: We will be prepared.

2419 COMMISSIONER LANGFORD: Let's move on now to the more difficult area, as you indicate yourself in some of your letters of response, and that is the area of spoken word.

2420 First I want to deal with a very simple area. When I read the program, the sample program, sample schedule that you provided us with in your letter of Tuesday, November 4th -- I'm holding it up for you. You may recognize it here.

2421 MR. LUTES: Yes.

2422 COMMISSIONER LANGFORD: It is typed in nice big print for us aging demographic folk.

2423 I see on it quite a number -- I haven't counted them -- eight, perhaps more, but at least eight that I can count, five-minute breaks for news, regional, local, national, world news with local weather.

2424 How exactly are you going to do that? Just give me some idea of how you are actually going to put this together so that you can put it out over the air?

2425 MR. LUTES: The "Moncton Times and Transcript", which is part of the Irving empire, one of the editors there has said that I can go on their Website and I can use their stories. So when I get up at 5:30 each morning and the first thing I do is gather my news, I will go there. There is another site that I got the press. So I propose to ask a local newspaper here for permission to use their stories that they collect.

2426 COMMISSIONER LANGFORD: That will give you the local content.

2427 MR. LUTES: That's right.

2428 COMMISSIONER LANGFORD: Then if Mr. Aristide flees Haiti, well it will be in the Moncton paper and here so you can do the world on that.

2429 MR. LUTES: Yes.

2430 COMMISSIONER LANGFORD: The weather. How will you get that?

2431 MR. LUTES: Through a weather service, the government weather service.

2432 COMMISSIONER LANGFORD: You are going to rely on the government weather services? Take a look out the window occasionally too would be my advice, so I may be allowed to make a suggestion.

--- Laughter / Rires

2433 COMMISSIONER LANGFORD: We are famous in Ottawa for having one of our radio stations -- and it will remain nameless -- but they never seem to look out the window. With great confidence they are reading what the weather is without actually looking. Rain when they are telling us it is sunny or whatever.

2434 MR. KENDRICK: They do, though, because it changes here every 20 minutes, so you have to look out.

2435 COMMISSIONER LANGFORD: And you are on every hour.

2436 Would you do that yourself? I'm jumping ahead of myself, but I noticed that later on in your application when you talk about staff you are having only two paid staffers and then the rest volunteered.

2437 Are you it basically?

2438 MR. LUTES: I do work hard, do a lot of work. I propose to spread myself between the two stations. I am debating as to whether to move my children and I down to Halifax, but -- if I could just share this.

2439 pcAnywhere allows me to hook my laptop up here in the hotel. I can see the computer at the radio station and I can transfer my voice file up there and I have been doing the news while I am down here in Halifax.

2440 What I'm hoping is to see more staff. I want to be in more of an administrative position.

2441 It is difficult working with volunteers. If I could just venture this, when you sign somebody's paycheque you can dictate a little bit more. I want to be very cautious pertaining to Halifax in using volunteers.

2442 We started CITA in Moncton without a bank loan and we will need some financing here for Halifax because we are talking about a bigger station. We just don't want to over commit ourselves. We just don't want to get a big monthly amount that we have to be paying. So we are starting small.

2443 With computers, it just expedites work.

2444 COMMISSIONER LANGFORD: Until there is a power failure and then what do you, carry a homing pigeon with you?

--- Laughter / Rires

2445 MR. LUTES: No. We have battery backups and then, of course, we would have a gas generator and there is a special switch that you can have that would recognize that the electricity has gone off and now its time -- the thing tells itself to fire up the gas generator.

2446 COMMISSIONER LANGFORD: But meanwhile you can't connect from Halifax, or wherever you may be, to plug in the news.

2447 MR. LUTES: We will make sure that we have -- we will have people specifically working here. I am saying two to start with.

2448 If I could venture this as well, in Moncton I haven't had to go out of my office. The businesses come to me to support the religious programming there. I am not necessarily always expecting that, but I don't think we are going to have to have an aggressive -- I don't want to be aggressive when it comes to -- I don't want to compete with the existing radio stations.

2449 I have statistics to prove that people still listen to the secular stations and they increase their listening time to include this new format. It is religious businessmen in the community who come to may saying "I like what you do, I approve of it and here is $1,000 cheque."

2450 So I don't see us as having a high pressure sales team going out there and beating the bushes because eventually people will hear this religious slogan, Lord willing, that we are on the air and I think that people will be coming to us and we just don't want to be aggressive when it comes to the commerce aspect.

2451 COMMISSIONER LANGFORD: No one seems to approve of us. No one has offered me a dime since I got here. But anyway, probably that's good.

2452 I am going to come back to your staff and I'm going to come back to you and your nimble PC, because I do have some questions about that. I think I will stick with spoken word now, moving on to some of the areas where I am just a little less certain about how you are going to ensure the content and quality that you state yourself in your opening remarks, and in your remarks today, that you want to ensure.

2453 I am looking at the question of balance, and what we call balance in religious programming. You referred to it this afternoon in your opening remarks. The sense of representing diverse views. You referred to opening a dialogue, I think with the Muslim community and --

2454 MR. LUTES: The Hindu community.

2455 COMMISSIONER LANGFORD: Which other?

2456 MR. LUTES: Hindu.

2457 COMMISSIONER LANGFORD: Hindu and you have the Bahai in Moncton.

2458 MR. LUTES: Yes.

2459 COMMISSIONER LANGFORD: I am afraid that though that is a great start and to be applauded and certainly recognized as the spirit of what we require, it at this point falls somewhat short of a guarantee of a commitment to it.

2460 You are not on the air yet so you have time, but how are you going to push this opening, these communications that you have? You have received a letter back, I think you said, from one of the groups. How do you push that to something more structured where in fact what people are hearing on the radio does contain a diverse viewpoint and that we are not hearing simply, as ecumenical as it may be in the sense of denominations, we are not hearing simply a Christian viewpoint on the major issues of the day but we are getting input from other religious groups as well?

2461 How do you take that past the "We have had talks with" step? Can you help me there?

2462 MR. LUTES: That is a fair question.

2463 I appreciated Pastor Jerry's wisdom in not suggesting we will have a four-panel committee that is independent of ourselves that we will report to. They will be the eyes and the ears to feedback and say "Hey look, there are people who are disgruntled, there are people who are feeling that they are not being served".

2464 One of the things that I have been doing is -- I call it the "Fireside Chat", where I invite a guest into the studio and we prerecord it. For example, I enjoyed so much my conversation with Samara here in Halifax who represents the Hindu community and she would be a delightful guest to have on to explain the Hindu system of belief.

2465 Or Greg Johnson from Eskasoni in Nova Scotia, to have Greg come up here to Halifax or do go down and see him and to record why he as a native elder is a member of the Bahai faith.

2466 I noticed that Bob Du Broy at CHRI in Ottawa, he has specifically a segment. So with our "Fireside Chat" we will be inviting members of other religious faiths -- as I presently do in Moncton. I have members of the Jewish community that come on our program. Whenever their synagogue has something to announce we make sure that it is well presented on our radio station.

2467 So we don't feel threatened in the least by people who have a different faith perspective. I will even show them how to produce their own program with computers.

2468 MR. KENDRICK: Perhaps I could just add something to that.

2469 As one of the Vice-Chairs on the committee that is bringing Franklin Graham into Halifax this fall you may be aware that he has made some controversial statements in some areas that are affecting that. As a result of that we have opened an excellent dialogue with the Muslim community, and in particular through the Interfaith Ministry Association.

2470 We see those open doors, quite frankly, as being advantageous to us in terms of this licence, because we are now having dialogue with them and we are now exchanging things and what was a contentious issue is now at peace and we are moving forward. We will follow them in supporting this and doing this and that is an open door that we see here, that we have those doors open now to talk to these people and we met them face to face. So we are looking to do this in diversity and helping whatever way we can.

2471 COMMISSIONER LANGFORD: I think that is an admirable beginning, but again without wanting to seem critical, but as I warned you at the beginning, I have to keep homing in on this. We have to come away from this with a feeling of confidence about these policies.

2472 Do you have anything structural -- let me for example say this: To bring in members of this community, that community, Jewish, Muslim or whatever, for what I might call educational purposes, Bahai community to sit with you at the fireside Franklin D. Roosevelt style and explain to people what their religion is all about, or their viewpoint or the spirit of where they stand on international affairs. That's fine and that meets a part of what we are looking for in diversity.

2473 The second part I would suggest would be -- and if I get this wrong we have very able counsel over here that will correct me before the day is out, but a second part I would suggest would be to ensure that in a program, one of your locally produced teaching programs that may be on any kind of a subject, it may be on the war in the Middle East, what you do with -- it may be on something much simpler in a community value, we like to think, and the notion of diversity in programming that is captured in the regulations, is that different viewpoints will be part of that as well.

2474 In other words, that it is not enough simply to say "Okay, we do five hours a week of programs on issues from a Christian point of view and then once a week we bring in somebody else to educate us about their religion.

2475 I think the spirit of what we are trying to achieve in balance and diversity is that these people would also be part of the programs on the issues.

2476 What can you tell me, perhaps from your experience in Moncton, or what do you have planned now that can show us, that can leave us with a sense that you have structured an approach to programming that captures the policy?

2477 MR. LUTES: The strategy that I have already devised is that I want to go to the Muslim community and the Hindu community and I want to show them that it is not an ominous task to produce a half hour talk program, that you can use Internet audio mix that you can download for $35; you can get a $39.95 microphone from Radio Shack. So even like, say, the Greek Orthodox community here in Halifax which may be relatively small compared to the big Rock Church, even a small group like that that may not have a lot of money, if they have a computer with a sound card I can show them how they can produce something that is air quality.

2478 What I want to do is make myself available to give the technical teaching.

2479 COMMISSIONER LANGFORD: With respect, even that may not be enough.

2480 MR. LUTES: Okay.

2481 COMMISSIONER LANGFORD: Today hopefully will be a bit educational for you as well. You are not on the air yet.

2482 MR. LUTES: Yes.

2483 COMMISSIONER LANGFORD: I think as well we expect a great inclusiveness in programs that are issue-based, so that not only do they come in and educate your listeners about their religion, not only do they make their own programs which may bring in a single viewpoint, but there should be a sense as well of a group viewpoint. In other words, of a group getting together on the big issues, where people of a different faith can say, "Well, that is the way the Christian faith does it but this is the way we look at it. Perhaps it captures the same spirit, perhaps it doesn't, but this is the way we do it."

2484 So that what your listeners are getting is not segments. Here is a little bit from the Muslims, here is a big piece from the Christians, here is a small bit from the Jews, it all comes together, everybody gets a bit of time, but also some time when all the pieces are brought together.

2485 Does that make sense to you?

2486 MR. LUTES: Perfect sense. This is my co-equal because I don't want to be like the guy from Moncton coming down and telling the people in Halifax how to do it.

2487 COMMISSIONER LANGFORD: It wouldn't work.

2488 MR. LUTES: It wouldn't work.

--- Laughter / Rires

2489 MR. LUTES: This is an autonomous group here in Halifax. They have been wanting this radio station for almost a decade and there have been some attempts. Pastor Jerry, who was the Chairman, is saying "Guarantee that", and we do guarantee that.

2490 Another thing, if this isn't too unorthodox, I am hoping that you will allow us the liberty. I would like to take from the CRTC today a statement for the Christian radio community across Canada, David Spencer of Rock Lake has a forum, I would like to hear of some checks and balances now that there is about 30 of these religious FM licences across Canada, what concerns to you have for us as a radio community that I would like -- you can add that on later -- that I can spread to other people in the Christian radio industry.

2491 COMMISSIONER LANGFORD: This would be the wrong forum for me and I would be quickly dropped into the harbour if I were to undertake to speak for the entire CRTC.

2492 But I will tell you that we have a very able legal department and our legal people go out, Peter McCallum, who is sitting here on the end, actually teaches a course called CRTC 101 I think it is called. We are always available to help and we are always available to counsel and if you needed some sort of a statement on the policy that is where to get it, from our able legal counsel here. Arrange something with them and they will put something together for you.

2493 I wouldn't presume to try to capture --

2494 MR. KENDRICK: Might I just add to this, though, that when I referred earlier to the Interfaith Ministerial Association, there was a time a few years ago when I was secretary of the Halifax Ministerial Association and the beautiful thing about progress and harmony that we made over the last few years, the Interfaith Ministerial Association didn't exist the way it exists now. That is what I meant, the doors are open now for dialogue and for us to have them on these programs and do those things.

2495 COMMISSIONER LANGFORD: But when you speak of interfaith, and I saw the list come up on one of the slides, is it ecumenical in a sense of all Christian faiths?

2496 MR. LUTES: Yes.

2497 COMMISSIONER LANGFORD: Does it go beyond that?

2498 MR. KENDRICK: Muslims, Jews, everything.

2499 COMMISSIONER LANGFORD: So it goes beyond.

2500 MR. KENDRICK: It is everything. That is why I mentioned in referring to again that Franklin Graham had made comments about the Muslim faith and they had some reservations about what was going to happen here and whether there would be protests or others. We went forth as a delegation and had a tremendous time and everything has been worked out. We met those people and the doors are open now and we can see what we can do here.

2501 COMMISSIONER LANGFORD: Let's look at some of the places where it may be a little more difficult for you. I think reference was made to this earlier.

2502 I'm thinking about when you bring in some of this programming from the United States, or even from other places in Canada, but you say, if I understand you application correctly, and some of your responses to our letters, that 15 of the 20 spoken word teaching programs, I think is what you call them --

2503 MR. LUTES: Yes.

2504 COMMISSIONER LANGFORD:  -- will come from the U.S.

2505 I guess the question is so obvious it hardly needs to be stated, but unfortunately we sometimes overlook the obvious so I will state it: How do you guarantee balance and adherence to the other religious policies regarding comment, donations, support, solicitation that are very clear and that you obviously recognize because you reference them in your own letters --

2506 MR. LUTES: Yes.

2507 COMMISSIONER LANGFORD:  -- but how do you adhere to it? How do you guarantee that? You have said yourself today that you don't have time to pre-screen all these programs.

2508 MR. LUTES: For example, Dr. Chuck Swindoll out of Texas, these men that we carry are the best of the best. When people think of Christian programming they automatically think of James Dobson, Dr. Charles Stanley. So we don't take lesser known ones. We take the best people that have 30 years proven experience, people that are not going to come with some off the wall comment that is going to be inflammatory.

2509 So we are going on the reputation of -- like Dr. David Jeremiah is on 1,100 radio stations in the United States. We have him on at 8:30 in the morning. So these are very reputable, very balanced people, but we still don't just take it for granted.

2510 For example, Focus on the Family, what they will do in sending out their Canadian programs, they will say "Such and such a topic is going to be coming up in Dr. Dobson's interview and you, as a radio station, may or may not choose to air it." So there are always warnings, particularly from the programs that we receive from Eagle-Com which comes out of British Columbia, letting us know if there is going to be something that is just going to be a little bit controversial.

2511 COMMISSIONER LANGFORD: Well, let's just jump right into the fire here. If something is coming from the United States, for example, on marriage among homosexuals, the Canadian position on that issue at this point is very, very different than that espoused by at least some politicians in the United States, most notably George W. Bush and others. There have been Massachusetts court decisions which have gone in other ways and things are going on in San Francisco.

2512 I would assume that in the spirit of the country you are in and understanding the Charter of Rights and understanding the rules we have in the Criminal Code about propagating hatred and whatnot, that if you were to do a show on that in Halifax or Moncton you would take a very, very careful stance. However, those rules don't apply once you cross the 49th parallel.

2513 So what happens if Pastor X from the United States decides this is the do or die issue for him or for her and goes on a roll, if we can put it that way in the colloquial, just let loose, a barn-burner. How do you stop it? What do you do?

2514 MR. LUTES: I am at risk of being labelled in my own religious community as being too liberal-minded, too open-minded.

2515 COMMISSIONER LANGFORD: I want you to know I am not preaching a position on this.

2516 MR. LUTES: No, I understand.

2517 COMMISSIONER LANGFORD: I am simply using this as the kind of issue that is current right now and something that could jump out and bite you.

2518 MR. LUTES: This subject does come up because there is so much of it in the news and I have had people call me at the station telling me that I am too much in favour of the homosexuals.

2519 As the person in charge, I make sure that there is nothing that is going to be inflammatory.

2520 For example, I have attended at the University of Moncton a monthly meeting for parents and friends of gays and lesbians and I think I surprised the person who was leading the meeting. He didn't expect a local clergy person to be that supportive.

2521 I believe very, very strongly -- and I feel it is safe perhaps here with the open-minded CRTC to say this, but I feel very, very strongly in supporting the rights of the gay and lesbian population in terms of making sure that they are not discriminated against. As the person in charge, there is nothing that is going to go on this proposed radio station that is going to be hurtful towards the gay population because I believe that strongly in it.

2522 COMMISSIONER LANGFORD: Okay, that is your position. Some here may think it is admirable and some may not, but let's assume for a moment that it is the absolute correct and admirable position, I still don't understand quite how you are going to guarantee that someone from Arkansas -- I think you mentioned Arkansas earlier, someone from Texas, I don't know, someone from New Hampshire, is going to toe the line.

2523 How do you pre-screen? You have two professional employees here, you have a bunch of volunteers you are going to train, you have yourself and your PC and your nimble fingers, but still what the CRTC wants is adherence to the policies. In other words, we want results.

2524 MR. LUTES: Yes.

2525 COMMISSIONER LANGFORD: You are, in a sense, offering me good intentions. We know where the pavement of that stuff leads, so how do we take it past good intentions to some sort of structured approach that -- okay, things slip by; even through the finest net things can slip through, but can you explain to us, especially after four years of experience in Moncton, a structured approach to screening which will give us the comfort to say "Yes, they have a system in place and though this could happen it is not likely to happen"?

2526 MR. LUTES: These organizations are to inform the local broadcasters if there is something of a controversial nature in the content and we are physically present there in the studio doing our administrative work with one ear part open, the radio turned down part way, and in three years of broadcasting I think on two occasions I have jumped up and gone right into the studio and cranked that right down. I don't bother giving a lot of explanation, I just say "Well, I think we will go to some music."

2527 That program is no longer on our radio station. In the past, if we started a new program and I thought "Okay, I will give this guy a little trial period", if I start to sense that he is thumping the Catholics or something of that nature, that program is gone. He doesn't get a second chance because we just don't tolerate that and we are very, very strict.

2528 So if something did get by the net, it is not going to get by the second net because we are there physically to make sure that it is cut right off.

2529 COMMISSIONER LANGFORD: But I get the feeling that you are the second net and I'm a little worried about your health because you are stretched very thin here.

2530 MR. LUTES: Thank you.

2531 COMMISSIONER LANGFORD: What about to go back a little bit to the volunteers, which is something that I said I would ask you about later.

2532 MR. LUTES: Yes.

2533 COMMISSIONER LANGFORD: Maybe this is a good time.

2534 MR. LUTES: Okay.

2535 COMMISSIONER LANGFORD: Do you have a training program for your volunteers in Moncton and are you going to bring it forth to Halifax and is it effective? Or is it always you? Are you always the person who has to jump up and grab the switch or do you train --

2536 MR. LUTES: Yes.

2537 COMMISSIONER LANGFORD:  -- the volunteers and your employees so that they understand the policies of the CRTC and the regulations and that they adhere to them?

2538 MR. LUTES: I have in my files today an application that a potential volunteer has to sign. He has to read and adhere to the Canadian Broadcasting Policy pertaining to religious content; he has to be familiarized with that. We are there in the studio with him for his first three months standing behind his shoulder and then gradually releasing the reins as we train him.

2539 The person that I have working for me in Moncton basically is running the radio station. I operate as the President of the organization which leaves me free to concentrate on Halifax and other projects. I personally train these people and delegate them and then I'm always listening to what is going on.

2540 It is not just myself, but we have a five-member Board of Directors in Moncton and then here in Halifax there are four people who are on the committee and then also this advisory board that is set up as well. So we have a number of ways to monitor so that it is not just the Jeff Lutes show type of thing.

2541 COMMISSIONER LANGFORD: Good, because I am going to read to you a couple of sentences of your own letter of November 4th. I don't want to seem patronizing, but I think it is not good enough and so this is what gives me fear.

2542 MR. LUTES: Okay.

2543 COMMISSIONER LANGFORD: You talk about having an alert kind of mentality in your -- this is from page 2 of your letter of November 4th, page 3 of our fax copy -- gosh, pages are had to deal with -- and you say:

"We have replacement programs and we are ready at a moment's notice to air them in the place of the regular program even if someone is not in the station personally. I have pcAnywhere on a laptop so that I can access the station's broadcast computer from any high speed Internet hookup and make necessary replacements." (As read)

2544 I would say that in a last ditch emergency you would certainly be congratulated for making a valiant effort, but if this is the system you have in place I think you might want to look for something more secure, the sort of system you were just describing about training people and ensuring that you are not the only last faint hope we have that some of this programming might get through.

2545 Is that said without being too critical?

2546 MR. LUTES: No, and I really appreciate the tenor of this meeting.

2547 We have the proven track records with these existing broadcasters and when I contacted Eagle-Com we are asking that the same programs be made available for the Halifax market. They are proven trusted people like James Dobson and Chuck Swindoll and they are noted for being balanced individuals.

2548 In terms of possibly the fish getting through the second net, the third net then is that if we do try somebody new, then we are going to have to scrutinize them very closely for a three-month period and then maybe we can let our breath out just a little bit in terms of humanly speaking.

2549 COMMISSIONER LANGFORD: I don't think we are trying to impose anything on you here onerous, although it can cause difficulties because it can require energy and work.

2550 The good old CBC just fell through both layers of the net with Mr. Cheevers(sic) who had some rather hateful things to say about different --

2551 THE CHAIRPERSON: Cherry.

2552 MR. LUTES: Oh, Don Cherry.

2553 COMMISSIONER LANGFORD: Don Cherry against hockey players. I get my former Boston Bruins people mixed up. It is Cheevers, is it, who had not very pleasant things to say about --

2554 THE CHAIRPERSON: Cherry.

2555 COMMISSIONER LANGFORD: It wasn't Cheevers, who was it?

2556 MR. LUTES: Don Cherry.

2557 COMMISSIONER LANGFORD: Don Cherry, all right. Well, I wish I hadn't brought that up.

2558 Suffice it to say anyone can make mistakes. Anyone can make mistakes and we are hoping to minimize them in this area.

2559 MR. LUTES: Yes.

2560 COMMISSIONER LANGFORD: We are particularly concerned when broadcasting is coming from afar.

2561 With regard to that foreign programming, I want to talk to you about it a little more when we get to your financial stuff and about the kind of money they are paying for it and what pressures that may put on you, but let's leave that for a moment, give you a bit of a rest, and just go to some straight factual stuff here so that we can give you a bit of a break. I will try to move this along a little more quickly.

2562 One question on your Canadian Talent Development. I got a little confused. At one point it seemed that it was $5,000 per year for seven years, and then I read another document where it seemed to say that it was $5,000 a year in year one but then increased $500 per year over the next six years to top out at $8,000 in year seven.

2563 Are either one of those statements correct?

2564 MR. LUTES: Yes, they are. My thought is that I think we have a $20,000 cushion here in terms of revenue after operating expenses and I am more than glad to donate to FACTOR. They have representatives here in Halifax and, for example, if that means that people like Judy Baxter or Noreen Corkum can go to FACTOR and receive some expense money to present their recently released CD, then I'm willing to give $,5000 to FACTOR if they demonstrate to me that it is not just secular. I'm not going to dictate to them, but I would be more than glad to help out if they are going to be helping the religious artists.

2565 COMMISSIONER LANGFORD: I'm not trying to pressure you to give more, in fact I think it would be quite incorrect for me to do that. You have given what you have given. I am trying to understand exactly what it is.

2566 Your commitment to Canadian Talent Development, is it $5,000 even each year or is it $5,000 the first year, going up $500 a year to be $8,000 in the final year?

2567 MR. LUTES: When I first began to make my case for Canadian Talent Development I wanted to present about The Oasis, which is a place where we showcase Maritime gospel talent in Moncton in anticipation that we could do the same here in Halifax. They informed me that that may not meet their requirements because that is something that we are doing on our own. It is not recognized or proven.

2568 Thinking, well, okay, what do they want then? Being willing to comply, thought that they wanted $5,000. Then they told me "Well, you didn't need to commit to that much, Mr. Lutes, $1,000 would have done it." So our financial budget talks about $1,000 per year and then as this proposed radio station for Halifax gets established and the businesses come, and so forth, then we feel that we can increase that in increments of $500 up to the point where we are talking about $5,000 a year.

2569 COMMISSIONER LANGFORD: I'm going to try again. It is always the little ones, isn't it, that drives everyone mad. The devils are in the detail.

2570 I'm going to confuse it more I suppose, but at one point very early on there was a mention of $2,000 per year for this application, leaving Moncton aside.

2571 MR. LUTES: Okay.

2572 COMMISSIONER LANGFORD: Then later there was a mention of $5,000 actually. I hoped I could leave the $2,000 out but we might as well put everything on the table.

2573 Then later there is a mention of $5,000 in the first year going up in increments to $8,000 in year seven.

2574 I am not here trying to squeeze more out of you. I am not suggesting which of those you should put on the table, but I am asking you which of your three proposals that have come at different times you would like to be bound by?

2575 MR. LUTES: I know what I would like to be bound by, which is $2,000, but we will commit to $5,000, in anticipation that FACTOR -- which we can't dictate to, but we hope in dialogue with the representatives that they will be able to give some assurances that people like Noreen Corkum are going to receive the assistance that they need.

2576 COMMISSIONER LANGFORD: I think what I'm going to do is leave that, along with the 20 per cent question that you will be discussing with counsel at the end, because she likes to nail down those details.

2577 MR. LUTES: All right.

2578 COMMISSIONER LANGFORD: That fine legal training.

2579 I may go out on a limb and, counsel, correct me quickly if I am -- I don't think, though, that you need feel any pressure from me --

2580 MR. LUTES: Thank you.

2581 COMMISSIONER LANGFORD:  -- to do the higher, lower, sideways, whatever, but I think by the end of this process counsel simply wants to know where you want to be and where you are comfortable with so that we can craft a license decision, should you be lucky enough to get one, which is accurate.

2582 MR. LUTES: Okay.

2583 COMMISSIONER LANGFORD: So this isn't a bargaining day here. I am not trying to push you up a ladder, but there were some conflicting statements.

2584 I think you have explained part of it, that you misunderstood what you had to do. Perhaps at the end you will be able to straighten that fine detail out with counsel and come to a number that you are comfortable with and that we can include in a decision should that happy occurrence come.

2585 Let me move on, then, to the situation of your association with your existing station in Moncton. Can you give me any idea -- we love this word -- synergies. I'm not sure what it means, but we love it.

2586 Can you give me any idea whether there will be any efficiencies, if I can call it that, gained because you already have one station and what the relationship might be between the two stations? Anything you can tell me about that, shared programming, shared staff, shared whatever. Are there any efficiencies and are there any relationships between them that might help us better understand what this product is that might be heard in Halifax?

2587 MR. LUTES: When we collect international and national stories, those would be applicable for both Moncton and Halifax, but the intention is to have specifically a Halifax news and then specifically your national, international news and then specifically your Moncton news. Then there is the synergy there in that we don't have to do everything right from scratch.

2588 The other thing is in wanting to broaden Moncton's horizons as well in drawing upon sister Halifax in terms of these interviews with the various religions here in Halifax. Because Moncton is fairly homogeneous. We don't have the diversification in Moncton that we do in Halifax.

2589 If I could make reference again to the "Fireside Chat", in terms of shared programming the only thing that we would be sharing would be some of the news and this fireside interview so that Moncton could get the benefit of broadening their horizons as well in terms of other faith groups.

2590 COMMISSIONER LANGFORD: Some of this purchased programming I gather would be the same on both stations and the music as well?

2591 MR. LUTES: It is the same, however the two stations are totally separate entitled in that Halifax would have its own set of books, and so forth. The only thing is that there would be a separate contract with the Halifax station from Moncton. Moncton is its own entity, same supplier though.

2592 COMMISSIONER LANGFORD: So we are not going to hear the same sound all day, except for the news?

2593 MR. LUTES: If I could, like in Moncton we are sensitive to the fact that there is a sister radio station there under Houssen Broadcasting and we have particularly aimed at the middle aged to senior audience. Here in Halifax we are going to be aiming also for a younger religious audience, the young people who are already in churches and so forth, so it will be a different sound.

2594 We try not to have much of a crossover. We are trying not to compete with CKOE in Moncton, but we anticipate that we will be the only religious FM broadcaster in Halifax, it is going to make it a lot easier in Halifax. I am looking forward to broadcasting in Halifax because in Moncton I am always so sensitive to try to make sure that I am not taking listeners from Mr. Houssen.

2595 COMMISSIONER LANGFORD: Let's talk a little bit about those listeners because, as you know, frequency space, you have been looking for one, is not limitless so the CRTC tries to make sure that the best use is made of it in the public interest for Canadians.

2596 The obvious statement one can make on that subject is that we see no point in transmitting programming that no one is going to listen to. That is not a good use of the space.

2597 MR. LUTES: Right.

2598 COMMISSIONER LANGFORD: This afternoon you presented us with, I would say, 50 or so endorsements from different people. So we know there are 50 people out there, or somewhere around that.

2599 MR. LUTES: Yes.

2600 COMMISSIONER LANGFORD: But you could probably get 50 people to endorse just about anything if you went out looking for them. I don't mean to in any way minimize the impact of what you have so professionally put together here, but I think you would agree that in a city this big you could probably find 50 people who would support almost anything.

2601 So what other kind of market studies have you done, what kinds of analysis have you done which would comfort us in thinking that there is a demand for this programming?

2602 MR. LUTES: Here is a survey of 365 people:

"Do you listen to the radio presently? If yes, how many hours do you listen per week?" (As read)

2603 46 per cent said zero to five hours; 25 per cent said five to 10 hours; and 12 per cent said 10 to 15 hours.

"Should a new Christian radio station begin broadcasting, how many hours per week would your listening time increase?" (As read)

2604 33 per cent said zero to five hours; 31 and a half per cent said five to 10 hours; and 17 per cent said 10 to 15 hours.

"If a Christian radio programming was available which option below would most closely describe how you would divide your personal listening time?" (As read)

2605 75 per cent to the Christian station; zero per cent to -- or 25 per cent to secular, that is 40 per cent, and only 28.9 per cent said 100 per cent to Christian.

2606 With Halifax having about 350,000 people we feel that about 30 per cent would be church attenders. It is a little bit higher here in the Maritimes, 35 to 45 per cent would have a closer kinship to a religious faith. So we feel most certainly that with 250 churches and support from most of them, we are very, very confident that there will be a very significant listenership.

2607 COMMISSIONER LANGFORD: Was that a survey that you were quoting from that you did yourself?

2608 MR. LUTES: Yes.

2609 COMMISSIONER LANGFORD: You personally?

2610 MR. LUTES: Yes. With helpers, yes. In Moncton.

2611 COMMISSIONER LANGFORD: This is a Moncton survey?

2612 MR. LUTES: Yes.

2613 COMMISSIONER LANGFORD: What date is on that?

2614 MR. LUTES: That is four years ago.

2615 COMMISSIONER LANGFORD: Four years ago. so you are making an assumption, and I am not indicating it is an incorrect assumption, but what you have said is what is sauce for the goose is sauce for the gander, I suppose: If it works in Moncton, it will work in Halifax.

2616 Is that essentially what you are saying?

2617 MR. LUTES: If I could qualify that.

2618 COMMISSIONER LANGFORD: Absolutely.

2619 MR. LUTES: that is a fair question.

2620 We feel that Moncton is more homogeneous, more blue-collar if I could say, although we are moving more towards Internet technology and call centres. Halifax is a much more cosmopolitan place, more diversity of culture so we definitely have to run a different ship here in Halifax.

2621 COMMISSIONER LANGFORD: So essentially then, would I be fair in saying that where you are basing your belief in market demand is simply on -- I'm not denigrating by using the word "simply", but simply on church attendance. Are you making a connection indicating that if they go to church they will also want this type of music?

2622 MR. LUTES: I think that is a fair assumption by these hundreds of letters we have. Because we are not particularly interested in being a thorn in the side of the existing secular stations. We just want to go quietly about our business.

2623 We don't feel that we are going to be pulling listeners away from existing stations and we feel that there is a very sizeable percentage of religious people in the Halifax area and that would strongly support this with their increased listening time.

2624 COMMISSIONER LANGFORD: I'm not suggesting that you should have hired a research company.

2625 MR. LUTES: Okay.

2626 COMMISSIONER LANGFORD: By the way, your associates are trying to hand you a note.

2627 MR. LUTES: Excuse me.

2628 COMMISSIONER LANGFORD: Maybe you should read it.

2629 MR. LUTES: Go ahead, Jerry.

2630 MR. KENDRICK: No, I was just handing him that.

2631 What I was just going to say is that like in a sense without us doing that, this, with the hundreds that are in here indicating -- of all these people saying all their different viewpoints. This was mentioned in churches all over the area. Pastors responded. People in the churches responded. We have handwritten letters here from teenagers and youth groups in the church saying that they would like to have their choice and the music and all of it.

2632 So in a sense they did the survey for us when they poured it in. Me may not have it as broken down as he has it there, but this powerful to us, coming in every day, day after day after day.

2633 COMMISSIONER LANGFORD: The demographics, which is a word you must have heard booted around here over the last couple of days, I gather you are trying to cover the waterfront, everything from six or seven years right up from womb to the tomb almost here.

2634 Is that your demographic for this station?

2635 MR. KENDRICK: That's it.

2636 MR. LUTES: We feel that we definitely can. There are marvellous programs like "Adventures In Odyssey" for the children. When they get off the school bus they rush in for milk and cookies and like to listen to this "Adventures in Odyssey".

2637 We want to have some block programming in terms of this southern gospel music that seems to be especially popular, but some people just don't care for the country sound.

2638 People recognize that a religious format is not going to appeal to the secular people and that to be able to have the support one can't just have an adult contemporary rock music format, one needs to make sure that for the senior listeners on Saturday afternoon they are going to be able to hear Bill Gaither's Sing-Along with 50 plus singers because they will be listening specifically.

2639 Moncton is being especially well served because Jim has the younger audience and we are going for the more middle aged and seniors. But here in Halifax we want to make sure that the seniors are going to be able to hear their old hymns, which I sang so much as a kid growing up I'm tired of them and I like the new or modern stuff. But the older people are constantly telling me, "Why don't you play more hymns? Why don't you play more hymns?" So we say to them, "Okay, well be listening on Saturday morning at 10 o'clock."

2640 So here in Halifax we will do the same thing so that they can listen in specifically for what they want to hear.

2641 COMMISSIONER LANGFORD: We are almost done now. I have worn you out almost.

2642 You talk about a 1.5 per cent market share, but is that just a kind of a hunch? I'm not trying to denigrate it, hunches aren't bad things, but is that essentially what it is, or it based -- I mean is there a kind of Association of Christian Broadcasters so that you have a sense of what you can expect to do? Is there something more than a hunch on that market share prediction?

2643 MR. LUTES: Yes. Right. Jim Houssen tells me I have 3 per cent of the market in Moncton. I was quite surprised to hear that. That is not founded. We haven't paid the $10,000 to the BBM to get a study done.

2644 However, across the board with these 30 or so religious FM licenses that you folks have been so gracious in granting here in Canada, generally on par these stations have but 1.5 per cent. So we are expecting to be the norm here in Halifax as well.

2645 COMMISSIONER LANGFORD: Okay. Let's look quickly at finances.

2646 You talked about having two paid staff members. You are going to have some start-up costs, obviously, in that sense unfortunately it is like any business, and you are going have some ongoing costs.

2647 MR. LUTES: Yes.

2648 COMMISSIONER LANGFORD: But you also project revenues over the term of just over $1.5 million. You break it down and what I would like from you is some idea of why you break it down or how you break it down or what you base this on. You break it down "local sponsorship". I guess that is what everyone calls ads. Right?

2649 MR. LUTES: Yes.

2650 COMMISSIONER LANGFORD: $670,500. The National Bible Program at $440,000 and network programming at $300,000 and other sources like church donations at $140,000.

2651 So can you just take me through that a little bit and where you get those numbers or where you get the confidence of those numbers?

2652 MR. LUTES: Based on the three years of broadcasting in Moncton and seeing how things have unfolded and then basically saying that Halifax is a market about three times the size, but in wanting to be very, very conservative I am starting gingerly because I want to wait until the businesses come to us and people are saying that "We want to support this".

2653 Then we add on the extra staff, so that Jeff doesn't get burned out which I appreciate is your concern. We add on the staff as we see that,

"Wow, this thing is really taking off here in Halifax and is doing twice as good as what we expected."

2654 I have approached Eagle-Com and I said, "Okay, you give me about $20 of program a month and I want $60 for Halifax". They never batted an eye because they want to get into the Halifax market because this is an untapped market for religious broadcasting.

2655 COMMISSIONER LANGFORD: What does the $60 buy them?

2656 MR. LUTES: It gives them 28 minutes of non-drive time.

2657 COMMISSIONER LANGFORD: I see. And that would be for some of these out-of-country teaching programs and whatnot?

2658 MR. LUTES: That's right.

2659 COMMISSIONER LANGFORD: The sort of thing we were talking about earlier.

2660 MR. LUTES: Yes.

2661 COMMISSIONER LANGFORD: Is that what you mean by network programming, that $300,000? Is all that coming from the sale of time slots?

2662 MR. LUTES: Yes.

2663 COMMISSIONER LANGFORD: The National Bible Program, how does that work?

2664 MR. LUTES: The network programming is things like Focus On The Family and then the other programming is referring to people like Swindoll and so forth.

2665 Really it is almost one and the same. The Focus On The Family is that talk program where he is interviewing different authors and people about how to be a good parent, and so forth.

2666 COMMISSIONER LANGFORD: I'm sorry, I rarely interrupt and I apologize but I am getting a little confused.

2667 MR. LUTES: That's all right.

2668 COMMISSIONER LANGFORD: Maybe we could just do one at a time?

2669 MR. LUTES: Yes.

2670 COMMISSIONER LANGFORD: When we talked about Swindoll -- boy he has to be careful how he pronounces his name, doesn't he?

2671 MR. LUTES: Yes, especially in religious broadcasting. That has gone through my mind.

2672 COMMISSIONER LANGFORD: Yes, gee. He might want to change it to Smith and just get it over with.

--- Laughter / Rires

2673 COMMISSIONER LANGFORD: Does he come in under network programming or under National Bible Program or are they both more or less the same? Are they both sales of time?

2674 MR. LUTES: My problem, sir, is that I saw three designations and I thought to myself, "Well he is network programming", but it is hard to differentiate between the two.

2675 COMMISSIONER LANGFORD: Let me ask really simple questions.

2676 MR. LUTES: Thank you.

2677 COMMISSIONER LANGFORD: Local Sponsorship. That is ads?

2678 MR. LUTES: Yes.

2679 COMMISSIONER LANGFORD: That is from the local Christian book store, or whatever it might be.

2680 MR. LUTES: That's right.

2681 COMMISSIONER LANGFORD: Fine.

2682 Number two, National Bible Program. That is going to earn you $440,000 over the next seven years. That is your projection.

2683 MR. LUTES: That's right.

2684 COMMISSIONER LANGFORD: Where will that money come from?

2685 MR. LUTES: It is coming from Eagle-Com who is the broker for Focus On The Family and some other syndicated programs.

2686 COMMISSIONER LANGFORD: Okay.

2687 And Network Programming?

2688 MR. LUTES: Is coming from people like Dr. David Jeremiah with Turning Point and Chuck Swindoll with Insight For Living.

2689 COMMISSIONER LANGFORD: So really those two are the same, aren't they?

2690 MR. LUTES: That's right. That was my problem.

2691 COMMISSIONER LANGFORD: Okay, well that is my problem . I have inherited from you and now I am getting rid of it because neither one of us has it any more.

2692 MR. LUTES: Thank you.

2693 COMMISSIONER LANGFORD: There are really only three categories.

2694 MR. LUTES: That's right.

2695 COMMISSIONER LANGFORD: So now we have got local sponsorship, we have got the sale of time and then we have other sources like church donations?

2696 MR. LUTES: Yes.

2697 COMMISSIONER LANGFORD: How does that work?

2698 MR. LUTES: Well, I don't want to be drawing much on the churches. I don't -- our purpose it to put on concerts and things like that and promote local talent and bring in some other better known singers. But from churches wanting to present things on the air and receiving donations, some churches in Moncton have us in their annual budget and we just didn't want that to be a large segment that we would be depending on. We feel there is enough people asking for money from churches and we just don't feel we need to.

2699 COMMISSIONER LANGFORD: But do you ask for money from your listeners?

2700 MR. LUTES: No, I don't. Well, I provide them with the opportunity if they want to give to International Harvesters, but we never say, "We are going off the air if you don't give us money" and, you know, "We are in trouble" or anything like that. Because for one thing we are not.

2701 The Moncton community is strongly supporting CITA. It is doing -- it is exceeding my expectations. There is more money there than I expected and we are careful to be using that properly. I expect people will be so grateful to the CRTC in granting this that they will strongly support this. We have put in there about wanting to see help go to Africa because --

2702 COMMISSIONER LANGFORD: But if I am so enthused by this programming -- I am living in Halifax and I am enthused and I sit down and write you a check for $100, who do I send it to?

2703 MR. LUTES: It is made payable to International Harvesters for Christ. Then I issue a receipt to you that you can use, for example, a reduction in your income taxes.

2704 COMMISSIONER LANGFORD: Where does the $100 go from there, then?

2705 MR. LUTES: Then it goes into the International Harvesters account that can be used for relief and development work and charitable work here in the Maritimes.

2706 COMMISSIONER LANGFORD: Okay. So it might go off to these aid programs that you have overseas or it might be used right here at home for some charity.

2707 MR. LUTES: Yes. That is supervised by this Board of Directors that is made up of representatives.

2708 COMMISSIONER LANGFORD: Yes.

2709 When some of the people who have bought time, 28 minutes of non-drive time, get up and say, "My name is the Reverend such and such", do they ask for money?

2710 MR. LUTES: They are saying "We have a book available". However, if a person sends $20 they don't get a $20 income tax receipt because $7.00 of that was, for all intents and purposes, for the purchase of that book. So the only thing that they can use as a reduction is $13.

2711 COMMISSIONER LANGFORD: Do they send that $20 to you or do they send it to Arkansas or wherever?

2712 MR. LUTES: No, they send it to Canadian offices. They send it to -- like, for example, there is an office in Montreal for Dr. John McArthur's program.

2713 Each of these organizations makes sure that they have a Canadian office and it pays staff here in Canada.

2714 COMMISSIONER LANGFORD: Do you screen these programs? Not necessarily what is on the air, but do you screen the recipients so that you are confident in your own mind that the people in your broadcasting market are sending money off to reputable causes?

2715 MR. LUTES: I myself give to those organizations to make sure that the people are getting what they have expected and scrutinize them. All of them -- because all of them have been in broadcasting for over 20 years and they are well-established, reputable balanced organizations.

2716 COMMISSIONER LANGFORD: Jimmy Swaggart was in broadcasting a long time, you know.

2717 MR. LUTES: No more. Fortunately. He is still on the TV --

2718 COMMISSIONER LANGFORD: Is he?

2719 MR. LUTES:  -- and sometimes I watch him and I think, "Boy, you have hung in there."

2720 COMMISSIONER LANGFORD: How about Jimmy Baker?

2721 THE CHAIRPERSON: Still crying.

2722 MR. LUTES: He's still trying, isn't he?

2723 THE CHAIRPERSON: Crying.

2724 MR. LUTES: Oh, crying!

2725 COMMISSIONER LANGFORD: I don't want to bring up a sore point, but in your screening then you are confident in your own mind that you are screening these programs, you are screening the endpoint where these donations will end up and you have a certain comfort level with them.

2726 MR. LUTES: And each of these organizations has a Canadian Board of Directors and I talk with the heads of these Canadian organizations and sometimes I get them to do liners on our radio station.

2727 COMMISSIONER LANGFORD: Thank you. Those are my questions. Some of my colleagues may have questions, counsel may have questions, and then Chairman Colville will give you an opportunity to sing your praises one last time. I think that is the way it works. Then we will wrap it up. Thank you very, very much.

2728 MR. LUTES: Thank you, sir.

2729 THE CHAIRPERSON: Thank you, Commissioner Langford.

2730 Commissioner Cram.

2731 COMMISSIONER CRAM: Thank you, Reverend Lutes.

2732 I was taken by your comment that in fact wasn't in the lovely colour slide show that you gave us talking about that you were applying for a religious, not a Christian radio. That of course then led me to circle "Christian" under all the letters of support in your slide show.

2733 MR. LUTES: Yes.

2734 COMMISSIONER CRAM: Which led me to believe that people may think it is a Christian station when it is a religious station.

2735 That then leads into the issue, Pastor Kendrick, of the independent advisory board, which I notice you said four different denominations.

2736 So if I have the structure of the Halifax office right, there is a Board of Directors that consists of Christians -- nothing wrong with Christians, I'm one myself -- and then an independent advisory board that consists of Christians.

2737 I have to say, I would be far happier and sort of think that there would be some balance if at least the advisory board was four different faiths as oppose to denomination.

2738 Because you see what I mean, what is supervising, what is running the place and what is even advising is all Christian.

2739 MR. LUTES: Right. Right.

2740 I have no problem with that, because in our mind what we are thinking about is having a representative. That is why I came back earlier and repeated the second time --

2741 COMMISSIONER CRAM: The Interfaith Council.

2742 MR. LUTES:  -- the Interfaith Council. When we meet with the Interfaith Council and they do that, they are all there together, like we are all there together, but they had the spokesman who represents them who makes the statement. That is the type of person that I am talking about and being on it.

2743 COMMISSIONER CRAM: I was actually thinking about a non-Christian member of the Interfaith Council. I can't tell you what to do, but you have heard our concerns about balance and maybe counsel would want to talk to you later about the make-up of the advisory board and what you would agree to.

2744 Only one more question, Reverend Lutes.

2745 In Moncton, you are physically in Moncton, can you pull the plug in Halifax?

2746 MR. LUTES: No, I can't. I would have to move or else make sure that we have ample time, because I know you folks will need months to make decisions, and in that time we will be interviewing people and making sure that we have adequate staff and we are going to have the people in place to operate it.

2747 COMMISSIONER CRAM: That's not my question.

2748 MR. LUTES: Sorry.

2749 COMMISSIONER CRAM: You said there was two times you pulled the plug.

2750 MR. LUTES: Oh, yes.

2751 COMMISSIONER CRAM: If you are in Moncton, can you physically pull the plug in Halifax?

2752 MR. LUTES: Well, if I could answer that, "Yes I could with my pcAnywhere and listening to on-line streaming", but I won't be because -- I won't have to because in the ensuing months we will be screening people who want to apply for these positions that we anticipate will be opened up and we will be making sure that these people are well versed.

2753 We want to get experienced radio people all ready. We will be looking at their resumés and we will be grilling them similar -- grilling them harder than what you folks grilled us today to make sure that they are well aware of the broadcasting regulations for religious programming here in Canada.

2754 COMMISSIONER CRAM: In support of Commissioner Langford, the issue about homosexuals actually happened in Canadian broadcasting on Vision Television. So it's not that it is an unrealistic issue. Because of that we have to be quite --

2755 MR. LUTES: Okay. I understand.

2756 MR. KENDRICK: Earlier the Chairman referred to the fact of the number of people that were not in the room so maybe it is safe for me to say this: We already have on file job applications that have been given to us by people who are currently in broadcasting in the market who want to join us, announcers and others. So with them not being in here, their employers just did not hear that because I did not say that.

2757 COMMISSIONER CRAM: They will because we are on the Web.

2758 MR. KENDRICK: Oh, we are on the Web?

2759 COMMISSIONER CRAM: Well, they just heard that.

2760 MR. KENDRICK: Okay.

2761 Could I just add something in here that you may come up in terms of the questions come in? Because I sat through from Monday morning right straight through and I noticed how all the applicants were bringing up the question over and over again about the hurricane and the cold snap and the 95 centimetres of snow and how they would handle news and what was happening in there.

2762 As a Pastor in the area and talking to all of the other Pastors of all the meetings we had, we found out that from a point of view of the faith community on all sides we had no voice.

2763 It hit us on the weekend of these storms and we had no vehicle in a sense to get it out. We were lost in a maze as to whether we were cancelling our services, whether we were cancelling mid-week.

2764 When the cold snap came we tried, and thank God for the telephone and driving back and forth, we tried to coordinate efforts to go out and help the homeless and to feed them and do other things, but the media was responding both on the hurricane and on the storms to the number of trees were down, the roads were blocked and we did not have a voice that we could organize the faith community to come together and help.

2765 So I just wanted to put that in as an asset to us as to what we plan in terms of the news department.

2766 Again, coming back, I served at CHNS for 18 years and the last seven were as the program director of both the AM and the FM station. The rest of them were as the news director. I am conscious of the needs of this area in news and one of my targets is to make the best news department we can to serve this.

2767 Being involved in these storms and other things I saw where, wow, it would have been great to have another voice on there that people could tune in and have gotten the news that was coming up as it affected the community from the point of faith. Thank you.

2768 COMMISSIONER CRAM: Thank you.

2769 THE CHAIRPERSON: Thank you. I suspect the faith community was out shovelling snow taking God's name in vain.

 --- Laughter / Rires

2770 THE CHAIRPERSON: Just a couple of questions just to clarify.

2771 In the discussion with Commissioner Langford you were suggesting, Reverend Lutes, that you were basing some of the numbers of your projected audience based on what was happening in Moncton and church attendance there and presuming that it perhaps would be similar in Halifax.

2772 Are you aware that the Catholic church has just recently published a study here called Forward in Faith and what the number is for regular church attendance there?

2773 MR. LUTES: Yes. As a matter of fact we altered our presentation because we didn't want to highlight the fact that there have been 25 Catholic churches that have closed down. We were going to up-play the fact that the Rock Church is like the second biggest church this side of Montreal, but we want to be very careful to make sure that this radio station is unifying the religious communities.

2774 But we feel that we need this radio station so that we can encourage Catholic people to go back to their churches.

2775 THE CHAIRPERSON: So you were aware that it was -- I think it is 17 per cent?

2776 MR. KENDRICK: Yes. I am on a couple of the committees involved in that and with the Archbishop and some of the priests who have written letters endorsing this in here, they are making a strong case from the point of view of a big cathedral downtown where people have moved out into the suburbs, and they are going to build new churches out in there areas so that they feel in some degree that the news media has misunderstood them.

2777 THE CHAIRPERSON: I'm just trying to take your point that you were basing your number on a 30 per cent figure and the number I understand in Halifax for the largest single denomination is more like 17.

2778 So you were aware of that. That's all I wanted to know.

2779 MR. LUTES: Thank you.

2780 THE CHAIRPERSON: Picking up on Commissioner Cram's point -- and as she said it is not up to us to craft your application for you -- but I take it from your comments that you have not established this Halifax committee.

2781 Is that correct?

2782 MR. LUTES: Yes.

2783 THE CHAIRPERSON: It has been established?

2784 MR. LUTES: It is, in existence.

2785 MR. KENDRICK: It is in existence and we have asked various people --

2786 THE CHAIRPERSON: You have?

2787 MR. KENDRICK: I'm sorry. We have asked the various people if they are willing to serve and they have indicated that they would.

2788 THE CHAIRPERSON: So you have four names? So it is going to be four people?

2789 MR. KENDRICK: We actually have more than four names.

2790 THE CHAIRPERSON: But you said it was going to be a committee of four people I understand.

2791 MR. KENDRICK: We are proposing it to be a committee of four people, but we have more that have said that they would be willing to serve.

2792 We asked some of them, we talked to some of them and said "Would we be best served" -- and I think that the Commissioner kind of would be best served at looking at a number of people that would serve in rotation so that it is not the same people all the time. But we are looking at it in rotation, that you might be for six months or a year and then we keep moving. Because we don't want to just format to say, "Oh well, they have it locked it".

2793 So we are looking at it in that way, yes.

2794 THE CHAIRPERSON: Okay. These would be four names from a list of names that are largely from this Interfaith group?

2795 MR. LUTES: Yes.

2796 THE CHAIRPERSON: I understand. Okay.

2797 Final point, then, for me. I don't have it in front of me right now but I recall reading when I read your application a statement of purpose, objective and means for your organization, Reverend Lutes.

2798 Could you state the purpose and objective? Do you have that there?

2799 MR. LUTES: Yes. It is to reach, preach and teach.

2800 THE CHAIRPERSON: But it's a little more fulsome than that, isn't it?

2801 MR. LUTES: Yes. To reach people with the gospel and to preach --

2802 THE CHAIRPERSON: Could you state it just about exactly what it is?

2803 MR. LUTES: Yes, by memory. I have it here with me.

"To reach people with the gospel, to preach the gospel and to teach people." (As read)

2804 THE CHAIRPERSON: So I guess what struck me when I read that, in the context of the balance issue that you spent a lot of time discussing with Commissioner Langford, how does our balance requirement measure up against your purpose and objective?

2805 MR. LUTES: For example, in talking with CITA, which of course is another government department, they recognize that there are Christian organizations that they can work with. We obviously are 100 per cent Christian organization, but that doesn't mean that we can't work with people of other faiths. We don't feel that that is going to jeopardize the overarching purpose of making sure that the other religions are well cared for.

2806 The way that we are making sure that the issue of balance and fairness to the other religious faiths is attended to is in having this panel of at least four people from other religions that will be scrutinizing us and giving us direction and input and we have to adhere to their guidelines to ensure that the issue of fairness and balance is being presented for the total religious community.

2807 THE CHAIRPERSON: Setting aside CITA, do you see the balance requirement as requiring you to somehow compromise the objectives and purpose of the organization?

2808 MR. LUTES: No, I don't. I feel very, very secure in allowing equal time for Hindu or Bahai or Muslim to present what their convictions are.

2809 I am very -- obviously we all are -- very, very proud to be a Canadian. I feel that this is what makes up the Canadian mosaic. We as Canadians are very, very tolerant people and I think it is part of what makes this nation so great.

2810 We gladly share the airwaves and we recognize that the airwaves are public and they are not for one specific faith group. I feel that it makes for a wholesome, healthy dialogue.

2811 THE CHAIRPERSON: Okay. Thank you for that. Counsel.

2812 MS JONES: Thank you. I just want to clarify a few of the areas you talked about with the various Commissioners.

2813 First of all, about the music. I just want to clarify the requirement in the regulation is that whatever the amount of music you propose to play, 10 per cent of it has to be Canadian. There were discussions about the possibility to increase that by a conditional license to 20 per cent. The question I am asking you would be: Would you be willing to have a condition imposed on a license, should the Commission license your application, to play 20 per cent of the music -- you propose that 20 per cent would be Canadian?

2814 MR. LUTES: Gladly so. We feel that that is a very easily obtainable goal. We feel that we can surpass that with the MAPL, M-A-P-L.

2815 MS JONES: Okay, thank you. The other thing I wanted to clarify was the Canadian Talent CTD contribution.

2816 The Moncton market requires a $400 annual contribution so that might be where the confusion comes from, because the Halifax market requires a minimum of $5,000.

2817 MR. LUTES: Okay.

2818 MS JONES: there were discussions earlier about a commitment of maybe $5,000 annually, but you would like, if possible, be required to commit to less. Maybe you can have discussions with staff and come back at Phase II of the hearing to clarify what your position would be, what you would you would be ready to accept in terms of Canadian Talent Development Contribution is acceptable to you.

2819 MR. LUTES: We are willing to give $5,000 annually.

2820 MS JONES: Thank you.

2821 The third area I wanted to discuss shortly, balance again. Just to give you a quick background that the Broadcasting Act provides that:

"The broadcasting system should provide an opportunity for the public to express differing views on matters of public concerns." (As read)

2822 Also the Act provides that the broadcaster has the responsibility for the programming that they broadcast.

2823 That is why the religious policy then sets out expectations of what the Commission sees as methods of providing the balance to meet the requirements of the Act that opportunity should be given to express different views.

2824 In providing balance often the Commission looks at those expectations that are set out in the policy and what Commissioner Langford was trying to see here were your plans with regards to balance. So maybe if you want to consult the policy, the staff can provide you with the policy and there are specific requirements that -- not requirements but expectations that the Commission has set out there. Maybe you want to think about it and during Phase of the hearing maybe propose or lay down what your plans would be with respect to providing balance.

2825 MR. LUTES: Okay. That is where we will bring in about our advisory committee, the members form the various faith groups.

2826 MS JONES: Thank you.

2827 MR. LUTES: Yes.

2828 MS JONES: Just a second.

--- Pause

2829 MS JONES: You submitted that you would have about 20 hours of spoken word religious programming per week and, in addition to those 20 hours, we are going to be looking for a commitment of balanced programming that you would be available to provide.

2830 MR. LUTES: Yes.

2831 MS JONES: Balanced programming doesn't have to be necessarily in the same program, but it is the overall programming that you would broadcast over a reasonable period of time. There has to be some balance.

2832 MR. LUTES: Right.

2833 MS JONES: So we are going to be looking at how many hours in comparison to that 20 hours of spoken word programming you would be ready to accept as balanced programming.

2834 MR. LUTES: I think that if there is 250 Christian churches, maybe about 10 per cent of that might include -- or in addition to the churches you might have, you know, mosques and Hindu temples and Greek Orthodox churches, and what we would like to do is provide a half and hour each day for something that is other than Christian.

2835 MS JONES: That would work out to be about 5.5 hours per week.

2836 MR. LUTES: I think that is reasonable.

2837 MS JONES: Would you be ready to accept that as a condition of license?

2838 MR. LUTES: Yes, we would accept that as a condition of license. And we would go out and solicit dialogue with people like Samara, the Hindus, and encourage her and show her that maybe there is a young person in her community that we could teach the computer to and help them.

2839 MS JONES: Thank you very much. Those are all my questions, Mr. Chairman.

2840 THE CHAIRPERSON: Thank you, counsel.

2841 Commissioner Langford I guess left it to me to pose the question of the best use of frequency, is the way we are putting it in terms of the sort of final question, if you will. While your application is not competing with another one for the same frequency, you are competing with a number of others to enter the market if you will here.

2842 So we will give you the opportunity to sum up and tell us why you think your application is the best use of frequency or, in other words, why you should be licensed.

2843 MR. LUTES: It has been stated during these hearings that the key factor to consider is what benefit the applicant will bring to the local community.

2844 Number one: It is a unique format, providing a needed service meeting the needs of the community we serve.

2845 Number two: The format reaches a segment of listeners with music not being broadcasted on any other station in the market.

2846 Number three: It is a station that opens up a new avenue of airplay for multiple talent artists not presently available in the area.

2847 Fourth and finally: It is a format that will have minimal impact on the existing stations, while meeting the required needs of those not being served.

2848 THE CHAIRPERSON: That's it? Well I want to thank you very much for answering our questions this afternoon.

2849 MR. LUTES: Thank you.

2850 THE CHAIRPERSON: I guess two of you were on the spot and two of you got to watch and listen.

2851 That will conclude our work for the day. We will reconvene tomorrow morning at nine o'clock, for all of you who are listening and not here today, with the Halifax JAMZ application.

2852 Thank you very much. That concludes our business for the day.

--- Whereupon the hearing adjourned at 1755, to resume

on Wednesday, March 3, 2004 at 0900 / L'audience

est ajournée à 1755, pour reprendre le mercredi

3 mars 2004 à 0900

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